RED submits comment to FERC on how CHP can stabilize the grid
Posted by Dick Munson on May 2nd, 2011
RED and the Alliance for Industrial Efficiency have submitted comments to the Federal Energy Regulatory Commission on how CHP and waste heat recovery (WHR) projects should be compensated for the reliability and stabilization benefits they provide to the electric grid. (See also the Alliance’s comments to FERC).
FERC can simultaneously foster grid reliability and industrial efficiency. At the moment, such reliability is generally supplied by inefficient single-cycle gas turbines. WHR and CHP provide superior alternatives. Grid operators could encourage these investments by offering long-term contracts that compensate CHP and WHR project owners for the frequency regulation benefits supplied by their installations at industrial sites. Such long-term contracts are needed because CHP and WHR units require major capital investments. By compensating these distributed projects for their local power-factor support, grid operators could both balance reactive power throughout the transmission and distribution system as well as reduce line losses. At the same time, such distributed power projects would improve energy efficiency and manufacturing productivity.
The potential for WER and CHP to enhance frequency regulation is vast. The Oak Ridge National Laboratory found that efficient CHP and clean WHR can produce 156 gigawatts of new power by 2030 – equal to the capacity of more than 300 conventional power plants (assuming a conventional power plant generates 500 MW). FERC can encourage this investment by having its frequency rulemaking send appropriate price signals to WHR and CHP developers.
CHP and WHR projects, which can provide active power-factor support controlled by grid operators, could increase frequency control and grid reliability. The groups encourage the Commission and grid operators to offer long-term contracts for the grid benefits supplied by distributed CHP and WHR installations.
