LIKE THE trolley car and the ceiling fan, a process known as cogeneration is another energy-saving technology that, although once commonplace, disappeared in the march of time, a casualty of "progress." Its enormous potential is finally beginning to be appreciated again. Unfortunately, industries, utilities and state power commissions are simultaneously discovering that a variety of energy regulations unintentionally inhibit its use.
Cogeneration is an alternative to the familiar way of generating electricity by producing electricity together with a large amount of low-temperature "waste heat." Cogeneration produces two products: elecricity and useful, higher-temperature heat. That way, much more usable energy is extracted from the same amount of fuel, and energy is conserved.
Since the easiest and cheapest way to use that heat is in an industry that needs a lot of steam, cogeneration facilities are most attractive at industrial sites. Early in this century many American industries produced all the energy they needed by this means. However, as electric utilities grew and the price of electricity fell, most decided to leave the business of making electricity to the utilities.
As the cost of fuel for making electricity has soared in the last few years, cogeneration has slowly begun to be seen as an attractive alternative to conventional electrical plants. One recent study estimated that cogeneration could save the equivalent of almost two million barrels of oil a day, or more than one-quarter of current U.S. electricity consumption.
What is holding back the realization of this enormous savings? The greatest barriers are laws and regulations that discourage utilities from owning and operating cogeneration plants. Because of these, most such facilities are owned by businesses, which are generally reluctant to get involved in the heavily regulated and unfamiliar world of producing energy.
Utilities are far better suited to do the job. They are already in the business of making and selling energy. They are equipped to raise the needed capital. They have the experience to design and build the plants, to operate and maintain them at lowest cost and to obtain the necessary government permits.
Another major hold-up is restrictions that prohibit the use of oil and gas in cogeneration facilities. The most efficient cogeneration technologies today can be run only on oil or gas, though eventually the means will be developed to use coal, biomass and synthetic fuels. In the meantime, the restrictions have the unintended effect of wasting precious fuels.
As in so many other areas of energy policy, government needs to "unwrite" a lot of regulations to start saving more energy. Though utilities have been slow to appreciate its potential, cogeneration is so economically attractive that if they can be set free to get into this business, and encouraged by a few state utility commissions, the marketplace should do the rest.