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Emerging Issues

The following emerging issues pose a significant impact on clean energy at both the regional and national levels. (See also our Policies & Incentives page for broader, ongoing policy areas that confront clean energy development.)

Tapping the efficiency potential of additional clean energy (CHP, waste heat recovery, and district energy) adoption would greatly reduce greenhouse gas (GHG) emissions. While many predict that climate change legislation U.S. that assesses a cost to GHG emitters, no one can safely say when it will happen (this year or next?) or what form it will take (emissions tax or cap and trade?). Legislative projections were further muddied by the massive BP oil spill in the Gulf of Mexico in late spring. The USCHPA is working diligently to educate bill authors on the benefits of CHP in hopes of avoiding undue penalties, given the net GHG reductions CHP creates . While the U.S. EPA has previously promised swift enforcement of GHG regulations in the absence of timely legislation, it has since softened its stance and proposed a gradual phase-in of regulations for industrials, beginning in 2011.

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The U.S. Environmental Protection Agency (EPA) has proposed a revision to greenhouse gas (GHG) regulations that could spell relief for clean energy adopters. Current GHG rules issue permits based on on-site emissions, which are higher at self-generating clean energy installations versus sites that purchase electricity remotely from power plants, even though the net emissions tend to be much lower in the former instance.

The proposal would require the EPA to collect more information about cogeneration use across the country in hopes of recognizing the technology's net GHG emission reductions and affecting the permitting process accordingly.

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Emergency preparedness and effective response depend entirely on the reliability and quality of a first responder's power supply. If primary grid power goes down, so too can "911" and state emergency communication centers, first responder stations, hospitals, prisons, control centers, traffic signals, public transportation, wastewater treatment facilities, water pumping stations and other critical infrastructure.

Typically facilities like hospitals have diesel generators on site for emergency power when the grid fails. Unfortunately, diesel generators have a history of failure in disaster situations including the July 1999 power outage in New York City and the massive Northeast blackout in August 2003. After Hurricane Katrina, downed power lines and flooding made it impossible to deliver diesel fuel to smaller generators that would ordinarily serve as backup power. Without electricity the Gulf Coast region was not able to function. Without power the emergency response system broke down.

Installing combined heat and power systems at critical facilities and emergency response centers could help prevent another Hurricane Katrina. The ability of a CHP system to generate both electricity and thermal energy for use in space heating/cooling, hot water and steam would allow hospitals to continue functioning, like Mississippi Baptist Medical Center (MBMC) in Jackson, MS - the only hospital in the Jackson area to continue operating at near capacity during and after Hurricane Katrina made landfall.

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Some water experts contend that diminishing supplies of fresh water -- in the U.S. as in the many of the parts of the world -- present a more pressing dilemma than even climate change. The increasing severity of recent droughts in several parts of the country has spurred predictions of worsening dry spells and water shortages, forcing the issue of water conservation upon policymakers. Since the extraction of some conventional energy sources and their combustion to generate electricity can be extremely water-intensive, the efficiencies of these processes assumes greater urgency. Fortunately, combined heat and power (CHP) and waste heat recovery are not only highly efficient but also use ZERO water in their generation of electricity, assigning them vital roles in the developing energy-water nexus.

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Pioneered in Germany in 1991 and later adopted in Canada, Britain, and elswhere, "Feed-In Tariffs" (FITs) democratize energy production by permitting residential and commercial adopters of distributed generation systems (such as CHP and solar panels) to sell suprplus power to their local utilities. Producers of renewable energy are paid a premium rate, or "tariff," for each kilowatt of energy they "feed into" the grid. FITs are incentives for homeowners, farmers, businesses, etc., to become producers of decentralized energy, or to increase their production  of renewable energy. As such, they increase the overall production and use of renewable energy, and decrease the consumption and burning of fossil fuels. The states of California, Vermont (SPEED), Washington, and Wisconsin have implemented statewide FITs, and other states are considering following their leads. Depending on the whims of the FIT program architects, CHP may or may not be included as eligible. (The Sacramento MUD included CHP in its FIT but may join Britain in offering a FIT specifically for CHP systems, separate from renewables.)

Critics of FITs contend that FITs introduce price-setting problems for forms of alternative energy while renewable portfolio standards (RPS) are more market-oriented and therefore preferable from the utilities' standpoint, allowing them to purchase the cheapest renewable energy source on a kilowatt-hour basis. However, proponents counter that quota systems such as an RPS introduce bureaucratic hurdles and greater expense. Under a FIT structure, no regulatory permission is required to sell power to the utility.

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Clean energy systems contribute greatly to a building's or facility's sustainability. As LEED standards inch their way into municipal, state, and federal building codes, on-site clean energy systems like CHP merit serious consideration prior to construction or major renovation at suitable sites. In some cases, smart building designers can manipulate a site's thermal profile (e.g., shifting electrical loads to thermal loads, normalizing seasonal demand fluctuations) such that its year-round thermal loads improve CHP feasibility.

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Proposed federal energy efficiency jobs provisions would create about 333,000 jobs in 2010 and then 184,000 jobs in 2011 as funding begins to ramp down, according to a new analysis released today by the American Council for an Energy-Efficient Economy (ACEEE).The proposed programs include residential and commercial retrofit programs and an energy-efficient manufacturing grant program. One proposal would provide $4 billion in grants to manufacturers for investment in energy efficiency and clean energy project manufacturing projects. This proposal would provide additional funding to a $156 million DOE grant program initiated by ARRA stimulus legislation. ACEEE estimates that the additional grant funding would create 77,000 jobs in 2010 and 91,000 jobs in 2011 from funding the existing, unfunded applications and from a solicitation for a second round of proposals. As CHP, waste heat recovery, and district energy are considered "green" by most accounts, greater investments in these clean energy applications would create or favor those "green jobs" behind their manufacture and service provision.

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While natural gas carries many economic and environmental benefits relative to other energy sources, certain natural gas drilling techniques -- namely hydraulic fracturing in resistant shale deposits -- has an as-yet inderterminate impact on air quality. The U.S. EPA is currently investigating the extent to which these drilling practices cause environmental contamination.Two of the countries largest shales -- Barnett and Haynesville -- are being actively drilled in the Gulf Coast region. Natural gas is the most prevalent fuel source for CHP systems.

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Natural gas, the most prevalent fuel source of CHP installations, is becoming increasingly favored as an energy source for both economic and environmental reasons. According to the Energy Information Administration (EIA), natural gas fired electricity generation is expected to increase dramatically over the next 20 years. Expansions in domestic shale drilling and a projected glut of supply in the gas market suggest relatively low, stable gas prices for the foreseeable future, although the  volatility of energy prices render most predictions tenuous at best. Nevertheless, oil and gas prices are less likely to move in tandem with one another in light of the new surge in domestic gas production and rising demand for oil in emerging international markets.

Coupled with ecological concerns about coal as an electricity source, stable natural gas prices bode well for clean energy projects. Still, economic viability boils down to "spark spread," that is, the difference in cost of purchased electricity and natural gas: the wider the gulf that separates these prices, the more attractive is the payback for clean energy projects.

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While the road toward cleaner and more sustainable power generation includes wind, solar, geothermal, and other forms of renewable technologies, these technologies alone cannot power a modern industrial economy such as ours any time soon. Simply put, the combination of their diffuse energy sources and relative inefficiencies render renewables economically and technically incapable of collectively even 10% of regional or national electrical needs. The present limits of conventional renewable technologies for the foreseeable future therefore complement highly efficient and robust “clean energy” technologies -- combined heat and power (CHP), waste heat recovery (CHP), and district energy. Waste heat recovery can capture excess thermal energy that industrial plants are already generating and convert it into electricity, consuming no additional fuel and producing no additional emissions. As such, a growing number of states count waste heat recovery among their Renewable Portfolio Standards' eligible sources. Some states also count CHP and district energy as eligible. Although the most prevalent fuel source for CHP and district energy is natural gas -- a non-renewable fossil fuel -- they produce far fewer emissions than coal-fired power plants and capture and reuse waste heat to power other functions, thereby conserving energy and reducing emissions. Hence, since this thermal energy would otherwise be released into the atmosphere (as typifies conventional, inefficient power plants), its reuse arguably qualifies as a renewable energy source.


Record droughts and blackouts in 2011 in Texas and Louisiana have compelled policymakers to re-examine the state's energy-water nexus. As an efficient and water-conserving form of power generation, CHP can help address energy-water concerns recently raised by state officials.

Resources:

  • Texas Water Plan 2012 - Texas Water Development Board's latest quadrennial water plan includes policy recommendations related to power generation.  
  • Impact of the 2011 Drought and Beyond - The Texas Comptroller Office's recent 12-part report notes that a significant amount of electricity from intensive water-using power plants would be compromised during prolonged droughts.
  • 2012 Legislature Interim charges - Both the Texas Lieutenant Governor and House Speaker have tasked certain committees with proposing ways to ensure water and energy resource adequacy prior to the 2013 legislative session:   

Houston Advanced Research CenterU.S. Department of Energy Gulf Coast Clean Energy Application Center
4800 Research Forest Drive
The Woodlands, TX 77381

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