LOCAL GOVERNMENT CLIMATE AND ENERGY STRATEGY SERIES Combined Heat and Power A Guide to Developing and Implementing Greenhouse Gas Reduction Programs Energy Efficiency U.S. ENVIRONMENTAL PROTECTION AGENCY 2014 EPA’s Local Government Climate and Energy Strategy Series The Local Government Climate and Energy Strategy Series provides a comprehensive, straightforward overview of green- house gas (GHG) emissions reduction strategies for local governments. Topics include energy efficiency, transportation, community planning and design, solid waste and materials management, and renewable energy. City, county, territorial, tribal, and regional government staff, and elected officials can use these guides to plan, implement, and evaluate their climate change mitigation and energy projects. Each guide provides an overview of project benefits, policy mechanisms, investments, key stakeholders, and other imple- mentation considerations. Examples and case studies highlighting achievable results from programs implemented in communities across the United States are incorporated throughout the guides. While each guide stands on its own, the entire series contains many interrelated strategies that can be combined to create comprehensive, cost-effective programs that generate multiple benefits. For example, efforts to improve energy efficiency can be combined with transportation and community planning programs to reduce GHG emissions, decrease energy and transportation costs, improve air quality and public health, and enhance quality of life. LOCAL GOVERNMENT CLIMATE AND ENERGY STRATEGY SERIES All documents are available at: www.epa.gov/statelocalclimate/resources/strategy-guides.html. ENERGY EFFICIENCY URBAN PLANNING AND DESIGN ■ Energy Efficiency in Local Government Operations ■ Smart Growth ■ Energy Efficiency in K-12 Schools SOLID WASTE AND MATERIALS MANAGEMENT ■ Energy Efficiency in Affordable Housing ■ Resource Conservation and Recovery ■ Energy-Efficient Product Procurement ■ Combined Heat and Power RENEWABLE ENERGY ■ Energy Efficiency in Water and Wastewater Facilities ■ Green Power Procurement TRANSPORTATION ■ On-Site Renewable Energy Generation ■ Landfill Gas Energy ■ Transportation Control Measures Please note: All Web addresses in this document were working as of the time of publication, but links may break over time as sites are reorganized and content is moved. CONTENTS Executive Summary_________________________________________________________________v 1. Overview _________________________________________________________________________1 2. Benefits of Combined Heat and Power ___________________________________________1 3. Combined Heat and Power Opportunities for Local Governments _______________4 4. Key Participants __________________________________________________________________6 5. Foundations for Project Development ___________________________________________8 6. Strategies for Effective Project Implementation __________________________________9 7. Costs and Funding Opportunities _______________________________________________11 Costs ____________________________________________________________________________ 11 Funding Opportunities______________________________________________________________ 11 8. Federal, State, and Other Program Resources __________________________________ 13 Federal Programs __________________________________________________________________ 13 State Programs ____________________________________________________________________ 14 Other Programs ___________________________________________________________________ 14 9. Case Studies ____________________________________________________________________ 15 City of Boston, Massachusetts ________________________________________________________ 15 Program Initiation ______________________________________________________________ 15 Program Features _______________________________________________________________ 15 Program Results ________________________________________________________________ 16 City of Hartford, Connecticut ________________________________________________________ 16 Program Initiation ______________________________________________________________ 16 Program Features _______________________________________________________________ 16 Program Results ________________________________________________________________ 17 10. Additional Examples and Information Resources _____________________________ 18 11. References ____________________________________________________________________ 24 Combined Heat and RELATED GUIDES IN THIS SERIES Power ■ Energy Efficiency: Energy Efficiency in Water and Wastewater Facilities EXECUTIVE SUMMARY CHP systems are very compatible with wastewater treat- ment facilities that use anaerobic digesters. Anaerobic Developing and Implementing digesters produce a continuous flow of biogas that can be Energy Efficiency Programs used as a fuel source. In addition, anaerobic digesters have a heat load small enough to be met by most CHP systems. Saving energy through energy efficiency improvements can cost less than generating, transmitting, and distrib- ■ Renewable Energy: Landfill Gas Energy uting energy from power plants, and provides multiple Landfill gas, which consists of approximately 50 percent economic and environmental benefits. Energy savings methane and 50 percent carbon dioxide, can be captured can reduce operating costs for local governments, free- at municipal solid waste landfills and used as a fuel ing up resources for additional investments in energy source for CHP systems. efficiency and other priorities. Energy efficiency can also help reduce air pollution and GHG emis sions, improve ■ Energy Efficiency: Energy Efficiency in energy security and independence, and create jobs. Affordable Housing Local governments can promote energy efficiency in Many local governments partner with private and their jurisdictions by improving the efficiency of munic- nonprofit organizations to develop multi-family afford- ipal facilities and operations and encouraging energy able housing. Through these affiliations, local govern- efficiency improvements in their residential, commer- ments can encourage developers to use CHP systems in cial, and industrial sectors. The energy efficiency guides multi-family housing units to increase energy efficiency and reduce costs. in this series describe the process of developing and implementing strategies, using real-world examples, for improving energy efficiency in local government opera- ■ Energy Efficiency: Energy Efficiency in tions (see the guides on local government operations, K-12 Schools energy-efficient product procurement, and water and A number of schools around the country are using wastewater facilities) as well as in the community (see CHP systems to reduce energy costs and improve the guide on affordable housing). energy supply reliability. Energy Efficiency in Combined ■ Energy Efficiency: Energy Efficiency in Local Heat and Power Production Government Operations The use of CHP in government buildings and opera- This guide describes how local governments can lead by tions can help increase energy efficiency and reduce example and increase use of combined heat and power GHG emissions and criteria air pollutants by decreasing (CHP) in their facilities and throughout their commu- consumption of fossil fuel-based energy. nities. CHP, also known as cogeneration, refers to the simultaneous production of electricity and thermal energy from a single fuel source. This guide includes an overview of the benefits of CHP systems, costs, sources local government partners, such as local businesses, utili- of funding, and case studies. ties, energy service companies, and non-profit organiza- tions. Readers of the guide should come away with an The guide is designed to be used by staff at local energy understanding of options to improve energy efficiency or environment agencies, local code enforcement using CHP, a clear idea of the steps and considerations officials and city planners, city councils, and mayors or involved in implementing CHP systems, and an aware- county executives. It also provides information useful for ness of expected investment and funding opportunities. Combined Heat and Power | Local Government Climate and Energy Strategy Series EXECUTIVE SUMMARY v The guide includes descriptions of the benefits of CHP (section 2); opportunities to implement CHP systems (section 3); key stakeholders (section 4); strategies for promoting CHP projects (section 5); strategies for effective project implementation (section 6); costs associated with CHP systems and opportunities to manage these costs (section 7); federal, state, and other programs that may be able to help local governments with information or financial and technical assistance (section 8); and finally two case studies of CHP projects implemented at local government facilities (section 9). Additional examples of successful imple- mentation are provided throughout the guide. Relationships to Other Guides in the Series Local governments can use other guides in this series to develop robust climate and energy programs that incorporate complementary strategies. For example, local governments could combine use of CHP with alternative fuel sources such as biogas generated at wastewater facilities or landfill gas captured at solid waste landfills to help achieve additional economic, environmental, and social benefits associated with reduced use of fossil fuels. In addition, because CHP systems require less fuel to produce the