Combined Heat and Power: Pathway to Lower Energy Costs, Reduced Emissions, Secure and Resilient Energy Supply

This fact sheet from the Environmental and Energy Study Institute (EESI) describes the technology, benefits, and potential of Combined Heat and Power (CHP) systems in the United States. It highlights how CHP increases energy efficiency, reduces emissions, and provides resilient power during grid failures, while identifying regulatory barriers and the specific advantages of biomass-fueled systems.

• Combined heat and power (CHP) systems are significantly more efficient than producing heat and power separately, achieving energy efficiencies of 70 percent or more, whereas separate production is on average less than 45 percent efficient.
• The United States has over 4,100 CHP systems in operation, totaling more than 82 gigawatts (GW) of installed capacity, which accounts for approximately eight percent of the country's total electric power generation capacity. The chemical industry holds the largest share of this capacity at 29 percent, followed by petroleum refining (18 percent) and pulp and paper (14 percent).
• The DOE and EPA estimate that adding 40 GW of new CHP capacity could save U.S. businesses and industry $10 billion annually in energy costs and reduce national energy demand by one percent, with an investment of $40 to $80 billion that could be recovered in four to eight years.
• CHP systems reduce environmental impact; the current fleet saves approximately 1.8 quads of energy per year and lowers U.S. carbon dioxide emissions by 240 million metric tons. An additional 40 GW of capacity could further reduce CO2 emissions by 150 million tons annually.
• CHP provides critical energy resilience during extreme weather events and grid failures. It proved more reliable than emergency back-up generators in the aftermath of Hurricane Sandy in New Jersey, New York, and Connecticut, as well as after hurricanes Katrina and Rita in Louisiana.
• The U.S. has significant untapped CHP potential of about 130 GW at commercial, institutional, and industrial facilities. CHP is underutilized in the U.S. (8% of power production) compared to countries like Denmark, Finland, and the Netherlands, where it represents 30 percent or more.
• Biomass-fueled CHP can be net carbon negative on a life cycle basis by avoiding methane emissions from decomposing residues. It provides reliable baseload power 24/7, unlike intermittent sources such as wind (available ~36% of the time) and solar (available ~22% of the time).
• Deployment is hindered by regulatory and legal barriers, including unfavorable interconnection standards, backup power rates, and a lack of critical policies in states facing high coal plant retirements. In response, President Obama issued an August 2012 order to increase U.S. CHP use by 40 GW (50 percent) by 2020.

APA

Environmental and Energy Study Institute (2013). Combined Heat and Power: Pathway to Lower Energy Costs, Reduced Emissions, Secure and Resilient Energy Supply. https://www.eesi.org/files/FactSheet_CHP_052113.pdf

Chicago

Environmental and Energy Study Institute. Combined Heat and Power: Pathway to Lower Energy Costs, Reduced Emissions, Secure and Resilient Energy Supply. 2013. https://www.eesi.org/files/FactSheet_CHP_052113.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Combined Heat and Power: Pathway to Lower Energy Costs, Reduced Emissions, Secure and Resilient Energy Supply |date=May 2013 |url=https://www.eesi.org/files/FactSheet_CHP_052113.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2013combined, author = {{Environmental and Energy Study Institute}}, title = {{Combined Heat and Power: Pathway to Lower Energy Costs, Reduced Emissions, Secure and Resilient Energy Supply}}, institution = {Environmental and Energy Study Institute}, year = {2013}, month = may, url = {https://www.eesi.org/files/FactSheet_CHP_052113.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }