Cap-and-Trade is Coming

Posted on October 23, 2012


To better elucidate the benefits of cogenerated power (aka Combined Heat and Power, or CHP), consider cap-and-trade regulations to limit greenhouse gas emissions via permits.

California is prepared to roll out the nation’s first statewide cap-and-trade programBuildings magazine reports that under the initial effort, California’s Air Resource Board (ARB) will register 400 primarily industrial and utility facilities.  Permits worth one ton of gas emissions will be distributed.  The idea is that companies which “green” their emissions will need less permits, and will be allowed to auction any excess permits, or “credits”, quarterly to more needy companies.  Emissions will never be directly capped; however permits available for annual purchase (to cover a company’s emissions) will be reduced each year toward a target level.

Possibly of more interest to hospitals considering green energy on campus, companies that generate power on-site, including cogenerated power, will receive more favorable treatment in the cap-and-trade system.  They are likely to receive benefits that are yet-to-be-determined, but may include more permits, special allowances at quarterly auctions, or other exemptions.

For hospitals, specifically in California but in other states with progressive attitudes toward energy, it is time to develop or revisit the hospital’s energy portfolio for the future.