How CHP can deliver on carbon reduction targets

Green Building 130X130

Combined heat and power (CHP) can make an important contribution to legally binding carbon reduction targets by decarbonising heat supplies and supporting intermittent renewables, such as solar and wind.

The fifth carbon budget passed into UK law during July 2016 and commits the government to slashing CO2 emissions by 57 per cent between 2028 and 2032, against 1990 levels. One of its key recommendations is to increase the uptake of low carbon heat. 

Decarbonising heat

Waste heat is a weak link in the current energy supply chain. Forty per cent of the UK’s energy is used to generate heat energy; and heat wasted from buildings accounts for half of total energy emissions. Such waste has been highlighted in a report by a coalition of industrial manufacturers and environmental groups, which states that 54% of energy used to produce electricity is being wasted via conventional power production at a cost of £9.5 billion per year.

The UK's energy productivity problems can be significantly improved by moving from centralised to decentralised production, using technologies such as CHP. By capturing and utilising heat via CHP, organisations can achieve 85% efficiency, more than double that of conventional power production. The technology can reduce CO2 emissions by as much as 30%, as well as achieving cost savings of up to 40%.  

CHP consistently provides a highly effective method for converting natural gas and carbon-neutral fuels, such as biogas, into useable power and heat. This is particularly beneficial for applications where there is a large heating or cooling demand, like hotels, hospitals, universities, leisure centres and industry. CHP also scores in terms of versatility since it is suitable for new and refurbished buildings, as a replacement for an ageing boiler plant, or in augmenting existing or new boilers.

Back-up for renewable generation

The UK’s energy industry is coping with a turbulent transition from fossil fuels to renewable energy and the need to maintain energy security. CHP has long been considered the ultimate agile and flexible technology. Its rotating momentum helps stabilise the network and manage system stresses when there is wide fluctuation in power output, as is the case with intermittent sources such as wind and solar.

With the growth of renewables, much more is now being asked of CHP via the new European Network Codes, such as Requirements for Generators (RfG). Modifications to equipment will enable transmission system operators to shift loads to compensate for excess renewable generation when demand for electricity is low. This will ensure they are able to access a sufficient amount of energy to balance the growing differences between supply and demand on their network.

A recent study from the National Bureau of Economic Research (NBER) concluded that the expansion of intermittent wind and solar power still needs backup from electricity generated by natural gas.

The report 'Bridging the Gap: Do Fast Reacting Fossil Technologies Facilities Renewable Energy Diffusion?' argues that, in the absence of viable storage options, renewable energy integration has been made possible by 'fast-reacting mid-merit fossil-based technologies', which act as back-up capacity.

One German grid manager quoted in the report claims that a ratio of 8 MW of back-up capacity is required for any 10 MW of wind capacity added to the system.

The authors state: “Fast-reacting fossil technologies, which includes most gas-generation technologies, combined heat and power and integrated gasification combined cycle to name a few, are characterized by mid-merit order, quick ramp-up times, lower capital costs and modularity (meaning that efficiency does not fall significantly with size). They are thus particularly suitable to meet peak demand and mitigate the variability of renewables.”

Smart Grids

The use of CHP and other decentralised supplies, including renewables, is being taken to a new level of  demand response via smart grids, such as the Smart Cornwall project, which plans to develop the U.K’s first integrated smart energy network.

Research undertaken by ENER-G in partnership with Advanced Digital Institute; Flexitricity; Smarter Grid Solutions and UK Power Networks has provided simulations to demonstrate the potential of clusters of CHP assets in a decentralised smart-grid or virtual network. 

A constructive partnership between CHP operators and gas distribution network operators is vital to realise the full flexibility of CHP in providing electricity grid stabilisation and balancing services. Gas distribution network operators have a part to play in the stabilisation of the electricity grid by ensuring that the gas network can respond to the increasingly spiky gas demand that CHP brings about as it responds to its new commercial drivers,

CHP savings

Small scale CHP is widely regarded as one of the lowest cost carbon abatement technologies due to the significant primary energy savings it can achieve.

In the current market of lower wholesale gas prices and with tax-saving opportunities, such as UK exemption from the Climate Change Levy for small-scale installations and access to Enhanced Capital Allowances, the attractiveness of CHP is strong. And with security of energy supply now of increasing importance, on-site CHP is key to the decentralised energy generation mix.

When a building's heating/cooling and power demand are suited to CHP, payback on investment is typically three to five years, delivering energy cost stability and savings over an average asset lifespan in excess of 15 years. When configured in island mode, it can also reduce grid dependency to improve security of supply.

Emissions performance

Greenhouse gas emissions and air pollution continue to be a hot topic. Major cities are taking steps to reduce the impact of air pollution by setting tough air quality assessment benchmarks for NOx emissions. Emissions performance is a key challenge for the CHP industry. ENER-G has responded by launching a new range of 'ultra-low' NOx systems that are achieving a five-fold reduction in emissions. The technology is achieving sustained lifetime emissions levels of less than 50mg/Nm3 @ 5% O2, which is almost half of the most stringent emissions limit set by both BREEAM and the new Greater London Authority (GLA) Sustainable Design and Construction guidelines. 

Greener building strategy

In its Construction Strategy, the UK Government has targeted a 50% reduction in CO2 emissions from buildings by 2025, much of which will be achieved by energy efficient, collaborative designs. Most local authorities are now championing CHP as part of local planning and building regulation approvals, with assessments needing to consider district heating networks and community heating schemes with CHP as a main energy source. The Government is supporting the development of heat networks with a commitment of £300 million.

New buildings need to be greener, with designs that prove the development will be environmentally responsible and resource efficient throughout its lifetime. Local authorities insist on an energy strategy and/or sustainability policy statement with planning applications, showing how the design will reduce energy use by introducing climate change resilience, resource efficiency and pollution reducing measures. In particular, the BREEAM environmental performance and sustainability assessment awards credits for the use of innovative, energy saving technology, such as CHP, within new and existing building fit-outs. The technology also contributes significantly towards legislative compliance with part L2 of Building Regulations.

Low-carbon, energy saving technologies like CHP have a big role to play in productive decentralised energy production, helping stabilise the energy supply to support renewable generation and future-proof its security.


For further information read the Essential Guide to CHP