Could Cogeneration Become the Norm in US Factories?

Masnedø CHP power station in Denmark. This station burns straw as fuel while the adjacent greenhouses are heated by district heating from the plant.

According to the Energy Information Administration, the industrial sector currently accounts for nearly one third of all energy consumed in the United States. That’s a lot of electricity flowing through the grid and into factories all over the country.

Although electricity accounts for considerably less than labor or materials and supplies in terms of the total cost of manufacturing, the impetus for manufacturers to “Go Green” and reduce their environmental footprints could lead more companies to consider bringing power generation in-house.

More specifically, cogeneration, also known as combined heat and power (CHP) could become the norm within the next decade according to Roy Palk, senior energy advisor for the law firm LeClairRyan and former president and CEO the East Kentucky Power Cooperative.

What is Cogeneration?

Conventionally, the production of electricity results in the loss of at least some energy in the form of waste heat. The idea behind cogeneration is to put that waste heat to use. For example, Palk cited one Kentucky manufacturer which uses sawdust and other wood waste as fuel for boilers to run turbines which generate nearly 40 percent of the plant’s electricity.

Trigeneration combines cooling, heating and power. (Image courtesy of Jonnathan McForlan.)

“Cogeneration clearly is poised for rapid growth given the ongoing advances in renewable-energy technology, the renewal of the 10% Business Energy Investment Tax Credit for CHP, and the increasing push for CHP among regulators at both the state and federal levels,” wrote Palk in an article for Plant Engineering Magazine.

As further evidence for this claim, Palk cited a recent report by Transparency Market Research which predicts that the global CHP installation market will grow from approximately USD $525 billion in 2014 to $813 billion in 2024.

The current cost of CHP installations makes cogeneration impractical for most small and medium-sized enterprises, but Palk predicts that CHP could follow a similar trajectory to solar installations.

“Not so long ago, solar panels were considered far too expensive and inefficient for most,” Palk wrote. “Today, however, the economics of solar installation are penciling out for a growing number of businesses and other users.”

Mitsubishi Electric Installs Solar Panels at U.S. Headquarters

Mitsubishi Electric US, Inc. has installed a 369kW solar electric system on the rooftop of its U.S. headquarters in Cypress, California. (Image courtesy of Mitsubishi Electric.)

As an example of how far solar panels have come in a relatively short time, consider the recent installation by Mitsubishi Electric of a 1,380-module photovoltaic (PV) system at the company’s U.S. headquarters.

The PV system was installed using 690 Diamond Premium and 690 Diamond Pro high-efficiency PV modules. The system is expected to produce 547,865kWh within the first year of production.

The system is expected to save the company 85 percent in electric costs, which totals $2 million over the next 25 years. Based on current electricity usage, the system is expected to cover 90 percent of the Mitsubishi Electric facility’s electricity needs, which means it will pay for itself in less than five years.

In addition to the significant financial savings, the system is expected to reduce greenhouse emissions by an estimated 424 tons annually.

The system includes 10 Yaskawa – Solectria Solar PVI 36TL transformerless, three-phase string inverters along with non-penetrating racking by PanelClaw.

“Mitsubishi Electric is pleased to contribute to the community and environment by producing clean energy with our own solar modules,” said Kiyoshi Furukawa, president and CEO of Mitsubishi Electric US, Inc. “The system proves that businesses can be both environmentally and financially sustainable.”

In addition to reducing a company’s environmental footprint, a principal advantage of bringing power generation in-house is that it reduces a facility’s dependence on outside infrastructure which, in the case of the electrical grid, is becoming increasingly vulnerable.

What do you think? Is cogeneration the best way to improve energy efficiency in U.S. factories?

Comment below.