The CHP Technology

Buildings are responsible for over 36% of carbon dioxide total emissions that is recognised as the major greenhouse gas causing global warming (UK Green Building Council, 2018). Reduction of 'residential' CO2 emissions could be accomplished by increasing housing energy efficiency and utilization of zero and low carbon energy technologies.

One of them is a combined heat and power (CHP), which is the process of simultaneously producing both electricity and heat from a single fuel source like gas, liquefied petroleum gas or biomass (Kazemi-Beydokhti & Heris, 2012).

The generated electricity could respond to the electrical demand of the building and displace some of the electricity consumption from the grid. It should be noted that CHP is neither a new or untested idea.

The world's first power plant built by Thomas Edison in 1882 was essentially a CHP design: it supplied both heat and power to nearby buildings in Manhattan ('Combined heat and power cogeneration', 2018).

The CHP technology nowadays has three main types (the difference is the way in which they generate electricity): Stirling engine, internal combustion engine and fuel cell.

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For residential purposes mostly the products with an electrical output of less than 5kWh known as 'Micro-CHP' units (mCHP) are used. They are similar in size and shape to ordinary domestic boilers and also could be wall hung or floor standing.

1. Energy savings due to a fuel use efficiency

CHP is considered as the most cost-effective method of utilising gas to generate energy at the domestic level (Ecuity Consulting, 2013). Empirical evidences show that a conventional power station and boiler would need more units of fuel comparing to the fuel used by mCHP to produce an equivalent level of heat and electricity (Hanafizadeh et al.

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, 2016). For this reason, CHP could reduce primary energy needs by approximately 30% (Graph 1).

Graph 1. CHP vs. Conventional Generation Source: Smarter Business, 2018

As the annual average bills for household and small business in the UK are around ?1300 and ?3500 respectively, even 10% in fuel reduction could save up to ?300 in a year (Smarter Business, 2018).

2. CHP makes energy more affordable

The Feed-in Tariffs (FITs) scheme is the UK Government scheme designed to encourage uptake of a range of small-scale renewable and low-carbon electricity generation technologies (Office of Gas and Electricity Markets, 2010). Under the FITs, a mCHP owner is to be paid 14.52p/kWh for every generated and used kWh at his site (e.g. house, business facility).

In addition to this, the owner could also earn 4.64p/kWh for every generated but not used kWh due to his electricity export to the national grid (Energy Saving Trust, 2019). Thus, the annual earnings of ?400 on FIT might be achieved, which means less spending on heating and electricity. As there is a little difference between a mCHP installation and a standard boiler, it might be derived that energy becomes more affordable for the mCHP users.

3. Contribution to national energy security

CHP is independently fueled and operated, hence immune to the technical disruptions of transmission system, including those connected to extreme weather. So mCHP eases grid congestion when demand for electricity is high (Jentsch et al., 2014). Moreover, by producing electricity onsite, the technology also avoids transmission and distribution losses that occur when electricity travels over power lines.

4. UK economy decarbonisation

Each mCHP unit could reduce annual CO2 household emissions by up to 2.1 tonnes when compared to a condensing boiler (US Environmental Protection Agency, 2014). The UK statistics shows that within 2015 - 2017 the annual average carbon savings due to CHP against all fossil fuels were 11,2 MtCO2 (Department for Business, Energy & Industrial Strategy, 2018).

As 14 - 18 million of the UK households are suitable for mCHP units and the country's small businesses were accounted to 5,6 million, a huge potential exists in contributing to the UK commitments on 80% carbon reduction by 2050 via promotion of the technology (Ecuity Consulting, 2013).

However, mCHP has also its downsides. First of all, while using a fossil fuel input source, the technology could not be considered an ultimately sustainable solution for the long term.

It was also revealed that under some circumstances the alternative technologies like heat pumps not only produce less CO2 than CHP, but are more likely to be utilized due to the higher penetration of renewables like wind, hydropower or nuclear power plants (Faramarz, S. 2014).

Hence, mCHP rather helps to slow the rate of carbon emissions with substantial energy savings in situations where more sustainable options are not available or affordable.

Another mCHP disadvantage is its costliness. At present, deployment of mCHP unit requires initial investment up to 10 thousand pounds. This is the main reason why there were only 1,438 CHP schemes in operation in the UK in 2017 (Carbon Trust, 2018).

Nevertheless, mCHP is expected to have greater future demand as more affordable CHP technologies (e.g. fuel cells) further develop in the country. This could be evidenced by the learning curve of Korea showing almost 20 times drop in mCHP price once there is an increase in the volumes of manufacture and respective sales (Graph 2).

Graph 2: Micro-CHP prices and volumes in Korea within 2010 - 2020 (projections included) Source: JDS Associates, 2011

Based on all the above mentioned it could be stated that CHP is cost-effective and timely option for the UK now, though there are some flaws.

In a time when there seems to be huge industry focus on renewable technologies, whether they are generating electricity or heat, mCHP could play its part as solution in the UK Energy Trilemma: increase national energy security, achieve the UK carbon emissions targets, and ensure affordability of energy supply for all end users, particularly those from low income groups.