How combined heat and power can cut energy costs and ready your business for a net zero future
High efficiency combined heat and power (CHP) has a key role to play in reducing energy costs, while preparing organisations for a net zero future. In an article written for Building Services and Environmental Engineer, Centrica Business Solutions' Aaron Parker explains how.
Amid the current period of high energy costs and continuing market uncertainty, organisations should urgently consider CHP as part of their energy cost efficiency plans.
This versatile and high efficiency technology can also help to prepare organisations for a net zero future. Hydrogen-ready CHP systems are a game changer that can rapidly switch from natural gas fuel to low and zero carbon hydrogen as the network develops.
There are also opportunities to combine cogeneration units with heat pumps and/or solar as hybrid or tribrid systems that provide a cost-effective pathway to decarbonisation.
CHP can reduce energy costs by as much as 40% and provide a return on investment of less than 12 months for some projects. Considering that a CHP system will operate at high efficiency for 10-15 years, the long-term cost savings are spectacular and help secure long term low energy costs and budget predictability.
At the current time, this is a lifeline for those struggling with significantly higher energy bills and concerns about future price stability.
Many organisations are also using CHP to achieve cost saving advantage by load shifting their energy consumption to avoid peak power costs and to generate flexibility revenues from Demand Side Response.
Hundreds of our customers across many sectors are gaining cost efficiency by using CHP for financial advantage. A leading UK supermarket group is saving £1.28 million in annual energy costs, while Alton Towers has cut its energy bills by 12%. We've installed CHP as part of integrated sustainable energy upgrades across many NHS Trusts. Among them, London’s St George's Hospital is reducing energy costs by £1m per year and Whiston Hospital is cutting its yearly energy spend by £500k.
By cogenerating heat and electricity on-site, organisations can reduce their grid dependence and boost resilience. They can recycle the waste heat that’s wasted in traditional power production and use it to provide hot water, steam, heating and for their operations. They also avoid energy losses in transporting electricity from remote generators. CHP can thus achieve total efficiency ratings of over 80%, compared to a conventional heating and energy supply.
In summer, heating may not be required, but an absorption chiller connected to the system can use CHP waste heat to produce chilled water for cooling and air conditioning systems. This process is referred to as trigeneration. Alternatively, surplus heat may be stored in hot water storage tanks.
Our CHP trigeneration partnership with automotive manufacturer Magna is reducing energy costs and saving 14,000 tonnes of CO2 annually.
Our latest net zero global research study indicates that 73% of UK energy decision makers (69% internationally) are looking closely at trialling or installing hydrogen-ready CHP systems as part of their net zero pathway.
CHP systems based on hydrogen as a fuel offer the potential for rapid financial and environmental success. Our partnership with 2G Energy AG will provide customers across the UK & Ireland, Netherlands and Italy with 100% hydrogen ready CHP systems. The partnership also adds the capability to offer biogas and LPG engines, in addition to conventional natural gas.
The move is in response to the growing need for integrated hydrogen solutions, which are a key tool in the decarbonisation of decentralised energy. As the hydrogen network develops, the highly efficient units can continue to run on traditional fuel sources, helping future proof investments by ensuring an extended life for the assets.
In addition, we're developing a 20% blended hydrogen solution across a wide range of engines – with the switch achievable through minor changes to parts and software. Additional tests are being conducted in the 20-40% range.
Our hydrogen-ready trigeneration CHP installation will yield cost savings of around £700k per year & improve carbon output for a global leader in life sciences and pharmaceuticals. This will protect the South Wales site from ongoing energy market fluctuations and price rises throughout 2023 and beyond.
Combining CHP with Solar PV generation and heat pumps can also deliver a future-proofed transition to net zero. The impressive cost savings of CHP and solar can make the economics of electric heat pumps stack up, enabling organisations to capitalise on lower emissions now rather than waiting for technology costs to fall as the market expands.
Many sites that already have CHP in situ can be reconfigured with minimal disruption to share the heating/cooling load with electric heat pumps. This can also work as a hybrid solution, without solar.
Many customers are reinvesting cost savings from CHP in sustainable energy projects with a longer return on investment. This is enabling them to make a cost effective and affordable transition to net zero. Where sites are suited to cogenerating heat and power, we’re working with customers to integrate CHP into their net zero energy pathways – helping them to deliver on both their economic and environmental goals.
Rapid payback on CHP makes it an attractive investment, but for those with capital constraints and competing budget priorities, flexible financing, provides CHP funding with no upfront costs.
With its high efficiency and cost saving potential, hydrogen-ready CHP balances financial and sustainability goals to provide a no-regrets glide path to net zero.
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