Why it's time for your city to reconsider co-generation

Fri, 2015-12-18 06:50 -- SCC Staff

Scandinavia has long been a hotbed (pun intended) for combined heat & power (CHP). That's the process of capturing the waste heat from power generation and using it for additional purposes. In some cases, to heat nearby buildings. In others, to power chillers. In others, to inject heat into industrial processes.

For a variety of reasons, North America has never gotten on the bandwagon. But now would be a great time for your city to reconsider. CHP lowers costs, but it also lowers emissions. So CHP can make things better for your businesses while also contributing to your environmental and climate goals.

Take a look at this recent example from Finland for an excellent example. With the help of Veolia -- a world leader in resource conservation -- they're creating safer, cleaner, cheaper power. -- Jesse Berst

The combined heat and power plant (CHP) will be located in Porvoo, Finland and will operate as a joint venture company -- Kilpilahti Power Plant Limited (KPP) -- with all three companies as owners. Neste's equity share will be in the form of transferring the existing power plant to KPP.

The new company will build steam and power generating facilities which will provide 450 megawatts of thermal and 30 megawatts of electric power. The cost of the building the plant is expected to be about $378.2 million and the overall investment will be roughly $432.2 million.

A subsidiary of Council Associate Partner Veolia will take responsibility for overall energy management and management of the operations staff at the current plant from Neste. Veolia will enter into a 20-year agreement to perform operations and maintenance for KPP.

Safer and cleaner
The primary focus is of course a modern, reliable power plant. But other elements of the CHP project are just as important, said Matti Lehmus, EVP for Oil Products at Neste. "We have combined forces to build this modern power plant, and from 2018 onwards its customers will have a more secure, efficient and clearly cleaner power source."

Thomas van de Velde, VP of Hydrocarbons & Energy for Borealis, said "The joint venture will deliver safe and reliable energy supplies, and support the sustainable development of our Porvoo location. This joint venture will secure our long-term reliable energy supply for our operations in Porvoo on a competitive basis."

"The cooperation with Neste and Borealis constitutes an important milestone for Veolia in the Finnish and Nordic energy services markets and demonstrates the attractiveness of our business model and technical operations know how," said Mikael Jansson, Veolia CEO for Nordic countries.

CHP in the United States
While CHP is common in the Scandinavian countries and elsewhere in the world, adoption in the U.S. has been hampered by current electric utility rate structures and emissions regulations that don't take into account CHP's increased efficiency and pollution reduction effectiveness, according to Council Advisor American Council for an Energy-Efficient Economy (ACEEE). However, CHP's future in the country is likely to improve. ACEEE says current CHP installed capacity in the U.S. is 82 gigawatts, but notes the Obama administration has called for an additional 40 gigawatts by 2020.

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