What is the role of distributed energy resources under scenarios of greenhouse gas reductions? A specific focus on combined heat and power systems in the industrial and commercial sectors

Combined heat and power (CHP) is promoted as an economical, energy-efficient option for reducing air emissions, mitigating carbon emissions and reducing reliance on grid electricity. However, its potential benefits have only been analyzed within the context of the current energy system. To fully examine the viability of CHP as a clean-technology alternative, its growth must be analyzed considering how the energy sector may transform under the influence of various technological and policy drivers that are specifically geared toward limiting greenhouse gas (GHG) emissions. Scenarios were developed through a bottom-up technology model of the U.S. energy system to determine the impacts on CHP development and both system-wide and sectoral GHG and air pollutant emissions. Various scenarios were considered, from CO2 emissions reductions in the electric generating units (EGU) sector to GHG reductions across the whole energy system while considering levels of CHP investment. The largest CHP investments were observed in scenarios that limited CO2 emission from the EGU sector alone. The investments were scaled back in the scenarios that incorporated energy system level GHG reductions. The energy system level reduction scenarios yielded rapid transformation of the EGU sector towards zero emissions technologies as reliance on electricity increases with the electrification of the many end-use sectors such as buildings, transportation and industrial sectors, reducing investment in CHP. The prime mover and fuel choice heavily influenced the air pollutant emissions resulting in trade-offs among pollutants including GHG emissions. The results suggest that CHP could play a role in a future low-carbon energy system, but that role diminishes as carbon reduction targets increase.