Our guide to the economics of Combined Heat and Power (CHP)

In today’s volatile energy environment, many organisations are looking to secure their energy supply. But with budgets squeezed, overheads rising and the future unpredictable, it can be difficult to find the right way to do so.

In our Economics of CHP guide, we’ve outlined some of the key reasons why a Combined Heat and Power (CHP) system could be the answer to securing your supply – and why now is the perfect time to invest. You might already be thinking about deploying CHP, but do you have all the data you need to get buy-in from your stakeholders?

We’ve put together the facts on running costs, sustainability and energy requirements to help you to answer your stakeholders’ questions – whether from your Energy Manager, Sustainability Manager, or CEO. Read on to discover how our findings can help you to strengthen your business case for investing in onsite energy generation.

How gas and electricity prices can affect your CHP business case

For any organisation considering investing in Combined Heat and Power, gas and electricity prices are a vital part of the conversation – in two ways.

We often calculate project viability using spark spread. This is the difference between the incumbent electricity tariff and the cost of fuel – usually natural gas – used to power the CHP system. A spark spread between 4 and 8 is generally a good indication on the viability of a new CHP project.

Gas and electricity prices also shape the payback period of your investment – and we’ve found that the higher prices rise, the shorter your payback period could be.

Our guide explores our expected changes to spark spread, and examples demonstrating payback periods as low as under a year – helping you to strengthen your case for investing in onsite energy generation.

How you could save by switching from a boiler to CHP

Does your boiler meet your heat requirements now? Have you decided what to do when it reaches the end of its life?

Our guide explores the cost savings you could make by swapping to a CHP system when your boiler is no longer working, or no longer meets your heat requirements. Working through an example of a paper manufacturer with 1MW of low-temperature heat requirements per hour, we identify the savings they could make with CHP under a five-year Discount Energy Purchase contract.

And we’ve planned for their hypothetical future too. Sticking with the same example, we’ve identified how they could plan for their heat requirements increasing, prices stabilising, or if they didn’t use all the heat generated from their CHP system. Could your organisation benefit in a similar way from deploying CHP?

How your running costs might look with a new CHP system, versus a boiler

Using the same example as above, our guide also walks you through the potential running costs of switching to CHP.

We’ve outlined the costs involved in running a CHP system for five years after installation, alongside the costs of running a new boiler. And we’ve dispelled the myth that running a boiler is cheaper than investing in CHP, by comparing the costs of importing electricity from the grid with the costs of generating your own power onsite. So, when you put forward your case for investing in CHP, you’ll be able to demonstrate that it’s the right choice for your organisation.

How to finance your CHP system

So, you’ve created your business case and decided to deploy CHP. What are your next steps?

You could choose to invest via capital purchase, providing the funds for your new CHP system upfront. Or you could choose to partner with us on one of our in-house financing options. Our guide introduces you to three financing packages for CHP – giving you the flexibility to invest in the way that works best for you, all supported by our strong balance sheet and in-house capabilities.

We can help you to bundle your new CHP system, financing, and operations and maintenance into one simple contract, so you can rest assured we’ll be here to support you for the long term. Your CHP is in safe hands – so why wait to secure your energy for the future?

Download your guide to the economics of CHP to learn why now is the right time to invest in CHP – and strengthen your business case with demonstrable savings.