With ongoing price volatility in the energy market, businesses are looking for ways to reduce their energy costs, get maximum value for money from their energy infrastructure and gain better cost predictability for the future.
Combined Heat and Power (CHP) is one potential solution. It’s a highly efficient solution that captures the heat created through the electricity generation process, producing on-site heat and power simultaneously. And, as energy prices increase, the payback period for your CHP installation would reduce significantly. So much so, that your CHP could potentially payback in less than 1 year – good news in today’s volatile environment.
These payback periods have been calculated based on the assumption that there is 80% heat use, 100% electricity use, and that the CHP is operational for 8,000 hours per year.
With electricity rates at 12p/kWh and gas rates at 2.5pkWh, the maximum payback period you could expect would be just over 1 year and 9 months. For a smaller scale units, the payback period could be even lower, at around 1 year and 8 months.
If energy prices increase, these payback periods drop. With electricity rates at 40p/kWh and gas rates at 10p/kWh, the maximum payback period that you could expect for your CHP installation would be just over 7 months. For small-scale units, it could drop to as little as 6 months and 2 weeks.
Not only is the payback period for CHP very desirable, but it can also help you to unlock a range of other benefits. It can help you to:
Investment in any quality energy infrastructure doesn't come cheap. But when you consider that the lifespan of a CHP system is 10-15 years, it can deliver impressive financial returns.
For those organisations with capital constraints or competing funding priorities, a range of flexible and transparent financing options are available, which remove the need for capital investment. These can finance the capital cost of the unit itself, and the ongoing maintenance costs.
A range of different options are available:
It’s a win-win for businesses, providing the upfront investment to accelerate delivery of onsite cogeneration projects and unlock immediate benefits.
Interested in learning more about our CHP solutions? Click the link below to find out more, or contact our team.
Aaron Parker is Centrica Business Solutions' Head of CHP Sales, he supports customers across a range of industries - including public sector, pharmaceutical, food and beverage, hotels, leisure and manufacturing - to reduce their energy costs and carbon emissions. He has over a decade of experience within business development and two decades within engineering solutions.