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Fuel does double duty in N.Y.

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For at least one economist, capturing energy that would otherwise be wasted represents the belated arrival of common sense. With worry over greenhouse gases mounting, inefficiency is the "elephant in the room," says Tom Casten, chairman of Recycled Energy Development in Westmont, Ill. By his count, the nation could save $70 billion simply by harnessing the heat now going out its collective smokestacks. "We can't afford not to change it," he says. "Without a doubt, this is the cheapest power you can make."

A typical electric plant uses only one-third of its fuel's energy to push turbines. The other two-thirds are lost as waste heat. Boilers, on the other hand, can achieve up to 85 percent efficiency. By combining both processes, CHP can capture between 70 and 80 percent of the energy in the fuel. Theoretically, cogeneration delivers the same energy as separate generation, but with half the fuel and emissions. Because of close proximity to the end-user, relatively little electricity is lost in transmission.

CHP does have potential drawbacks: The technology is still expensive; larger models may be noisy; and if carbon-capture technology ever comes on line, dealing with many little flues versus a few big ones could be onerous.

Proponents say these negatives are far outweighed by the benefits: "The greatest source of renewable energy is energy you don't use," says Mr. Falcier.

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