In a late December ruling, the Colorado Public Utilities Commission approved Public Service Company of Colorado, a subsidiary of Xcel Energy, to provide financial incentives to industrial facilities that convert waste heat to power, a type of combined heat and power (CHP).
The ruling, a first for the state, places cogeneration technologies alongside better-known renewables like wind, solar, biomass and geothermal. CHP produces electricity with no added emissions and no added fuel.
The ruling allows Xcel Energy to pay an incentive of about $500 per kilowatt of the recycled energy. The incentive is paid over 10 years, which reduces the payback period on a company’s initial investment.
The ruling also allows Xcel Energy to count up to 20 MW of recycled energy per year through 2016 toward its goals of 30 percent renewable energy by 2020 under the Renewable Energy Standard originally adopted by the state legislature in 2007. Individual projects can be as large as 10 MW. There is no minimum project size.
Industrial and manufacturing sectors such as steel, glass, metals, chemicals, oil and gas, cement, bakeries and pipeline compressor stations often have operations suited to energy projects. The incentives help make affordable the cost of turning a wasted resource—excess heat from operations—into energy that can be used onsite or sold.