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I've noticed lately that combined heat and power (CHP) has been getting a lot more attention in the news. The U.S. Department of Energy released a statement announcing the allocation of $156 million in project funding under the U.S. Recovery Act for CHP and related technologies. WIRED magazine is talking about it. You can even find it on YouTube.
Why should you do it?
Electricity generation is not necessarily an efficient process – as an example, traditional coal fired plants generally only convert about 30% of the potential energy of the fuel being used into viable energy. By utilizing the thermal energy, CHP packages typically achieve total system efficiencies of 70 to 80%, effectively lowering fuel consumption and reduced emissions compared with conventional separate generation of heat and power.
Uses for CHP
Recovered heat can be converted into useful thermal energy, usually in the form of steam or hot water, for use in nearby buildings or in a power plant itself. Uses include:
- Space or domestic hot water heating
- Seasonal cooling (by way of absorption chillers)
- Desiccant dehumidification
- Heat for light production processes
- Process cooling
Economics of CHP
Heat recovery does not need to be that ambitious to have a meaningful, positive effect on project economics. Almost any installation can profit from a simple heat exchanger capturing low-grade heat from the engine coolant.
Consider a small or mid-sized manufacturer with an on-site generator set and a hot-water load amounting to roughly one-third of the heat recoverable from the engine cooling circuit. A heat exchanger in the engine cooling loop, with a thermostatically controlled diverter valve to regulate the flow to the in-plant load, could cost-effectively satisfy the hot-water requirement.
Today's financing vehicles provide alternatives to return on investment calculations based on simple payback alone. For example, traditional debt financing or leases can be structured with fixed monthly or annual payments costing less than the owner's net savings on energy. In this scenario, the owner sees immediate positive cash flow – a net reduction in operating expenses from the first month in service. Leased equipment has the added advantage of being classified as an operating, rather than capital, expense. This can help expedite management approvals and take the projects out of competition for capital. For more information on procurement and financing, the U.S. EPA has published a very informative guide.
Getting Started
Extensive information is available on the web regarding combined heat and power. I've listed a few links below:
- U.S. EPA – Is My Facility a Good Candidate for CHP?
- International Energy Agency – The International CHP/DHC Collaborative
- American Council for an Energy-Efficient Economy
- DSIRE – U.S. Incentives/Policies for Renewables and Efficiencies
- Oak Ridge National Laboratory CHP Report
Are you presently considering CHP? Are there other resources/partnerships that you've found especially helpful? Have you had success in CHP that you'd like to share? Please post below.
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