Combined Heat and Power in New York State’s Deregulated Electricity Market

Nag Patibandla, Mark R. Torpey, Dana L. Levy, and Scott A. Smith, New York State Energy Research and Development Authority

Keywords

Abstract

Emerging distributed generation (DG) technologies such as fuel cells and microturbines offer potential to self-generate electric power at emissions competitive to central station generation. When heat is recovered for useful purposes, i.e., combined heat and power (CHP), these options can provide an end-user with an efficient and reliable energy supply option. CHP systems can exceed 80% fuel-use efficiency and can reduce NOx and other air pollutant emissions when compared to the traditional "make heat, buy electricity" model employed by most energy users. that there is nearly 13 GW of remaining CHP technical potential in New York State. The bulk (nearly 70%) of the remaining potential, 9.1 GW at 21,000 sites, is in the commercial/institutional sector in building CHP (BCHP) applications. BCHP applications use smaller DG systems with higher per-unit costs ($/kW) that are not likely to compete with separately provided cooling, heating and power, unless there is an adequate thermal load. Also, the presently practiced permitting and utility interconnection procedures and associated costs present a significant hurdle to the smaller BCHP projects. This paper presents a public benefit overview of NYSERDA’s DG-CHP program, examines environmental aspects of the CHP use and reviews hurdles such as utility interconnection, exit fees, and standby/backup charges.