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Answers to uncomfortable CHP questions that others avoid

Aaron Parker, Principle Business Development Manager, tackles the challenging CHP questions that often go unanswered.

Combined Heat and Power (CHP) can help organisations to save up to 40% on their energy costs, and can be more than 80% more efficient than conventional heating and energy supply. However, questions are often raised about the longevity of CHP, and the role it can play in a net zero future.

We’ve collected these common questions and objections, and have put them to Aaron Parker, Principle Business Development Manager at Centrica Business Solutions. From the sustainability of CHP to its future prospects, Aaron has left no 'uncomfortable question' unanswered.

Some people say CHP has a short shelf life. Is this true?

CHPs are one of the most mature and effective technologies to date for energy efficiency. They have existed for over forty years and operate with extreme profitability, since they capture waste heat and redistribute this for use elsewhere site. Yes, they are often fueled using natural gas, which may feel at-odds with net zero. But it’s also possible to fuel them using biogas or a blend of hydrogen, which may better align with your transition plans.

What’s more, we shouldn’t think of any energy technology in isolation. Mix CHP with Heat Pumps and Solar PV, and the pros and cons of each technology can really harmonise. The CHP can save you a huge amount of money, but cost you carbon if it’s running using natural gas. The Heat Pumps can save you carbon, but often have high operating costs. Solar PV can save you both carbon and money, but only works during daylight hours. Bringing all three technologies together as part of an on-site tribrid energy generation system can help you get the benefits of each, while balancing their respective drawbacks.

Recent volatility could mean that an energy strategy that’s dependent on gas feels unreliable. Is that the case?

It’s true that we’ve seen significant volatility in the price of gas in recent years. This may be concerning to some companies who are thinking about investing in CHP. But because of the way the UK and Ireland’s electricity markets are structured, the price of gas and electricity are tightly connected. When there’s not enough renewable electricity being generated, gas peakers are often used to generate the electricity we need. If gas is expensive, this means the price of electricity can become more expensive too. 

It's also important to note that the UK Government has said they will support the building of new gas power stations. This is part of their plans to ensure there is a reliable energy source when the weather means solar and wind cannot meet demand. This shows strong, long-term commitment to gas as part of the UK’s wider energy mix.

Given that volatility in the energy markets affects both gas and electricity, this is the challenge that businesses should be focused on solving. Opting to buy your CHP via a financed solution could help here. With our Discount Energy Purchase (DEP) funding option, you’ll pay an agreed p/kWh electricity unit rate in line with the agreement you create with us, giving you more certainty over your future energy costs.

You talked about the option of fueling the CHP with hydrogen. However, many people think that hydrogen is a long way from being a sustainable fuel source. Is that not the case?

While it has many advantages, there are almost no abundant natural sources of pure hydrogen, which means that it has to be manufactured. This is an energy intensive process and can produce carbon, which is a problem if we want to decarbonise our heating.

But, it's important to understand that not all hydrogen is created equally, and its impact on the environment will vary depending on how the hydrogen is manufactured. Although there are no universally agreed definitions, different colours are used by the energy industry to describe hydrogen, depending on how it’s made, which you can find in the video below.

Green hydrogen is made using renewables and has no emissions making it far better for the environment than Black or Brown hydrogen, which are made using black coal or lignite.

In order to make hydrogen in a way that's compatible with net zero, we need to be able to capture and store the carbon any carbon arising from the manufacturing process, as well as making sure we use renewable energy to power that process.

In terms of making it readily available for businesses to use, hydrogen is a key component of the Government’s plan to reach net zero and they have plans to develop it at scale. Centrica are playing a leading role in this, particularly in terms of looking at how we can support with the significant volumes of hydrogen storage that could be needed as soon as the early 2030s.

We manage the Rough reservoir, located offshore in Humberside, which been used to store natural gas safely for over three decades. A repurposed Rough has the potential to provide around half of the UK’s hydrogen storage requirements, putting us on track to meet the government's objectives of decarbonising the UK’s gas supplies, while benefitting communities and creating thousands of local jobs.

So do we have to wait?

We are ready to help businesses move to hydrogen when their supply becomes available. We already offer CHPs that can run on 100% hydrogen. These can be fueled using natural gas today, and switched by our expert Operations and Maintenance (O&M) team to run on hydrogen when the fuel is available.

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