There’s something a little stirring about the president of the United States praising your efforts. It’s particularly heartwarming when he does it before a national audience and a gathering of all the key federal policymakers. So there were understandable cheers among clean energy advocates when President Obama embraced industrial energy efficiency in his State of the Union Address.

Here’s the actual quote, delivered from the podium before a joint session of Congress:

“Of course, the easiest way to save money is to waste less energy. So here’s another proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, and more jobs for construction workers who need them. Send me a bill that creates these jobs.”

Pundits, of course, have suggested several of the president’s proposals are not Republican favorites. Yet enhancing manufacturing efficiency and productivity is as bipartisan as you can get. Which party would ever be in favor of energy waste?

The challenge, of course, is having the two parties act together. Opportunities abound, including an extension of the Treasury grant program, expansion of the combined heat and power (CHP) tax credit, and a clean energy standard that highlights efficient CHP and clean waste heat recovery.

More than 200 companies signed a full-page advertisement placed in three Capitol Hill newspapers declaring industrial energy efficiency will put a million Americans to work. The ad, coordinated by The Pew Charitable Trusts, explains that U.S. utilities and factories send enough heat up their chimneys to power all of Japan. But with existing, proven technologies, we can harness that wasted energy, dramatically cut electricity costs, and make our manufacturers more competitive.

The print ad references the Oak Ridge National Laboratory study explaining how increased use of combined heat and power would “spur more than $200 billion in new private investment in the U.S., and create up to 1,000,000 jobs.”

Signers include major corporations like DuPont and Dow Chemical Company, labor unions like Sheet Metal Workers’ International Association and United Steelworkers, trade associations like the American Gas Association, environmental groups like the Union of Concerned Scientists, and small firms like Recycled Energy Development.

Learn more about industrial energy efficiency here.

In this politically partisan era, it’s refreshing to see the liberal Brookings Institution and the conservative Hoover Institution agree on something. That something, in the wonky words of such policy reports, is: distributed power systems (DPS) have “the potential to make a significant positive contribution to the U.S. power system.” The two think-tank behemoths also found “a strong case for DPS as a resource for the defensive and offensive operations of the U.S. military.”

The report pays particular attention to combined heat and power, lamenting that CHP is “homeless” since energy efficiency advocates think it will detract from their preferred lighting and appliance standards, renewable energy advocates argue it will divert benefits from solar collectors and wind turbines, and utility lobbyists worry independent cogenerators will take away their load and customers.

The report, in contrast, argues CHP needs a home in the minds of all policymakers, since cogeneration offers environmental benefits as well as “the added security benefit of being able to operate independently of the grid and greatly superior efficiency.”

Of note, the bipartisan researchers call for placing a price on carbon, either through a tax or a cap-and-trade system, as well as a fund, such as the proposed Clean Energy Development Authority (CEDA), that finances the development and deployment of innovative technologies. The researchers also want to extend Section 1603, which provides greater access to financing for clean energy projects; that cash-grant initiative, they say, has been successful and much less expensive that a tax-equity approach.

Let’s hope congressional leaders read about the energy policies on which conservatives and liberals agree.

The Alliance for Industrial Efficiency recently submitted comments to the Environmental Protection Agency (EPA) on its “Boiler MACT,” a set of rules to reduce hazardous air pollutants from the nation’s industrial boilers. (MACT stands for the “maximum available control technology” standards that must be met by these boilers.) The Alliance views the rules as an important means to enhance industrial efficiency, especially through the use of waste heat recovery (WHR) and combined heat and power (CHP) projects.

Among the Alliance’s comments are:

• EPA should clarify that coal-fired facilities seeking to incorporate clean and efficient combined heat and power or waste heat recovery are eligible for a one-year compliance extension.
• EPA should modify the output-based alternative compliance mechanism to allow more facilities to benefit.
• EPA should clarify that facilities may simultaneously adopt the alternative output-based compliance standard and average emissions.
• EPA should preserve the energy assessment requirement, but make this requirement more robust by expanding the definition of cost-effective energy efficiency improvements.
• EPA should refine its engineering cost analysis to account for savings identified in the energy assessment.

The comments were submitted on behalf of the U.S. Clean Heat and Power Association, Avalon Consulting, Cummins Power Generation, DCO Energy, Enercon Engineering, Energenic, Mechanical Contractors Association of America, National Electrical Contractors Association, Ohio Business Council for a Clean Energy, Recycled Energy Development, Sheet Metal and Air Conditioning Contractors’ National Association, Texas CHP Initiative, The Association of Union Constructors, and Veolia Energy North America.

On a separate but related issue – this time on hazardous air pollutants from larger, utility-scale boilers – RED’s Melissa Mullarkey delivered testimony at an EPA hearing in Chicago. Among Melissa’s key points:

• The final Utility MACT rule should provide a benefit greater than 5 percent for CHP’s avoidance of transmission and distribution losses.
• EPA should clarify that facilities seeking to incorporate clean and efficient CHP are eligible for a one-year compliance extension.

Should the EPA adopt these suggestions, U.S. industry will become more productive and competitive, create jobs, as well as reduce pollution.

December was a great month for those of us who get excited when energy recycling gets the attention it deserves. First, Congress passed the bipartisan tax bill, and it included the extension of the Treasury Grant Program for combined heat and power (CHP). Then, McClatchy Newspapers ran an outstanding article on the economic and environmental benefits of energy recycling.

The article appeared in a whole slew of papers and websites across the country, from Northern California to North Carolina, and featured RED CEO Sean Casten. Sean highlighted RED’s work to make American manufacturers more energy efficient, and noted that it’s imprudent for our country to continue wasting such massive amounts of energy.

The article also quotes Rob Thornton of the International District Energy Association, who explained that most American power plants are only 33 percent efficient, meaning that most of the energy is wasted as heat and only a third is converted to useful electricity. That, as Thornton said, “is like buying a six-pack and the guy smashes four bottles before he hands it back to you.”

Anyone who reads this article will be glad, then, to learn that policymakers are catching on to the importance of energy recycling and have extended the Treasury Grant Program for CHP through the end of 2011. This is good news for the economy and the environment.

Prior to the financial crisis, many clean energy projects relied upon private sources of capital to get off the ground. The economic downturn dramatically reduced the availability of private financing, severely limiting the funding sources for renewable energy projects. Created in 2009, the Treasury Grant Program defrays some of the cost of constructing a CHP facility by allowing companies without taxable income to instead take approved tax credits as grants.

The program is needed because many CHP developers have little or no tax liability and therefore wouldn’t receive the benefits of a traditional tax credit. It will help more CHP projects get going, which will lead to improved energy efficiency, economic growth and a cleaner environment.

So, we’re closing out 2010 with some really good news. May 2011 bring even more.

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Too often, the business community and the Environmental Protection Agency seem to be at odds. But recently, the EPA has earned praise from a variety of business groups for recognizing energy recycling as a good way to cut greenhouse emissions.

EPA’s recently issued guidance for greenhouse gas emissions permits (PSD and Title V Permitting Guidance for Greenhouse Gases) makes energy efficiency the centerpiece of its compliance options. It recognizes energy recycling techniques including combined heat and power (CHP) and waste heat recovery as cost-effective ways to cut greenhouse pollution in the industrial sector. It also explicitly mentions CHP and waste heat recovery as Best Available Control Technologies (BACT), which will allow industrial plants to employ energy recycling techniques as a way to satisfy EPA’s permitting requirements.

This decision caused the Alliance for Industrial Efficiency to praise the EPA in a comment letter written on behalf of several businesses and business organizations, including RED, the Glass Manufacturing Industry Council, Mechanical Contractors Association of America, National Electrical Contractors Association, Ormat Technologies Inc., and The Association of Union Constructors.

The beauty of the EPA move is that it’s as good for the economy as it is for the environment.  As the EPA recognizes, energy recycling offers proven techniques that can dramatically improve the energy efficiency of industrial plants. It’s a win-win that reduces emissions andenhances the competitiveness of American manufacturers by reducing energy costs, typically a top operating expense.

As RED’s Tom Casten said, “It’s a myth that we can’t grow our economy and reduce greenhouse emissions at the same time. By improving the efficiency of large industrial plants, which account for about one-third of total U.S. energy demand, we can lower energy costs, increase productivity, create jobs and help the planet.”

Of course, more can be done, and the Alliance is calling on the EPA to strengthen its proposal by requiring all facilities to consider CHP and waste heat recovery at the beginning of the permit process. It also recommended the EPA create a comprehensive, searchable database of BACT determinations and available technologies for all industrial sectors, to ensure that regulated entities can consider all available options.

We hope the EPA agrees to these recommendations. They’ll make a good decision even better.

Toronto Star columnist Tyler Hamilton does a great job of explaining energy recycling. He writes about how he teaches schoolchildren about energy by putting a steaming cup of coffee under a windmill-like device. The steam from the coffee moves the device — a form of a Stirling engine — and it gains speed and momentum, powered only by the heat rising from the cup. The demonstration shows how heat can be harnessed and put to work.

He goes on to write that while we can’t power the world with coffee, “clearly we don’t give enough consideration to the problem of waste heat.”

As readers of this blog know, and as Hamilton points out, most power plants running on fossil fuel waste an enormous amount of energy in the form of heat. Furthermore, many industries, including cement plants, steel mills, pulp and paper mills, oil refineries, chemical plants — all are energy-intensive enterprises that generate tons of waste heat.

Just ask the man Hamilton calls “the continent’s chief energy recycling evangelist,” RED’s Tom Casten. Tom’s policy paper, Profitably Reducing Greenhouse Gases, is quoted in the article:

“Energy waste is pervasive. Policymakers don’t seem to see it, but ask virtually any school kid to draw a picture of a power plant and you’ll see something resembling Homer Simpson’s, where massive columns of waste heat are vented into the air.”

Then Hamilton makes the case for the soundness and practicality of energy recycling as a cost-effective, clean energy solution:

“Making products, processes and facilities more efficient to begin with is one way to reduce waste heat, but the other is to capture that heat and recycle it into, say, electricity or steam for an industrial process or hot water for heating a new residential community. It’s no different, really, than how we recycle plastic bottles, glass jars and soup cans in into park benches, juice bottles and pop cans. Yet one is encouraged, even mandated, while the other is largely ignored. Why is that?”

Great question.

A growing coalition of business, labor, and environmental groups has rallied together to support investment tax credits for combined heat and power and energy recycling projects. The Alliance for Industrial Efficiency sent letters to the Senate Finance Committee and House Ways and Means Committee, urging them to include an industrial energy efficiency provision in their final tax packages.

Since I last wrote about this effort, the coalition has grown to 122, and now includes such new notables as the United Steelworkers, The Pew Environment Group and ArcelorMittal.

Why are organizations with such varied interests uniting on this issue? Because energy recycling dramatically improves industrial energy efficiency, and therefore increases manufacturing competitiveness and creates jobs — all while reducing pollution.

As our own Tom Casten put it, “The industrial sector is a huge consumer of power, yet it’s often overlooked in the quest for energy efficiency. Manufacturers that recycle their waste energy can typically cut energy expenses by 20 percent, making them more competitive while slashing carbon emissions. Companies can then reinvest those savings in hiring more workers and expanding production.…

The industrial energy provision can already be found in S. 1639 (sponsored by Sens. Jeff Bingaman, D-NM and Olympia Snowe, R-ME), H.R. 4751 (sponsored by Reps. Paul Tonko, D-NY and Dean Heller, R-NV), and in the House Ways and Means Committee’s draft energy tax package. If enacted, the bipartisan provision would create and preserve jobs within the industrial sector, including for the manufacture, installation, and operation of combined heat and power and waste energy recovery equipment.

Recycled energy, which captures waste energy from industrial facilities, now receives no tax benefits. Combined heat and power, a highly efficient process that generates both electricity and heat on site (also known as cogeneration or CHP), currently obtains only a 10 percent investment tax credit for the first 15 megawatts of a project limited to 50 megawatts in size. The legislative proposals in the House and Senate would encourage more large-scale projects by removing the cap, applying the tax credit to a project’s first 25 megawatts, and adding a 30 percent tax credit for recycled energy and combined heat and power projects with efficiencies above 70 percent. For comparison, the average U.S. power plant is only 33 percent efficient.

At the end of the day, it’s a small change to the tax code that can make a very big difference for our economy and the planet. Let’s hope our elected leaders are listening.

On a warm summer night in Chicago, thousands gathered in Millennium Park to watch the new documentary Carbon Nation. Recycled Energy Development’s own Sean Casten is featured in the film discussing energy recycling as a profitable way to mitigate climate change. “I don’t know of any bigger opportunity to make more money reducing more C02 than this one. So, if you don’t give a damn about the environment, do it because you’re a greedy bastard and just want cheap power,” says Casten.

The much buzzed-about film attracted a Who’s Who of Chicago media, government and business leaders, including journalist Bill Kurtis, Illinois Governor Pat Quinn and producer/businessman Craig Sieben.

This solutions-based, “big tent film” about tackling climate change while boosting the economy inspired the audience.  Let’s hope other cities embrace it as warmly as our hometown has.

We hope you’ll be hearing a lot more about energy recycling now that several companies in the field have teamed up to launch a new initiative called Heat is Power. The goal is to educate lawmakers and the public about the enormous potential of the type of energy recycling known as waste heat recovery—or as they put it, “WH2E” (waste heat to electricity)—to help solve our energy woes and put America back to work. According to Heat is Power, WH2E is the “missing link to America’s clean energy future” and has the potential to “boost U.S. competitiveness and keep American industry in America by providing a new source of profit or cheap onsite clean electricity for our industrial manufacturers.”

The group also points out that, “no country is yet a leader in exports of this technology… American companies today can manufacture this technology with greater than 90% American content. Capturing the export market of this technology will catapult the United States in the global clean energy race and result in the creation of sustained American manufacturing jobs.”