Five Things to Help You Correctly Specify Your Combined Heat and Power (CHP)

Posted by John Hyde on 21-Mar-2017 11:07:00

Discover 5 things you need to do to correctly specify your Combined Heat and Power (CHP). 


The effectiveness of a Combined Heat and Power (CHP) system depends in large part on the specification - the essential document that describes the physical and operational characteristics of the unit and control systems and how they affect other parts of the building. A vital part of drawing up a specification is determining the optimum capacity for the CHP unit to provide the best returns (whether they be financial and/or environmental).

Read on for five methods to achieve the best specification possible for your CHP.

Identify the goal   

CHP can reduce the running costs of a building, reduce its CO₂ emission levels and generate electricity for use on-site, or sale to the grid. It’s necessary to understand how and when the energy will be consumed and to identify priorities during the design process, such as whether there is a primary goal and if it related to sustainability, cost reduction or both.

For example, where generation of electricity is the priority, it may be acceptable to size and design the system to reject excess heat at times when electricity demand is higher than the associated heat demand. However, if the priority is to reduce CO₂ emissions then a strategy that rejects heat will not be appropriate, as this will dissipate any emissions reductions obtained through CHP. It is key to strike the right balance.

Identify the demand

In order for a CHP plant to be financially viable and achieve the desired cost savings and payback period, it must run at full capacity for at least 4,000-5,000 hours per year for maximum efficiency. The unit must therefore be sized from the heat and electrical power profiles of the site, which should be studied on both a daily and seasonal basis. In most cases the CHP system should be matched to the thermal (heat) profiling of the site.

A system sized against the thermal baseload of the site is likely to be able to run efficiently all year round however the savings may not appear to be as great as initially expected. Conversely a system sized against the electrical baseload of the site will be able to deliver more savings in the winter months but will have to reject heat or even shut down in the summer months. There is an optimum size CHP which sits somewhere between these two limit cases and it is only by having a comprehensive understanding of the energy profile of the site that a skilled CHP engineer can determine the best solution.

To reject, or not to reject

Where the priority is electricity generation, it may be desirable to run the CHP plant to produce electricity even when there is little or no demand for heat, with the unwanted heat being rejected through an air blast radiator or similar device. This will be economically viable if the grid electricity price is high enough, but it will have a negative impact on CO₂ emissions. Too high a proportion of heat rejection will negate much of the benefit of CHP. It is also likely to fail  the government’s quality standard for CHP (CHPQA), which only allows 25% of heat to be rejected.

Use realistic comparators

The investment case for CHP is inherently comparative, as its viability depends on the difference between the cost of providing heat and power through CHP and the cost of conventional heat sources and grid electricity. CHP performance must be evaluated against a realistic comparative case, which uses agreed baseline energy costs for gas and electricity. Markets such as the UK, which have seen continuous increases in the price of electricity with gas prices staying relative static in comparison, are prime to benefit from CHP technology.


A CHP plant is an investment with a lifespan of 15-20 years, although the payback period is usually 3-5 years. It is therefore essential that the financial case remains viable for at least the payback period. The basic measure which determines the financial return on CHP is the spark spread. That is, the difference between the market cost of electricity and the cost of production in the CHP plant. Although it is not possible to predict future spark spread with complete accuracy, a realistic business case for CHP must take the effect of long-term price variations into account.


  1. CHP can reduce running costs and CO₂ emissions, and generate electricity for sale to the grid.

  2. Size your CHP unit in line with the seasonal and daily energy demands of your site in order to maximise financial returns.

  3. Be mindful of the level of heat rejection and be sure to remain compliant with the government’s CHP quality standard.

  4. Use as accurate a comparative case as possible when trying to determine the viability of a CHP system against that of conventional energy sources.

  5. Always take long-term price variations into account when comparing costs.
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Topics: CHP / Cogeneration

John Hyde

Mechanical & Manufacturing Engineer with over twelve years’ experience in the UK, USA & European Low Carbon Technology industries. Based in London, John works with consultants from early feasibility stages to investigate variables which influence CHP design. Endeavouring to increase awareness of the economic implications and best practice design of CHP through presentations of CPD seminars.