The industrial sector plays a key role in our transition to sustainable energy sources. There are countless opportunities to make industrial processes more energy efficient, in particular through Combined Heat and Power (CHP) and manufacturing innovations. But, most importantly, a wide range of industrial companies are directly involved in designing, building and maintaining renewable energy systems and energy efficiency solutions. Industry is also responsible for much of our electricity transmission infrastructure, which will need to accommodate distributed generation while becoming more resilient to extreme weather.
The growth and development of the renewable energy and energy efficiency fields translates into an immense opportunity for new jobs in the energy industry. These "green jobs" provide secure, well-paying jobs to millions of Americans. A report from the Renewable and Appropriate Energy Laboratory in Berkeley found that renewable energy creates more jobs per megawatt (MW) of power installed, per unit of energy produced, and per dollar of investment, than the fossil fuel industry. Workers of all skill levels are needed to design, manufacture, construct, and operate renewable energy and energy efficiency technologies, update the nation's electric grid, and construct new high-performance green buildings.
Combined Heat and Power (CHP), also known as cogeneration, is the simultaneous production of electricity and heat from a single fuel source. More than half of the energy used to create electricity in conventional thermal power plants is lost in the conversion process. CHP is a system that reclaims some of this lost energy by using the "waste" heat to provide heating to the power plant facility or to buildings that are connected to the power plant by a steam pipe network (see "District Energy" below). CHP increases the energy efficiency of power generation to up to 80 percent, while also providing more resilient and reliable thermal energy and electric power.
CHP is a proven technology. There are more than 3,600 CHP systems in use in the United States today. More than two-thirds are fueled with natural gas, but renewable biomass, process wastes, and coal are also used. The U.S. Environmental Protection Agency (EPA) reports that the United States has 82 gigawatts (GW) of installed capacity, representing about eight percent of total U.S. electric power generation capacity. The chemical industry has the largest share of CHP capacity in the United States today (29 percent), followed by the petroleum refining industry (18 percent), and the pulp and paper industry (14 percent).
District energy systems are a highly efficient way to heat and cool many buildings in a given locale from a central plant. They use a network of underground pipes to pump steam, hot water, and/or chilled water to multiple buildings in a downtown district, college campus, hospital, airport, military base or other such area. Providing heating and cooling from a central plant requires less fuel and displaces the need to install separate heating and cooling systems in each building. District energy therefore helps communities reduce their operating costs and keep more energy dollars local by reducing their need to import fuel. In addition, the environmental impacts from heating and cooling are significantly reduced because of the greatly improved efficiency of these systems. Though the focus is often on electricity generation and transportation fuels, making heating and cooling systems more efficient is critical to achieving sustainability. According to a May 2011 report by the International Energy Agency, heat represents 37 percent of final energy consumption in OECD countries and 47 percent globally.
District energy systems are often used to distribute the heat generated by combined heat and power systems (see above), although they can be used to distribute thermal energy produced independently from resources such as “waste” heat from industrial processes, biomass, geothermal heat, solar energy, or cold lake or ocean water.
According to the International District Energy Association, there are 837 district energy systems in the United States (including at least one system in every state), some of which date back to the 1800s. But there are many more locations where district energy would be appropriate and hundreds of district energy systems with expansion potential. Nevertheless, constructing a new district energy system is a major infrastructure project, involving connecting all of the buildings in a district to the central plant through underground pipes. Even though the long term energy savings and environmental benefits are significant – and the project would generate many good paying jobs – the high upfront costs can discourage developers.
Effective storage technology can keep the lights on during severe storms, supply shortages and power interruptions, and help consumers avoid high utility rates by offsetting the need to generate new electricity during peak demand. Energy storage can also be used for energy arbitrage, generation capacity deferral, ancillary services, ramping, renewable integration, electric vehicles, maintaining power quality, and end-user applications. Last but not least, energy storage also facilitates the integration of variable renewable energy sources such as solar and wind power into the grid.
Today, pumped hydro and compressed air energy storage (CAES) are capable of discharging electricity for tens of hours, with project sizes that reach 1,000 megawatts (MW). Other technologies aim to reach comparable capacities. Despite this potential, the implementation of many types of storage technology is limited today, primarily due to the high cost of research and development for utility-scale storage implementation. Federal policy has sought to address this, most notably through Department of Energy (DOE) programs and Federal Energy Regulatory Commission (FERC) Orders. These initiatives aim to spur innovation and encourage utilities to rethink the existing transmission paradigm, and they have helped energy storage overcome hurdles in recent years.
Electricity transmission is often taken for granted, but it is one of the pillars of advanced, industrialized economies. Fostering investment in electric transmission infrastructure is among the nation's highest energy priorities as a strong grid facilitates the development of alternative generation resources, is more resistant to storms, lowers electricity costs to consumers, promotes a liquid wholesale power market with minimal congestion and market power, improves reliability and energy security, and advances energy independence overall. Investments in the grid also create good, stateside jobs.
One way to increase capacity and resiliency without laying down more lines is by making the existing grid smarter. The term “smart grid” refers to the application of communication and information technology to the electricity transmission and distribution system. As one part of this new network, in-home displays provide real-time information on energy usage and cost, allowing consumers to adjust their habits to save money and reduce peak load demand. In addition, grid monitoring and control devices are used by utilities to anticipate, detect, and resolve problems quickly, minimizing power disruptions and making the grid more reliable and secure. These devices also allow for greater integration of distributed energy (for example, from rooftop solar panels) and intermittent renewable energy sources. And a two-way flow of information and electricity will be necessary for the wide-scale use of plug-in electric vehicles, which will simultaneously increase demand on the grid and provide opportunities for distributed electricity storage in car batteries.