Making CHP ‘do-able’

Front view of a CHP unit

The Government’s set a target for the UK to generate 15.5 GWe from combined heat and power (CHP) by 2020. Today, only 5.5 GWe is generated from CHP. So, how do we deal with this target shortfall in CHP?

The planning department has, in recent years, relaxed their policy on approving CHP plant projects. On the other hand, they try to insist on new building design incorporating CHP.  Of course, nobody likes to be coerced like this. But what is more important is that arguably this approach is not effective. For example, design engineers sometimes find it difficult to justify using CHP instead of the traditional boiler. It is seen to be too costly to build the CHP where the return on carbon reduction will be so little.

There is nothing inherently wrong with CHP, but rather in how we apply it. This large kit, even with better efficiency, is not suitable for a building-by-building application. We need to think at a community scale. It works perfectly well in district heating, or even a small community with several buildings. The key is to have more buildings where the load profile requires a constant energy demand.

CHP is more costly than traditional boilers. When it comes in a larger scale, the capital investment will probably be rejected by your finance director. But, does that really have to be the end of the story?

A happy ending with Energy Supply Contracting?

Perhaps, if you haven’t already done so, you should consider Energy Supply Contracting (which is also called Contract Energy Management in the UK). The service providers (ESCOs) provide low carbon energy to the clients, and the advantage of this business model is that it can allow the end user to enjoy low carbon energy without any upfront cost.

More thoughts on this particular model to follow – but what do you think? Can you tell me about any good or bad experiences with this?

3 Responses to Making CHP ‘do-able’

  1. Ian says:

    If design engineers are finding it difficult to justify CHP over traditional boilers on the basis of carbon reduction per £ spent then I suspect the evaluation is not taking accurate account of displaced grid emmissions and the operating cost reduction that correctly sized and reliably operated CHP will deliver. If a CHP unit pays for itself in its lifetime, then compared to a boiler it has cost nothing.

    The problem, I believe, lies in the seperation of capex and opex at the key decision making stages in new construction. Very few building projects retain a link between first cost decision making and lifetime benefit, usually because the outcomes of each reside on the accounts of entirely seperate entities.

    As individuals, businesses or government our low carbon aspirations are constantly at odds with our desire to keep near term costs to a minimum.

    The ESCO model facilitates the tie between opex and capex. The ESCO takes care of the capital cost and derives its profitability from keeping opex to the lowest possible level. However its not quite a win-win, the ESCO charges a premium for the risk it is taking and expects to make some level of profit. Private industry
    is generally well equiped to make what is effectively a buy or lease decision and understand the opportunity cost of its investment in energy related equipment compared to process enhancement/core business. The Public sector has a tendency to engage in the ESCO/CEM model due to budget limitations, but in doing so gives a lot of the long term value of CHP to the ESCO rather than retaining that benefit for the long term good of the treasury.

  2. Bruce says:

    the post says we must think of cogen at a community scale, an increasingly common and strident refrain. But where’s the evidence ? Anybody seen any worthy feasibility studies, including all piping infrastructure, pumping, losses etc. proving it’s the right choice ?

  3. We have done a more than a dozen community energy feasibility studies and have built several community wide energy systems for private developers and public sector and it does take a life cycle cost analysis to appreciate the full benefit. Our systems enable the integration of CHP and numerous other energy sources, and are economically viable for private and public entities.

    The real challenge with CHP on a community scale is the capital, operating and maintenance costs of the distribution of the heat. District Heating systems arose when large industrialist recognized that they could take their waste heat and distribute the heat into their communities and governments aligned behind the industrialists to improve their national energy security and reduce greenhouse gas emissions.

    However, building systems have evolved over the last 100 years to where buildings are beginning to balance their internal heat gains (the people and equipment in the building plus solar gains) with the building’s heat losses through both natural means and the use of heat pumps. Architects and developers from around that world have found that injecting high temperature (typically 85C) is not an effective way of balancing the building’s energy demands, and does not return an effective rate of return for the utility either.

    What companies like Siemens AG of Germany have found, is that as buildings become more energy efficient, or as in Germany some buildings have become net zero, combined heat and power and district heating systems have become redundant, as it becomes all about moving low intensity energy around a community.

    That is modern District Energy Systems must take the imbalance (surplus) in heating or cooling, and distribute it out into the community. Imbalances in heating in one building is made up by imbalances in cooling in another building. Or in other words, the District Energy System must capture the rejected heat from buildings that are in cooling, and deliver it to buildings that are in heating (rejecting cold) and vice versa.

    For example, a community made up of 45% residential, 30% office and 25% retail can supply 25% to 35% of the total thermal energy through energy sharing. The variation is a function of the amount of thermal storage and the retention time in the network.

    A CHP system must therefore allow for the use of the imbalance in a buildings’ heat gains and heat losses, in addition to the integration of other energy sources throughout a community to help the community move to net zero, and make CHP an economically and environmentally sustainable option.

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