SIC 4961
STEAM AND AIR CONDITIONING SUPPLY



This industry comprises companies that produce and/or distribute steam and heated or cooled air for sale.

NAICS Code(s)

221330 (Steam and Air-Conditioning Supply)

The steam and air conditioning supply industry consists mainly of a few big competitors that produce and sell steam and hot air. The industry also encompasses some miscellaneous activities, including production of geothermal steam and trailer-mounted air conditioning units used as back-up cooling systems. In the 2000s, the industry was dominated by Trigen Energy Corporation, which was formed by the merging of Cogeneration Development Corporation with ELYO in 1986. Trigen focused its business entirely on energy for buildings.

One growing segment of this industry is cogeneration. Cogeneration is a process that conserves fuel by improving energy efficiency in power plants. When power plants create energy using thermal processes, excess heat is produced. However, only 30 to 40 percent of that thermal energy is converted to usable electricity. Many power plants try to capture this excess heat and deliver it directly to a nearby consumer in the form of hot air or steam. These plants, by capturing the heat, are able to produce and sell both heat and power.

An electric utility plant, for example, might capture heat dissipated during steam production. It could then channel the heat through an underground pipe or vent to, for example, a nearby automobile factory for the factory's heating needs. This is like a car's heating system, which vents residual heat dissipated by the engine back to the car's interior.

Plants using cogeneration typically operate at about 80 percent efficiency, meaning 80 percent of the energy source converts to usable power. Traditional power plants, by comparison, operate at closer to 40 percent efficiency. Although cogeneration has been understood for decades, it was not until the 1980s and 1990s that energy plants started cogeneration programs.

One of the largest cogeneration projects of the 1990s was done by Virginia Electric & Power Co. In 1993, this utility asked state regulators to approve a company plan to build and own 10 "dispersed energy facilities" in its territory, to help industrial customers save money. Other utilities observed Virginia Power's efforts, and some analysts predicted similar cogeneration efforts may end the construction of traditional centralized power plants.

A new wave of large cogeneration projects emerged toward the latter half of the decade and into the millennium, representing viable power sources. Most cogenerated power remains in the manufacturing sector, with the paper and chemical industries as leading users. The potential savings in energy remains tremendous. For example, in 1998 nearly 2.7 trillion cubic feet of natural gas, almost 60 million barrels of petroleum, and 56.8 million short tons of coal were all burned off in order to produce electricity.

With the continued deregulation of electricity and rising environmental concerns, the appeal of on-site electric generation continues to grow. One California study projected that on-site (distributed) generation would double by 2004. Power shortages and price hikes during the summer of 1998 stimulated further interests in the advantages of on-site generation.

The Federal government also had taken a renewed interest in cogenerated power because of the decrease in global carbon emissions. On December 10, 1998, the Department of Energy announced its goal to double the capacity of cogenerated power by 2010. Partially in anticipation of this expected growth, the Comprehensive Electricity Competition Act of 1999 contained provisions addressing required interconnections between cogenerative power producers and distribution utilities.

Trigen Energy Corporation, with 46 cogeneration and district energy facilities, produces steam hot water, electricity, and chilled water for 1,500 industrial and commercial customers in Canada, Mexico, and the United States. It also is a leader in converting biomass to energy. Its corporate offices were based in White Plains, New York. Trigen, which produces and sells electricity as a by-product of its heat and power generation, is considered the leading thermal science company in North America.

In 2001, there were 62 firms operating 84 establishments in this industry. There were about the same number of establishments employing fewer than 20 employees as there were employing more than 500. Overall, the industry employed 1,630 workers with an annual payroll of $80.1 million. The average hourly wage was $22.41.

Further Reading

Baker, Deborah J., ed. Ward's Business Directory of US Private and Public Companies. Detroit, MI: Thomson Gale, 2003.

Trigen Energy Corporation. 23 March 2004. Available from http://www.energy.rochester.edu/trigen .

U.S. Census Bureau. Statistics of U.S. Businesses: 2001. 1 March 2004. Available from http://www.census.gov/epcd/susb/2001/us/US332311.htm .

U.S. Department of Energy. Energy Information Administration. Annual Energy Outlook 1998 With Projections to 2015. 20 March 2000. Available from http://www.eia.doe.gov/oiaf/aeo97/elefut.html .

——. Electric Power Annual 1999, Vol. I and II. 20 March 2000. Available from http://www.eia.doe.gov/cneaf .

U.S. Department of Labor. 2001 Occupational Employment Statistics. Available from http://www.bls.gov .

U.S. Department of State. United States Information Agency. Energy Restructuring in the United States, 20 March 2000 Available from http://www.usia.gov/abtusia/posts/GE1/wwwh0000.html .

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