How combined heat and power boosts energy efficiency

A major inefficiency in the energy sector comes in the form of heat wasted during electricity generation. No wonder, then, that the most efficient use of energy available to date uses that heat productively. Combined heat-and-power (CHP) installations, for example, can achieve efficiencies above 90%—vs just 37% for a standard fossil fuel plant.

Thermal CHP is already economically viable in industrial and commercial settings that require constant heat, such as food production, gas-processing facilities or hospitals. Combining thermal CHP with renewables might increase the ROI further. Exactly how much is what a demonstration project launched last week in Berlin aims to measure. Developed as a partnership between GE, BELECTRIC and Kofler Energies, the 1MW plant will combine a 400KW CHP Jenbacher gas engine with 600KW of solar photovoltaic energy backed up by 200kWh of battery storage and smart energy management systems – the last two will be used to control and optimise energy production, selling surplus to the grid whenever conditions are favourable. Should the project prove successful, it can easily be scaled up.

With only 9% of power generation in the form of CHP globally, however, the potential for CHP remains largely untapped, notably at the small scale. “The overall economics don’t start pencilling out as you get into these smaller applications,” says Rick Fioravanti, head of the Distributed Energy Resources section at DNV GL Energy. The operational complexities of CHP, for example, can have a deleterious economic impact at the smaller scale. Aggregation at the district level could be a solution, he notes.

This concept is echoed by Thibaud Voïta, programme officer for Energy Efficiency at SE4all, who points out that district energy schemes represent a major opportunity for CHP expansion. “There is a strong move from cities”, he says, highlighting Paris and Copenhagen as among current leaders in district energy system development.

Copenhagen, for example, has been using district heating since the 1930s and significantly expanded it in the 1980s following the oil crisis. Today, more than 60% of consumers are supplied with district heating, 78% of which is produced via CHP. Paris also began its own district energy journey back in the 1930s.

Urban developments also present an opportunity to expand the role of district heating and, with it, the use of CHP. London’s new Greenwich Millennium Village housing development project, for example, will see a gas-fired CHP supply heat to some 1,700 houses set to be built over the next eight years.

Rapidly urbanising countries will be important markets—notably China, whose urban population may reach the billion mark by 2030. The country, which has one of the largest fleets of CHP installations in the world (170GW as of 2010), is actively investing both in district heating and in gas-fired CHP—its 12th five-year plan contains ambitious targets for both, including plans for 1,000 gas-fired CHP plants and ensuring that at least 43% of all district-heating plants are CHP.

At the UN Sustainable Energy For All Forum last week, UN Secretary-General Ban Ki-Moon reiterated the goal of doubling energy efficiency improvements by 2030. In view of its potential, clearly CHP will have a role to play.

This article first appeared on GE LookAhead. Publication does not imply endorsement of views by the World Economic Forum.

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Author: David Appleyard is a contributor at GE LookAhead.

Image: Electric pylons are pictured. REUTERS/Siphiwe Sibeko.