e-News #74: Combined Heat and Power

July 30, 2010
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Reduce Your Footprint with Cogeneration

A building may contain a vast array of efficiency measures, or it may be old and inefficient.  Either way, the electricity used in the building will likely be produced with inherent inefficiencies.  The efficiency of fossil fuel based electricity production averages 34% (although new combined cycle plants can exceed 50% efficiency). The ultimate efficiency of any building pulling electricity from the grid is limited by that number.

The balance of the energy consumed in a power plant is rejected as waste heat. Combined heat and power (CHP) systems tap that waste heat to serve heating and cooling loads, increasing the overall efficiency of a building.  Combined heat and power systems are also known as "cogeneration" since they generate both electricity and usable thermal energy.

Figure 1 - Fuel cells at USPS facility

Figure 1 - Fuel cells at USPS facility
Photo courtesy of NREL

Microturbines, while having higher emissions than fuel cells, are generally the cleanest burning of the combustion based cogeneration systems. Some microturbines are also exempt from air emission permitting requirements. Microturbines and the larger gas turbines are more versatile for heating applications since waste heat can be harvested at much higher temperatures, making it suitable for use in a wider array of purposes. Microturbines are also known for their reliability.

For a CHP system to work, the electricity generation must usually occur at or near the building so that the heat can be used on site, as thermal energy is not as easily distributed as electricity or fossil fuels.

What can the thermal energy be used for?

  • Space heating
  • Hot water heating
  • Localized  reheat
  • Industrial processes
  • Cooling through absorption chillers

Potential for Significant Savings

Target Facilities for CHP

Building types where CHP systems can be used effectively to meet coincident electrical and thermal loads include:

  • Hospitals
  • Colleges/Universities
  • Nursing Homes
  • Large Hotels
  • Prisons
  • Refineries
  • Breweries/Distillers
  • Food Processing
  • Bio Technology
  • Sewage Treatment Plants

The United States already has a large number of CHP systems. The avoided energy use is more than 1.9 quadrillion BTUs annually.

Despite those significant savings, combined heat and power is not being used to its capacity.  In 1900, over 50% of electricity production in the United States came from CHP sources, but that number dropped to 15% by the 1950s and to 5% by the 1970s.  With the passage of the Public Utilities Regulatory Policies Act of 1978 (PURPA), CHP generation began rising once again, but it is still far below the levels achieved in Europe, where the percentage of CHP production is five to six times higher.

When to Consider Cogeneration

Cogeneration systems can accomplish a number of different goals, including:

  • Increased efficiency
  • Use of renewable fuel sources to reduce a facility's carbon footprint

Designing for efficiency
The primary factor driving the higher efficiencies possible in a CHP system is a demand for thermal energy, preferably occurring at the same time as a building's electrical demand.  Generally speaking, the more a system runs, the more money is saved, recouping the initial investment. The instantaneous efficiency of a system is also greatest when it runs continuously and at full capacity.  Because of those compounding factors, CHP systems are generally sized to meet the smaller of the electrical or thermal baseloads, with the balance of the energy needs secured from conventional sources.

Reduced Carbon Fuel Sources
Cogeneration users can eliminate the carbon footprint of the energy consumed by a CHP system by establishing contracts for the purchase of biogas.  Because biogas is generated through carbon absorption (rather than mining fossil fuels), the lifecycle of biogas is generally considered carbon neutral.  The resource consumed in biogas production is organic matter, the product of photosynthesis. Plants use photosynthesis to convert CO2 into oxygen and carbohydrates. Even if organic matter produces CO2 in the course of biogas formation, there is somewhat of a balance between the exhaustion of CO2 into the atmosphere and the absorption of CO2 from the atmosphere in the relatively short time cycle involved. What is important is that this process of giving out and taking in CO2 should occur in a short span of time. Then this idea of carbon circulation is "carbon neutral."

The biogas production need not be at the site of the cogeneration facility. Gas delivery can be arranged through utility pipelines, in an arrangement known as wheeling, provided the biogas producer meets certain quality and reliability requirements for injecting their biogas into natural gas transmission pipelines.

Figure 2 - Comparative energy use and losses between conventional power usage and a CHP system
Figure 2 - Comparative energy use and losses between conventional power usage and a CHP system
Because CHP systems will generally be sized only to meet the base thermal loads, conventional electricity generation and conventional boilers may also be used, meaning that total efficiency in a building will likely be derived from a balance of the different systems.

Types of Cogeneration Systems

Key types of CHP systems include:

  • Fuel Cells
  • Gas Turbines and Microturbines
  • Internal Combustion Engines
Saving Water, as well

Not only do CHP systems save energy, but they can save considerable quantities of water as well.  Conventional electricity generation often relies upon the evaporation of fresh water in the cooling phase of the generation process, on the order of half a gallon per kWh.  CHP systems, on the other hand, often rely on the associated heating loads of the facility to provide the necessary cooling of the electric generator (although backup evaporative cooling systems are sometimes required if the heating loads are not consistent enough for the level of electrical generation).

Consequently, a 200 kW fuel cell running 50% of the year can save approximately 400,000 gallons of water per year.  These savings are dependent on the exact type of generation that is being offset by running of a combined heat and power system.

The biggest advantage of fuel cells is that they do not combust the natural gas that is used to generate electricity, eliminating the toxic emissions that result from a combustion process. Because of the relatively clean emissions profile, the California Air Resources Board provides an exemption to permitting requirement for some fuel cells. A downside to fuel cells is that the thermal energy that can be captured from their operation is of a much lower temperature than combustion technologies.  They can produce hot water and low pressure steam, but not high pressure steam or high temperature gas.
With the drop in prices of PV, Fuel Cells are now the most expensive generating technology. Costs range from $4,000--$10,000 per kw installed. In addition, their maintenance costs can be very high.

Thermal Loads

For CHP systems to reach their overall efficiency potential of 80%, they need to maximize their use of the available thermal energy.  The majority of CHP systems in California are a part of industrial facilities where the demand for thermal energy can be both significant and persistent, maximizing system efficiency.

For many buildings, cooling loads are more significant than heating loads.  Those loads can be served by the thermal energy via an absorption chiller.  Absorption chillers use a thermal compressor to drive a cooling process.  Although not as efficient as electric powered chillers, when run off of excess heat that would otherwise go to waste, they can create significant energy savings.  The efficiency of absorption chillers increases with the temperature of the thermal input, so higher temperature CHP systems such as microturbines can be more effective in driving the chillers than a lower temperature fuel cell system.


Figure 3 - A microturbine unit
Figure 3 - A microturbine unit Courtesy DOE/NREL, Credit - Capstone Turbine (click to enlarge)

Internal Combustion Engines are one of the oldest available technologies, with the lowest upfront cost, and can produce high temperature thermal energy.  The comparatively large number of moving parts in an internal combustion engine increase maintenance issues and the higher emission rates makes the permitting process much more difficult in areas of the state with impaired air quality.

Absorption chillers can be particularly valuable where CHP systems are designed for power supply reliability with the electric generation sized to meet a certain minimal electrical load of a building.  In those circumstances there is often far more heat than can be used for thermal loads alones and an absorption chiller system can provide significant additional savings by limiting the need for electric powered cooling.

Planning Considerations

Combined heat and power systems are expensive.  The cost and benefits of the system can vary widely depending on a number of factors, but they will be cost beneficial only in a relatively narrow window of circumstances.  A careful economic analysis must be made before deciding to invest in a CHP system.

CHP manufacturers can provide assistance with assessing the overall feasibility of a project.  Key factors that will be taken into consideration are:


  • Electrical loads
  • Variability in electrical loads
  • Power supply reliability needs
  • Heating loads
  • Variability in heating loads
  • Temperature needs of heating loads
  • Cooling loads


  • Future electricity costs
  • Future natural gas costs
  • Potential terms of a biogas contract (if desired)
  • State, federal, and utility subsidies


  • Availability of net-metering
  • Air emission permit requirements
  • Utility interconnection standards
Training Highlights

California utilities offer outstanding educational opportunities that focus on the design, construction and operation of energy-efficient buildings. Listed here are a few of the many upcoming classes and events; for complete schedules, visit each utility's website.

Ecologically Restorative Architecture and Design
Todd Jersey of Todd Jersey Architecture will present on refining and implementing green building systems and strategies. Mr. Jersey will also discuss the development of an ecological accounting and payback protocol to assist in creating projects that generate a net gain in ecological capital and a net decrease in greenhouse gases.

August 31, 9-12pm. San Diego.
register >


Sustainable Building Envelopes
Learn about the integrated design process and explore passive building measures for high performance buildings. Topics include building orientation considerations, high performance glass, and building integrated photovoltaic systems.

August 19, 8:30-12:30pm. Edison AGTAC, Tulare.
register >

Introduction to Life-Cycle Costing
LCC is an economic analysis method that helps building owners, designers, and operations managers assess the cost benefits of energy efficient technologies, designs, and operations. Learn about the role of key assumptions and how to interpret an LCC analysis.

August 6, 8:30AM -12:30 pm. Edison AGTAC, Tulare.

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e-News is published by Energy Design Resources (www.energydesignresources.com), an online resource center for information on energy efficiency design practices in California.

Savings By Design (www.savingsbydesign.com) offers design assistance and incentives to design teams and building owners in California to encourage high-performance nonresidential building design and construction.

Energy Design Resources and Savings By Design are funded by California utility customers and administered by Pacific Gas and Electric Company, Sacramento Municipal Utility District, San Diego Gas and Electric, Southern California Edison and Southern California Gas Company, under the auspices of the California Public Utilities Commission.


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