Northeast Clean Energy Application Center

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Benefits and Barriers to Clean Energy

(See our Policies & Incentives section and Emerging Issues subsection for in-depth discussions of policy issues currently confronting clean energy adoption.)

Benefits

...for owners:

  • Improved fuel efficiency — up to 2/3 savings in fuel costs!
  • Improved power quality & reliability
  • Improved energy cost predictability
  • Business continuity
  • Energy security

...for society:

  • Reduced emissions per unit of useful output- up to 33%-50% reduced emissions!
  • Lower overall capital cost for power per kW
  • No ratepayer investment required in generating, transmitting or distributing power
  • Reduced land-use impacts and NIMBY objectives
  • Reduced fresh water use
  • Optimized natural gas, reducing price volatility- up to 40% greater efficiency than conventional units!
  • Creation of new high-tech manufacturing sector in domestic and export markets
  • Support of competitive electricity market structure

...for electric utilities:

  • Reduced energy losses in transmission lines - current transmission losses are roughly 10%! Clean energy requires no remote transmission and therefore sustains no transmission losses.
  • Reduced upstream congestion on transmission lines
  • Reduced or deferred infrastructure (line and substation) upgrades
  • Optimal use of existing grid assets, including the potential to free up transmission assets for increased wheeling capacity
  • Less capital tied up in unproductive assets
  • Improved grid reliability
  • Higher energy conversion efficiencies than central generation
  • Faster permitting than transmission line upgrades
  • Ancillary benefits including voltage support & stability, contingency reserves and black start capability

Barriers

  • National interconnection standards and procedures apply differently, or not at all, depending on region
  • Standby and backup power charges
  • Interconnection approval can be slow
  • Stranded cost-recovery charges and exit fees
  • Air regulations that do not recognize the environmental benefits of CHP
  • Non-standardized, time-consuming environmental permitting process
  • Complex local ordinances regarding siting, zoning, fire code, etc...
  • Volatile natural gas prices and "spark spread"
  • Facility managers unaware of the benefits of on-site power generation
  • On-site generation systems' lack of a specific tax depreciation category. CHP systems can qualify for one of several categories depending on configuration and ownership resulting in a depreciation period ranging from 5 to 39 years.

Additional resources

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