Steam and Air-Conditioning Supply

This industry is dominated by large competitors. In addition to the production and sales of steam and hot air, establishments in this industry produce geothermal steam and trailer-mounted air-conditioning used as back-up cooling systems. In the 2000s, the industry was dominated by Trigen Energy Corp., which was acquired in 2007 by Veolia Energy, a global leader in renewable energy. Trigen operated 46 cogeneration and district energy facilities that produce steam, hot water, electricity, and chilled water for 1,500 industrial and commercial customers throughout North America.

The industry was bolstered with renewed promise in the early twenty-first century as the United States sought, invested in, and developed alternative energy sources. Geothermal systems and cogeneration--conserving fuel through improved energy efficiency--are receiving most of the attention in this industry. Thermal production processes produce excess heat; however, only 30 to 40 percent of that thermal energy is converted to usable electricity. Combined heat and power (CHP) technologies recover heat that normally would be wasted, save the fuel in an electricity generator, and produce heat or steam at a facility located near the consumer. CHP offers dramatic advantages in efficiency and much lower air pollution than conventional technologies--an efficiency rate of 89 percent compared to the 55 percent of conventional power. A wide variety of CHP technologies generate electricity and meet thermal energy needs (direct heat, hot water, steam, process heating or cooling) simultaneously, at the point of use.

According to the U.S. Environmental Protection Agency (EPA), the efficiencies of CHP reduce traditional air pollutants and carbon dioxide, the leading greenhouse gas associated with climate change. A CHP system can produce the same electrical and thermal output at 75 percent fuel conversion efficiency as compared to less than 50 percent for separate heat and power. According to the EPA, the result is a 50 percent gain in overall efficiency, resulting in a 35 percent fuel savings.

In 2008, cogeneration was used to produce 8 percent of U.S. electric power, saving building and industry owners more than $5 billion in energy costs and preventing the release of more than 35 million metric tons of carbon equivalent into the atmosphere. Leading the charge is California, where there were more than 770 active cogeneration projects in 2006, representing 17 percent of power generation in the state. Hospitals, universities, food processors, refineries, and various industries used cogeneration to power their facilities. The excess electricity they produced was sold under contract to investor-owned utilities for use by California consumers. Con Edison, on the east coast, distributes 30 billion pounds of steam yearly to 100,000 buildings in Manhattan--the largest steam-powered district in the world.

Food and beverage processors are an example of energy-intensive industries making use of cogeneration. Many of the industry's processes require heat, and thermal energy (waste heat) can be recovered and used for processing raw materials or vented into a chiller or desiccant for efficiencies up to 80 percent. Sunkist Citrus Juice and Oil (CJ&O), for example, uses two cogeneration units that can produce 95 percent of the energy needed to run plants. For the eight months of the year when the plant processes oranges, the generators produce all the necessary electricity. Overall, CHP cogeneration systems accounted for 22 percent of energy used in beverage manufacturing in 2006.

Development of cogeneration was spurred by the 1970s energy crisis and the Public Utility Regulatory Policies Act of 1978 (PURPA). PURPA was intended to encourage more energy-efficient and environmentally friendly commercial energy production. However, development of and investment in cogeneration technologies cooled somewhat in the 1980s. Nevertheless, sustained improvements led to one of the largest cogeneration projects of the 1990s, administered by Virginia Electric & Power Co. Other utilities observed Virginia Power's efforts, and a new wave of cogeneration projects emerged into the 2000s.

On the federal level, renewed interest was rising in cogenerated power in order to decrease carbon emissions. In the late 1990s, the Department of Energy set the goal of doubling the capacity of cogenerated power by 2010. In the late 2000s, most cogenerated power remained in manufacturing industries, with chemical, food and beverage, and paper industries the leading users.

Key challenges remained in the middle of the first decade of the twenty-first century for further applications of cogeneration. There were no industry and nationwide standards for interconnecting CHP units, frustrating attempts to mass-produce distributed generators that can operate in any state. Regulation of CHP is at the state level, and promoters of CHP argue that national deregulation and tax incentives would spur further industry growth. The Environmental Protection Agency teamed with numerous companies in the industry to form the Combined Heat & Power Partnership. A major goal of the EPA CHP Partnership in 2006 was to double the amount of CHP to the U.S. power supply by 2010. That year, more than 150 firms, from consultants to end users, participated in the partnership.