Cogeneration stands to gain from climate change efforts

By CMTA Staff

Capitol Update, Dec. 15, 2006 Share this on FacebookTweet thisEmail this to a friend

For supporters of natural gas combined heat and power (CHP), progress made in recent years has been uneven at best – a win here, a loss there.

CHP, also known as cogeneration, uses heat that would otherwise be wasted to generate electricity.   

The 2005 Integrated Energy Policy Report, an implementation plan for the state energy policies, contains a number of pro-CHP recommendations, including requiring utilities to design and construct distributed systems more CHP-compatible and a goal of 5,400 megawatts of CHP to be incorporated into yearly utility procurement goals by 2020.  And earlier this year the Governor’s Climate Action Team targeted CHP for 2.4 percent of the state’s 2020 Greenhouse Gas (GHG) emissions goals.    

Then, this summer, the Legislature amended AB 2778 (Sally Lieber, D-Mountain View) which removed fossil fuel combustion technologies like CHP from the Self-Generation Incentive program (SGIP).  Effective Jan. 2008, the program will be limited to fuel, wind and qualified waste gas applications.

When Governor Arnold Schwarzenegger signed the bill, his office released a message noting that it eliminates clean combustion technologies like microturbines and pledged to work with the Legislature "to enact legislation that returns the most efficient and cost effective technologies to the program."  The Governor also left open the possibility that if legislation cannot be worked out, the California Public Utilities Commission "should develop a complimentary program for these technologies."

Both the Governor’s commitment to work on SGIP/CHP and the AB 32 (Fabian Nunez, D-Los Angeles) process implementation give supporters of CHP a reason to believe the future may indeed be brighter.  It may be an idea whose time has come.

CHP provides an important environmental benefit by reducing GHGs.  Natural gas-fueled CHP reduces the state's GHG emissions from power generation by up to 65 percent compared to a typical California power plant.  CHP is also the most cost-effective form of distributed generation.

CMTA and other advocates of CHP will be working next year to increase state incentives for CHP, including continuing eligibility for clean combustion technologies in the SGIP program beyond 2008.

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