14.4: Combined Heat and Power as an Alternative Energy Source
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Electricity in the United States is generated, for the most part, from central station power plants at a conversion efficiency of roughly 30 to 35 percent. Meaning, for every 100 units of fuel energy into a simple cycle central station electric power plant, we get only 30 to 35 units of electricity. The remainder of the energy in the fuel is lost to the atmosphere in the form of heat.
The thermal requirements of our buildings and facilities are generally provided on-site through the use of a boiler or furnace. The efficiencies of this equipment have improved over the years and now it is common to have boilers and furnaces in commercial and industrial facilities with efficiencies of 80 percent and higher. Meaning, for every 100 units of fuel energy into the boiler/furnace, we get about 80 units of useful thermal energy.
Commercial and industrial facilities that utilize the conventional energy system found in the United States (electricity supplied from the electric grid and thermal energy produced on-site through the use of a boiler/furnace) will often times experience overall fuel efficiencies of between 40 to 55 percent (actual efficiency depends on the facilities heat to power ratio).
Combined Heat and Power (known also as CHP or “cogeneration”) is an integrated system located at or near the building/facility that generates utility grade electricity which satisfies at least a portion of the electrical load of the facility, and captures and recycles the waste heat from the electric generating equipment to provide useful thermal energy to the facility.
CHP implies that heat and electricity are produced simultaneously in one process. Use of combined heat and power helps to improve the overall efficiency of electricity and heat production as these systems combine electricity production technologies with heat recovery equipment. Increasing the conversion efficiency of power generation through the use of CHP helps to reduce the environmental impact of power generation. These systems can reach fuel use efficiencies of as high as 75 to 85 percent (versus the conventional energy system at approximately 40 to 55 percent).
A well designed, installed and operated CHP system provides benefits for the facility owner (end user), the electric utility, and society in general. The high efficiency attained by the CHP system provides the end user with lower overall energy costs, improved electric reliability, improved electric power quality, and improved energy security. In areas where the electric utility distribution grid is in need of expansion and/or upgrades, CHP systems can provide the electric utility with a means of deferring costly modifications to the grid.
Although the electricity generated on-site by the end user displaces the electricity purchased from the local electric utility and is seen as lost revenue by many utilities, energy efficiency and lower utility costs are in the best interest of the utility customer and should be considered as a reasonable customer option by forward-looking customer oriented utilities. Finally, society in general benefits from the high efficiencies realized by CHP systems. The high efficiencies translate to less air pollutants (lower greenhouse gas and \(\ce{NOx}\) emissions) than produced from central station electric power plants.