Page 119 - Sustainable On-Site CHP Systems Design, Construction, and Operations

CHAPTER 6

Regulatory Issues

Gearoid Foley

HP systems are covered by various federal, state, and local regulations, which
must be thoroughly understood by anyone either considering installing a CHP
Csystem or by anyone operating a CHP system. Regulations can influence the
sizing, selection, and cost of the CHP system, define minimum efficiencies, and can
provide financial support. Other key regulations control allowable emissions and inter-
connection methods which in turn affect CHP system configuration as well as accessory
equipment requirements. This chapter discusses the development of CHP related regu-
lations from a U.S. federal and state perspective as well as briefly look at some of the
international regulations.
It has been said that most of the benefits derived from CHP are in fact societal rather
than accruing to the owner such that it is in the best interest of the public to support
CHP wherever it can. As recognition of CHP’s sustainable role in meeting greenhouse
gas (GHG) emission reduction targets gains traction, many state authorities have pro-
posed new regulations that will help encourage the industry including, in some cases,
consideration of CHP as a “renewable” energy resource. In addition, the role of CHP as
a tool to bolster grid reliability has long been understood and is starting to be adopted
at a state and even at an electric utility level as a way to avoid expensive infrastructure
upgrades to the electric distribution system. As a secondary benefit to relieving power
grid congestion, implementing CHP can also help reduce the local demand for electric
power transmitted from outside the local region and therefore influence the electric
price downward. From a security and environmental point of view, the high fuel effi-
ciency of CHP versus central power generation and separate heat generation, means
less fuel required from outside sources as well as less emissions. As all these benefits
offered by CHP are becoming recognized as societal benefits, we see public policy
changing to encourage and assist CHP installations. From federal to state to even utility
and local authority level, changes are taking place to reduce barriers to CHP implemen-
tation as well as financially support CHP.

U.S. Federal CHP Policy
The role of the federal government in regulating CHP is somewhat limited based on the
conflict between individual state jurisdiction versus federal jurisdiction over power
generation, transmission, distribution, and environmental issues. The federal government’s

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