Benefits & Barriers to Clean Energy

(See our Policies & Incentives section and Emerging Issues subsection for in-depth discussions of policy issues currently confronting clean energy adoption.)

Benefits

...for owners:

• Improved fuel efficiency - up to 2/3 savings in fuel costs!
  
• Improved power quality & reliability
• Improved energy cost predictability
• Business continuity
• Energy security

...for society:

• Reduced emissions per unit of useful output- up to 33%-50% reduced emissions!
  
• Lower overall capital cost for power per kW
• No ratepayer investment required in generating, transmitting or distributing power
• Reduces land-use impacts and NIMBY objectives
• Reduces fresh water use
• Optimizes natural gas, reducing price volatility- up to 40% greater efficiency than conventional units!
  
• Creates new high-tech manufacturing sector in domestic and export markets
• Supports competitive electricity market structure

...for electric utilities:

• Reduced energy losses in transmission lines - current transmission losses are roughly 10%! Clean energy requires no remote transmission and therefore sustains no transmission losses.
  
• Reduced upstream congestion on transmission lines
• Reduced or deferred infrastructure (line and substation) upgrades
• Optimal use of existing grid assets, including the potential to free up transmission assets for increased wheeling capacity
• Less capital tied up in unproductive assets
• Improved grid reliability
• Higher energy conversion efficiencies than central generation
• Faster permitting than transmission line upgrades
• Ancillary benefits including voltage support & stability, contingency reserves and black start capability

Barriers

• National interconnection standards and procedures apply differently, or not at all, depending on region
• Standby and backup power charges
• Interconnection approval can be slow
• Stranded cost-recovery charges and exit fees
• Air regulations that do not recognize the environmental benefits of CHP - although the EPA proposed a rule change in April 2010 to rectifiy permitting inconsistencies
  
• Non-standardized, time-consuming environmental permitting process
• Complex local ordinances regarding siting, zoning, fire code, etc...
• Volatile natural gas prices and "spark spread"
  
• Facility managers unaware of the benefits of on-site power generation
• On-site generation systems do not fall into a specific tax depreciation category. CHP systems can qualify for one of several categories depending on configuration and ownership resulting in a depreciation period ranging from 5 to 39 years.

Additional resources:

• The Potential Benefits of Distributed Generation and Rate-Related Issues That May Impede Their Expansion - U.S. DOE (Feb. 2007)
• Gulf Coast: CHP in the Gulf Coast Region: Benefits and Challenges - GC RAC (2006)