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CHP Overview

What is Combined Heat & Power (CHP)?

  • Combined heat and power (CHP) is the production of electricity and useful heat in a single process. In CHP plants the heat produced during the generation of electricity can be put to good use, rather than being wasted.
  • Centralised power generation in the UK has an average delivered efficiency of only around 40%; in other words, far less than half is supplied as electricity to the point of use. The remainder of the energy in the fuel is dissipated as heat via power station cooling towers and from the electricity transmission and distribution systems. Modern combined cycle gas turbine stations only achieve a delivered efficiency of about 45-50%.
  • By contrast, CHP plant generates useful energy, at the point of use, in the form of both electricity and heat, with an overall efficiency of typically upto 80%.

When to consider using Combined Heat & Power (CHP)

CHP should always be considered when:

  • designing a new building,
  • installing new boiler plant,
  • replacing/refurbishing existing plant,
  • reviewing electricity supply,
  • reviewing standby electrical generation capacity or plant,
  • considering energy efficiency in general.

Further information about when and how to consider CHP is provided in Good Practice Guide - Combined Heat and Power for Buildings and CIBSE Applications Manual 12.

Components of Combined Heat & Power (CHP)

All CHP schemes consist of a number of core components with variations to suit the particular application. The fundamental components are:

  • Prime mover: an engine to drive the generator
  • fuel system
  • generator: to produce electricity, which is fed into the building's power distribution system
  • heat recovery system: to recover usable heat from the engine
  • cooling system: to dissipate heat rejected from the engine that cannot be recovered
  • combustion and ventilation air systems: to supply fresh air to, and carry exhaust gases away from, the engine,
  • control system: to maintain safe and efficient operation
  • enclosure: to achieve physical and environmental protection for the engine and operators, and to reduce noise.

Combined Heat and Power (CHP) in Individual Buildings

CHP provides an excellent solution to the energy needs of many different building types which have a simultaneous requirement for heat and power for in excess of 5,000 hours per annum. There are approximately 1000 individual buildings with CHP in the UK, representing an installed capacity of approximately 320MWe. Buildings that have proved particularly suited to CHP include:

  • hospitals,
  • hotels,
  • leisure centres,
  • universities,
  • police stations,
  • residential homes.

Other possible applications include:

  • prisons,
  • retail stores,
  • offices,
  • museums,
  • schools.

Combined Heat & Power (CHP) in Community Heating

In addition to the individual sectors, there is considerable advantage in energy linking buildings so that aggregate loads are met by centralised plant. This can be built up into community (or district) heating (CH) networks, with significant extra CHP potential. CH is where a group of buildings, whether domestic, non-domestic or a combination, are supplied with heat from a single source. CHP provides an excellent heat source for CH schemes. There are a number of CH schemes with CHP in the UK, representing a sizeable installed capacity. The vast majority of this CHP is installed in large multi-use CH schemes such as those in:

  • Woking,
  • London (Citigen),
  • Southampton,
  • Nottingham,
  • Sheffield.

The Community Energy programme is currently providing development and capital grant funding to encourage the installation of CH networks with CHP. Visit the programme web site for further information -

Financing CHP With installed costs typically between £600 and £1,500 per kWe (depending on the unit size), CHP can represent a sizeable investment, although the savings produced typically give a simple payback of around 5 years. There are three main alternatives for funding:

  • Capital Purchase - With this option the CHP unit is purchased outright by the host site.
  • Equipment Supplier Finance (ESF) - Most CHP suppliers provide ESF under their own brand names. Under such schemes the site benefits from reduced costs for no capital outlay and very little risk.
  • Contract Energy Management (CEM) - Under this arrangement the CEM company owns the CHP unit and sells heat and power to the host site at a reduced rate.