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The Value of Combined Heat and Power Cogeneration

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Credit: iStock/Martin Wahlborg
“Waste not want not” is a respected proverb in many engineering applications. However, according to the three laws of thermodynamics, waste heat is inevitable in any working system. And, while it is physically impossible to prevent the generation of waste heat, a power system operator can make a virtue out of it and put waste heat to work. This is accomplished with Combined Heat and Power (CHP) or “cogeneration” systems, which take the waste heat created by one power source and apply it as energy to another operating system (usually heating or cooling). This allows for the concurrent production of electrical power (or the running of a mechanical engine) and thermal energy as one energy source performing two functions. The result is the economical capture and reuse of thermal heat that would have normally been lost.

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CHP Technology, Applications, and Benefits
Most electrical power plants in the US create steam as a byproduct, which is then vented off via an exhaust stack. A cogeneration CHP system captures this steam and extracts its heat to provide energy for local commercial buildings, businesses, and manufacturing operations. The potential savings in efficiency that could be achieved by complete conversion to CHP are truly impressive. For example, the US wastes an amount of heat energy from electrical power generation that is equivalent to the total energy used by all of Japan. This energy loss could be cut in half with extensive adoption of CHP.

Conventional central coal- or nuclear-powered power stations convert only about 33% of their input heat to electricity, with the remaining heat radiating from the turbines as low-grade waste heat. That means 67% of the heat generated by its fuel source is not used to generate electricity, but is instead lost as waste heat. A CHP system, on the other hand, can operate at efficiencies as high as 80%, thereby reducing the amount of waste heat lost by approximately 70%.

This is not a new breakthrough technology. CHP has been around since the start of the electrical power industry. The world’s first electrical power plant, designed and built by Thomas Edison, utilized a basic form of CHP over 100 years ago. From the very beginning this was seen as a common sense application. But the early extensive adoption of this technology was limited by many economic and technical factors: the relative isolation of power generating plants from potential users of CHP captured heat, the complication of early system designs, the upfront capital costs of these systems compared to the cheap costs of fuel, etc. However, recent increased costs of energy and stricter environmental emission standards have spurred renewed interest in improvements in overall operational efficiency, including CHP. In this light, CHP can be viewed as an efficiency improvement and thus, a significant cost saver.

The increased popularity of CHP is shown by the current level of adoption of this technology. The US now has an operational CHP capacity of over 82 gigawatts (GW) installed at 4,100 industrial and commercial facilities nationwide. That means 8% of America’s generating capacity is currently provided by CHP—and it has extensive capacity for further expansion. This potential has led to the establishment of CHP industry goals in partnership with the Department of Energy (DOE) and the US Environmental Protection Agency (EPA) for CHP to represent as much as 20% of US electrical capacity (equiv­alent to approximately 21 GW) by 2030.

Near term, planned expansion includes President Obama’s pledge to add 40 GW of new, economical CHP by 2020. This plan will save the American economy $10 billion annually in energy costs. It will require an investment of $40 to $80 billion in new capital plants and facilities. This, in turn, will create thousands of well-paying jobs. Lastly, the capture and reuse of waste heat by these new CHP systems will reduce the need for addional energy production and further reduce carbon pollution by 150 million metric tons per year. This reduction would be equivalent to removing more than 25 million cars from the roads, in helping America meet its goals for reducing greenhouse gas emissions.

Credit: 2G Energy A 2G 400kWe CHP cogeneration power plant, serves about 20% of Yuengling  Brewery’s total electricity needs.
Credit: 2G Energy
A 2G 400kWe CHP cogeneration power plant, serves about 20% of Yuengling Brewery’s total electricity needs.

CHP may not be a sexy, high-tech breakthrough, but oftentimes these unexciting kinds of applications and steady, incremental improvements add up into significant energy and cost savings. And, fuel constraints or types of fuel do not limit CHP’s expanded use. Anything that can generate heat energy (coal, biomass, natural gas, even concentrated direct solar energy) can be modified to include CHP cogeneration systems. And its applications are equally limitless. Multiple industries are capable of adopting CHP. Not only is the US Congress installing a dedicated CHP plant capable of generating over 18 MW of energy and providing steam for heating congressional office buildings, but CHP systems are being installed in buildings and facilities as diverse as hotels, nursing homes, hospitals, schools, apartment complexes, university campuses, stores, restaurants, theaters, and office buildings. CHP can also play a significant role in energy production during disasters, acting as reserves of heat energy that can be drawn upon when other systems are down (as was shown in the aftermath of Hurricane Sandy).

The CHP operation at Simonds International in Fitchburg, MA, is a perfect example of innovated engineering. The cogeneration plant consists of 3 x 2G avus 600ekW NG Fully Containerized CHP modules.
Credit: 2G Energy
The CHP operation at Simonds International in Fitchburg, MA, is a perfect example of innovated engineering. The cogeneration plant consists of 3 x 2G avus 600ekW NG Fully Containerized CHP modules.

As of 2012, up to 13% of CHP capacity was installed in institutional buildings for commercial operations. CHP has been widely adopted by the petroleum and refinery industry, pulp and paper mill operations, chemical processing plants, and steel manufacturing. Expansion of CHP continues into light manufacturing and assembly operations, pharmaceutical production, food processing, and other industries. However, hobbling continued expansion of CHP through the inter-connection of distributed energy systems and the local utility grid is a lack of standard business practices, regulatory requirements, and technological specifications. With this lack of standards often come complicated, overlapping, and often contradictory regulatory environments.

Cogeneration at Yuengling Brewery
Credit: 2G Energy
Cogeneration at Yuengling Brewery

The Physics of CHP Cogeneration and Heat Engine Efficiency
So how does CHP work? To understand CHP you have to begin with the Carnot cycle, and how it describes the function and efficacy of any heat engine. The thermodynamic Carnot cycle (proposed by Nicolas Carnot in 1824) is a four-stage process that describes the reciprocal operations of a heat engine consisting of a piston in a cylinder, driven by a volume of confined gas that expands and contracts with temperature and applied heat. The piston is attached to a crankshaft that allows for cyclical motion. These four stages of the Carnot cycle are as follows:

  • During the first stage, heat is applied to the confined gas, which causes it to expand greatly as it absorbs the heat—which, in turn, drives the piston outwards. This is an isothermal stage (involving heat addition and absorption at constant temperature). As the gas expands, it experiences a drop in pressure, and the movement of the cylinder turns the crankshaft and performs work. The entropy of the gas increases during this stage.
  • The second stage is adiabatic, neither losing or gaining heat, as the gas volume continues to expand (performing more work), but its temperature drops. Since heat is neither gained nor lost, entropy of the gas stays constant (isentropic) during the second stage.
  • The third stage sees the crankshaft continuing its turn, driving the piston back into the cylinder. Like the first stage, this stage is isothermal and involves rejection of waste heat from the drive cylinder to the exterior environment. As the volume reduces, internal pressure increases while the temperature stays constant. Since heat is lost, entropy falls during this part of the cycle.
  • The fourth and last stage sees an increase in both pressure and temperature as the gas is further compressed by the cylinder (the system now does work on the gas instead of the other way around). Like the second stage, this stage is adiabatic and isentropic, with entropy staying constant. Completion of this stage brings the system back to the starting point of stage one and the cycle begins again.

So it is the third stage—when the piston compresses the gas, which reduces volume while temperature stays constant—that gives off waste heat to the environment. The cycle can be represented by comparing the cycle’s maximum and minimum temperatures, and its maximum and minimum levels of entropy:


TH = the system’s maximum temperature of the heat source during stage one;


TC = the system’s minimum temperature of the exterior environment (cold reservoir) that receives expelled waste heat during stage three;
SB = the system’s maximum entropy during stage two;
SA = the system’s minimum entropy during stage four;
QH = the amount of heat put into the system during stage one from the exterior heat source;
QC = the amount of heat expelled from the system to the exterior environment (cold reservoir) during stage three—represented by the red shaded area; and
W = the amount of work performed by the system, equal to the amount of heat put into the system (QH) less the amount of waste heat (QC)—represented by the white shaded area.

The efficiency of a heat engine represented by the above diagram is calculated as follows:

n =W / QH = (QH – QC) / QH
n = 1 – (TC / TH)

And, since TC can never be absolute zero, and there is always some loss of heat, no physical system can ever be 100% efficient. Therefore, waste heat is always produced by any mechanical or electrical system that performs work. And, it is this waste heat that is captured and put to work by CHP cogeneration systems.

Types of CHP Systems and How They Work
How is this heat captured and put to work? There are several types of CHP systems. Each is designed to generate electricity and heat energy in a single integrated system. CHP systems can be installed onto exiting electrical production systems by means of retrofitting. Instead of utilizing onsite equipment to provide heating and cooling, CHP clients can utilize heat recovered from the electrical production process.

What kinds of CHP systems are used to accomplish this? At the small scale of distributive energy—applications less than 5 kilowatts (kW)—there is micro CHP. Small-scale internal combustion engines and stand-alone internal combustion engines can utilize this application for power production. It has even found applications in solar energy systems, with both concentrated solar utilizing Stirling engines and photovoltaic cell (PVC) arrays, as well as advanced fuel cells. In terms of reducing green house gas emissions (with up to 14% reductions over standard energy production) in conjunction with Stirling engines and generating energy from gas turbines, this system is the most cost-effective energy production system on the market. Micro CHP systems produce both heat and electricity, thereby reducing the price of the first, and allowing the second to be sold back to the grid.

It’s latest applications combine micro CHP with PVC arrays as a power back up to residential and commercial rooftop solar energy systems. These types of systems have been shown to significantly reduce waste energy, and allow for economical expansion of PVC systems by reducing overall operational costs. The money saved by not having to separately produce heat energy can go to purchasing expanded PVC arrays. As part of trigeneration CHP applications, an absorption chiller is added to further reduce waste heat and allow for system cooling. Cooling PVC cells further increases their efficiency, making them more productive. Trigeneration CHP itself is a broader application that combines electrical generation, heat production, and cooling by the use of linked absorption chillers that can provide refrigeration.

CHP can also be applied to a larger scale by use of district heating. These are advanced applications of traditional steam pipe utilities. The largest district heating system in America provides steam from cogeneration systems for 2,000 buildings in New York City. Heat can be provided by standard power generation stations, geothermal power plant, solar energy systems, and large-scale heat pumps. New York has the largest, most extensive system of district heating in the world, with 105 miles of pressurized steam pipes running beneath the streets of the city. These pipes deliver steam heat to buildings throughout Manhattan. Also known as Heat Recovery Steam Generation (HRSG), this system significantly increases the efficiency of fuel usage and thereby reduces emissions and the city’s carbon footprint.

As described above, industrial CHP represents the most widespread application of this technology. The main difference between industrial CHP and utility CHP is that industrial cogeneration plans tend to operate at lower boiler pressures. So, there is some loss of power generation in exchange for improved emissions and achieving sustainability goals while utilizing waste heat. Other issues include maintaining the purity of the boiler feed water, and managing the load swings occurring with each production shift. Given the need for a constant heat supply these variations can represent a significant percentage of the overall energy load during production lows.

CHP, Microgrids, and The Energy Mix
micro grid CHP—not to be confused with Micro CHP—is defined as a small electrical power generation and distribution system that services only a few local buildings and businesses. They normally operate in conjunction with regional utilities. CHP linked to a local micro grid allows these few customers to share a heat energy supply system, without the need to build and operate individual CHP systems. This arrangement can greatly increase cost effectiveness through economies of scale. Such a locally centralized system can utilize its fuel source more efficiently than several small systems. It also allows for easy load leveling across its small customer base.

CHP systems augmenting microgrids must take into account infrastructure requirements, physical location of customers and their distance from the CHP unit, local building codes and land boundaries, and potential interference from pre-existing utility lines. And, the operators of these systems must coordinate budgets, contracts, and billing requirements with each customer who may have significantly different energy loads. However, once these hurdles have been overcome, the benefits of sharing a CHP system become apparent to all participants.

Return On Investment: the Economics of CHP
The economics of CHP systems are governed by a few basic capital costs, operational factors, and operational costs. First of these is the proposed CHP system’s generating capacity, measured in kW. This capacity drives both the upfront capital installation costs, the daily operating costs, and whether or not the system is worth installing in the first place. An overly large system compared to both the generator and the potential customer base is an unnecessary investment, while too small of capacity would not be useful for large utilities. The capacity will also determine the overall net installed costs.

Cost comparisons start with cost to purchase electricity to create the heat energy provided by the CHP system, along with the boiler fuel costs and CHP fuel costs. Add in incremental operations and maintenance costs and standby charges to determine annual operating costs. This value can then be compared to projected annual operating cost savings. Simple payback (measured in years) is determined by dividing the net installation costs by the annual operating cost savings.

Performance parameters to be examined during the decision to install a CHP system also start with the proposed system’s generating capacity. Using this information as a baseline, analyzing boiler efficiency and subsequent turbine efficiency are the next steps in the screening process. Sizing of the system will be determined largely by the HRSG steam pressure and the process steam pressure, along with both steam’s flow rates.

Major Producers of CHP Applications
2G Energy Inc., an American subsidiary of 2G Energy AG of Germany, is a CHP cogeneration specialist offering cogeneration systems for natural and biogas in the 50 to 2,000 kW power range. Offering unique standardized modular systems, they have completed 4,500 installations worldwide. In the 50 kW range, they offer the g-box, which is a connection-ready module with cabinet-enclosed PLC controller. With its low noise profiles, it is suitable for applications like hotels, offices, or residential buildings. The company’s filius model provides energy from 50 kW to 150 kW, and is especially designed for smaller biogas plants. The 100 to 400 kW patruus series is a larger scale generator of heat and power that is available with both naturally aspirated and turbocharged engines. Also in the 220 to 450 kW range is the agenitor series with improved combustion chamber geometry for increased efficiency. At the 600 to 2,000 kW end of the scale is their avus series, designed for high electric power consumption, which is used in larger industrial and commercial projects or for supplying microgrids.

2G Energy is currently providing new advanced biogas technologies and a modern CHP energy conversion CHP system to Yuengling Brewery, the oldest brewery in the US. Yuengling operates a 2G 400 kilowatt electrical (kWe) CHP cogeneration power plant, serving about 20% of Yuengling’s total electricity needs at the brewery and saving the owner a significant amount of money. The cogeneration module was supplied “all-in-one” and “plug-and-play”.

The brewery will use the heat generated by the plant to heat the brewery’s pasteurization process, allowing Yuengling to save energy. Less steam is required to heat the brewery’s tunnel pasteurizers, again providing substantial savings.

Treating the wastewater in an anaerobic digester generates the methane gas. 2G Energy also supplied the gas treatment system to dehumidify the saturated gas, and to remove hydrogen sulfide contained in the raw biogas. The CHP system has been designed as a dual-fuel module that can be operated on low-BTU biogas, as well as pipeline-quality natural gas. 2G Energy was selected to supply and install a fully containerized agenitor 212, a thermodynamically optimized MAN-based engine with 400 kWe or 3,320 MW p.a. electrical power and 474 kWh/th thermal power output. The payback and return on investment (ROI) for this project will come from the energy produced, and the CHP pays for itself.

2G Energy CHP systems also work for heavier manufacturing as well. A CHP operation in Fitchburg, MA, is an example of how a large CHP plant can be integrated into an existing building. The customer (a manufacturer of saw blades) and its team of engineers concluded that selecting the fully containerized option was the most cost-effective approach, with the lowest technical risk. This project is quite complex and includes equipment with many different options selected by the customer. The cogeneration plant consists of three 2G avus 600 kWe NG fully containerized CHP modules. In addition to the CHP system, three fully integrated Selective Catalytic Reduction (SCR) systems are part of the package to control and to reduce emissions. Best Available Control Technology (BACT) and the fully integrated SCR system met the requirements of this project, meeting ambitious local air district limits, as well as standard EPA limits. This customer is paralleling with the utility grid while producing its own electricity onsite to reduce peak electrical demand. By operating at all times, the savings in electricity cost are substantial, helping to achieve a very fast ROI. In addition to the electricity being produced, the customer is utilizing all the thermal energy provided by the CHP system, feeding a large absorption chiller, which provides the facility with cooling through the summer months and heating in the winter. BE_bug_web

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