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How’s this for a tantalizing possibility: rather than install solar panels on your roof, the lost heat from your furnace could power your home.

That’s not yet a product, but a growing number of scientists and clean-tech companies are trying to coax usable energy from smokestacks and other waste-heat sources.

A global push toward energy efficiency is prodding more industrial outfits to reuse heat from their operations that would otherwise be lost to the skies.

Meanwhile, improving thermoelectric technology that converts heat into electricity is being fitted onto everything fromcar exhaust pipes to furnace flues.

It’s a sign that energy efficiency, which often takes a backseat to renewable energy or alternative fuels, is getting more attention from technology innovators.

One company, GMZ Energy which was formed earlier this year by researchers from Boston College and the Massachusetts Institute of Technology, is taking a high-tech path to waste-heat recovery.

It has developed a nanomaterial-manufacturing process that improves the efficiency of existing thermoelectric modules, which are usually made from bismuth telluride and look something like a computer chip.

Thermoelectric devices can work in two directions: passing an electrical current through a module creates heat on one side and cooling on the other. Working in the reverse, applying heat to a device will create electricity.

Initially, GMZ Energy plans to sell modules to the existing market for cooling in small refrigerators or server racks, CEO Mike Clary said. The bigger market–on the order of billions of dollars–is converting waste heat from smokestacks or industrial equipment to electricity, he said.

“Eventually, we’re going to see a tremendous amount of waste heat recovery applications, but that’s 5 to 10 years off,” Clary said. “We have to get to that 10 percent efficiency threshold to start making it viable.”

Clary said appliance maker Bosch has shown interest in making a home-heating unit with an attachment that makes electricity from exhaust heat. At 10 percent efficiency, a home could meet its power needs with the heat on.

GMZ’s prototype modules now operate at about 7 percent efficiency, 30 percent or 40 percent better for cooling than existing devices, Clary said.

A thermoelectric module, which one company intends to use for harvesting waste heat to make electricity.

The company, which got its seed funding from venture capital firm Kleiner Perkins Caufield & Byers, is looking to raise a round of funding in September to set up assembly operations in China, Clary said.

It is also readying a technical paper to show that its manufacturing process, where material is milled and then repressed into an ingot, works with both bismuth antimony telluride and silicon germanium for high-temperature applications.

Make steam, make juice
Automakers, too, are investigating heat recovery through thermoelectric devices.

BMW and General Motors are reviving work in this area and plan to test attachments to exhaust pipes next year. So far, research indicates that mileage could be improved by about 5 percent, or 1 mile per gallon, on a Chevrolet Suburban.

GMZ Energy’s Clary thinks that automakers’ interest in thermoelectrics is one reason the market is likely to take shape. He also notes that many researchers are working in the area.

But even before any breakthroughs in advanced materials, many people consider waste heat recovery the proverbial low-hanging fruit in energy efficiency.

“The market is a lot of wasted energy, and that is, by definition, a zero-cost feedstock,” said Roger Ballentine, president of Green Strategies and a clean-tech investor. “That’s a pretty attractive proposition.”

A traditional heat recovery system. Click to see larger image.

(Credit:Recycled Energy Development)

Ballentine has consulted for China Energy Recovery, a Shanghai-based company that says it can capture 90 percent of energy that would otherwise be lost.

Efficiency, in general, is less sexy than renewable-power generation, an area that attracts more entrepreneurs and investors. But the economics of efficiency are usually better, said Ballentine, who expects to see more growth in heat recovery.

“If energy prices keep going up, the economics keep getting better,” he said.

Co-generation plants, where both heat and electricity are produced, have been around for many years. Yet even though it is a cleaner form of power generation than burning fossil fuels, combined heat and power has held steady, at 9 percent of energy production, for several years, according to the World Alliance for Decentralized Energy.

Wasting away
The granddaddy of the waste heat recovery business is Recycled Energy Development, whose chairman, Thomas Casten, has been involved in energy-recycling projects for 30 years.

In projects at power plants or factories, the company places coils around a smokestack or other equipment to heat water. That hot water is then pumped back into the facility for heating or industrial processes. Or the hot water is turned into pressurized steam to make electricity in a turbine.

The amount of heat in a typical power plant that goes up in smoke is a “problem and an embarrassment,” said Dick Munson, senior vice president at Recycled Energy Development, who spoke at the Virtual Energy Forum in June.

The average U.S. power plant uses three units of fuel to do one unit of power, meaning that two-thirds of the energy content is vented as waste, he said.

The efficiency of power plants in the United States has not improved in 50 years, while industry in Denmark has managed to increase efficiency 60 percent in the last three years, he said.

One customer is taking wasted energy from a steel smelter to make 220 megawatts of electricity. That’s on the order of a single large solar-power plant. Through waste heat recovery, the U.S. could generate the equivalent of 400 coal-fired power plants, Munson said.

Polices need to be updated to better favor efficiency, Munson argued. Another barrier to industrial-scale heat-recycling projects is high capital costs, Ballentine added.

But one of the biggest impediments to heat recovery is changing the mind-set of building operators and product designers.

That’s even truer of thermoelectric technology, which still needs to improve before more people look at it seriously, said GMZ Energy’s Clary. A hybrid car or diesel truck, for example, could improve efficiency, as could a solar-thermal power generator.

“New ways of thinking like that just don’t happen overnight in complex systems that have complex product cycles,” he said. “As people get dialed into it, and the performance goes up, it will take off.”

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