Can CHP Replace Coal and Lower kWh Cost?

10/26/2012 |

New report examines energy possibilities

Lower electricity rates are possible if utilities follow commercial buildings in adopting combined heat and power (CHP) systems like this plant.

Borrowing the technology from building owners, utilities could turn to combined heat and power (CHP) to replace coal-fired generation and ultimately lower electricity rates.

According to a report by the American Council for an Energy-Efficient Economy (ACEEE), a new natural gas-powered CHP system could generate electricity at an average cost of 6 cents/kWh, compared to the cost of new natural gas-powered or nuclear-powered generation ranging from 6.9-11.3 cents/kWh. CHP can generate electricity and thermal energy at efficiencies of up to 85%, while the average electric generation efficiency of U.S. power plants is about 33%.

To create these efficiencies, CHP systems use a single fuel source to concurrently produce electricity and thermal energy. Heat is a byproduct of most electricity generation that traditional power plants waste by releasing it into the air or water. CHP systems capture it for productive uses, such as generating steam.

Coal Retirements and the CHP Investment Opportunity reports that an estimated $70-180 billion will be invested in new power plants or pollution controls for existing ones in the coming years. Spending this on CHP instead could replace up to 30% of of demand in West Virginia or 100% for Kansas and South Carolina.


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