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Combined Heat and Power Systems



In Combined Heat and Power (CHP) systems the fuel source can be natural gas, propane, fuel oil, coal, wood chips, biogas, other biomass materials or any combination. CHP uses this fuel to provide all or a part of the electric energy and thermal energy output to a facility at an overall energy efficiency that is greater than what would be required if the electricity and thermal energy were being provided separately.

Electric power production requires high temperatures, while lower temperatures can fulfill space heating or process energy needs. By capturing unused low temperature heat energy rejected from the electric production process, fuel energy is used more efficiently. Combining heat and power production reduces the net fuel demands for energy generation by supplying otherwise unused heat to residential, commercial and industrial consumers who have thermal needs.

A range of commercially available technologies can be employed in CHP facilities including: diesel and gasoline engines, fuel cells, combustion turbines and steam turbine generators combined with fossil fuel fired boilers. Although fuel cells are not normally considered to be cogeneration devices, they present common issues to CHP.


Combined Heat and Power systems use fuels, both fossil and renewable, to produce electricity or mechanical power and useful thermal (heating and cooling) energy far more efficiently and with lower emissions than conventional separate heat and centralized power systems. Nationally, current CHP benefits includes:

• Produces over 9% of the electric power generated in the U.S.
• Saves users over $5 billion each year in energy costs
• Decreases energy consumption by almost 1.3 trillion Btus a year
• Reduces NOx emissions by 0.4 million tons per year
• Reduces SO2 emissions by over 0.9 million tons per year
• Prevents the release of over 35 million metric tons of carbon equivalent into the atmosphere.

This benefit has come about primarily from large industrial facilities such as are found in the paper, refining and chemical industries. However, new CHP technologies now entering the market hold the promise for even larger benefits for both large and small users by:

• Improving profitability of local companies,
• Utilizing an environmentally friendly way to build generation capacity, and by
• Reducing the load on Electric Transmission Infrastructure through distributed generation.



Reciprocating steam engines powered the first electric generators in the 1880's. Because these plants were inefficient, a large amount of waste steam was available for process use or building heat. Early electrical developers provided electricity to customers and sent the waste heat through steam pipes for space heating. This concept of what has been referred to as district heating was first implemented in 1884 to provide energy for the Del Coronado Hotel in San Diego.

By the turn of the century, larger steam turbine generators with greater efficiencies replaced reciprocating engines. Power engineers, in an effort to satisfy expanding energy needs, focussed on building larger and larger steam turbine generating stations. Generating efficiencies improved from 3.7% in 1902 to 16.5% in 1932.

During the early 20th century abundant and relatively cheap coal became the fuel of choice for electric generation. But, the public nuisance of coal dust and flue gas particulate emissions forced electric generation facilities out of the cities. The remote location of most coal-fired power plants made capture and transmission of heat energy uneconomical and brought an end to use of waste heat in surrounding buildings. In fact, by the time federal regulation of the utility industry began in the 1930's, generation and supply of electrical energy were separate from generation and supply of heat energy. This model would predominate well into the 1980's. This did not bring an end to the supply of steam through pipes for space heating. In many cases, however, because the electrical loads were increasing in the summer time when heating was not required, it was more economical to separate these two functions.

By 1965, conventional steam turbine technology had reached its peak efficiency, rising to roughly 33 percent. Today's advanced combustion turbine technology can produce electricity at over 40% efficiency when operated alone. Because of improvements spurred by defense and air transport needs, combustion turbine technology now surpasses steam technology’s efficiency. This is due in part to the fact that the hot exhaust gases from a gas turbine, unlike fuel fired boilers which feed steam turbine generators, have a relatively high energy content which still can be used to make steam in a Heat Recovery Steam Generator (HSRG). The greatest efficiency - over 60 percent - occurs when the two cycles are combined; i.e., when a generator is driven by a gas turbine, and a second generator is driven by steam made with the gas turbine's exhaust heat. Energy waste drops from two-thirds of the input fuel to less than half in this process, known as a Combined Cycle. For non-utility applications, the high-energy content of the gas turbine exhaust can alternatively be used with a waste heat boiler to provide steam for process or space heating needs in a CHP process.

In the 1980's the Public Utility Regulatory Policies Act (PURPA) opened the field to improved efficiency, which gave industrial energy users a financial incentive to adopt CHP. Those that have continued to generate their own power have realized fuel efficiencies as high as 90 percent, depending on how well the electric and thermal needs are matched and on which type of system is used.



On a national scale, CHP has the potential to offset significant quantities of emissions of CO2 and other so-called greenhouse gases (see Appendix C). CHP systems can have an overall energy efficiency that is more than double that of most electricity-only fossil fuel power plants by distributing the waste thermal energy from power generation that would otherwise be lost as waste heat. CHP systems increase the energy efficiency and thus reduce the net amount of air pollutants per unit of energy derived from fuels.

Based on the Presidental Climate Change Initiative, DOE has kicked off a CHP Challenge in order to “raise awareness of the energy, environmental and economic benefits of CHP, and to promote innovative thinking about ways to accelerate the use of CHP.” The initiative has three goals: to facilitate the removal of barriers to CHP implementation, especially on the state level; to facilitate the identification and installation of innovative CHP projects; and to assist states in educating end users and the financial community about the benefits of CHP, especially new CHP technologies.


Facilities choosing to use CHP for their total electrical power needs may also incorporate on-site backup power for use when the CHP is down. Under these conditions the facility is independent of the electrical grid. Normally, however, facilities will maintain a connection to the grid and continue their service with a distribution utility. This occurs for a variety of reasons, such as to supplement their on-site power generation to meet their peak electrical requirements, or for backup reliability purposes during planned or unplanned outages of their own CHP system.

CHP systems need a balanced relationship between the thermal energy supplied and the electric power produced that depends on the type of CHP system being used (Appendix B). It is also normally important to have thermal loads that are coincidental with the electrical load to make CHP cost effective. The use of thermal energy storage is not typically economic unless the electrical rate structure has a heavy demand charge. Hence, most CHP facilities use the thermal energy at the time it is produced and so thermal energy demand should match the time that electrical energy is needed. A facility can be designed to match either the thermal or electrical load of the facility. If a facility is designed to meet the thermal load, the difference between the electrical power produced by the CHP system and the power required by the facility must either be sold to others or purchased from the grid. Conversely, if the facility is designed to meet the electrical load, energy to meet the thermal load will either need to be supplemented or disposed of. For example, a gas turbine can be used to generate electrical power and then the exhaust gases can be passed to a heat recover steam generator for the supplying thermal needs of the facility. The gas turbine can be used to track the electrical load requirement and if insufficient waste heat is available, supplemental fuel firing can be used to supply the heat recovery steam generator with additional energy to produce needed steam requirements.

New technologies are allowing CHP to enter new markets, including small commercial buildings and food service operations. It may also seem that cooling loads are not consistent with the hot thermal output from CHP plants. However, by using an absorption cycle chiller, the hot thermal output of the CHP plant can be converted to a chilled water supply for use in the summer for space cooling.

CHP technology should be considered in geographical areas where electricity rates are high, fuel costs are low, and for applications with a requirement for both electricity and thermal energy. Typical candidates for implementation of CHP include:

• any industrial company requiring coincidental thermal energy,
• schools, hospitals and universities,
• apartment buildings (urban district heating systems),
• commercial buildings requiring heating and air conditioning,
• health clubs, laundries, nursing homes and extended care facilities, and
• facilities considering upgrades or replacement of existing boilers.