New England Utilities Turn to Steam Power

In Europe, steam used to heat a building is also used to generate electricity. Now, the combined heat and power system is catching on with some American power companies and is being put into use in parts of New England.

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As oil prices go up, interest in more efficient energy technologies is also rising. With one method, called combined heat and power, companies take the steam heat used to heat a building and use it to generate electricity as well. From Boston, NPR's Chris Arnold reports.

CHRIS ARNOLD reporting:

Environmentalists for a long time have tried to promote combined heat and power systems because they're very efficient. They're widely used in parts of Europe, but in the US, they've been largely ignored, in part because doing things the old way has just been cheaper. But that's changing.

Mr. EDWARD DONDERO (Director of Facilities, Biogen Idec): Five years ago, a plant like this wouldn't have made economic sense given what we were paying for steam and electricity at the time.

ARNOLD: Edward Dondero is director of facilities for Biogen Idec, a large biotech company in Cambridge, Massachusetts. He's down in a deep basement under a new office building where construction's under way on a combined heat and power plant. Iron workers and pipe fitters are sending sparks flying down from the intricate system of girders, conduits and water, steam and gas pipes.

(Soundbite of construction work)

Mr. DONDERO: Right now we're 32 feet below grade. We've got a five-megawatt turbine down here attached to the back of a heat recovery steam generator and two 50,000-pound-an-hour boilers.

ARNOLD: The natural gas-fired boilers here will heat Biogen's buildings and make steam for its manufacturing process, but what's unusual is that same steam will also be sent through this turbine. Its spinning blades will generate enough electricity to power the nearly one million square feet of offices and labs here. Since the steam is doing two jobs at once, the system is twice as efficient as stand-alone boilers or electric power plants. Dondero says that's a lot more important these days. Electricity is getting more expensive here and the price of steam the company pipes in from a local utility has triple.

Mr. DONDERO: It will be economically viable. It will save us in excess of $3 million a year.

ARNOLD: Since this new on-site power plant costs around $9 million, Dondero says it should pay for itself in just three years.

These numbers do not hold true for many regions of the US where electricity is cheaper, and a lot of businesses don't want to spend time and money learning how to do all this, especially with energy prices so volatile and unpredictable. But in more places, some businesspeople have decided that these more efficient systems do make economic sense. Frank Frankini is senior vice president with Equity Office Properties, which owns some 625 buildings across the US.

Mr. FRANK FRANKINI (Senior Vice President, Equity Office Properties): Yes, properties within the right states, where the alternative cost of electricity was extremely high; areas of California, New York and Chicago fall into that category.

ARNOLD: Equity Offices put combined heat and power systems into 19 of its buildings in those regions in the past two and a half years, and Frankini says he could see such systems working in as many as a hundred other buildings that he oversees. But he says there are obstacles. He says different power utilities have wildly different attitudes about this technology.

Mr. FRANKINI: Some of the utilities, like PG&E and ConEd, work with you and open up the technical details and say, `This is what we need to do as a team.' Some of them start off saying, `It can't be done.'

ARNOLD: Frankini says some power utilities see these large on-site generators as unwanted competition and so they're being obstructionists. He says some charge excessive fees that have derailed some projects. The utilities argue that such fees are justified because they have to be prepared to offer backup power to a factory or office building if its on-site generator goes down. Penni McLean-Conner is vice president of customer care for NSTAR, the power utility around Boston.

Ms. PENNI McLEAN-CONNER (Vice President of Customer Care, NSTAR): If they need us as their backup, than we have to have the infrastructure in place to support that. And in these big units, like you're talking at Biogen, that's a substantial infrastructure that needs to be in place.

ARNOLD: Still, after pressure from business groups, environmentalists and state regulators, NSTAR recently agreed to lower the fees it charges to customers like Biogen who generate their own electricity. Chris Arnold, NPR News, Boston.

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