Combined heat and power (CHP), also referred to as cogeneration, has been quietly providing highly efficient electricity and process heat to vital industries for decades. Cogeneration is a proven, cost-effective tool for reducing emissions and furthering sustainability goals.
What is a CHP system?
CHP, or cogeneration, is the simultaneous production of electricity or power and thermal energy from a centralized source of energy.
CHP combines the production of thermal energy, used for both heating and cooling, and electricity in one process.
Key facts about CHP systems:
- CHP systems can be located at an individual facility, building, or campus. They can also be combined with district energy or utility resource.
- CHP systems usually consist of a few key components: a heat engine, generator, heat recovery, and electrical interconnection, which are configured into an integrated whole.
- CHP is typically employed where there is a need for both electricity and thermal energy.
- All CHP systems involve recovering otherwise-wasted thermal energy to produce useful thermal energy or electricity.
- As a result, CHP systems require less fuel to produce the same energy output as conventional systems, emitting fewer greenhouse gases and air pollutants.
How do CHP systems compare to separate heat and power (SHP) systems?
Although CHP is used in over 4,400 facilities across the U.S., many operations are still powered with conventional, onsite separate heat and power (SHP) systems.
Unlike CHP, SHP systems are not integrated, meaning they obtain fuel from several sources, such as central fossil-fueled power plants and onsite natural gas heating systems.
To get the complete picture of how CHP compares to SHP, let’s dive into the facts across a few key areas of focus.
Is CHP energy efficient?
The average efficiency of fossil-fueled power plants in the U.S. is 36%. This means that 64% of the energy used to produce electricity at most power plants in the U.S. is wasted in the form of heat discharged into the atmosphere.
Overall, SHP is 50–55% fuel-efficient. Alternatively, CHP systems typically achieve total system efficiencies of 65-80%, by recovering and using the otherwise-wasted heat from on-site electricity production.
Can CHP systems drive cost savings?
According to the U.S. Department of Energy and the EPA, installing 40 GW of new CHP capacity would save U.S. businesses and industries $10 billion each year in energy costs. These agencies estimate that such an investment would cost about $40 to $80 billion and could pay for itself within four to eight years.
CHP systems also reduce energy bills because of their high efficiency. Recurring costs are further reduced because the CHP output reduces the need for electricity purchases.
How sustainable are CHP systems?
Because CHP systems require less fuel to produce the same energy output as SHP systems, CHP can reduce emissions of greenhouse gases and air pollutants such as nitrogen oxides (NOx) and sulfur dioxide (SO2).
A CHP system can operate on various fuel types, such as natural gas, biogas, biomass, and more sustainable alternatives as they become widely available. The emissions prevented by a single 5MW CHP system are equivalent to the annual emissions of more than 5,400 passenger vehicles.
What is the growth potential for CHP systems?
There is enormous growth potential for the CHP market: Global Market Insights forecasts revenue generation within the market to increase from $20 billion in 2016 to over $45 billion by the end of 2024.
Investing in CHP systems can also help stimulate local, state, and regional economies through job creation and market development. Demand for raw materials and construction, installation, and maintenance services can create green jobs and develop markets for future sustainable technologies.
The potential capacity for CHP also cannot be understated: a U.S. Department of Energy study identified nearly 14GW of additional technical potential for CHP across more than 5,000 U.S. colleges and universities alone.
How reliable are CHP systems?
CHP systems are more efficient and more resilient, and reliable than conventional methods, especially when configured as part of an advanced microgrid. These systems can be designed to operate independently from the electric grid to enhance facility reliability.
Through the onsite generation and improved reliability, facilities can continue operating in the event of a disaster or an interruption of grid-supplied electricity.
CHP enables a low‑carbon future
Major U.S. cities like Boston, Cambridge, and Philadelphia are already reaping the benefits of CHP. CHP is integrated with local district energy networks in these communities, delivering low-carbon thermal energy to buildings and campuses across the cities’ urban core.
By leveraging existing district energy infrastructure and CHP, these cities are leading the way in America’s adoption of this powerful technology and forging ahead towards a zero-carbon future.
