Last edited 10 Oct 2020

Combined heat and power CHP

Combined heat and power (CHP), sometimes referred to as cogeneration, is a process in which the heat that is created as a by-product of power generation is captured and used rather than simply being wasted.

According to the Combined Heat and Power Association, “In today’s coal and gas fired power stations, up to two thirds of the overall energy consumed is lost in this way, often seen as a cloud of steam rising from cooling towers.”

Whilst there are a range of different forms of CHP, typically, a gas-powered turbine or reciprocating engine is used to produce electricity, and the heat recovered is used for local water or space heating, or to support an industrial process. Increasingly absorption cooling can use the heat recovered to produce cooling. Sometimes this process is referred to as trigeneration or combined cooling, heat and power (CCHP).

Alternative systems have heat generation as their primary function, and then use a steam turbine to generate electricity.

CHP as a process is not dependent on a specific fuel and so renewable fuels such as biomass feedstocks can be used.

Very broadly, CHP is appropriate in circumstances where there is a continuous local demand for heat and power, such as district heating schemes, hotels and leisure centres, industrial applications that require heat for manufacturing processes and so on. If excess electricity is generated, this can be exported back to the national grid.

The Department of Energy and Climate Change (DECC) lists the advantages of CHP as:

An efficiency of over 80%, compared to 38% for a coal-fired power station.
Up to 30% savings on energy bills.
Up to 30% reduction in carbon emissions.
Reduced transmission and distribution losses.
Increased fuel supply security.

CHP can be a very significant investment and requires careful consideration. However, where they are certified as Good Quality (GQ)CHP, they are exempt from the Climate Change Levy for fuel inputs and electricity outputs. They may also qualify as Enhanced Capital Allowances (ECA) and be eligible for business rates exemption.

CHP plant can be manufactured as packaged units or can be custom designed and built. Increasingly, micro CHP units can be used to supply small-scale and domestic needs. In effect, these replace conventional boilers. Heat is the primary output of micro CHP, with the ratio of heat to electricity for domestic appliances typically around 6:1, generating up to 1kW of electricity. As with larger CHP plant, if excess electricity is generated, this can be exported back to the national grid. This may be eligible for Feed-in Tariffs in England and Wales and is considered an ‘eligible measure’ suitable for funding under the Green Deal.