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Advanced Energy Technology of the Week: Combined Heat and Power (CHP)

Matt Stanberry's picture
Advanced Energy Economy

Matt Stanberry is the Director of Industry Analysis and oversees AEE's analytical efforts and the development of information describing the advanced energy industry, its businesses, and...

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  • Aug 21, 2014

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The U.S. Environmental Protection Agency’s (EPA’s) plan to regulate carbon emissions is just the latest challenge facing the U.S. electric power system. Technological innovation is disrupting old ways of doing business and accelerating grid modernization. Earlier this year, AEE released Advanced Energy Technologies for Greenhouse Gas Reduction, a report detailing the use, application, and benefits of 40 specific advanced energy technologies and services. This post is one in a seriesdrawn from the technology profiles within that report.

CHPCombined Heat and Power (CHP), also called cogeneration, generates both electricity and useful heat from the same fuel source. CHP typically involves dedicated equipment to generate electricity, followed by recovery of exhaust/waste heat for use in industrial processes, space heating, or water heating. Any fuel can be used for CHP, including fossil fuels and renewable fuels. In certain industries, onsite “waste” fuels are used for CHP, such as wood chips, bark and sawdust in forest products, blast furnace gases in steel mills, and various process gas streams in refining and petrochemicals. Because thermal energy (steam, hot water) is more difficult to transport than electricity, CHP systems are typically installed at or near a suitable thermal load. Most U.S. CHP capacity is installed at industrial sites, but it is also fairly common at college campuses, hospitals, military bases, and in district energy plants.[1] Housing complexes and commercial buildings also use CHP. So-called micro-CHP can be used in residences and small commercial buildings for water or space heating or for heating swimming pools. CCHP (combined cooling, heating, and power) is a variation of CHP that uses the waste heat to drive a cooling system (via an absorption chiller) in addition to generating heat and power. CCHP can make sense when heating loads are more seasonal and where there are large cooling requirements, resulting in higher overall utilization of waste heat than would be possible just with CHP.

CHP has been used in some form for over a century. New York City, for example, has operated a district heating system that uses CHP since 1882. Despite its long track record, CHP only makes up about 8% of U.S. generation capacity (about 80 GW), suggesting that there is ample opportunity for greater adoption. Hospitals and colleges are good candidates for CHP, as CHP systems can continue to generate power during grid outages. For example, incentivized by ConEdison’s lower rate structure for CHP, New York Presbyterian Hospital installed a 7.5 MW CHP system, reducing the amount of power purchased by 80%. The avoided power purchases and overall fuel savings are expected to reduce greenhouse gas emissions by 67,000 tons each year, not including any emissions from construction.

In the United States, average power plant efficiency is about 34%, i.e., roughly 2/3 of the fuel’s energy content is wasted. Best-in-class power plants have efficiencies of about 50% to 55%. By utilizing waste heat, CHP plants can typically achieve overall fuel efficiencies of 75% to 85%, and sometimes even higher. Overall, CHP reduces annual U.S. energy consumption by 1.8% and avoids CO2 emission of 248 million metric tons a year. Should the President’s goal of adding 50 GW CHP to U.S. generation capacity by 2020 be met, an additional 100 million metric tons of CO2 emissions per year could be avoided.

[1] District energy is discussed in more detail in another part of this series.

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Engineer- Poet's picture
Engineer- Poet on Aug 21, 2014

Cogeneration using fossil fuels is a stopgap. A very useful and possibly essential stopgap, but still a stopgap. We are steadily depleting the finite resources of oil and gas, and nothing that relies on them will be around any longer than they are.

Engineer- Poet's picture
Engineer- Poet on Aug 22, 2014

Not just the cost of the pipes but the losses from them.  If you compare the energy density of methane (50 kJ/g LHV) to steam (about 2.2 kJ/g), you’ll see that you have to move a lot more physical matter per unit of energy.  Moving stuff requires energy, so you run into diminishing returns very quickly.

Most of the proposed CHP systems aren’t powerplants converted to make heat, but heating plants which also generate electricity.  They’ll be sized for the required heat output.

Bas Gresnigt's picture
Bas Gresnigt on Aug 22, 2014

My two brothers run a large greenhouse in The Netherlands (NL), growing tomatoes, etc. 
They have 4 huge engines that run on natural gas.
Those drive 4 electricity generators that deliver to the grid.

The hot cooling water of the engines heat their greenhouse. The exhaust gasses of the engines are injected into the greenhouse as those contain high levels of CO2, which implies more growth.

As the whole installation is rather complicated and they are a market garden, they outsourced management to an utility which has a dedicated control room that (remote) manages a number of similar installations (there are several competiting utilities that made this job part of their core business). 

Roughly 30% of all electricity In NL is generated using this method (we have lots of green houses).

In general, the idea of one central power plant distributing heat is not very good as transport losses and investments takes a lot of the benefits away. Small power plants heating one or few nearby buildings seems to be beneficial. Also environmental, as no heat is wasted.

They have 4 units as they cannot afford an interruption for more than an hour or so. Those plants require the right temperature (within a degree celsius) and CO2 level to grow optimal.

Bas Gresnigt's picture
Bas Gresnigt on Aug 22, 2014

We now also can buy and install micro-CHP boilers in our houses!
Those generate electricity using an engine running on gas, and use the otherwise wasted warmth to heat the house as well as the douche, etc.
They often have a sterling engine wich allows for very quiet operation.

The nice thing is that such micro-CHP produce most electricity in the evening and especial in winter, when your rooftop solar produces very little!

Nathan Wilson's picture
Nathan Wilson on Sep 5, 2014

CHP is a great way to reduce fossil fuel use by a little bit.  In a future (desirable) non-fossil energy system, it clearly won’t be an important source of electricity, since almost all electricity in that scenario will come from nuclear and renewable power.  

In many cases CH&P (especially micro-CH&P) competes with electrically power heat pumps; with clean electricity available, CH&P is the much dirtier option.  In such a non-fossil energy system, we’ll need all the biomass and waste we can get to make transportation fuel, so that can’t be fuel source for CH&P … it’s a dead-end technology.

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