IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v97y2016icp618-627.html
   My bibliography  Save this article

Do Combined Heat and Power plants perform? Case study of publicly funded projects in New York

Author

Listed:
  • Athawale, Rasika
  • Felder, Frank A.
  • Goldman, Leo A.

Abstract

We investigate lower than expected capacity factors of Combined Heat and Power plants using a publicly available dataset of hourly performance for plants in the state of New York. Low utilization of a CHP indicates underperformance. We examine possible causes of this underperformance including economic arbitrage, poor maintenance and operational practices, oversizing of plants, and reliability and resiliency needs. Based on seasonal and weekday/weekend capacity factor averages, we find that there is not enough evidence to support the economic arbitrage cause. Out of 99 plants in the dataset, 64 plants have average capacity factor below 60%, indicating they are either oversized and/or poorly maintained. This suggests that the current practice of one-time fixed incentive ($/kW) favors investment in capacity with no incentive for utilization (unlike a production credit which incentivizes generation $/kWh). From a policy perspective, this paper recommends better pre-engineering assessment for correct sizing, as well as revision of incentives based on performance. Additional information should be collected so that a more accurate ongoing analysis of the societal benefits of CHP projects can be made. Lastly, the energy efficiency gap may be smaller than is commonly assumed and other options should be explored to meet energy efficiency goals.

Suggested Citation

  • Athawale, Rasika & Felder, Frank A. & Goldman, Leo A., 2016. "Do Combined Heat and Power plants perform? Case study of publicly funded projects in New York," Energy Policy, Elsevier, vol. 97(C), pages 618-627.
    • Handle: RePEc:eee:enepol:v:97:y:2016:i:c:p:618-627
    DOI: 10.1016/j.enpol.2016.06.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142151630324X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.06.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Karl Magnus Maribu & Stein-Erik Fleten, 2008. "Combined Heat and Power in Commercial Buildings: Investment and Risk Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 123-150.
    2. Mueller, Steffen, 2006. "Missing the spark: An investigation into the low adoption paradox of combined heat and power technologies," Energy Policy, Elsevier, vol. 34(17), pages 3153-3164, November.
    3. Backlund, Sandra & Thollander, Patrik & Palm, Jenny & Ottosson, Mikael, 2012. "Extending the energy efficiency gap," Energy Policy, Elsevier, vol. 51(C), pages 392-396.
    4. Cho, Heejin & Smith, Amanda D. & Mago, Pedro, 2014. "Combined cooling, heating and power: A review of performance improvement and optimization," Applied Energy, Elsevier, vol. 136(C), pages 168-185.
    5. Athawale, Rasika & Felder, Frank A., 2014. "Incentives for Combined Heat and Power plants: How to increase societal benefits?," Utilities Policy, Elsevier, vol. 31(C), pages 121-132.
    6. Hu, Mengqi & Cho, Heejin, 2014. "A probability constrained multi-objective optimization model for CCHP system operation decision support," Applied Energy, Elsevier, vol. 116(C), pages 230-242.
    7. Zhang, Jian & Cho, Heejin & Knizley, Alta, 2016. "Evaluation of financial incentives for combined heat and power (CHP) systems in U.S. regions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 738-762.
    8. Hawkes, A.D. & Leach, M.A., 2008. "On policy instruments for support of micro combined heat and power," Energy Policy, Elsevier, vol. 36(8), pages 2963-2972, August.
    9. Gulli, Francesco, 2006. "Small distributed generation versus centralised supply: a social cost-benefit analysis in the residential and service sectors," Energy Policy, Elsevier, vol. 34(7), pages 804-832, May.
    10. Blakemore, F. B. & Davies, C. & Jones, K., 1995. "Combined heat and power, economies of scale and option appraisal," Utilities Policy, Elsevier, vol. 5(3-4), pages 167-174.
    11. Daan van Soest & Erwin Bulte, 2001. "Does the Energy-Efficiency Paradox Exist? Technological Progress and Uncertainty," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 101-112, January.
    12. Kaikko, Juha & Backman, Jari, 2007. "Technical and economic performance analysis for a microturbine in combined heat and power generation," Energy, Elsevier, vol. 32(4), pages 378-387.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Heng Chen & Jidong Xu & Yao Xiao & Zhen Qi & Gang Xu & Yongping Yang, 2018. "An Improved Heating System with Waste Pressure Utilization in a Combined Heat and Power Unit," Energies, MDPI, vol. 11(6), pages 1-20, June.
    2. Zhihua Ge & Fuxiang Zhang & Shimeng Sun & Jie He & Xiaoze Du, 2018. "Energy Analysis of Cascade Heating with High Back-Pressure Large-Scale Steam Turbine," Energies, MDPI, vol. 11(1), pages 1-15, January.
    3. Khuram Pervez Amber & Antony R. Day & Naeem Iqbal Ratyal & Rizwan Ahmad & Muhammad Amar, 2018. "The Significance of a Building’s Energy Consumption Profiles for the Optimum Sizing of a Combined Heat and Power (CHP) System—A Case Study for a Student Residence Hall," Sustainability, MDPI, vol. 10(6), pages 1-16, June.
    4. Zhang, Youjun & Xiong, Nian & Ge, Zhihua & Zhang, Yichen & Hao, Junhong & Yang, Zhiping, 2020. "A novel cascade heating system for waste heat recovery in the combined heat and power plant integrating with the steam jet pump," Applied Energy, Elsevier, vol. 278(C).
    5. Ahn, Hyeunguk & Miller, William & Sheaffer, Paul & Tutterow, Vestal & Rapp, Vi, 2021. "Opportunities for installed combined heat and power (CHP) to increase grid flexibility in the U.S," Energy Policy, Elsevier, vol. 157(C).
    6. Shankar Ganesh Pariasamy & Vinod Kumar Venkiteswaran & Jeyanandan Kumar & Mohamed M. Awad, 2022. "Industrial CHP with Steam Systems: A Review of Recent Case Studies, Trends and Relevance to Malaysian Industry," Energies, MDPI, vol. 15(20), pages 1-15, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang, Jian & Cho, Heejin & Knizley, Alta, 2016. "Evaluation of financial incentives for combined heat and power (CHP) systems in U.S. regions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 738-762.
    2. Kalantzis, Fotios & Revoltella, Debora, 2019. "How energy audits promote SMEs' energy efficiency investment," EIB Working Papers 2019/02, European Investment Bank (EIB).
    3. Díaz, Guzmán & Planas, Estefanía & Andreu, Jon & Kortabarria, Iñigo, 2015. "Joint cost of energy under an optimal economic policy of hybrid power systems subject to uncertainty," Energy, Elsevier, vol. 88(C), pages 837-848.
    4. Zheng, Xuyue & Wu, Guoce & Qiu, Yuwei & Zhan, Xiangyan & Shah, Nilay & Li, Ning & Zhao, Yingru, 2018. "A MINLP multi-objective optimization model for operational planning of a case study CCHP system in urban China," Applied Energy, Elsevier, vol. 210(C), pages 1126-1140.
    5. Jin, Xiaolong & Mu, Yunfei & Jia, Hongjie & Wu, Jianzhong & Xu, Xiandong & Yu, Xiaodan, 2016. "Optimal day-ahead scheduling of integrated urban energy systems," Applied Energy, Elsevier, vol. 180(C), pages 1-13.
    6. Tapia-Ahumada, K. & Pérez-Arriaga, I.J. & Moniz, E.J., 2013. "A methodology for understanding the impacts of large-scale penetration of micro-combined heat and power," Energy Policy, Elsevier, vol. 61(C), pages 496-512.
    7. Akvile Lawrence & Patrik Thollander & Magnus Karlsson, 2018. "Drivers, Barriers, and Success Factors for Improving Energy Management in the Pulp and Paper Industry," Sustainability, MDPI, vol. 10(6), pages 1-35, June.
    8. Onishi, Viviani C. & Antunes, Carlos H. & Fraga, Eric S. & Cabezas, Heriberto, 2019. "Stochastic optimization of trigeneration systems for decision-making under long-term uncertainty in energy demands and prices," Energy, Elsevier, vol. 175(C), pages 781-797.
    9. Gao, Lei & Hwang, Yunho & Cao, Tao, 2019. "An overview of optimization technologies applied in combined cooling, heating and power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    10. Lawrence, Akvile & Karlsson, Magnus & Thollander, Patrik, 2018. "Effects of firm characteristics and energy management for improving energy efficiency in the pulp and paper industry," Energy, Elsevier, vol. 153(C), pages 825-835.
    11. Allan, Grant & Eromenko, Igor & Gilmartin, Michelle & Kockar, Ivana & McGregor, Peter, 2015. "The economics of distributed energy generation: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 543-556.
    12. Bai, Zhang & Liu, Taixiu & Liu, Qibin & Lei, Jing & Gong, Liang & Jin, Hongguang, 2018. "Performance investigation of a new cooling, heating and power system with methanol decomposition based chemical recuperation process," Applied Energy, Elsevier, vol. 229(C), pages 1152-1163.
    13. Li, Wenjia & Hao, Yong & Wang, Hongsheng & Liu, Hao & Sui, Jun, 2017. "Efficient and low-carbon heat and power cogeneration with photovoltaics and thermochemical storage," Applied Energy, Elsevier, vol. 206(C), pages 1523-1531.
    14. John Foster & Liam Wagner & Phil Wild & Junhua Zhao & Lucas Skoofa & Craig Froome, 2011. "Market and Economic Modelling of the Intelligent Grid: End of Year Report 2009," Energy Economics and Management Group Working Papers 09, School of Economics, University of Queensland, Australia.
    15. Apriani Soepardi & Pratikto Pratikto & Purnomo Budi Santoso & Ishardita Pambudi Tama & Patrik Thollander, 2018. "Linking of Barriers to Energy Efficiency Improvement in Indonesia’s Steel Industry," Energies, MDPI, vol. 11(1), pages 1-22, January.
    16. Gabriele Loreti & Andrea Luigi Facci & Stefano Ubertini, 2021. "High-Efficiency Combined Heat and Power through a High-Temperature Polymer Electrolyte Membrane Fuel Cell and Gas Turbine Hybrid System," Sustainability, MDPI, vol. 13(22), pages 1-24, November.
    17. LOFGREN Asa & MILLOCK Katrin & NAUGES Céline, 2007. "Using Ex Post Data to Estimate the Hurdle Rate of Abatement Investments - An application to the Swedish Pulp and Paper Industry and Energy Sector," LERNA Working Papers 07.06.227, LERNA, University of Toulouse.
    18. Burek, Jasmina & Nutter, Darin W., 2019. "A life cycle assessment-based multi-objective optimization of the purchased, solar, and wind energy for the grocery, perishables, and general merchandise multi-facility distribution center network," Applied Energy, Elsevier, vol. 235(C), pages 1427-1446.
    19. Shamshiri, Mehdi & Ashrafizaadeh, Mahmud & Shirani, Ebrahim, 2012. "Effects of rarefaction, viscous dissipation and rotation mode on the first and second law analyses of rarefied gaseous slip flows confined between a rotating shaft and its concentric housing," Energy, Elsevier, vol. 37(1), pages 359-370.
    20. Gucciardi Garcez, Catherine, 2017. "Distributed electricity generation in Brazil: An analysis of policy context, design and impact," Utilities Policy, Elsevier, vol. 49(C), pages 104-115.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:97:y:2016:i:c:p:618-627. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.