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18. Combined Heat and Power – Opportunity or Liability?

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On-site Combined Heat and Power (CHP) seems to be an attractive way to reduce costs and cut carbon emissions. The reality is that many CHP plants do the exact opposite of this. Unfortunately, many users are unaware that this is happening or, even if they know, they’re stuck with a very expensive piece of kit with high maintenance costs, often paid for with borrowed money and operated by a third party.

In our 21 years’ experience as independent energy consultants CHP is one of the most problematic and poorly specified energy efficiency solutions that we come across.

In this issue of Intelligent Energy Insights Nick Osmaston, our Principal Associate Consultant, explains CHP and the reasons why it is often not a good energy efficiency solution on cost or carbon reduction grounds.

Nick d3450_no - - beckyeveloped our rigorous Energy Efficiency Methodology and has over twenty years’ experience of providing energy consultancy services in the leisure, education, health, manufacturing and retail sectors - and has advanced knowledge of all relevant technologies.

He covers the following topics:

  • Why CHP and what is it?
  • Does CHP reduce carbon emissions?
  • Does CHP save money?
  • Should CHP be used for space and water heating?
  • How is CHP correctly sized?
  • How can I know if my CHP is operating efficiently?
  • Should I invest in CHP for a new or existing building?
  • What are the future prospects for CHP?

You might also like to consult the following related Insights.

Boiler plant - beasts in the basement
Are boiler controls a good idea?
Is your BMS wasting energy?

Click here to see all Intelligent Energy Insight topics

John Treble, Managing Director

Why CHP and what is it?

Gene3450_pic1_insight18 - - beckyrating electricity using heat from the combustion of fossil fuels or biomass, or from the fission of uranium in a reactor, is inherently inefficient. Although the latest combined cycle gas turbine power stations (illustrated) claim efficiencies of around 50%, this still means that half of the energy is effectively wasted. The laws of physics make it very difficult to improve on this and most power stations achieve less than 40%.

To further improve efficiency, it is necessary to make use of the heat wasted in the electricity generation process. In isolated cases, such as the historic use of Battersea Power Station to heat the Dolp3450_pic2_insight18 - - beckyhin Square development, it is possible to use the waste heat from a power station directly.

However, the usual method employed is CHP in which the heat rejected from an engine’s water-jacket, oil-cooler, exhaust etc is used to provide process, space or water heating. CHP can vary from a few kilowatts of electrical output to tens, or in industrial installations such as oil refineries, hundreds of megawatts.

Smaller units of less than 2 MW, the subject of this article, are usually reciprocating gas-engines with spark ignition, whilst units over that size are invariably gas-turbine. Reciprocating engines will generally have theoretical electrical efficiencies of 30-35%, but gas turbines will usually be lower than this, although modern “regenerative” units may achieve closer to 40%.

It should be noted that the majority of CHP providers quote the efficiencies of their units based on the net calorific value of fuel (the lower heat value) rather than the gross figure which is what you pay for. This exaggerates the efficiency of the CHP. However, these figures are still lower than the efficiencies achieved by “grid” generators.

The two most important questions to ask about existing and proposed CHP schemes are:

  • Does CHP reduce carbon emissions?
  • Does CHP save money?

Does CHP reduce carbon emissions?

Carb3450_1pic5-insight15 - - beckyon savings will result if beneficial use is made of a healthy proportion of CHP’s thermal output. This does not happen automatically: if the CHP is primarily used to support a space-heating load then there may be long periods during the warmer months when the full thermal output is not required and modulation or heat-rejection will result in reduced efficiency. Carbon savings are affected by seasonal factors, and reduced operation may be necessary during the warmer months if carbon savings are to be maximised.

“Grid average” carbon intensity benefits from the virtually zero emissions from hydro, nuclear and renewables such as wind. The result of this is that for a CHP installation to reduce carbon emissions relative to the grid, beneficial use must be made of a significant proportion of the available thermal output: usually 30% or more.

Does CHP save money?

CHP installations are extremely capital intensive, and the maintenance costs are considerable. If CHP operation is to be financially beneficial, it is likely that as much as 60% of the unit’s thermal output must be utilised. Existing and potential operators of CHP therefore need to be very aware of the actual efficiencies of their installations and continually work to improve them. Participation in the Government’s CHP Quality Assurance (CHPQA) programme can assist in this process.

Should CHP be used for space and water heating?

Most small-scale CHP supports space heating, and the demand for this should be zero in the summer months in the majority of cases which means that the plant cannot be operated efficiently for all of the year. Significant demands for heating in the summer usually indicate inefficient plant operation rather than a need for CHP.

Using CHP for the production of domestic hot-water (DHW) rarely improves the situation as demands for DHW are usually quite small, and the thermal input required is minimal. In addition, providing DHW from centralised plant is inherently inefficient, with point-of-use generation being preferable. Even using dedicated water heaters, DHW production efficiency may well be less than 10%.

How is CHP correctly sized?

T3450_pic3_insight18 - - beckyhe sizing of CHP plant is critical to its efficient operation. Many installations are over-sized and this results in excessive thermal output being wasted. This may happen through the operation of a heat-exchanger designed to dump heat to the atmosphere in order to reduce the return water to an acceptable temperature. These units used to be known as “heat-dumps”, “waste heat radiators” or more recently “thermal trimmers” – a euphemism presumably designed to give a more sophisticated aura to the rejection process.

These units waste a huge amount of energy and still waste energy when the fans are not running. Ideally the system should operate without one, modulating its output according to the conditions. The use of multiple CHP on a single system will also provide greater “turndown” although the capital and maintenance costs will be much greater.

Heat is not just dumped through the waste heat radiator. In many systems it is effectively dumped through the heating systems by literally opening the windows, allowing the circuit temperature to rise to levels which would simply not be possible using low pressure hot water (LPHW) boiler plant, or by dumping heat through the flues of boilers or elsewhere in the system. In these cases the “beneficial” use of the thermal energy will be severely reduced, resulting in reduced efficiency with greater costs and carbon emissions.

CHP units are often sized according to existing gas demands, but this is rarely carried out with any scientific or engineering rigour. It is sometimes done using annual gas usage figures with apportionment by month being completed using degree-days, usually to an incorrect base temperature (the outside temperature above which a building needs no heating).

This results in a very misleading estimate of operating hours and heat demands.  Ideally, half-hourly gas use data should be subjected to “duration analysis”: an assessment of the site’s operating hours at particular levels of thermal demand.  Account will need to be taken of the seasonal efficiencies of the boiler plant, which are likely to be particularly low in the summer months.

How can I know if my CHP is operating efficiently?

To establish whether or not CHP is working efficently and or cost-effectively, requires an investigation of the thermal performance of the building, or other process, in order to establish the thermal load profile; a comparison of this with the thermal capacity of the CHP and boiler plant; a detailed investigation of the operation of the system, including waste heat radiator if fitted, effectiveness of modulation, circuit temperatures etc; and consideration of the contract if the CHP is operated by a third party.

Should I invest in CHP for a new or existing building?

Unfortunately many CHP installations are commissioned based on inadequate modeling or to satisfy a measure of sustainability that awards points for that technology regardless of its suitability for any particular situation. It is essential that energy efficiency be optimised independently of such “tick box” schemes and “bolt on” solutions should be only be considered, if at all, after the underlying energy efficiency fundamentals are thoroughly understood.

A feasibilty study for a CHP in an existing bulding needs to include an assessment of the existing thermal demands and the efficiency of existing plant in order to establish the thermal load profile of the building, or other process, plus detailed consideration of the optimum type and size of CHP unit.

For buildings at the design stage, or under construction, these investigations will be based on theoretical figures obtained from analysis of the theoretical heat losses from the building through fabric and ventilation, including consideration of likely hot-water demands.

What are the future prospects for CHP?

The UK has a long-term objective to de-carbonise the electricity supply through the elimination of the most carbon-intensive generation which means that CHP has increasing difficulty in reducing carbon emissions relative to the grid.

Replacing coal generation with combined cycle gas turbine (CCGT) production reduces carbon emmissions from about 900 to 400 g/kWh. Wind, other renewables and “new-nuclear” all have virtually zero emissions.

France is already a poor market for CHP as the grid emission factor is less than 60g/kWh, and even if 100% of the thermal output from a gas-fired CHP could be utilised, the carbon intensity of the electricity would still be over 185 g/kWh.

The future de-carbonisation of the grid means that the window of opportunity for CHP installation is rapidly diminishing and, for existing installations, a high standard of operation and maintenance will be essential if the units are to be financially viable and emission positive.

Your Independent RISK FREE Solutions

A Green Consultancy CHP Health Check will determine the efficiency of your CHP and identify and prioritise all cost-effective energy saving opportunities. If you are considering CHP for an existing or new building we will be pleased to carry out a CHP Feasibility Study to find out if there is a good business case for it.

For more information click the above links or call John Treble on 01761 176300, or email John@GreenConsultancy.com

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CHP feasibility study for Liverpool Heart & Chest Hospital NHS Foundation Trust

“The Green Consultancy carried out a feasibility study into the extension of the Trust’s combined heat and power (CHP) district heating system.
“This project was completed in a professional manner and in a very short timescale due to the Trust’s requirements; the report received was of high quality.”

David Sanderson, Head of Estates

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Energy work for Daily Mail and General Trust

“The work undertaken for DMGT demonstrates the very high technical aptitude of The Green Consultancy within the area of energy management.”

Dr Rick Stunt, Group Paper Director

See case history of our work for DMGT

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University of Oxford

“I have worked with and for energy consultancies for more than 20 years, and the quality of The Green Consultancy’s work is some of the best I have seen.”

Philip Pike, Former Energy Manager

See case history of our work for University of Oxford