Outdoor installation of a CHP system
“With American DG Energy's On-Site Utility, we're saving 15% on our electricity costs. It adds up to thousands of dollars in savings annually.”
Multi-Family Housing Facility
Combined Heat and Power
Combined heat and power (CHP), also known as cogeneration or distributed generation, is the simultaneous production of two types of energy – heat and electricity – from one fuel source, often natural gas or propane. The ability to create two forms of energy from a single source offers tremendous efficiency and thus both cost savings and environmental benefits.
The key components of a CHP system are an internal combustion, reciprocating engine driving an electric generator. The clean natural gas fired engine spins a generator to produce electricity. The natural by-product of the working engine is heat which is captured and used to supply space heating, heating domestic hot water, laundry hot water or to provide heat for swimming pools and spas. The CHP process is very similar to an automobile, where the engine provides the power to rotate the wheels and the by-product heat is used to keep the passengers warm in the cabin during the winter months.
Efficiency of CHP Systems
Combined heat and power systems use fuel very efficiently. A CHP system provides electricity and heat at a combined efficiency approaching 90%. This is a significant improvement over the combination of the 35% efficient electric utility and a conventional heating boiler with a 65% seasonal efficiency.
Why is there such a big difference in fuel efficiency between the electric utility and a combined heat and power system? The electric utility and CHP system each produce electricity and heat from one source of fuel. However, the heat produced at the electric utility is not used; it goes into the cooling water or up the smokestack along with greenhouse gases and other pollutants. Approximately two-thirds of the fuel’s energy is wasted. Alternatively, while generating electricity, a properly sized combined heat and power system recovers nearly all of the heat it produces and deploys it on site.
Additionally, when purchasing power from the electric utility, a separate source of heat, usually a boiler, is required. Despite using an efficient boiler, the total fuel required to produce conventional electricity and boiler heat is greater than the amount of fuel required to produce simultaneous energy with a combined heat and power system. This demonstrates why CHP-produced energy is more cost effective than the combined energies from the electric utility and local boilers.
Combined heat and power (CHP) technology has been around for over 100 years going back to the days of Thomas Edison. In 1882, the first commercial CHP plant was opened utilizing a single fuel to produce both heat and electricity. With an executive order signed by President Obama calling for 40 GW of new CHP by 2020, representing a 50 percent increase from 2012, CHP is gaining renewed emphasis.
Benefits of Combined Heat and Power
Because of the high efficiency of the system, CHP provides considerable energy, environmental and economic benefits. CHP systems reduce the demand on the utility grid, increase energy efficiency, reduce air pollution, lower greenhouse gas emissions and protect your property against power outages, while significantly lowering the utility costs of building operations.
Installation and Operation
Installing a combined heat and power system requires capital and experience. System installations require properly skilled and experienced system engineering, project management, electrical and mechanical work performed. Once the system is in place, continuous operation and maintenance are necessary to optimize performance. For businesses with a stretched budget and competing capital improvement projects, finding the cash and expertise for turnkey installation of a CHP system presents a challenge. In most cases, an On-Site Utility is the best option.
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