So I recently read in The Atlantic (home of the esteemed James Fallows) an article by Lisa Margonelli on combined heat and power. In general, this article is fairly good, especially the second half. However, I still saw some paragraphs that rankled. Let's dive in, shall we?
The U.S. economy wastes 55 percent of the energy it consumes, and while American companies have ruthlessly wrung out other forms of inefficiency, that figure hasn’t changed much in recent decades.and, later,
For the better part of a century, we’ve gotten electricity from large, central generators, which waste nearly 70 percent of the energy they burn.A ha! Yes, the ever popular confusion regarding the difference between useful work and waste heat. Once is forgivable as editorial discretion, but twice is a pattern. Let's take nice, high-pressure and hot steam and pass it through a steam turbine. Surprise, we lose heat and pressure from the steam in order to run the Rankin cycle. You can take that steam and pass it through another turbine, but the 2nd cycle will get a lot less electricity out for the same capital costs. The final potential use then is to take the latent heat from the low-quality steam and dump it somewhere: process heat for drying , heating the factory floor, or speeding up some chemical reaction.
Ok, so definition time: this article is about combined heat-and-power (CHP), but you won't see those words in this article. In fact, the article only talks about the other way around — capturing waste heat to make electricity.
CHP usually aims to take an industrial activity where you burn a fossil fuel for process heat, and run the fuel through an electricity generation process first and use the waste heat for the process. Margonelli, on the other hand, provides an example where electricity is used for heating. This isn't common, because electricity is still far more expensive than natural gas on a pure dollar per Joule basis. In fact, it's only used when you need either extremely high purity or extremely high temperatures. Such as,
Heat, which in some industrial kilns reaches 7,000F, can be used to produce more steam.tungsten tool making for one. Needless to say, most industrial activity isn't involved in the manufacture of refractory materials, zone-refined silicon, etc. This is my major problem with the article. The example provided isn't very representative of industrial uses of heat. What can be economic for a specialty steel refiner probably isn't for an ethanol plant or oil refinery.
TANSTAAFL (There Ain't No Such Thing As A Free Lunch) applies here as much as anywhere. For some plants, better insulation may be a better buy.
In some industries, investments in energy efficiency also suffer because of the nature of the business cycle. When demand is strong, managers tend to invest first in new capacity; but when demand is weak, they withhold investment for fear that plants will be closed. The timing just never seems to work out. McKinsey found that three-quarters of American companies will not invest in efficiency upgrades that take just two years to pay for themselves.This says a lot more about business leaders' acumen than the particulars of a efficiency upgrade. If you can't generate some cash flow to invest in capital equipment (and that is what we are discussing here — a gain in productivity) during a boom you probably aren't going to survive the inevitable bust. Why the emphasis on capacity growth? Are the CEOs really that concerned about losing market share? Or is this just an example of knee-jerk brownian attitudes? Or are executives just really dumb? (Don't answer that.)
The other giant impediment to CHP the article sort of dances around but never really addresses. In the giant race to the bottom of labour costs (i.e. off-shoring), it is a pretty big gamble for a power plant to setup for combined heat and power and then hope that their customer will still be around in five years. Low-grade steam isn't something you can pump around the state to find a new customer because you'll simply bleed it all off as parasitic losses to the pipeline. So I think the emphasis on Free Trade which has introduced such volatility in the cost of labour is probably a big part of the general failure of CHP to have a big impact on our energy economy.
The other reason CHP hasn't really taken off is that natural gas hasn't turned out to be as cheap or as fungible as expected, and it's the only fossil fuel that's really clean enough to run with decentralized power and easily pipelined. Coal isn't.