Waste Heat to Power Still Waiting for a Breakthrough

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Waste Heat to Power Still Waiting for a Breakthrough ( waste-heat-power-still-waiting-breakthrough )

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Government Incentives for Waste Heat to Power Despite the fact that power from waste heat generates no emissions, and is therefore considered to be clean energy, it is often seen as more of an energy efficiency play than a renewable energy play. In both cases, industry members and others feel the technology warrants government incentives similar to those enjoyed by other clean energy technologies, but to date, those incentives have not been realized outside of a few states and local regions. The lack of widespread state or federal incentives to promote waste heat to power generation has been a drag on industry growth. An Uneven Playing Field in the United States There is some debate over whether waste heat to power projects should be considered renewable energy projects or energy efficiency projects, particularly when the waste heat is created by burning fossil fuels. It is more than just a question of semantics because the result determines whether waste heat to power projects qualify for incentives designed to promote renewables. Currently, only 4 of 29 states with binding renewable portfolio standards (RPSs) include waste heat as a qualifying resource (Colorado, Connecticut, Nevada, and Ohio), while 2 states with renewable energy goals include it (Indiana and South Dakota). However, the more critical issue for the industry in the United States is that waste heat to power projects do not qualify for either the federal investment tax credit (ITC) or the federal production tax credit (PTC). While inclusion in state-level RPSs, as well as a smattering of local energy efficiency and clean energy incentive programs, does give waste heat to power projects advantages in some areas over others, the inability to claim federal tax incentives is having a material impact on industry growth. In July 2010, legislation was introduced in the U.S. House of Representatives that would provide a 30% investment tax credit to projects that generate electricity from waste heat produced by industrial processes. Unfortunately, the bill did not become law. The U.S. Clean Heat & Power Association (USCHPA) is currently pressing for a 10% federal investment tax credit for both combined heat and power (CHP) and waste heat to power. However, to date, no bill has been introduced to that end, and the prospects for a federal tax incentive for these technologies in the near future look dim at this point. Canada Provides an Attractive Incentive Program The Ontario Power Authority (OPA) is promoting the adoption of waste heat to power projects up to 20MW in size through a new Energy Recovery Standard Offer Program (ERSOP). 200MW of Page 4 #EI229456 ©2011 IDC Energy Insights

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