Opportunities for installed combined heat and power (CHP) to increase grid flexibility in the U.S.

Increasing use of renewable energy requires sufficient grid flexibility to address uncertainty and variability in electricity generation. Previous studies suggest that combined heat and power (CHP) systems may support grid flexibility but they do not consider operating hours. In this paper, we used CHP operating data and determined annual and monthly availability of the installed CHP capacity from various sectors (e.g., utility, independent power producer, commercial, and industrial) in all seven U.S. independent system operators (ISOs) and regional transmission organizations (RTOs). Also, we estimated hourly CHP availability installed in five facility types (i.e., hospitals, universities, hotels, offices, and manufacturing) in the state of New York. The results show that regardless of ISO/RTO, sector, or season, more than 40% of the installed CHP capacity (0.7–8.7 GW) was not fully utilized in 2019; the results are similar for 2018. This available CHP capacity accounted for up to 9% of the ISO/RTO's peak electric demand, which may yield cost savings up to $16 billion by avoiding installation costs of new natural gas combustion or combined-cycle turbines. To exploit the available CHP capacity to enhance grid flexibility, we recommend different policy implications including flexible contract lengths between CHP owners and grid operators, improved market designs, and simplified interconnection standards.