Time right for combined heat-and-power systems

As energy prices continue to increase, now may be the opportune time to consider combined heat-and-power (CHP) systems. Even with significantly higher costs for natural gas—the fuel of choice for CHP—the spark recently has returned to favor CHP systems with high load factors in many regions of the United States.


As energy prices continue to increase, now may be the opportune time to consider combined heat-and-power (CHP) systems.

Even with significantly higher costs for natural gas—the fuel of choice for CHP—the spark recently has returned to favor CHP systems with high load factors in many regions of the United States. More specifically, states with a higher dependence on natural gas for electric power production are target areas for CHP. Many of these states, including California, Connecticut, New Jersey and New York, are establishing standardized rules for grid interconnection and are supporting the deployment of CHP with financial incentives.

CHP provides many benefits, but is only economically feasible in high-cost power regions (above $0.10/kWh) and when the full power and thermal output of the system has a minimum load factor of 70%. While 8,760 operating hours are preferable, it is feasible to have the system operate down to 4,000 hours per year in high-cost power locales. However, the system must have a high load factor for reduced operating hours. The essence of good CHP design is maximizing load factor rather than run hours—or even maximizing efficiency. A 70% efficient system with a 90% load factor is always a better economic proposition than a 90% efficient system with a 70% load factor.

The requirement for high electric and thermal load factor generally means the CHP system should be sized to meet the facility base loads, and the application of the thermal energy becomes more of a focus, because it is relatively easy to apply 60 Hz power to a building. For applications that have 12-month heat loads, systems can be as small as 50 kW, though engineering and integration costs can be prohibitively expensive for such small applications. For systems that require cooling output, 250 kW typically is the smallest practical size to meet payback expectations. This would roughly translate to a minimum building size of 50,000 sq. ft for heat only and 250,000 sq. ft for cooling and heating applications. A primary building consideration is the availability of a thermal distribution system that supports CHP output form and volume. Often this requires both a hot water and chilled water loop that operate in winter and summer, respectively, to meet thermal use requirements. A supply of natural gas as well as a suitable location for the CHP system also must be available. Suitable market sectors include hotels, casinos, colleges, universities, healthcare facilities, and multifamily residences.

Recent innovations in the CHP industry include the development of prepackaged generator and thermal systems specifically for CHP applications. Generator systems continue to improve power density and efficiency while reducing emissions, and there are thermal technologies available to expand the capabilities of CHP systems for higher load factor.

The following are valuable Web sites for information on CHP systems:

Key facts for CHP systems

• Combined heat-and-power is a system that generates both electricity and usable heat.

• For applications with 12-month heat loads, systems can be as small as 50 kW.

• For systems that require cooling output, 250 kW is typically the smallest system that will meet payback expectations.

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