Panel Paper:
Assessment of Opportunities and Barriers Surrounding Diffusion of Combined Heat and Power in the United States
Saturday, November 5, 2016
:
2:25 PM
Gunston West (Washington Hilton)
*Names in bold indicate Presenter
Vivek Bhandari, Stephen Rose and Elizabeth Wilson, University of Minnesota
Creating sustainable energy systems requires the integration of new technologies, energy markets, regulatory frameworks and business practices. Combined Heat and Power (CHP) is a mature technology that could play a critical role in future energy systems because they are efficient, fuel flexible, and, if designed properly, would allow for operational flexibility that could allow for greater penetration and better integration of low-carbon but variable renewable resources. While CHP technologies are well developed and plants are integrated into power systems around the world, the deployment of CHP in the United States is small and remains challenging (less than 8% of total generation). The policy and regulatory challenges are the biggest barriers to CHP in the United States because they affect finance and business decisions. For example, because CHP plants produce heat and power and can use multiple fuel sources, they often straddle several different energy policy programs, industries, utility boundaries and regulatory regimes. We assess the concurrent technology and policy opportunities and barriers for CHP by evaluating existing policies and laws and 30 semi-structured interviews with energy experts like legislators, regulators, CHP developers and utility managers.
In order to understand cross-site variations of the opportunities and barriers and the role of individual agency to affect implementation decision, we use Strategic Action Framework (SAF) and situate this analysis within broader energy policy and decision-making literature. We find that implementer specific subjective factors like CHP aesthetics and objective factors like costs, and existing regulatory barriers like interconnection requirements are the largest impediments to CHP diffusion. The subjective factors are dependent on a) explicit knowledge like formal training and b) tacit knowledge like the anecdotal experiences from others who have built CHP. The objective factors for CHP are dependent on the availability of the support from the state and these factors heavily influence the subjective factors. Therefore, without policy changes and support from the state, both in terms of making the project economics work like investment and production subsidies; and lifting the regulatory barriers like interconnection standards, the subjective factors won’t change and CHP’s share of generation will remain stagnant.
