The policy question I have is, "What action, if any, should be taken, by the Governor and the State Legislature, to encourage further development and innovation in the realm of neighborhood scale combined heat and power in Pennsylvania?"
Combined Heat and Power (CHP) is, like cogeneration, the production of both heat and electricity from the same fuel source, but where cogeneration is done by utilities at large scales, CHP is done by smaller entities, in Pennsylvania this is primarily large commercial or industrial energy users, see http://maceac.psu.edu/states_pa.html. However, CHP has the potential to improve the energy efficiency and reduce the environmental impact of our energy needs for residential, commercial and industrial needs.
Pennsylvania is perhaps uniquely suited to become a leader in CHP. It has an abundant supply of natural gas, which is perhaps the most promising of CHP fuel sources. It already has more than 150 combined heat and power units operating in the state, according to http://www.govtech.com/state/Pennyslvania-Needs-to-Encourge-Development-of-Cogeneration-Technology.html (attributing the assertion to the [Public Utility] Commission).
Perhaps the single largest barrier to Pennsylvania becoming a national leader in CHP is the regulations surrounding what it takes to be able to sell electricity and heating and cooling to others. Although Pennsylvania already has done quite a bit to make it possible for independent electricity generators to provide generation to retail customers of the traditional monopoly utilities, it is possible that more could be done to make this a reality in this state.
Hi Michael,
ReplyDeleteYou have a very good point here. It is best to have one central authority/plant for services that depend upon a more number of people. Such monopolies are called natural monopolies if I remember correctly. I also support your idea of having one central agency that would serve heat and power. That way they can complement each other. Heat distribution is scattered across small corporations and private entities. Which makes me think it might not be easy for these entities to accept the idea of one central agency because they will go out of business. It is definitely great idea from an economic standpoint. I am looking forward to more inputs on this idea of yours.
Cheers
Varun
Hi Michael,
ReplyDeleteIn your analysis I have clearly seen the problem and the client matched with it. In most examples in the materials of the class, the analysis keep the current policy unchanged, and in your analysis you do it in your way. I think it is good to feel unlimited by some rules in the materials. With the deeper understanding of the problem, we may try to consider the effectiveness of the current ones. CHP is good for the energy efficiency, but I think there will be difficulties to persuade then small entities to follow the policy you want to make as they have to consider the business benefits. Maybe this is also why you say that the government has to change something to make the policy available. It's a good problem as the energy problems are more and more important now. I'm also looking forward what policy you will make.
Yulong
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ReplyDeleteI recommend the blog entry have separate and distinct sections for policy question, references, and etc. In the future, consider ruling out alternative policy options concerning CHP, and in doing so, asserting the manner in which to handle CHP. There is also the matter of obviating the arguments against CHP altogether.
ReplyDeleteDefinitely look at the different stakeholder perspectives. Otherwise, the blog entry is rather focused.