Manufacturers Best Practice Guide
Combined Heat and Power: Basics
Combined heat and power (CHP), or cogeneration, is the onsite generation of electricity and heating or cooling from a single fuel source. Rather than consuming more fuel to produce heat, cogeneration utilizes existing byproducts of electricity generation, such as steam and heat. Cogeneration is thermodynamically the most efficient use of fuel. By capturing the excess heat, CHP allows for a more total use of energy than conventional generation, potentially reaching an efficiency of 80%, compared with approximately 35% for conventional plants. This means that less fuel needs to be consumed to produce the same amount of useful energy.
Conventional power plants release the heat created as a byproduct of electricity generation to the environment through cooling towers, as flue gas or by other means. CHP captures the byproduct heat for domestic or industrial heating purposes, either very close to the plant, or for distribution through pipes to heat local housing (district heating). Byproduct heat at moderate temperatures (100°C to 180°C) can also be used in absorption chillers for cooling. A plant producing electricity, heat and cold is sometimes called a trigeneration, or more generally, polygeneration plant.
In California, there are more than 770 active cogeneration projects, representing 17% (9,000 megawatts) of power generation in the state. Hospitals, universities, food processors, refineries and various industries use cogeneration to power their facilities. Cogeneration plants may sell the excess electricity they produce to investor-owned utilities for use by California consumers. It is a practical way for industries to not only reduce power and fuel usage, but also to dramatically reduce their GHG emissions. The 17% of power produced through co-generation is equivalent to removing 5 million cars from the California roadways, preventing the emission of over 26,000,000 tons of CO2 and NOx. (CogenWorks)
In 1998, the U.S. Department of Energy set a goal to double U.S. cogeneration capacity by 2010, which could potentially add 46 gigawatts of electricity - the equivalent of almost 100 large (500-MW) power plants. Analysis by the American Council for an Energy Efficient Economy found that the DOE goal is not only achievable, but could be readily surpassed.
To understand the advantages of cogeneration, it is helpful to first think about grid power. Electricity sent along the utility grid is about 27% efficient, with as much as 73% of the fuel input energy lost by the time power reaches end-users at the socket. About 65% of this fuel is lost as waste heat during generation, and another 8% or so is lost along transmission lines.
CHP limits losses by recapturing waste heat and reusing it as a source of heating or cooling. Not only does this save energy otherwise lost up the smoke stack, it also reduces onsite energy demand. Several functions can be powered by waste heat rather than electricity or natural gas: steam generation, process heat, building heat and process cooling, for example. The most efficient CHP systems have high thermal loads relative to electric loads, and can achieve upwards of 80% efficiency.
CHP also minimizes the distance electricity has to travel between generator and end-use, so very little is lost during transmission.
Installing a CHP system is an expensive capital investment, but yields substantial energy savings. Like boiler systems, there are several fuel options that work well with CHP, so some businesses can achieve even further cost savings using waste products such as methane or biomass instead of fossil fuels.
For many businesses in California, CHP has another important advantage: reliability. Since electricity is generated onsite, supply disruptions in grid power will not interfere with operations or building systems. In effect, CHP can act as backup generation. Given the high cost of disruptions to most manufacturers, the indirect benefit of increased reliability can be almost as significant as energy cost savings.
Quick Facts
Cogeneration, or combined heat and power (CHP), is the most efficient and cost-effective form of distributed generation. Cogeneration provides numerous benefits to California, including reduced energy costs, more efficient fuel use, fewer environmental impacts, improved reliability and power quality, locations near load centers and support of utility transmission and distribution systems." (California Energy Commission)