In today’s economy, manufacturers are constantly seeking new ways to reduce costs. Many of these solutions compromise productivity—cutting jobs, exporting production to other countries, or reducing quality. Yet, many overlook the opportunities in capturing wasted energy—one of the simplest ways to reduce expenses. Nearly two-thirds of the energy that manufacturers and utilities put into their process is simply lost to the atmosphere as wasted heat (see Figure 1). But by capturing that wasted heat and using it to either generate new power or to heat or cool buildings through processes known as Waste Heat Recovery (WHR) and Combined Heat and Power (CHP), U.S. manufacturers can slash their energy costs and become more efficient and competitive. And SMACNA members are well-positioned to construct, install and maintain the equipment that is needed for these money- and energy-saving techniques. Recognizing this opportunity, for the past two years, SMACNA has been an integral voice for the Alliance for Industrial Efficiency-seeking opportunities on Capitol Hill and at federal agencies to advance an agenda to productively harness manufacturing energy waste.
Figure 1: Conventional Power Production1
In 2008, the U.S. Department of Energy’s (DOE) Oak Ridge National Laboratory found that Combined Heat and Power and Waste Heat Recovery could provide 20 percent of U.S. electric capacity by 2030 – on par with current production from nuclear power and comparable to DOE’s projections for wind over roughly the same period.2 At that level, we could expect dramatic economic and environmental benefits.
Such full-scale deployment would produce one-million new jobs in the design, construction, installation and maintenance of CHP equipment— jobs that could be filled by SMACNA members. It would reduce carbon emissions by more than 800-million metric tons per year, the equivalent of removing more than half of the current passenger vehicles in the U.S. from the road.3 SMACNA has an opportunity to challenge the nation to realize this full potential by supporting bipartisan legislation that sets an ambitious goal of doubling CHP and WHR deployment over the next decade.
While the potential is far greater, we can already see the benefits of CHP in nearly every state. Unlike other clean energy sources, CHP projects can be installed anywhere. They can operate around the clock—even when the sun doesn’t shine or the wind doesn’t blow. And, what’s more, the equipment is largely made right here in the United States. A 2010 report assessing the technical potential for CHP deployment identified nearly 64 gigawatts of CHP opportunities in the industrial sector and an additional 68 gigawatts of commercial and institutional CHP opportunities. Combined, this represents the equivalent electricity production of more than 260 conventional power plants! In short, we can use hospitals and factories to fuel the nation with clean and efficient energy – energy that would otherwise simply be released into the atmosphere.
Strikingly, many of the greatest opportunities lie in the states where SMACNA membership is strongest. In fact, more than 60 percent of SMACNA members are located in these ten states (see Figure 2, identifying top CHP opportunities by state).
Figure 2: Top 10 States for Industrial CHP4
Industrial CHP opportunities can be found in virtually every sector, though the greatest opportunities are at the most energy-intensive industries, such as chemical manufacturing and forestry products.
Where it’s installed, manufacturers report dramatically lower energy costs from Waste Heat Recovery and Combined Heat and Power. Take, for instance, the ArcelorMittal steel facility in East Chicago, Ind. ArcelorMittal has installed four efficiency projects that capture and harness the manufacturer's waste energy to generate 220 megawatts of power. Using Waste Heat Recovery at this one steel plant saves the company nearly $100 million annually. That money, in turn, can be invested in the company’s bottom line or in reducing the cost of production.
We anticipate the construction of more projects like ArcelorMittal with the finalization of an EPA rule regulating hazardous air emissions from coal-fired boilers at industrial facilities. While these facilities may choose to switch to natural gas to satisfy the rule’s emission limits, EPA’s analysis suggests that many of these facilities may decide to go the extra step by converting to natural gas and adding CHP to their systems. In doing so, these businesses will not only reduce their emissions of hazardous pollutants, but they will dramatically lower their energy costs, allowing them to become more competitive over time.
Along with the rule, EPA is launching an interagency technical assistance program to educate regulated facilities about the opportunity to incorporate energy efficiency into their compliance strategy.
Strikingly, as Figure 3 demonstrates, many of these facilities are likewise located in states with high CHP/ WHR potential and a large concentration of SMACNA members.5 SMACNA is thus well positioned to help these facilities through the transition once the rule becomes finalized later this spring.
Figure 3: Major Source, Industrial Coal-Fired Boiler Locations (601 total)
Many more opportunities await—opportunities that would be unleashed with the appropriate policies. SMACNA has been working tirelessly with the Alliance for Industrial Efficiency to help advance these policies to increase awareness about and interest in CHP and WHR.
We invite SMACNA members to urge their members of Congress to support legislation that seeks to double CHP deployment over the next decade, to advocate for an investment tax credit to help finance CHP and WHR projects, and to join a national ad campaign to tell Congress to “Harness the Heat” and support industrial energy efficiency.
If you are interested in adding your business’ name to these efforts or showcasing energy efficiency projects at your business, contact Jennifer Kefer, project manager for the Alliance for Industrial Efficiency at email@example.com.
Editor’s note: This article was written for SMACNA’s Industrial Insights newsletter by Jennifer Kefer, project manager, Alliance for Industrial Efficiency.
5Nearly half (44 percent) of the covered boilers are located in the ten states flagged in Figure 2.