Combined Heat and Power (CHP)

Definition

Combined Heat and Power (CHP) is also known as co-generation. It is an integrated system which produces electricity on-site and recovers its by-product, heat. The heat recovered by the system is used for heating or cooling buildings. The system captures the thermal energy instead of rejecting it as waste and therefore, it is comparatively a very efficient system. The source of fuel for CHP can be fossil as well as renewable such as natural gas, propane, fuel oil, coal, wood-chips, and biogas.

CHP systems are used to produce a portion of electricity needed by a facility whereas the rest is purchased from the utility. CHP offers an energy efficient system and helps reduce emissions.

CHP Applications

CHP systems are most suitable in locations where electricity rates are high, fuel costs are low and for facilities that need both electric and thermal energy. Typical customers of CHP are:

• Industrial companies requiring electric and thermal energy
• Institutions such as schools
• Multi-family residential facilities
• Facilities considering upgrades or replacement of boilers

Benefits of CHP Systems

Large industrial facilities such as paper, refining and chemical may benefit from a CHP system as follows:

• Save energy costs of $5 billion per year
• Reduction of energy consumption by 1.3 trillion BTU’s per year
• Prevent emission of 35 million metric tons of carbon

Common benefits to large and small users of CHP systems are:

• Less fuel is required to produce energy; transmission and distribution losses of power grids are absent.
• The impact of power outages in utilities is eliminated. It improves power quality for sensitive equipment.
• High efficiency of CHP, combined heat and power efficiencies of about 90%, means reduction in energy bills and hedge against unstable energy costs.

Costs

Unit cost of 2 to 6KW systems is about $10,000 to $20,000. A CHP system using natural gas requires routine maintenance every 4,000 to 10,000 hours. Necessary servicing during this period like oil and filter change, spark plug replacement, etc. costs about $200.

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