The ARI Combined Heat and Power Workshop, which was held on 30 May 2003, addressed how best to realize the technical and market potential of commercial and institutional sector CHP development in Virginia, with particular attention to the environmental implications for the Commonwealth's ozone non-attainment jurisdictions.

The USEPA now includes CHP in its definition of eligible efficiency projects that states or local jurisdictions can choose to include in their NOx set-aside programs, and CHP may qualify as an ‘innovative measure’ incorporated in a State Implementation Plan (SIP) designed to reduce ozone precursors. By outlining an increased role for CHP in the region’s energy mix, the workshop results could assist the Metropolitan Washington Area Council of Governments in the severe ozone nonattainment SIP, as well as other nonattainment regions in Virginia.

A study recently commissioned by the US Department of Energy identified a nationwide market potential for CHP in the commercial and institutional sectors of 77,000 megawatts, with more than 1,800 megawatts of this potential located in Virginia. Although CHP does not constitute a strong domestic market at this time, the study concluded:

Two key changes in the economic system are occurring that could make CHP more important economically and environmentally – the restructuring of the electric power industry may provide an enhanced economic driver and efforts to comply with the Kyoto Protocol on global warming may provide an environmental driver for energy efficiency options such as CHP. In addition, there is a renewed interest in small-scale power technologies and a number of emerging technologies that promise to decrease first costs, increase efficiencies, reduce maintenance, and lower environmental impact.

Exploitation of northern Virginia’s CHP potential in theory could result in substantial emissions benefits, particularly with ‘credit’ for the thermal energy contribution, and could help the region more quickly achieve NAAQS air quality standards. However, the realization of this potential must answer to both regulatory concerns and the economic interests of the various stakeholders. In order to facilitate this process, the ARI workshop will focus on four task elements:

Evaluate the commercial and institutional CHP market potential in Virginia's major nonattainment jurisdictions;
Describe Federal, regional, state-level (Virginia and other) and local regulatory initiatives and/or constraints affecting the adoption of CHP;
Discuss appropriate business models and associated benefits streams (financial and environmental) for principal stakeholders affected by CHP implementation; and
Identify necessary and appropriate measures required for development of CHP-responsive regulatory policies in Virginia.

The invited audience included Virginia legislators and local jurisdiction representatives included in the northern Virginia ozone nonattainment area, along with representatives from associations on behalf of the commercial building, school and hospital sectors.

Presenters have reviewed the USEPA CHP Partnership program, the USDOE CHP market study and current Virginia regulations affecting CHP market penetration. The afternoon session was devoted primarily to discussion of needed follow-up activities, as well as opportunities for other interested parties to make brief presentations.