Manufacturers to receive Xcel incentives for waste heat electricity

Colorado manufacturers will be able to receive incentives from Xcel Energy Inc. (NYSE: XEL) for electricity generated from heat produced by their operations under a ruling from the Public Utilities Commission.

The Colorado Public Utilities Commission approved last month an Xcel Energy Inc. proposal to provide financial incentives to manufacturers that convert waste heat to power, known as recycled energy. Recycled energy is a way to capture heat from exhaust stacks or pipes that would otherwise be lost and convert it into electricity.

The ruling lets Xcel Energy pay an incentive of about $500 per kilowatt of recycled energy over 10 years.

“The ruling, a first for the state, places recycled energy technologies alongside better-known renewables like wind, solar, biomass and geothermal,” said Christine Brinker, director of combined heat and power at the Southwest Energy Efficiency Project.

The Boulder-based organization, which promotes energy efficiency in Colorado, New Mexico, Arizona, Utah, Wyoming and Nevada, advocated for aspects of the recycled energy program. At least four of 29 states that have renewable energy standards include waste heat as a qualifying resource, including Colorado, according to a 2011 report by Massachusetts-based IDC Energy Insights.

The ruling also lets Xcel count as many as 20 megawatts of recycled energy annually toward its goals of 30 percent renewable energy by 2020 under the Renewable Energy Standard passed by the state Legislature in 2007. Individual projects can be as large as 10 megawatts, and there is no minimum project size.

Businesses that produce steel, glass, metals, chemicals, oil and gas, and cement, as well as bakeries and pipeline compressor stations, often have operations suited for recycled energy projects. The incentives help make affordable the cost of turning excess heat from operations into energy that can be used on-site or sold.

Xcel has until Feb. 23 to file details on the program, company spokesman Mark Stutz said. The company will know toward the end of the first quarter when it will launch the program.

“There still are some issues to be determined,” he said.