CHP: Progress or Regression?

A major misconception about Combined Heat and Power (CHP) is that people believe its efficiency is far greater than other methods for generating electricity.

Efficiencies of over 90% are claimed for CHP, but these are misleading.

CHP uses the exhaust gasses or exhaust steam from the power plant generating electricity, to provide heat to buildings. It’s easy to see why this misperception is rampant since it would appear that more energy is being used when heat from the exhaust is supplied to buildings, such as from a natural gas combined cycle (NGCC) power plant or a diesel generator.

Claims of 80% or 90% efficiency are mistakenly seen as vastly better than the 32% HHV efficiency of a traditional coal-fired plant, 45% for a gas turbine, or 60% for an NGCC power plant. (These are approximate efficiencies with variations occurring among different plants.)

Unfortunately, while there is some improvement in efficiency with CHP, efficiencies aren’t doubled as some people suggest.

The mistake arises when people assign the same value to the heat extracted from exhaust gasses with the electricity produced by the power plant. The exhaust gasses have low heat content and therefore less value than the electricity produced by the power plant.

The best analogy is one suggested by Power Magazine: An automobile’s engine using gasoline has considerable horse power and also heats water in the engine’s cooling system. The hot water is then used to heat passengers during the winter. While this takes advantage of the heat in the water, the water doesn’t have the power to drive the automobile. Gasoline has high energy density, while hot water has a low energy density.

Even Gas Power Magazine fell into this trap when it touted CHP in its December 3rd, 2012 issue.

It reiterated a report from New York University that its CHP installation had over 90% efficiency, and also repeated similar claims made for other installations.

CHP was in vogue in the United States during the first part of the twentieth century, before the grid supplied low-cost electricity to manufacturing plants. These plants installed CHP to generate electricity for the plant and to supply steam to various processes and for heating buildings. After the grid was in place and cheap electricity was available from the grid, these CHP plants fell out of favor.

The opposite was true in Europe, where CHP is still used extensively in many European countries.

In Europe, the steam and heat from turbines is used to heat buildings in the area around the power plant. The steam is conveyed by large pipelines, covered with insulation, to the buildings using the steam for heating. The close proximity of buildings in Europe, rather than homes spread out in suburbs, as in the United States, makes CHP convenient in Europe, but impractical in most instances in the United States. Once again, the history of how the United States developed, capitalizing on abundant and low cost land, compared to Europe where people reside primarily in cities, played a role in Europe’s adopting CHP.

There are exceptions in the United States such as NYU that uses CHP to generate electricity and provide heat for campus buildings.

It’s important to remember that CHP doesn’t provide very high efficiencies, because the government is about to try to force the adoption of CHP on America.

President Obama issued an executive order in August calling for increased use of CHP. The EPA has issued a 22 page report touting the benefits of CHP as a “clean energy solution”.

California and other states are pushing CHP. California provides a feed-in tariff for CHP, while some states include CHP in their Renewable Portfolio Standards.

The emphasis on CHP is another effort to reduce CO2 emissions.

Greenpeace in its energy plan, the Energy [R]evolution, says, “The lack of district heating networks [in the United States] is a severe structural barrier to the large-scale utilization of geothermal and solar thermal energy [and CHP].” This, of course, reflects another Greenpeace objective which is to have Americans live in mixed-use communities, preferably near mass transit which would also eliminate the use of automobiles.

Providing feed-in tariffs and including CHP in RPS merely distorts the free market.

CHP is not far more efficient than other methods for generating electricity. It can provide ancillary benefits in special circumstances, but should not be forced on Americans. Its wide use in Europe is not a reason for adopting CHP in the United States, though Europe is being held up as the role model.

Does Gas Power Magazine infer this when it says: “CHP is a major source of energy in many countries in Europe — in Denmark, Finland, and the Netherlands, for example, CHP accounts for over 30% of total generating capacity. The European Union’s 2004 Cogeneration Directive required member states to promote CHP and remove barriers to its deployment. The recently approved Energy Efficiency Directive requires that CHP be considered for any new or substantially refurbished generation facility. In addition, many European countries have used policy tools such as feed-in tariffs to support CHP.”

And, when Gas Power Magazine says, “But it gets worse: Most CHP in the U.S. is small scale.”

The United Sates isn’t Europe … at least not yet.

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