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Combining Heat and Power

An old American idea to capture and use waste heat from electricity generation, adopted by Europe, needs to come back home for a visit.

One of the most unexciting but obvious ideas for cutting pollution and making a nation more energy-independent is a simple concept called “combined heat and power,” known as CHP or cogeneration, which traps heat from a power plant and sends it around to local buildings as, well, heat.

The technology started with Thomas Edison, but the European Union has surged ahead of America in putting it to use.

Power plants give off huge amounts of heat as a by-product of burning coal, oil or gas to move turbines. “Cogeneration” plants just install the necessary pipes to catch and recycle the heat. It can be used to heat buildings or gin up more electricity.

European countries have invested heavily in cogeneration because of the EU’s goal of slashing greenhouse-gas emissions by 20 percent (from 1990 levels) before 2020. The EU passed a mild directive in 2004 to spur its members to build more cogeneration plants, but the leading countries in Europe, like the Netherlands and Denmark, have developed combined-heat-and-power systems out of pure self-interest.

EUROPEAN DISPATCHMichael Scott Moore complements his standing feature in Miller-McCune magazine with frequent posts on the policy challenges and solutions popping up on the other side of the pond.

Michael Scott Moore complements his standing feature in Miller-McCune magazine with frequent posts on the policy challenges and solutions popping up on the other side of the pond.

Denmark started to use cogeneration seriously in the 1970s, when the energy crisis drove up the price of oil. It moved away from oil-fired power plants and back to coal, but it also replaced individual coal- or wood-burning stoves with “district heating” systems that carried extra heat from the coal plants around to local houses and buildings. Property owners in those areas had no choice — they were ordered to join the district-heating schemes. But now Denmark heats around 80 percent of its buildings with “waste heat” — including from solar — and derives some 40 percent of its power from it, too.

The U.S. evolved in the opposite direction. Because it was easier to electrify the vast American countryside from huge regional utilities instead of from smaller, “district”-sized plants, it became illegal, in some states, to compete with the big monopolies. Without smaller plants, recycling heat wasn’t practical. Laws changed in the 1970s and ’80s, but the U.S. still lags.

The average American power plant generates electricity equivalent to about 33 percent of its fuel and wastes the rest in heat. Cogeneration plants run at 60 percent efficiency rates and sometimes much higher. The Department of Energy is on the case, nominally; it wants to raise the country’s share of CHP-generated power to 30 percent — well under Denmark — by 2030.

This is embarrassing, since Edison pioneered the technology. In 1882, he designed the first commercial power plant — a cogeneration plant — on Pearl Street in New York City. New York in the meantime has the United States’ largest and most venerable recycled-steam system, which lets the city’s power plants warm (or even cool) Manhattan high-rises.

Washington, as a rule, doesn’t legislate big change (health care being a notable exception), so the main federal incentive to build more of these plants lately has been a tax credit to the tune of 10 percent on CHP investments. That hasn’t caused huge change across the land. A bill that would kick the incentive up to 30 percent stalled in Congress last year.

Cogeneration is also a ripe area for smart government stimulus, since the elements of a heat-recycling system — ventilation, exhaust and heat-exchange components — are, or can be, built in the United States. The Department of Energy did hand out $156 million for cogeneration technology as part of the Recovery Act in 2009. But compared to the billions shoveled into banks for so-called “quantitative easing” in 2008 and 2010, those DoE grants sound more like an afterthought.