State Establishes $3 Million Fund to Bankroll Combined Heat and Power Projects

Funding will enable colleges and state agencies to save energy, reduce greenhouse gas emissions

New Jersey is setting aside $3.235 million in federal stimulus funds for projects at state-owned facilities and institutions to build Combined Heat and Power (CHP) plants, a step that would allow colleges and state agencies to reap big energy savings.

The Board of Public Utilities (BPU) is soliciting requests from state facilities to obtain grants to build the CHP plants. But applicants must submit proposals by this Friday and be ready to begin construction within three months, according to the agency.

CHP is viewed by state officials as a way of generating more electricity and increasing the reliability of the grid, while producing less greenhouse gas emissions than conventional fossil fuel plants. CHP produces electricity, generally using natural gas, but recaptures the steam in the process, using it to heat and cool nearby facilities.

Last year, the state agency and the New Jersey Economic Development Authority jointly allocated $18 million to fund six CHP projects, but one of the grant recipients dropped out and money became available to partially fund projects at state facilities.

The six projects will leverage more than $100 million in total investments, creating an estimated 240 construction jobs and 18 full-time jobs and reducing carbon dioxide emissions by 85,695 tons annually. The projects included two casinos, a Newark brewery, a nutritional products manufacturer, a hospital in Princeton and Ocean County College.

Officials hope to repeat that effort on a smaller scale at state facilities.

“State entities have large energy loads that are extremely inefficient,” the state’s notice of solicitation noted. “That reality coupled with this funding represents an opportunity to realize significant energy savings. Such investments will reduce costs, save taxpayers money and create jobs.’’

New Jersey’s Energy Master Plan calls for the development of at least 1,500 megawatts of CHP by 2020 to help meet the state’s power needs. CHP facilities are generally more than twice as efficient as conventional power plants and produce much less pollution.

Most CHP plants have been installed at industrial facilities, particularly those with big energy loads. New Jersey has approximately 3,400 megawatts of installed CHP capacity, with 3,174 megawatts at 112 industrial plants. Most of that capacity was installed in the late 1980s and early 1990’s, with about 400 megawatts installed each year.

That trend has slowed in recent years, with only about 5 megawatts of new capacity added in the past decade, according to the U.S. Department of Energy’s Mid-Atlantic Clean Energy Application Center.
Nevertheless, there is a great deal of potential in developing CHP at government facilities with the center estimating more than 600 government buildings could take advantage of the technology.

The legislature also is looking to promote the technology. Assemblyman Upendra Chivukula (D-Somerset) held a hearing last week to weigh the possibility of creating a CHP portfolio standard, similar to what New Jersey has done to promote renewable energy. The standard would require the development of a certain amount of CHP each year.