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Michigan Energy Office issues Combined Heat and Power report


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The Michigan Energy Office (MEO) issued a report that provides a roadmap for Michigan to make Combined Heat and Power (CHP) a significant part of its future energy mix.

CHP is a proven technology that provides a highly efficient way to generate electricity and process heat in a single onsite system with significant economic, environmental and resiliency benefits to the electric grid.

Michigan is home to 88 CHP system with an installed capacity of 3,500 MW. The CHP Roadmap identifies the ideal level of additional CHP in Michigan for commercial and industrial customers as between 722 MW and 2,360 MW based on a least-cost analysis.

The report considered projects to be viable if the payback period was 10 years or less for the public and institutional sectors and less than four years for the private sector.

“This report identifies opportunities and barriers to implementing more CHP in Michigan,” said Anne Armstrong Cusack, executive director of the Michigan Agency for Energy, of which the MEO is part. “Based on detailed feedback from over 100 individuals and organizations across the state, it is a valuable tool that can be used to drive the adoption and deployment of CHP in Michigan.”

The Roadmap’s recommendations include:

  • Considering best practices in utility standby rates and Public Utility Regulatory Policies Act (PURPA) avoided cost/buyback rates.
  • Fully valuing CHP when considering costs and benefits of distributed energy resources.
  • Incorporating CHP as a resource in Michigan utility energy waste reduction plans
  • Requiring utility integrated resource plans to consider CHP as both a supply-side and demand-side resource.
  • Updating interconnection standards to better align with new technologies and best practices.
  • Offering financial incentives for CHP adoption.
  • Promoting Property Assessed Clean Energy (PACE) financing and on-bill financing for CHP, which would allow customers to pay for projects as part of their utility bills.
  • Collaborating closely with leading CHP organizations.

The MEO is pursuing opportunities and partnerships to advance Roadmap findings and recommendations.

The Roadmap was funded by MAE and the U.S. Department of Energy to examine where opportunities and barriers to adoption exist.

The full report is available here.

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