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Obama Sets National CHP Target To Increase Industrial Energy Efficiency And Reduce Demand On Oil And Coal

President Obama yesterday signed an executive order that sets a national goal of 40 GW of new combined heat and power (CHP) by the end of 2020. Additionally, the Department of Energy’sBetter Buildings, Better Plants program yesterday announced that five companies — Kingspan Insulated Panels, semiconductor manufacturer Cree, General Aluminum Manufacturing Company, PaperWorks and Harbec, a maker of machine tools and injection-molded plastic parts — have signed on, and committed to improving their energy intensity by 25 percent over 10 years.

Partners in the Better Buildings, Better Plants program have already realized at least $80 million in cost savings, according to the DoE. These actions are expected to save about $1 billion cumulatively by 2020.

The executive order intends to accelerate investments in industrial energy efficiency, which could save manufacturers at least $100 billion in energy costs over the next decade, according to the White House. Meeting the President’s 40 GW CHP goal would mean $40 billion to $80 billion of new capital investment in American manufacturing facilities. But the White House says investments in industrial energy efficiency, including CHP, incur as little as half the cost of traditional forms of new baseload power.

Other benefits include reduced nationwide GHG emissions and enhanced grid security.

The executive order directs agencies to hold ongoing regional workshops with information about best practice, policies and investment models, and directs the EPA, along with the Departments of Energy, Commerce and Agriculture, to coordinate actions at the federal level while providing policy and technical assistance to states to promote investments in industrial energy efficiency.

In support of the executive order, DoE and EPA released a report, Combined Heat and Power: A Clean Energy Solution, that discusses ways to achieve 40 GW of new CHP by 2020. Environmental Leader examines that report in greater detail here.

Obama made the announcement on the day that Mitt Romney accepted the Republican Party’s nomination to run against the president in November, and just two days after the White House finalized a rule to require cars and light trucks to achieve 54.5 miles per gallon by 2025. Reuters said that as Congress has repeatedly blocked Obama’s efforts to pass energy and climate legislation – including measures to encourage investment in CHP – the administration has turned to its executive agencies as a means of achieving its goals.

In his acceptance speech yesterday, Romney said of Obama’s environmental policies, “His assault on coal and gas and oil will send energy and manufacturing jobs to China.”

The global market for commercial CHP systems will reach $11.2 billion by 2022, with 80 GWe installed by that year, according to a report by Pike Research published earlier this month. California has set a goal of 4 GW of new CHP generation in the state by 2020, with 1990 as a baseline.

Harbec, one of the new private sector commitments to the Better Plants program, has set a goal of becoming a carbon neutral company by 2013.

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