The industrial sector includes manufacturing industries (food, paper, chemicals, refining, iron and steel, nonferrous metals, and nonmetallic minerals, among others) and nonmanufacturing industries (agriculture, mining, and construction). Chemicals and refining, iron and steel, nonmetallic minerals, paper, and nonferrous metal manufacturing account for the majority of U.S. industrial energy consumption. Industrial energy demand varies across states depending on industry mix and economic activity. Energy is consumed in the industrial sector for a wide range of activities, such as processing and assembly, space conditioning, and lighting. Industrial CHP installations in the U.S. are typically large (average system size is 52.5 MW) and represent 87% of total installed national capacity.  Existing CHP in the industrial sector is concentrated in energy intensive industries such as chemicals, refining, paper, primary metals, and food processing, that have large and coincident electric and steam demands. Installation of large (greater than 20 MW) CHP systems in this sector has been limited in recent years, but market activity is increasing as natural gas rates have declined in many regions. There is also increasing interest in biomass and other alternative fuels.

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  • Chemicals – The chemicals industry is comprised of a wide variety of plants and processes providing a diverse array of commodity and specialty chemical products. CHP is extensively used in certain segments of the chemicals industry such as plastic materials and resins, basic inorganic and organic products and commodity chemicals such as alkali and chlorine. These segments are highly energy intensive with large steam process loads. CHP systems in these applications tend to be based on large gas turbine or combined cycle systems, many owned and/or operated by third party entities that sell steam and power to the industrial facility and excess power to the grid. Growth opportunities appear in smaller CHP systems based on gas turbine and reciprocating engines that can be used in less energy intensive segments such as ethanol, pharmaceuticals and consumer products (soaps, detergents, etc.). Existing CHP in this market is heavily based on natural gas (80% of CHP capacity). Coal and process wastes are secondary CHP fuels used primarily in boiler/steam turbine systems.
  • Refining – Most large refineries in the U.S. currently utilize CHP to provide a portion of their process steam and power needs and to enhance energy reliability. 90% of existing CHP in the refining sector is natural gas, and like chemicals, is dominated by large combined cycle and simple cycle gas turbine systems. Growth opportunities may exist in refineries planning expansions and upgrades.
  • Paper – The paper industry has long used CHP to supply its extensive steam and power demands. Large pulp and paper mills tend to be self-sufficient in energy, utilizing wood waste and black liquor recovery, sometimes supplemented with coal in boiler/steam turbine CHP systems. Smaller plants and recycled pulp mills have installed natural gas CHP systems based on gas turbine technology.
  • Food Processing – Food processing comprises a wide variety of plants and process ranging from local dairies to large wet mill corn processing facilities that resemble chemical plants. Natural gas is the preferred fuel for CHP in this sector (68% of existing capacity) unless the plant has processing waste available or is used to handling large amounts of solids in their operations. Expanding markets for CHP include animal/poultry slaughtering, flour and rice milling, breweries, soft drink manufacturing, animal food manufacturing, fruit and vegetable canning, fluid milk, beet sugar, soybean processing and cereal manufacturing.
  • Primary Metals – While natural gas represents 51% of existing CHP capacity in the iron and steel industry, this segment also uses a variety of process waste (blast furnace gas, coke oven gas, waste heat) to provide steam and power at its facilities. Natural gas is used more frequently in non-integrated mills where process wastes are not as available.
  • Transportation – Automobile and truck manufacturers and their suppliers have started to utilize CHP more frequently to provide steam and power needs. Natural gas currently accounts for 88% of existing CHP capacity in this segment.

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