Waste Heat to Power Investment Tax Credit Creates Opportunities for Renewable Energy in the Industrial Sector

At the end of last year, the United States congress passed the Consolidated Appropriations Act, 2021. The Business Energy Investment Tax Credit (ITC) included in this act includes a 26% ITC for “Waste Energy Recovery Property”. 

North Carolina Clean Energy Technology Center’s (NCCETC) Database of State Incentives for Renewables and Efficiency explains, “Qualified waste energy recovery property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity.” 

Traditional combined heat and power (CHP) cogeneration captures heat that is produced in the process of generating electricity and has a 10% ITC available for private companies. Waste heat to power (WHP), on the other hand, captures waste heat generated from industrial processes that otherwise is released into the atmosphere. The passing of this act is the first nationally supported tax incentive for installing WHP technology.

The Heat is Power Association (HiP) is a national organization that works to educate decision-makers and the public about waste heat as a renewable energy resource. HiP co-founder and Chairman of the Board John Prunkl said, “As waste heat has the potential to generate 15 gigawatts of zero emission electricity to power American industry, WHP technologies are an excellent tool for advancing the dual goals of a strong economy and a more sustainable environment.”

Patricia Sharkey, Executive Director of HiP, is getting a lot more inquiries from companies and organizations interested in capturing their waste heat since the ITC was passed. “We’ve been contacted by the glass industry, wood pellet industry, paper and pulp industries- all asking what more they can do to be capturing their waste heat and reducing their emissions.

Sharkey has also gotten inquiries from some more contemporary industries. “Someone was creating a data mining company to mine Bitcoins and they wanted to know if they could capture the heat the machines produce during the production process.”

According to the U.S. Department of Energy (DOE), it is estimated that between 20 and 50 percent of industrial energy input is lost as waste heat in the form of hot exhaust gases, cooling water, and heat lost from hot equipment surfaces and heated products. 

In the industrial sector, waste heat may be generated by equipment such as furnaces, ovens, kilns and engines such as at steel mills and glass manufacturing plants as well as a byproduct of operations at field locations such as landfills, compressor stations and mines. There are three major sources of this waste heat: thermal processes such as furnace operations, a mechanical drive such as a pipeline compressor station and other systems such as exothermic reactions used to manufacture fertilizers. 

Waste heat must reach a certain temperature for effective recovery with current technologies, but emerging technologies are beginning to lower that limit, enabling economic feasibility of generation from waste heat at even lower temperatures over time. “A lot of work is being done on improving heat exchangers so you can pick up heat better at lower temperatures,” Sharkey noted. “This tax credit can enable research to move off of the bench and into demonstration and highlight stages to make waste heat to power more economically viable.”

 WHP systems are becoming a more accessible way for companies to decrease their greenhouse gas emissions and this federal ITC supports industrial companies interested in investing in clean energy.

In 2018, the U.S. DOE selected ElectraTherm to receive approximately $1.4 million in funding to support several years of research and development to enhance reciprocating engine based CHP systems via integrated WHP Organic Rankine Cycle (ORC) technology

Current ORC systems operate at relatively low temperatures and are used as a bottoming cycle waste heat recovery solution. The DOE is working with Electratherm to develop a new ORC system with a higher temperature and pressure rating, enabling the CHP system to generate more power and generate hotter water at the discharge. Such a high-efficiency CHP system could lead to a total CHP system efficiency of 85% more and result in fuel and cost savings for industrial, commercial and institutional facilities.

ElectraTherm successfully commissioned its first WHP generator in California as part of a California Energy Commission grant for CHP/prime power generation from biomass. At the site, a biomass boiler consumes locally-sourced cleanup and logging waste to generate fuel-free power. The biomass boiler provides heat to the Plumas County Health and Human Services Building in Quincy, California.

If you are think you have a waste heat to power opportunity at your facility, and are  interested in technical assistance, please contact us.  The U.S. DOE Southeast Combined Heat and Power Technical Assistance Partnership (CHP TAP) at the NCCETC promotes and assists in transforming the market for CHP, waste heat to power and district energy technologies/concepts in the following eight southeast states: North Carolina, South Carolina, Tennessee, Kentucky, Georgia, Alabama, Mississippi and Florida, as well as Puerto Rico and the U.S. Virgin Islands. The CHP TAP network provides fact-based, unbiased education and technical assistance to help energy end-users consider the benefits of combined heat and power. 

If you would like to learn more about CHP or have any additional questions, please contact Isaac Panzarella, Director of the U.S. DOE Southeast CHP TAP at NCCETC, at iipanzar@ncsu.edu.

Photos courtesy of CleanTechnica.