The Michigan Public Service Commission recently approved DTE Energy’s request to develop a 34 MW combined heat and power (CHP) plant on the campus of Ford Motor Company’s Research and Engineering Center.¹ This project highlights how ownership of CHP facilities can be a valuable option in a utility’s resource planning and can bring economic and environmental benefits for the utility and its customers over the long term. Due to their size, high efficiency, and grid benefits, utility-owned CHP projects likely offer a better deal to ratepayers than the construction of traditional central power stations. Continue reading »
Recent regulatory decisions in Michigan and other Midwestern states indicate a growing recognition of combined heat and power (CHP) facilities’ demonstrated reliability. The decisions impact the rates and fees charged to CHP systems due to their potential need for standby service (i.e., backup service) and are important steps toward increased financial viability of CHP facilities in the region. As other states look to encourage CHP facilities, these recent actions can provide examples of aligning rates and fees more closely to actual CHP performance. Continue reading »
What is Combined Heat and Power?
Combined heat and power (CHP) is a system that not only generates electricity, but also harnesses the thermal energy from power generation for heating and cooling applications (typically burning natural gas for electricity and capturing the exhaust for steam heat). By combining these two processes, some CHP systems can achieve thermal efficiencies of 60-80 percent, which is up to twice the efficiency of traditional power generation. Continue reading »