Summer 2009
How It Works: Combined Heat and Power
Most U.S. power plants operate by burning fossil fuels to create thermal energy (such as steam from a boiler or hot air from a turbine), which in turn drives generators to produce electricity. Much of this thermal energy does not get converted into electricity; a typical coal-fired power plant, for example, converts only about one-third of the energy contained in the coal into electricity, with the rest lost as “waste” heat. An additional 3 percent is lost in transmitting the electricity to homes and businesses.
Combined heat and power (CHP) systems, also known as cogeneration, offer a much more efficient option for energy consumers. CHP is not a new technology; it predates the national electricity “grid” and has been implemented in an increasing number of manufacturing plants, hospitals, colleges, and other facilities since the late 1970s. By generating electricity on-site and capturing much of the otherwise wasted thermal energy for space heating and other purposes, CHP systems have allowed industrial facilities and building owners to save money on energy costs and reduce the environmental impacts of their fossil fuel use.
(Click to view full-size graphic.)
A Custom-Built Solution
CHP is actually not a single technology but rather an integrated system for producing electrical and thermal energy—in the form of heating or cooling—from one fuel. CHP systems are usually custom engineered to meet the specific thermal needs, or “load profile,” of a particular user. While these systems vary in the fuel they use (e.g., coal, natural gas, diesel, plant-based “biomass” such as wood chips), there are just two common system configurations:
Boiler-based CHP systems burn fuel in a boiler to create high-pressure steam, which powers a turbine that, in turn, drives a generator to produce electricity (see the diagram). The remaining steam can be used to provide heat for an industrial process or to heat buildings in the vicinity. Steam turbines are well-suited to medium- and large-scale industrial sites that would already use boilers.
Gas turbine- or engine-based CHP systems burn fuel—typically natural gas—directly in a turbine or engine that drives the electricity generator. Hot exhaust gas from the engine enters a heat exchanger that creates steam or hot water for space heating. This configuration is ideally suited to sites requiring ample amounts of both electricity and heat; it has also become less expensive to install compared with boiler-based systems due to recent advances in technologies.
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CHP Success Stories A few examples of how CHP systems large and small can make a difference. Large-scale In 2004, Harbec Plastics, an injection molding manufacturer near Rochester, NY, installed 25 natural gas “microturbines” capable of producing 750 MW of power. By generating its own electricity and space heating and cooling, the CHP system reduced Harbec’s carbon emissions by 90 percent while paying for itself in two years.
Small-scale The CHP system installed in a Melrose, MA, home last year runs on natural gas and is 83 to 90 percent efficient. This model circulates hot water for heating, but forced-air systems are also available. In northern climates, these units can generate about half of the electricity—and all of the space heating—needed by a home each year. |
The Benefits of Efficiency
While coal-fired power plants are only about 30 percent efficient (after transmission losses), CHP systems are 65 to more than 80 percent efficient depending on the system design, the equipment and fuel being used, and the site’s thermal energy demand. By substantially reducing the amount of fuel needed to produce heat and electricity, CHP systems can deliver significant cost savings and pollution reductions (see the sidebar). And because they generate electricity on-site, they not only eliminate transmission and distribution losses but also help protect against power outages and other grid-related problems—an important benefit for hospitals, manufacturing plants, government facilities, and other sites that must be fully operational during emergencies.
Businesses, government, and consumers have much to gain if CHP is adopted on a larger scale. In 2006 CHP produced 506 billion kilowatt-hours (kWh) of electricity—more than 12 percent of total U.S. power generation that year. Researchers at the Department of Energy estimate that if CHP accounted for 20 percent of the country’s electricity capacity (a target already achieved by several European countries), we would reduce global warming emissions by more than 800 million metric tons per year, the equivalent of taking more than half of the United States’ current passenger vehicles off the road. And because technology improvements and cost reductions promise to make CHP systems viable for homes and small businesses, all energy consumers will be able to use CHP to substantially reduce their heat-trapping emissions.
Ensuring a Strong Future for CHP
Despite the clear economic advantages and growing popularity of CHP, there are still significant regulatory and market barriers that are preventing these systems from achieving their full potential. For example, many project owners seeking to connect their systems to the electricity grid can face discriminatory pricing practices, as well as technical hurdles created by uncooperative utilities.
UCS recommends that the federal government and state utility regulators lower these barriers by establishing consistent national standards for CHP permits and interconnections; establishing an equitable financial structure for CHP owners wishing to purchase power from, or sell power to, their local utilities; and funding federal and state programs that support CHP development. We estimate that these policies and investments could create 4,000 megawatts (MW) of additional CHP capacity each year through 2030—a critical step forward in our transition to a clean energy future.
Ned Raynolds is the Northeast climate policy coordinator at UCS.
