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Combined Heat & Power (CHP)

CHP provides efficient, clean, reliable, and affordable energy – today and for a more sustainable future. 

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Combined Heat & Power (CHP)

Combined heat and power (CHP), also known as cogeneration, is:

  • The concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy.

  • A type of distributed generation, which, unlike central station generation, is located at or near the point of consumption.

  • A suite of technologies that can use a variety of fuels to generate electricity or power at the point of use, allowing the heat that would normally be lost in the power generation process to be recovered to provide needed heating and/or cooling.

CHP technology can be deployed quickly, cost-effectively, and with few geographic limitations. CHP can use a variety of fuels, both fossil- and renewable-based. It has been employed for many years, mostly in industrial, large commercial, and institutional applications. CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, but it has quietly been providing highly efficient electricity and process heat to some of the most vital industries, largest employers, urban centers, and campuses in the United States. It is reasonable to expect CHP applications to operate at 65%–75% efficiency, a large improvement over the national average of about 50% for these services when separately provided.

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Combined heat and power (CHP) is an efficient and clean approach to generating electric power and useful thermal energy from a single fuel source. Instead of purchasing electricity from the distribution grid and separately burning fuel in an on-site furnace or boiler to produce thermal energy, an industrial or commercial facility can use combined heat and power to provide both services in one, energy-efficient step. CHP is a clean energy solution that directly addresses a number of national priorities, including improving U.S. competitiveness by:

  • Reducing energy operating costs

  • increasing energy efficiency

  • Reducing greenhouse gas emissions 

  • Enhancing our energy infrastructure

  • Improving energy security and resiliency 

  • Growing” the U.S. economy

 

There are several emerging market drivers contributing to current CHP growth, including lower energy operating costs, CHP-friendly environmental regulations, resiliency initiatives, federal and state policies and incentives, utility support, and project replicability. The drivers that are currently influencing the market growth of CHP are part of a larger recognition of the benefits that CHP provides both to the user and the nation as a whole. CHP can reduce strain on the electric grid and lower greenhouse gas (GHG) and other harmful emissions. CHP can lessen the need for new transmission and distribution infrastructure and uses abundant clean domestic energy sources such as natural gas and biomass. CHP can be utilized in a variety of industrial facilities and commercial buildings with coincident power and thermal loads. Industrial manufacturing facilities that are a good fit for CHP include agriculture, food processing, chemicals, refining and metal manufacturing. For commercial buildings, year-round coincident on-site loads suitable for CHP are present at hospitals, hotels, multifamily buildings, colleges and universities, wastewater treatment plants and military campuses. In addition to industrial and commercial facilities, CHP can also be integrated into municipal energy systems.

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While CHP has been in use in the United States for more than 100 years, it remains an underutilized resource today. CHP currently represents approximately 8% of U.S. generating capacity4 , compared to over 30% in many other western countries. Its use in the U.S. has been limited, particularly in recent years, by a host of market and non-market barriers. Nevertheless, the outlook for increased CHP use is bright as policymakers at the federal and state level are recognizing the potential benefits and the role that this technology could play in providing clean, reliable, cost-effective energy services to industry and businesses. There are several emerging market drivers contributing to current combined heat and power growth, including: 

 

  • Lower Operating Costs: Compared to conventional power generation techniques, CHP systems can save money through increased energy efficiency. Higher operating efficiencies enable CHP systems to consume up to 40% less fuel while generating the same amount of power and useful thermal energy as separate heat and power systems. With stable and low-cost natural gas supply forecasts stemming from the development of shale gas production, the economics of CHP have been improving.

  • Environmental Regulations: Recent environmental regulations have created opportunities for combined heat and power to help meet compliance goals.

  • Resiliency: In the event of a man-made or natural disaster that causes a grid outage, CHP systems can be configured to be more resilient and reliable than traditional backup generators. During recent storm events such as Hurricane Sandy, CHP systems enabled a number of critical infrastructure facilities to continue their operations when the electric grid went down. Texzon Utilities in association with Clarke Energy will provide guidance and engineering on how CHP can enhance the resiliency of critical facilities, and the best way to size such systems. 

  • Policy Support: A number of federal and state policies and financial incentives have strongly encouraged the market for combined heat and power. At the federal level, currently there is a 30% investment tax credit and MACRS depreciation for CHP along with robust grants to offset costs. Texzon Utilities has incentive and federal grant writers in-house as a value-added service.

  • CHP can be utilized in a variety of industrial facilities and commercial buildings with coincident power and thermal loads. The majority of existing CHP capacity in the United States is in the industrial sector and is concentrated in five major facility types: chemicals, refining, paper, food and metals manufacturing. ​

  • Cogeneration is a highly efficient form of energy conversion and using gas engines it can achieve primary energy savings of approximately 40% compared to the separate purchase of electricity from the electricity grid and gas for use in a boiler. If the fuel for the gas engine is renewable such as biogashydrogensyngas or RNG, CHP can be a highly sustainable source of electricity and heat.​

  • Combined heat and power plants are typically embedded close to the end user and therefore help reduce transportation and distribution losses, improving the overall performance of the electricity transmission and distribution network.

  • District energy schemes use combined heat and power plants to generate both electricity and heat for a group of residential or commercial buildings. For power users where security of supply is an important factor for their selection of power production equipment and gas is abundant, gas-based cogeneration systems are ideally suited as captive power plants (i.e. power plants located at site of use).Being a localized source of power generation, it can help improve a site’s resilience in the event of a power grid failure with the addition of island mode operation features.

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Cogeneration is a highly efficient form of energy conversion and using gas engines it can achieve primary energy savings of approximately 40% compared to the separate purchase of electricity from the electricity grid and gas for use in a boiler. If the fuel for the gas engine is renewable such as biogas, hydrogen, syngas or RNG, CHP can be a highly sustainable source of electricity and heat.

Combined heat and power plants are typically embedded close to the end user and therefore help reduce transportation and distribution losses, improving the overall performance of the electricity transmission and distribution network.

 

District energy schemes use combined heat and power plants to generate both electricity and heat for a group of residential or commercial buildings. For power users where security of supply is an important factor for their selection of power production equipment and gas is abundant, gas-based cogeneration systems are ideally suited as captive power plants (i.e. power plants located at site of use).Being a localized source of power generation, it can help improve a site’s resilience in the event of a power grid failure with the addition of island mode operation features

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Combined Heat & Power Infrastructure

TEXZON UTILITIES provides the following services to support your CHP project:

  • Study of current system and utility expeditures

  • Energy demand, viability, and feasibility studies

  • CHP infrastructure and system design

  • Production analytics and total installed (turnkey) cost estimate

  • ROI, IRR, and cashflow – payback schedule

  • BESS (battery energy storage system) design and integration as required

  • Electrical and mechanical engineering

  • Electrical load analysis and transformer requirements

  • PPA (power purchase agreements) 

  • Utility interface and interconnection

  • Environmental and regulatory permitting and applications support

  • Software: Helioscope, Energy Toolbase, CAD, delos, etc.

  • Technical field services and project management

  • Civil engineering and environmental impact analysis / design

  • In-House grant writing, defining federal and state incentives, etc.

  • Financial products, project capital, and funding incentives

* Photos courtesy of Clarke Energy

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TEXZON UTILITIES

Let's talk to empower your CHP project.

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