Cogeneration (CHP)

What Is Cogeneration?

Cogeneration (cogen/combined heat and power/CHP) is the production of electricity and heat from a single fuel source, which is typically natural gas. These systems are primarily installed in a facility in order to reduce, or at least optimize, energy costs.  Cogeneration systems work by offsetting the energy supplied by any existing sources (like utility electric supply) and in-house systems (like boilers) that a facility uses to meet heat and power demands (SHP – separate heat and power).  Cogeneration units can also be used to completely replace any of these existing systems, although this isn’t as common.

SHP systems make it necessary for a facility to purchase electricity from their local utility and burn purchased fuel in a boiler or furnace to produce needed heat (or cooling). Cogeneration gives a facility both energy outputs, while only needing one fuel input.

*All images provided by respective cogeneration unit manufacturers

Cogeneration Benefits

Cogeneration is all about doing two things for the price of one – offsetting the requirements from two existing SHP sources with the CHP. This “two for the price of one” applies to facility energy costs and overall energy efficiency of the facility.  It also applies to the emissions footprint of the facility on the local area and community compared to its emissions footprint from its SHP systems.  CHP can also enhance the reliability and resiliency of the facility by providing standby power when the utility power is out.

Cogeneration Technology

Cogeneration is a very broad term that encompasses a wide variety of technologies, ranging from larger units capable of producing seveal megawatts down to single kilowatt units small enough to place in a closet. What most strongly differentiates CHP technologies is the prime mover in the unit; a prime mover is the component inside the cogeneration unit that converts fuel into useful energy. The prime mover determines how a cogeneration unit will be configured within a system, as well as what application that unit will provide the most benefit to.

Out of the variety of technologies available, five kinds of prime movers are identified as the most commonly used and commercially available.

Cogeneration System Configurations

All cogeneration applications produce heat and electricity, the fundamental difference between cogeneration technologies lies in how the energy is produced and used. Most cogeneration systems will generate electricity and heat simultaneously and independently of other processes, like those used in residential buildings and hotels; this is how combustion and fuel cell cogeneration units provide a facility with energy.

In some applications, like chemical plants, it is more cost effective for the facility to harvest the large amounts of waste heat available from other facility processes (which are independent of the cogeneration unit) to generate electricity. This is how steam turbine cogeneration works.

Incentives for cogeneration are available in a wide variety of forms, including grants and special energy loans. Reduced gas delivery costs for efficient technologies, like cogeneration, are often available from the providing utility. Utility suppliers may also provide project cost support, as well as energy development agencies such as NYSERDA.

For us at DSMEA, identifying available incentives is a key part of assessing a potential CHP project. The ever-changing field of incentives may make a project that would have cost prohibitive few months ago, suddenly highly economical to the facility.

For a comprehensive list of what incentives apply to you, see:
EPA CHP Policies and Incentives