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Combined Heat and Power Evaluation, Step by Step

November 5, 2013 By Jack Griffin

Jack Griffin

Achieving Significant Efficiency with CHP

Combined Heat and Power (CHP), sometimes referred to as cogeneration, is an efficient energy solution that generates power and thermal energy (heating and cooling) simultaneously from a single fuel source.  Industrial and large commercial facilities, in particular, are great candidates for CHP. Medical, institutional and research buildings with high process loads and heating and cooling requirements critical to day-to-day operations require both thermal energy and electricity, which have traditionally been produced in two separate processes.

Traditional methods of separately producing electricity in power plants and heat and steam in boilers require the consumption of significantly higher volumes of fuel relative to CHP. When electricity is produced by a conventional generator, about 40% of the fuel consumed is converted into electricity, and the remaining 60% becomes waste heat. Conversely, CHP technology consumes 40 percent less fossil fuel than traditional utility power plant technologies by recycling waste heat and converting it to useful thermal energy. Since less fuel is burned per unit of useful energy output, cogeneration reduces CO2 emissions and decreases air pollution.

What Exactly Does CHP Provide?

  • Onsite generation of electrical and/or mechanical power.
  • Waste-heat recovery for heating, cooling, dehumidification, or process applications.
  • Seamless system integration for a variety of technologies, thermal applications, and fuel types into existing building infrastructure[1].

Legislation and Extreme Weather Is Driving Investment in CHP

Cogeneration has garnered more attention in recent years as an efficient energy source, particularly with the advent of President Obama’s Executive Order 13626, released in August 2012. The Executive Order 13626-Accelerating Investment in Industrial Energy Efficiency calls for 40 gigawatts (GW) of new, cost-effective CHP by 2020, in addition to encouraging greater investment in industrial energy efficiency.

As extreme weather events, such as Superstorm Sandy, threaten the electric grid and cause widespread outages and billions in damages, both public and private entities are looking towards distributed generation as an alternative, cost-effective, and reliable source of power.  New York University’s (NYU) 13.4 MW cogeneration plant highlights the myriad benefits achieved by CHP, particularly during extended grid outages caused by severe weather events.  In addition to providing electricity, heat, and hot water during Superstorm Sandy, NYU’s expanded cogeneration plant has resulted in $5 Million in annual energy savings and prevents an estimated 43,400 tons per year of CO2 emissions.

The Step-By-Step Process of Evaluating CHP

While CHP certainly offers multiple benefits, including increased efficiencies, cost savings in fuel consumed, environmental benefits, greenhouse gas emission reductions, and improved reliability, CHP is not always cost-effective or appropriate in every application. In order to determine whether CHP is right for your business and properly mitigate risk, organizations should adhere to a structured approach and engage both internal and external expertise. Once the project team is established, a thorough requirements assessment should be performed, with respect to energy needs, reliability, and sustainability.

The initial assessment will incorporate a review of physical assets, utilization rates, costs and other resources, physical or financial, available to meet current and projected future energy demand. At this stage, it is also important to ensure that potential fatal flaws are addressed: Is there a suitable fuel source on site? Are there local permitting constraints that would prevent a CHP project? This initial assessment will determine the viability of advancing a CHP project and should incorporate a financial analysis and total energy requirements model.

Following the assessment and selection of an optimal solution for CHP application, a detailed feasibility study should be performed, incorporating potential deployment sites, data collection, budget and life-cycle cost estimates, financial and operational modeling, and risk mitigation strategies. Relevant energy efficiency program administrators should be engaged during this stage for guidance and to facilitate potential utility incentives.  This proved to be vital for the development of Lahey Clinic Medical Center’s (Lahey Clinic) new 3MW cogeneration plant. Lahey Clinic received $2.3 million in incentives, which was critical to advancing the project.

Following the results of the feasibility report, the owner may choose to conduct an Investment Grade Assessment (IGA). An IGA is an interim step which is taken when the feasibility assessment indicates the positive benefit of cogeneration; however, the owner requires a deeper analysis to resolve open issues prior to proceeding. Relevant examples include complex engineering questions related to interconnection and operability, unconfirmed incentive amounts, etc.

If the owner chooses to move forward with the optimum solution, the schematic level design should incorporate major equipment general arrangement, process flow diagrams, electrical one-lines, and costs estimates. Following the Schematic phase, owners can competitively obtain engineering, permitting, and construction resources to construct, commission, and operate the CHP system.

Follow the Steps to CHP Success

CHP offers a versatile solution as a sustainable energy model, providing enhanced reliability, power usage optimization, reduced environmental impacts, and energy savings. Industrial and large commercial facilities seeking to evaluate the viability of CHP should engage an energy management consultant to help facilitate the process and mitigate risks. Successful CHP implementation is commensurate upon engaging the right internal and external resources, a thorough CHP evaluation, and an organized, collaborative, and structured approach.

Jack Griffin is the Vice President and General Manager of SourceOne, Inc., Boston. With over 25 years of experience in the energy industry, Jack is a highly experienced engineer and an expert in all aspects of energy systems development and application.  His consulting experience includes energy efficiency, sustainability, distributed generation, district energy system development, and utility-grade design. 

[1] http://www.epa.gov/chp/basic/index.html


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