Why CHP is Being Embraced by More and More Industries

Today’s CHP market welcomes a diverse range of industries, and it’s for the better
2 November, 2022 by
Why CHP is Being Embraced by More and More Industries
T&T Power Group.

CHP systems combine the production of both thermal and electric energy into one streamlined process - requiring much less fuel compared to conventional methods where heat and power are produced individually/separately.

Fortunately, this results in a much more efficient and eco-friendly approach to power generation - taking the place of other methods such as purchasing power from the grid, or employing an onsite furnace or boiler.

With that being said, typically only large industrial establishments would consider the adoption of combined heat and power (CHP) systems. In fact, most of the CHP capacity in use today was installed by large industrial facilities during the late 1980s through the early 2000s, when CHP offered a fiscal advantage for many due to the Public Utility Regulatory Policy Act (PURPA).

But today’s CHP market paints a much different picture.

A much broader range of industries, including smaller commercial facilities, are beginning to adopt CHP systems – because it’s beginning to make a lot more sense for them to do so.

Let’s talk about why that is.

CHP is more economically feasible

The CHP process is incredibly efficient; redirecting and repurposing the heat produced through power generation that will dramatically cut costs over time. In fact, according to McKinsey & Company, an extra 50 GW of capacity (equal to roughly half of the current nuclear generation capacity in the United States alone) has the potential to be cost-effectively employed to produce annual savings of $77 billion.

And, with a convenient abundance of natural gas availability and supply, this cleaner and dependable fuel source has become a much more viable and preferred option at a considerably lower cost.

CHP reduces greenhouse gas emissions

Through capturing and making use of heat that would otherwise be wasted through power production, CHP systems require less fuel (as much as 75%) in order to produce the same amount of energy. And since less fuel is required to be burned in order to produce each unit of energy output, CHP technology produces considerably lower greenhouse gas emissions as well as other air pollutants when compared to other conventional methods of energy production.

Furthermore, through the production of energy onsite, CHP also dodges any losses from transmission and distribution (T&D) that occur when electricity travels over power lines. Through avoiding these losses, cogeneration further decreases fuel use.

CHP installations have been made simpler

CHP installations used to require customized engineering and design and strictly on-site construction, known as the “design-build” process.

But with the progression of CHP systems and technologies, standardized packaged CHP systems that are engineered and assembled off-site have been produced to eliminate the time, effort and stress involved with design-build practices – making this a much more attractive option for smaller industries now, as well. Not to mention, this standardized approach also reduces the cost of CHP installations for the customer, which might be the most attractive advantage of all – especially for smaller sites.

CHP energy is more reliable

CHP energy is capable of providing continuous and reliable power supply and protection from grid failures, even in cases where back-up generators that rely on on-site fuel cannot. In general, a CHP unit that runs daily is more reliable during an emergency compared to a backup generator system that only powers up during this time.

According to an article from the Environmental and Energy Study Institute, extended power outages that resulted from Hurricane Sandy in the Northeast, in addition to other hurricanes on the Gulf coast, lead to billions of dollars worth of economic losses. However, CHP played a vital role in keeping the power up and running in New Jersey, New York, and Connecticut during Hurricane Sandy across CHP-powered hospitals, nursing homes, wastewater treatment plants and apartment complexes - with back-up generators not even able to deliver energy during the outage.

The sooner you adopt CHP, the greater the benefit.

It’s a promising time for power generation – as power providers have been listening to the customer’s growing demand for more eco-friendly, cost-efficient and reliable power options.

As Distributed Energy Resources (DER) and CHP becomes more widely available and utilized, smaller commercial establishments are wisely hopping aboard the CHP train and are cutting electricity bill costs, and keeping their operations up and running and safe when the grid fails.

See our Complete Guide to Combined Heat & Power (CHP)

Talk to our Team of Experts at T&T Today

Whether you operate a small or large industrial or commercial facility, now is the time to start thinking about embracing CHP if you haven’t already. The benefits are truly substantial, especially long-term – and our team can help you make the process as assuring and pain-free as possible.

Share this post