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POWER Act Would Incentivize CHP, Waste Heat to Power

June 18, 2015 By Linda Hardesty

capitolA group of federal legislators introduced the Power Efficiency and Resiliency Act (POWER Act) that would ensure that combined heat and power (CHP) and waste heat to power are treated in a manner that is on par with other energy technologies covered by the investment tax credit, according to a blog posting on the Pew Charitable Trusts site.

The proposed legislation would amend Section 48 of the Internal Revenue Code. More than 100 businesses that manufacture CHP or waste heat to power systems, develop projects, or are end users have already endorsed the bill.

CHP produces heat and power from a single fuel source, resulting in double the efficiency of central station power generation. Waste heat to power captures heat that would typically be vented from an industrial facility and uses it to make electricity with no incremental emissions, says the Pew blog.

Although installation of CHP and waste heat to power systems require an initial investment, companies start recouping their investment within a few years, and the POWER Act aims to incentivize that investment.

In addition to saving energy, CHP can sometimes be used to increase energy resiliency. During and after Hurricane Sandy, CHP enabled a number of critical facilities to continue operating when the electric grid went down, according to the US Department of Energy, the Environmental Protection Agency and the Department of Housing and Urban Development, which jointly released a guide to provide information on what factors must be considered when configuring a CHP system to operate independently of the grid.

While federal lawmakers try to advance the POWER Act, there are other avenues to promote CHP and waste heat to power. For instance, Public Service Company of Colorado provides financial incentives to industrial facilities that convert waste heat to power.

In 2012, President Obama signed an executive order that sets a national goal of 40 GW of new CHP by the end of 2020.

Photo: Capitol via Shutterstock

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