7 Reasons Combined Heat and Power May be for You

What is combined heat and power?

June 7, 2020

Recently, Radicle installed a combined heat and power unit at a large-scale grain and pork producer in central Alberta. Given the benefits that come along with this system, it’s no surprise they’re happy with the results! 

While combined heat and power has numerous benefits, it’s not always a good fit for everyone. Before we dive into these benefits and discovering whether combined heat and power is a solution for you, let’s provide an overview of what exactly it is. 

What is combined heat and power? 

Combined heat and power (CHP), or co-generation, is the simultaneous production of electricity and heat from a single fuel source. In Canada, this is typically natural gas, but propane and biogas units are also available. 

In traditional electricity generation, only a fraction of the actual energy created converts into electricity – around 35%. The remainder is lost as waste heat, the natural consequence of any power produced by gas. With CHP, that waste heat is recovered, put into the boiler system and used for other applications. In the case of this farm, it’s used for heating the home, pig-barns and other buildings. 

Now, let’s get into the 7 reasons why CHP may be for you.

Your heat and electricity needs are both high and consistent.

In the case of this grain and pork producer, their needs were 24/7 because of the hog barns, but also because of an on-site canola crushing plant, where their most significant electrical load originated. Given the farm’s location in central Alberta, heating demands for most of the year (at least nine months) are both high and consistent. 

Your electricity costs are over $0.10/Kw-hour.

This cost is where the economics of CHP make the most sense. The more expensive the electricity, the better the ROI.  

While the initial investment of a CHP unit is considerable, the average life of a Tedom CHP unit (the ones we at Radicle deploy) is 15 years. The ROI at this farm is expected to be as low as 3.45 years, which is quicker than the average of 4.7 years for this unit. 

You want to reduce your costs and increase your profits.

Without CHP, fuel is purchased to provide electricity, and then fuel is purchased to provide heat. Co-generation means less energy waste and lower bills. In some jurisdictions, you can sell energy surpluses back to the grid so that you can be making money. 

You have a desire to be as energy self-sufficient as possible.

If you’re in an exceedingly rural part of the province, grid disruptions and failures happen. With a CHP unit on-site, you’ll become your utility, diminishing or eliminating transmission losses and dramatically reducing delivery fees. There are apparent advantages to producing power close to where it’s consumed, where the grid can become a back-up energy system. 

You want to reduce greenhouse gas emissions. 

Because less fuel is burned to meet heating and power needs, CHP also reduces emissions of greenhouse gasses and other air pollutants. It’s estimated that CHP systems can reduce carbon emissions by up to 30%. 

You want to increase efficiencies and decrease energy waste.

This is what makes CHP an integrated energy system – one fuel source creates two energy outputs. CHP is an energy multiplier, squeezing more usable energy out of each unit of fuel everywhere it goes. 

It’s proven.

CHP has been used in Europe for decades. In fact, in countries such as Denmark, the Netherlands and Finland, co-generation currently makes up 40% of their total electricity generation — the highest proportion in the world.  

In Alberta, oil and gas operations have employed CHP longer than anyone. Many co-generation systems were added to chemical plants and oil sands facilities when the restructuring of the electricity industry began in the province in the late 1990s. Other facilities currently using co-generation in Alberta include intensive livestock operations, shopping malls, office and residential towers, recreation centres, greenhouses and even a prairie-based fish farm. 

If you think CHP may be a solution for you, contact us to explore the energy-making and energy-saving possibilities.