Potential Impact of Flexible CHP on the Future Electric Grid in California

This report describes an analysis of the potential financial value of both traditional and advanced, flexible CHP units in California. A multi-organizational team that included representatives from the National Renewable Energy Laboratory (NREL), Resource Dynamics Corporation (RDC), Oak Ridge National Laboratory (ORNL), Booz Allen Hamilton, and Energetics, Inc. performed this analysis. The team used cost-benefit analysis techniques to identify sites where CHP units could be installed and are likely to meet a payback period requirement (i.e., meet profitability requirements). Using those sites and a production cost model of the California electricity grid, the team estimated the impacts on the cost of operating the grid with those CHP units and compared them to the cost of operating the grid without the CHP resources.