CA, MA, and NY Continue to Shine in ACEEE CHP Rankings

ACEEE CHP Rankings
Dan Pidgeon, ERS, for Zondits

The 2017 ACEEE Scorecard was released in September, highlighting more state-led energy efficiency progress. The 11th edition of the scorecard continued to measure states’ energy efficiency success by the following metrics: utility and public benefits programs and policies, transportation policies, building energy code and compliance, combined heat and power (CHP) policies, state government-led initiatives, and appliance and equipment standards. Each policy area is scored and summed to a potential grand total of 50 points. The breakdown of the overall scoring methodology is below:

Scoring MetricPossible Points
Utility and public health programs and policies20
Transportation policies10
Building energy efficiency policies (code and compliance)8
Combined heat and power4
State government initiatives6
Appliance and equipment efficiency standards2

Those who follow the ACEEE Scorecard were not surprised to learn that the top five states were: Massachusetts, California, Rhode Island, Vermont, and Oregon scoring 44.5, 42, 41.5, 39, and 36.5, respectively. These states, among many others, continued to stimulate investment in energy efficiency while improving quality of life for their residents through lower bills, job creation, and healthier homes. In fact, over the past 2 years US energy use has declined 1% while GDP has increased more than 4%, suggesting continued progress for the future. This surge in efficiency programs has mitigated load growth, reduced carbon pollution, reconceptualization the electric grid, and improved business models.

Breaking Down the Scorecard – The CHP Chapter

One of the metrics that illustrates a vendor’s realistic expectation for ease of entry into a state’s energy efficiency is combined heat and power (CHP), also known as cogeneration (or cogen). CHP generates electricity and thermal energy in a single, integrated system. This is more efficient than generating electricity and thermal energy separately because the heat that is normally wasted in conventional generation is captured as useful energy. This recovered energy is used to heat or cool spaces, or to generate steam to run manufacturing processes. CHP systems typically achieve total system efficiencies of 60%‒80% for producing electricity and thermal energy. These are direct savings on a building owner’s energy bill.

The current ACEEE CHP scoring methodology is based on four criteria: interconnection standards electrically connecting CHP to the grid, encouraging CHP as a resource, deployment incentives, and additional support policies. Encouraging CHP as a resource holds the greatest weight, and, in addition is the most general category. A breakdown of their respective scoring criteria and weight is below.

MetricPossible PointsScoring
Interconnection standards0.5Presence and design of interconnection standards
Encouraged as a resource2.0 (each subcategory is 0.5)• Eligibility within an energy efficiency resource standard or a similar regulatory requirement
• Presence of utility-run or program administrator-run to acquire CHP energy resources
• Presence of defined kWh savings through state-approved production goals or program budgets
• Access to revenue streams linked to system kWh production (i.e. incentives, feed-in tariffs)
Deployment incentives0.5Includes rebates, grants, financing – a net metering standard – that applies to CHP
Additional supportive policies1Additional supportive policies that encourage the use of renewable or opportunity fuels with CHP (i.e. streamlined air permitting, technical assistance, resiliency)

CHP only makes up 8% of the possible points, holding little weight in the overall scoring. However, it is important to note, states that score high in CHP typically score high in other energy efficiency categories as well. Massachusetts, California, Maryland, and Rhode Island all had the highest focus on CHP and scored 4 points. New York stands right behind these trailblazers as the sole state in 2nd place at 3.5 points. Unsurprisingly, the states with the highest focus on CHP includes some of the most active in energy efficiency. California, Massachusetts, and New York (which also made the top 10 in the overall scoring) continue to be prime examples of a targeted approach of incentives and education outreach in the CHP community.

How States Scored in the CHP Chapter

California, one of the most supportive states for distributed energy resources (DERs), has updated its requirements for combustion technologies this year through the Self-Generation Incentive Program (SGIP), which includes direct CHP incentives. This update now mandates a portion of the input fuel is renewable fuel. In fact, the renewable fuel will be a larger and larger portion as successive updates of the SGIP happen. There is some concern that this may constrain projects accessible to the SGIP to those with access to cost-effective biogas resources, but the hope is to incentivize more of these projects to continually mature the market and drive prices lower. This program will also contribute to California’s leading carbon reduction goals.

Massachusetts recorded the same top score as California with robust CHP policies and programs in place. National Grid can connect interested customers with vendors who provide incentives for qualifying customers. Through Mass Save, an initiative sponsored by Massachusetts’ gas and electric utilities and energy efficiency service providers, a building owner can sign up for a no-cost energy feasibility assessment. If CHP is suggested as a useful upgrade to the building, there is a CHP rebate program through Mass Save that has four different tiers of incentive rebates. In addition, the Mass Save CHP rebate program provides other resources to help CHP projects come to fruition, including case studies, sample documentation, interval data requests, and CHP technical assessments. This information helps the customer feel knowledgeable about a piece of technology they are most likely unfamiliar with.

New York was right behind California and Massachusetts with 3.5 out of 4 points. The only category New York didn’t score in was revenue streams. However, despite ranking behind four states, New York has the most CHP installations of any state since 2015, and has several innovative approaches to boost CHP projects through collaborations with the Public Service Commission (PSC), the state energy office, and the state’s utilities year after year. New York has announced Reforming the Energy Vision (REV), where DERs (including CHP) are a focal point for utility investment as alternatives to traditional infrastructure investments. This will help drive viable and realized revenue streams for future installations.

For example, as part of Con Edison’s Brooklyn Queens Demand Management (BQDM) Program CHP deployment is incentivized in the targeted area of a highly constrained grid. This incentive matches the existing state CHP incentive offered by the New York State Energy Research and Development Authority (NYSERDA). NYSERDA also continues to pave the way for grid resiliency efforts through the NY Prize Community Grid Competition, through which NYSERDA funded 11 microgrids. The majority of the microgrids involved in the NY Prize Community Grid Competition take advantage of CHP technology.

Another upcoming opportunity to utilize CHP as a DER in the state of New York is through non-wires solution pilots. This will test the use of CHP and other DERs to lower distribution costs and improve system operations in a similar fashion to BQDM.

In addition, the PSC has ordered utilities (this mainly affects Con Edison and National Grid) to review current standby rates and suggesting a standby rate pilot program that would provide an exception for CHP systems, dependent on the efficiency of the system.

Although eight states and US territories scored 0 CHP points due to lack of any cogeneration programs, most states have CHP policies or programs in place. California, Massachusetts, and New York are setting examples for how to promote, educate, incentivize, and install CHP systems in various industrial, commercial, and residential buildings. The hope is that other states will respond in kind with their own programs to increase the energy consumption of this useful and efficient technology.

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