A technology that generates electricity and thermal energy from a single fuel source and offers greater reliability, needs more attention in Pennsylvania, said the state’s top utility regulator.
The Public Utility Commission on Tuesday heard from industry experts about how Pennsylvania can benefit from combined electricity and thermal energy technology, called cogeneration. While the energy industry and policy makers are focused on the Marcellus shale boom, cogeneration should be on its radar, said commission Chairman Robert Powelson.
“This is for us as a regulatory agency, to bring these thought leaders together … and really solicit ideas about how we can harness (combined heat and power) investment here,” Powelson said.
The commission hopes to share ideas with the state Legislature, make internal changes and consider better financial incentives to encourage companies to invest in Pennsylvania projects, he said.
That would be on top of the 150 combined heat and power units operating statewide, according to the commission, including eight in Pittsburgh. Duquesne University has utilized the technology with its Combined Heat and Power Facility.
The technology allows utilities to capture more energy and offers a more reliable, cost-efficient and safe way to power buildings, especially during natural disasters like Hurricane Sandy in New Jersey, Powelson said.
During that storm, mid-Atlantic region businesses saw $15 billion to $30 billion in business interruption losses, but electric systems using combined heat and power technology were not affected, he said.
That’s electrical reliability he’d like to see Pennsylvania harness.
Other states, including New Jersey, which was hit the hardest from Sandy, have aimed to encourage companies to invest in the technology to save money.
“These costs are immense, and they don’t even include costs of lost revenue and lost productivity,” said Joseph Sullivan, vice president of energy policy at Concord Engineering Group in New Jersey. The storm affected power in 21 states and 8.1 million homes lost power, he said.
New Jersey, Maryland, Connecticut and New York have developed tax credits and grants for businesses to invest in combined heat and power projects, which require large initial investments. Expensive infrastructure costs often are the biggest challenge for companies looking to utilize the technology, panelists said.
Pennsylvania has grants for such projects, but utility companies say the process should be more transparent, streamlined and stable. The federal government offers tax incentives, but those breaks, established through legislation, are set to expire in 2016.
The technology would help the state deliver gas from Marcellus shale to the market, by lowering connection costs and allowing gas trapped in pipes to be used in new ways, said Richard Sweetser, senior technical adviser for the federal Department of Energy. “We have a lot of trapped shale gas in certain parts of the commonwealth,” Sweetser said, because the supply has outpaced the infrastructure needed to take it to markets.