Historical background for combined heat and power usage

The concept of combined heat and power generation is not new. Indeed, the potential for combining the generation of electricity with the generation of heat was recognized early in the development of the electricity-generating industry. In the United States, for example, at the end of the 19th century city authorities used heat from the plants they had built to provide electricity for lighting to supply hot water and space heating for homes and offices too. These district heating schemes, as they became known, were soon being replicated in other parts of the world.

In the United Kingdom, around that time, a small number of engineers saw in this a vision of the future. Unfortunately, their vision was not shared and uptake was slow. It was not until 1911 in the United Kingdom that a district heating scheme of any significance, in Manchester city center, was developed.² Fuel shortages after World War I, followed by the Great Depression, made district heating more attractive as electricity generation expanded in Europe during the 1920s and 1930s. Even there, however, take up was patchy. Nevertheless, by the early 1950s district heating systems had become established in some cities in the United States, in European countries such as Germany and Russia, and in Scandinavia. In other countries like the United Kingdom there was never any great enthusiasm for CHP and it gained few converts, though a number of schemes were built after World War II as regions devastated by bombing were rebuilt.

This pattern of patchy exploitation has continued and the situation is complicated by the fact that it is almost impossible, economically, to build district heating infrastructure in modern cities that lack it. The centralization of the electricity supply industry must take some blame for this lack of implementation. Where a municipality owns its own power-generating facility it can easily make a case on economic grounds for developing a district heating system. But when power generation is controlled by a centralized, often national body, the harnessing of small power plants to district heating networks can be seen as hampering the development of an efficient national electricity system based on large, central power stations—unless, that is, the CHP approach is already a part of the philosophy of the national utility.

Power industry structure is not the only factor. Culture and climate are also significant. So, while countries such as the United Kingdom failed to make significant investment in district heating, Finland invested heavily. Over 90% of the buildings in its major cities are linked to district heating systems, and over 25% of the country’s electricity is generated in district heating plants. Many Russian cities, too, have district heating systems with heat generated from large local power stations. Even some nuclear power plants in Russia are harnessed in this way.

District heating was—and remains—a natural adjunct of municipal power plant development. But by the early 1950s the idea was gaining ground that a manufacturing plant, like a city, might take advantage of CHP too. If a factory uses large quantities of both electricity and heat, then installing its own power station allows it to control the cost of electricity and to use the waste heat produced, to considerable economic benefit. Paper mills and chemical factories are typical instances where the economics of such schemes are favorable and many such plants operate their own CHP plants.³

While this idea slowly gained ground, technological advances during the 1980s and 1990s made it possible for smaller factories, offices, and even housing developments to install CHP systems. In many cases this was aided by the deregulation of the power supply industry and the introduction of legislation that allowed small producers to sell surplus power to the local grid. Since the middle of the 1990s the concept of distributed generation has become popular and this has also encouraged CHP.

Recent concern for the environment now plays its part too. Pushing energy efficiency from 30% to 70% or 80% more than halves the atmospheric emissions from a power station on a per-kWh basis. Thus, CHP is seen as a key emission control strategy for the 21st century. But while environmentalists call for expanded use, actual growth remains slow.

Combined heat and power principles and applications

From single home heat-and-electricity units to municipal power stations supplying heat and power to a city, from paper mills burning their waste to provide steam and heat to large chemical plants installing gas turbine–based CHP facilities, CHP installations can be as different as their applications are varied. However, they do share one theme. Ideally, the heat and electricity from a CHP plant will be supplied to the same users. While this is not an absolute requirement it is a pragmatic principle for a successful CHP scheme.

If the heat and power plant is supplying both types of energy to the same users, be they an industrial plant or households, then the economics of the plant will remain sound so long as the customers remain. However, if a plant supplies electricity to one customer and heat to another, it can be undermined by the loss of either. Part of this risk is mitigated if a plant can export electricity directly into the grid, but, in general, the economics of CHP will be most soundly based where the same customers take both.

Examples of how this can be achieved exist at all levels within the electricity market from the smallest electricity consumer to the largest. At the very bottom of the scale many home owners buy electricity from a utility and either use this for heating or to purchase natural gas to provide hot water for domestic use and space heating. However, it is now possible to install domestic CHP systems based on micro-turbines or fuel cells that will replace a domestic hot water system and at the same time generate electricity for use by the household, with excess power perhaps being sold to the local utility. While such systems remain costly, they are likely to become more cost effective in time.

On a larger scale a micro-turbine or a reciprocating engine burning natural gas can be used to supply both electricity and heat to an office building, a large block of apartments, or a small commercial or industrial enterprise. Such systems are widely available and can be installed in urban environments with ease. The system may be connected in such a way that excess power can be exported to the grid, although the sizing of such systems is normally based on heat demand; power demand will be generally higher than the system can supply alone.

At the top end of the capacity scale, a municipal power plant based on a coal-fired boiler or a gas turbine can provide electricity for a city and heat for that city’s district heating system (Figure 6.1). As already noted, new systems of this type are difficult to install in existing cities but opportunities arise where major redevelopment takes place and new urban housing schemes can be built with district heating too.

In all these cases the supply of electricity is the primary requirement, but the use of heat from the power generation facility improves the economics considerably while offering significant environmental benefits. Similar opportunities exist in industry, but in many industrial cases the situation is reversed and it is heat or steam that is the primary requirement with electricity production a secondary consideration. However, the same arguments apply. There are many industrial processes that require a source of heat and all industrial plants will use some electricity. Often the two can be combined to good economic effect once the benefits are recognized. So where, in the past, a paper manufacturer would have installed a boiler to supply heat while buying power from the grid, now the same manufacturer is more likely to install a CHP plant, often fired with waste produced by the paper manufacturing process. Chemical plants often require a supply of high-grade heat too, as do some refineries. Food-processing plants may require large heat supplies as well.

Such instances represent the ideal but a good match of heat and power demand is not always possible at this level. However, provided the scale is large enough, such plants may be able to install a grid-connected power plant that exports electricity while using heat generated from the same plant to supply its industrial needs. Alternatively, a large CHP plant can be built to supply an industrial site supporting a range of different industries, some with large heat requirements, others with demand for electrical power.

Domestic heat consumption remains the biggest challenge. Where district heating networks exist, a good balance between domestic heat and electricity demand is possible. But where these do not exist the only solution is either power stations meeting the electricity demand only, or domestic CHP systems. The latter are the only solution for many households but their installed base is still very small and, as already noted, cost is high. If costs can be brought down then such systems offer a real chance of a significant change in global energy usage.

CHP technology

All types of power generation technology that are based on heat engines are capable of being integrated into a combined heat and power system. Thus, all fossil fuel–fired power plants and biomass power plants can be adapted to create CHP systems. In addition, electrochemical fuel cells can be an excellent source of heat and power. Among renewable technologies, solar thermal power plants can provide heat in addition to electricity if necessary, and geothermal energy has been widely exploited for both electricity generation and district heating. Other renewable technologies like wind, hydropower, and marine power involve no heat generation. However, solar photovoltaic power generation can, in principle at least, be exploited in conjunction with solar heating because the solar cell only uses a part of the incident light and rejects most of the heat-bearing infrared radiation. Nuclear power, too, can be exploited for heat and power generation although its use is rare.

While this range of technologies offers a wide choice for a CHP plant, the type of heat required from a CHP application will often narrow the choice of technology. If high-quality steam is demanded then a source of high-temperature waste heat will be needed. This can be taken from a steam turbine–based power plant, it can be generated using the exhaust of a gas turbine, and it can be found in a high-temperature fuel cell. Other generating systems such as piston engines or low-temperature fuel cells are only capable of generating hot water, and perhaps low-quality steam.

The way in which a CHP plant is to operate is another important consideration. Which of the two types of energy—heat or electricity—will take priority? If heat is the most important consideration, particularly if this is high-grade industrial heat, then a system based on a steam-generating boiler and steam turbine will probably be most appropriate. The boiler will be sized to meet the maximum steam demand while a steam turbine is available to exploit excess steam to generate electricity. If there is sizable demand for both heat and electricity, then either a steam turbine of a gas turbine–based system might be the most suitable, with exhaust heat from the gas turbine used to generate steam and a steam turbine to exploit any excess. However, this will require an electricity demand at least equal to the output of the gas turbine generator.

For smaller applications and where only hot water is needed, a reciprocating engine, micro-turbine, or low-temperature fuel cell might offer the best match. Again, however, the mode of operation will determine the optimum choice. If the unit is to supply power to a particular consumer or group of consumers, with its output following their demand, then a generating unit that can operate efficiently at different load levels such as a piston engine or fuel cell will probably be the best solution. However, if it is going to provide base-load generation then part-load efficiency will be of less significance.

Finally, location will be important. It will not be possible to install some types of CHP plant in urban areas because of the emissions and the noise they generate. Therefore, this will limit the technologies available for use in this situation.

The quantity of heat that will be available will vary from technology to technology. Table 6.1 gives typical energy conversion efficiency ranges for modern fossil fuel–burning power plants. However, not all the energy that is not converted into electricity will be available as heat. Modern high-efficiency coal-fired power plants can operate between 38% and 45% efficiency, though there are many that are much less efficient. However, high-efficiency coal-fired plants produce little usable waste heat unless overall efficiency is compromised, because the steam exiting the steam turbine is generally at a very low temperature and pressure. Gas turbines provide more flexibility while offering a similar electrical energy conversion efficiency because their exhaust gases can provide high-grade heat.

Where even more flexibility is required, it is possible to design a plant to produce less electricity and more heat than the efficiency figures in Table 6.1 suggest. Some technologies are amenable to this strategy, others are not. Most flexible are boiler/steam turbine plants, but gas turbine CHP units can easily be adapted in this way too.

All the technologies employed in CHP plants have their own chapters in this book where detailed accounts of their operation can be found. In discussing these technologies here, consideration will only be given to factors of specific relevance to CHP. Please refer to the other chapters for fuller accounts of each technology.

Piston engines

There are two primary types of piston engine for power generation: the diesel engine and the spark-ignition gas engine. Of these the diesel engine is the most efficient, reaching close to 50% energy conversion efficiency. The spark-ignition engine burning natural gas can achieve perhaps 42% efficiency but it is much cleaner than the diesel. The level of emissions from an uncontrolled diesel engine are such that it is impossible to obtain authorization to use a diesel engine for continuous power generation service in some parts of the world unless it is fitted with an extensive emission control system. Natural gas engines can often operate with minimum emission control.

Piston engines are well suited to CHP applications where hot water is required because much of the energy that is not converted into electricity appears as heat at a temperature suitable for water heating. There are four sources of heat in a piston engine: the engine exhaust, engine jacket-cooling system, oil-cooling system, and turbocharger cooling system (if a turbocharger is fitted), as shown in Figure 6.2. Engine exhaust can provide low- to medium-pressure steam and the engine jacket-cooling system can provide low-pressure steam. However, for most piston engine CHP applications all the sources of heat are used to generate hot water rather than steam. If all four sources of heat are exploited, roughly 70–80% of the energy in the fuel can be utilized.

Piston engine power plants suitable for general CHP applications are available in sizes ranging from a few kilowatts to 6.5 MW. These engines are particularly good at load following; a spark-ignition engine efficiency falls around 10% at half load while diesel engine efficiency barely drops over this range. There is no significant penalty in terms of engine wear for variable-load operation either, unlike for some other engine types.

Applications for piston engine CHP plants include small offices and apartment blocks, hospitals, government installations, colleges, and small district heating systems. Engines tend to be noisy, so some form of noise insulation is normally required. Emissions of gas engines can normally be controlled with simple exhaust catalytic converter systems, but diesel engines usually require much more elaborate measures to control their higher nitrogen oxide and particulate emissions.

Steam turbines

A steam turbine is one of the most reliable units for power generation available. Large utility steam plants designed exclusively for power generation have efficiencies up to 45%, but smaller units employed for CHP applications generally provide efficiencies of 30–42%. These turbines are usually simpler in design too. Steam turbines are available in virtually any size from 50 kW to 1300 MW.

A steam turbine cannot generate electricity without a source of steam. This is normally provided by a boiler in which a fossil fuel or biomass fuel is burned. This makes steam turbine CHP extremely flexible because the power and steam generation are essentially independent of one another. A steam turbine will normally be used in a CHP system only where there is a demand for high-quality, high-pressure steam for some industrial process.

There are a variety of ways of configuring a boiler/steam turbine system to provide both electrical power and heat. One method is to take heat directly from the boiler to supply heat to whatever process needs it with any surplus being directed to a steam turbine to generate electricity. Such an arrangement normally will be economically effective if most of the steam is being used by the industrial process; the addition of a small steam turbine unit then allows limited power generation when excess steam is available.

A more common configuration utilizes what is known as a back-pressure steam turbine (Figure 6.3). In this configuration the steam from the boiler goes directly to the steam turbine, which extracts a part of the energy contained within it. The steam exiting the turbine, still at an elevated temperature and pressure, is then directed to the process where heat is required. This will normally be used when lower-pressure and lower-temperature steam is required, but by balancing the size of the turbine and boiler, steam temperature and pressure can be tailored to suit the process in question. Back-pressure steam turbine CHP systems are widely used in industry.

A third approach is to feed the steam from the boiler into a condensing turbine (one that condenses steam to water at its exhaust to create the largest temperature and pressure drop possible), but then extract steam from a point partway through the steam turbine, where steam temperature and pressure match the heat requirement. Turbines designed for operation in this way are called extraction steam turbines and are commonly found in industrial plants.

These different configurations allow for considerable flexibility when designing a steam turbine–based CHP system. Systems can be more complex if an industrial facility has several sources of steam. These may feed surplus steam into different stages of a single steam turbine to extract the most energy possible.

Steam turbine CHP systems will generally be relatively large, from a few megawatts to perhaps hundreds of megawatts. Most often such plants will be associated with a single industrial plant or process. Depending on the fuel burned in the plant boiler to generate steam, emission control systems will be needed to limit atmospheric pollutants. Steam turbine CHP plants may burn coal or biomass but they will often burn natural gas too, which requires less by way of emission control.

Gas turbines

Unlike steam turbines, gas turbines burn fuel directly. Large industrial gas turbines operate with energy conversion efficiencies up to 42%, while smaller aero-derivative gas turbines can operate with an efficiency up to 46%. Gas turbine–generating capacities typically range from 1 MW up to nearly 400 MW. Units of any size can be used in CHP systems and gas turbines are probably the cheapest prime movers available today. The output of a gas turbine CHP plant can be modulated to suit the demand for heat and electricity, but they are probably best suited to continuous operation at or near full output if they are to achieve the best efficiency.

Gas turbines can burn a variety of fuels, including natural gas, distillate fuels, and biogas. However, the most popular fuel is natural gas. A stationary gas turbine is designed to generate electrical power, so there must be a market for the power generated by the plant if it is to be economically viable as part of a CHP plant. The heat output from the engine is all found it its exhaust gases, and it is these that must be exploited to provide steam or hot water. This will normally be achieved by fitting the unit with a heat-recovery steam generator. The energy contained in the exhaust of a gas turbine is suitable for generating high-pressure steam suitable for many industrial applications.

There are three main configurations for a gas turbine CHP plant. The simplest is to install a gas turbine to generate electrical power and use the exhaust gases to generate steam, all of which is used for process heat or to meet other heat demands (Figure 6.4). This basic configuration can be made more flexible in one of two ways. The first is to fit the plant with a steam turbine too, so that any excess steam can be used to generate further electrical power as in a combined cycle plant. The second is to fit the boiler with a supplementary firing system so that it can generate additional steam beyond the quantity that the gas turbine can provide.⁴ There can also be a combination of supplementary firing and a steam turbine to provide more flexibility and the steam turbine may be a condensing steam turbine, back-pressure steam turbine, or extraction steam turbine (Figure 6.5).

Which of these configurations is chosen will depend on the balance of demand for heat and electrical power. If heat demand is relatively constant, then the simplest configuration can be chosen with the size set to produce all the heat required. Electrical output can then be supplemented if necessary from the grid. If electrical demand is high, or if power is to be exported to the grid, then one of the other configurations might make more economic sense. If the system is designed to closely match electrical and heat demand, efficiencies up to 90% can be achieved.

Gas turbine CHP systems will generally be installed in industrial situations where heat demand is high. The principal emission that needs to be controlled is nitrogen oxide. It may be possible to meet regulatory requirements without additional emission control systems when the gas turbine is small, but larger units will generally require some exhaust gas treatment system. Very large units may also need systems to control the emissions of carbon monoxide and hydrocarbons.

Micro-turbines

There is another type of gas turbine called a micro-turbine that can be utilized for small cogeneration applications. Micro-turbines are tiny gas turbines that operate at very high speeds. Capacities for these machines vary from as small as 25 kW to perhaps 250 kW. There are larger units, between 250 kW and 500 kW, that are sometimes called mini-turbines, but they are best considered with traditional gas turbines and are not included in the following discussion.

Operating speed of micro-turbines can be as high as 120,000 rpm. The bearings are often air lubricated to reduce wear and most micro-turbines incorporate a generator on the same shaft to make the package as compact as possible. Units can burn gasoline, diesel, and alcohol, but for most applications they will burn natural gas.

The high operating speed means that a micro-turbine generator cannot interface directly with the grid, and most units are equipped with solid-state interfaces that convert the high-frequency output to grid frequency at 50 Hz or 60 Hz. Efficiency is relatively low for electricity generation at around 15% to 30%. This low efficiency is not generally a problem because micro-turbines are generally designed for CHP applications with waste heat-recovery systems capable of providing hot water or, in some cases, low-pressure steam.

Micro-turbines are generally supplied packaged so that all they require is a gas supply, an electrical connection, and a connection for their hot water supply. In this form they can be used in a variety of situations such as small commercial environments or office blocks. The units have low emissions so they can be deployed in urban settings without any problem. Noise generation is low too. Larger micro-turbines have been installed in schools and hospitals and they can be used in some small industrial situations.

The most recent development of micro-turbines is for domestic use. Units are packaged with an electrical output as low as 3 kW, suitable for many single homes where they will also supply hot water for heating and other uses. These domestic units are still relatively expensive but large-scale mass production could realize significant economies of scale.

Fuel cells

Fuel cells are electrochemical devices similar to batteries that convert the chemical energy in a fuel directly into electricity (Figure 6.6). Since fuel cells are not limited by the Carnot cycle efficiency, they are potentially more efficient than heat engines. However, very high efficiencies are difficult to realize in practice. Proton exchange membrane (PEM) fuel cells, being developed extensively for automotive applications, can achieve between 25% and 35% efficiency when operating on natural gas, although in principle these cells can run much more efficiently if they are supplied with hydrogen fuel. PEM cells operate at a relatively low temperature. High-temperature fuel cells, such as molten carbonate and solid oxide fuel cells, can achieve over 40% efficiency and potentially up to 50% or higher. They are also capable of supplying high-grade heat. However, the most popular fuel cell for CHP applications is the phosphoric acid fuel cell (PAFC). Fuel cells are particularly good at load following as efficiency varies little with output.

The PAFC was one of the first fuel cells to be developed commercially. It operates at a moderate temperature of 150–200 °C, allowing it to produce low-grade heat for hot water and space heating. In common with most fuel cells, the PAFC requires hydrogen and oxygen to be supplied to its electrodes. Oxygen is provided from air, but in most applications hydrogen must be generated from natural gas in a process known as reforming. This is relatively energy intensive and reduces overall efficiency. Even so, the units can generate electricity at an efficiency around 42%.

PAFC fuel cells are packaged so they can be installed rapidly and easily, requiring only a gas supply and connections for electricity and hot water output. Typical electrical generating capacities are 100–400 kW. In CHP applications they can achieve up to 87% efficiency. Units are virtually noiseless and emissions are generally negligible making them easy to site. The range of electrical outputs available from single units makes them most suited to small commercial and institutional applications, such as schools, hospitals, and offices.

PEM fuel cells operate at a much lower temperature than PAFC fuel cells, usually around 80 °C. This means they can provide some hot water, and small units are being built aimed at the residential market. Electrical efficiency for such systems is around 30% and CHP efficiency 80%. Unit sizes can range from 3 kW to 250 kW. As with PAFC fuel cells, these cells require hydrogen to be supplied to their electrodes. Again this is normally produced by reforming natural gas.

Two main types of high-temperature fuel cells are under development: the molten carbonate fuel cell (MCFC) and the solid oxide fuel cell (SOFC). MCFC cells operate at around 650 °C and can achieve an electrical conversion efficiency of 47%. SOFC cells generally operate at a higher temperature, 750–1000 °C, and have shown conversion efficiencies up to 43%. While both can be exploited for CHP applications, the MCFC is a relatively complex cell and has been developed for electricity production alone. The SOFC is simpler and some small SOFC units are being developed for domestic CHP applications. Capacities can range from as low as a few tens of watts to several megawatts.

Costs for all types of fuel cells remain high compared to other sources of electricity generation, but potential for cost reduction exists, particularly for PEM cells, which are being actively developed as power units for electric vehicles.

Nuclear power

Nuclear power plants exploit the controlled use of the nuclear fission reactions of large periodic table elements such as uranium and plutonium—reactions that release a massive amount of heat energy—to provide heat to generate steam for electrical power generation. In a nuclear power plant most of the available heat is captured and used to generate steam, which drives a condensing steam turbine so there will be little heat available for CHP applications. However, it is possible to adapt a nuclear plant so that some of the heat is available.

Nuclear power has been used in Russia and some other eastern European countries for district heating and for seawater desalination, a form of CHP when combined with power generation. However, nuclear CHP technology has never been adopted in the developed world.

The size and cost of building a nuclear power plant means that nuclear CHP plants, where they are built, are constructed for strategic reasons and form part of a national planning strategy. Small nuclear plants capable of CHP use have been proposed in the past but none has reached commercial maturity. Recent safety concerns have also made the future of nuclear generation appear fragile. Nuclear CHP is, therefore, likely to remain the preserve of countries like Russia and is unlikely to find widespread application for the foreseeable future.

Cost of CHP

The economics of CHP depend on the cost of installing the plant with its heat-recovery and generation system, the operating expenses, and the value of the electricity and the heat that it produces. The value of the electricity can be found by calculating the cost incurred by purchasing a similar quantity of electricity from the local supplier. The value of the heat is more difficult to estimate but can usually be found by estimating the cost of fuel that would have to be purchased to generate the heat from an alternative source.

Economics will also depend on the type of consumer that the unit is supplying. Large industrial consumers can buy electricity at wholesale prices from suppliers. The cost of the same electricity when supplied to a domestic consumer can be several times that of the wholesale price. Therefore, a domestic CHP system can be relatively expensive and yet still economically viable.

Table 6.2 contains some representative capital costs for CHP systems at the end of the first decade of the 21st century. Some are in pounds sterling and some in U.S. dollars.⁵ A small reciprocating engine-based system of less than 15 kW is the most expensive in the table with a cost of around £3290/kW or close to $5000/kW. Small CHP gas engines tend to be expensive but the cost falls as the size increases so that a similar system, but with an electrical generating capacity of 110 kW instead of less than 15 kW, has an estimated cost of £890/kW ($1300/kW). This is comparable to the cost of a similarly sized gas turbine–based CHP system that, according to the data in Table 6.2, would cost £900/kW ($1400/kW). These two large CHP systems would be expected to have a lifetime up to 20 years but the small reciprocating engine operating at around 5000 hours each year or more would have a lifetime of only 5–6 years.

Other systems included in Table 6.2 are a steam turbine–based system with a cost in excess of $2000/kW. This price is for a large steam turbine–based plant and the cost will rise for smaller systems. A commercial fuel cell based on PAFC technology is available in the United States for around $2500/kW. Meanwhile, micro-turbines are still relatively expensive at $3000–4000/kW.

To obtain the best economic return it is important to size a CHP system correctly. The unit needs to operate for at least 4000 hours each year to be cost effective, particularly where smaller systems are under consideration. Oversized engines running at less than full output will often lose some economic benefit, particularly if this involves dumping heat because it is not required.

The figures in Table 6.2 are all for generation systems based on combustion of natural gas. One of the major renewable CHP options involves wood-burning CHP. There are various approaches to this including a straightforward wood-fired boiler generating steam for a steam generator and wood gasification. The typical price for a relatively small wood-based combustion system (500 kW) is around £2000/kW ($3000/kW). Larger systems can cost less, with prices as low as £1200/kW ($1800/kW) feasible.⁶