Combined Heat and Power (CHP)

Amid volatile power prices, many organisations are saving up to 40% on their energy costs with Combined Heat and Power (CHP), also known as cogeneration.

Imagine your site as its own energy centre. The morning shift arrives, and heating and hot water continues to flow as usual. But behind the scenes, something fundamental has changed: instead of relying entirely on the grid, your site is generating low-cost electricity and useful heat onsite, from a single engine doing two jobs brilliantly. 

That is the promise of Combined Heat and Power (CHP). You’ll get cheaper energy, greater efficiency, and with our financing options, no upfront costs or ongoing maintenance charges plus longer-term price predictability.

UP TO
40%
energy cost savings vs traditional heating and supply, with a 1-3 year typical payback period
OVER
80%
efficiency ratings vs conventional heating and energy supply
MORE THAN
35 YRS
Combined Heat and Power experience across sectors such as Healthcare and Manufacturing
OVER
148MW
of CHP units installed by us in the UK and Ireland
Benefits of Combined Heat and Power
Partner with Centrica Business Solutions to invest in a new Combined Heat and Power system, and your organisation will enjoy a broad range of commercial, strategic and sustainability benefits:
Reduce your energy costs
CHP can deliver energy cost savings of up to 40% by generating electricity on site while capturing and reusing heat that would otherwise be lost. By reducing reliance on grid power, it helps lower energy bills and protect against price volatility, while also strengthening energy resilience. In addition, CHP gives you control over your energy use to support smarter decision making and more predictable long term operational costs.
Get strong return on investment
A typical CHP system can deliver a strong return, with payback often achieved in 2 to 3 years. By generating electricity on site and using the heat produced, it improves efficiency and reduces energy costs from day one. Flexible funding options, such as Discount Energy Purchase (DEP), can remove upfront costs while including maintenance, so you can start saving immediately with lower risk.
Reduce your carbon emissions
CHP reduces carbon emissions by generating electricity on site and making use of the heat produced, delivering a more efficient approach to energy use. This can significantly lower your carbon footprint compared to separate heat and power generation, supporting your net zero goals. The emissions savings are easy to track and report, helping you strengthen your sustainability credentials with customers, investors, and stakeholders.
Improve your resilience
CHP systems offer fuel flexibility, helping your organisation build greater energy resilience. Designed to operate on natural gas today, many systems can also use lower carbon fuels such as biogas, with options to be hydrogen ready for the future. By generating energy on site, CHP reduces reliance on the grid and exposure to market volatility, giving you a more secure, reliable and future ready energy supply.
Our CHP success stories
Centrica has been at the centre of the UK’s energy industry for more than 200 years. For the last two decades of this, we’ve been at the forefront of Combined Heat and Power (CHP) deployment. Our track record is filled with successful case studies across sectors – manufacturing, healthcare, retail, water utilities, education, government, and more. We design it. We finance it. We install it. We maintain it. See how our end-to-end CHP installations have helped businesses of all types to reduce energy costs, improve business resilience and decarbonise.
How does CHP work?
Combined Heat and Power systems convert a single fuel into both electricity and heat in a single process at the point of use.
Single fuel for power and heat

Providing almost continuous operation, a CHP engine requires only a single fuel to function, simplifying your infrastructure requirements.

Electricity production

The engine (coupled to an alternator) generates power, which is then converted into usable electricity to meet on-site energy demands.

Heat recovery

Simultaneously, heat is recovered from the engine exhaust, jacket and water/oil cooling circuit. The heat is then made available for redistribution on-site.

Speak to our CHP experts

Do you have a Combined Heat and Power project in mind? Contact our team of experts today to find out how you could save up to 40% on electricity with low-carbon heat and power.

Choosing the right fuel for your CHP strategy

When organisations first explore CHP, the starting point is rarely clear, but fuel choice quickly becomes central to the decision. Many begin with natural gas, using it as a reliable and cost effective way to unlock immediate savings and improve efficiency. But that is rarely the full story. As priorities evolve and net zero goals come into focus, attention shifts to how systems can transition to lower carbon options such as biomethane or hydrogen over time. The most effective strategies are not about making a single decision on day one, but about building in the flexibility to adapt. This turns CHP from a short term solution into a long term pathway, supporting both commercial performance and sustainability ambitions.

Understand your site before you invest in CHP

For many organisations, investing in CHP starts with a simple question: is your site the right fit? The answer lies in how you use energy day to day. By understanding your electricity demand, heat usage and operating patterns, you can see where CHP could deliver real savings and efficiency gains. Using the data available, an assessment brings this into focus, showing how the system could perform and what return you can expect. But it is not just about the numbers. Every site comes with its own constraints. Space, connections, fuel supply and planning requirements all shape what is possible. Get ahead of these early, and the path to CHP becomes much clearer. You can move forward with confidence, knowing your investment is built for resilience.

Take control of your CHP costs

Imagine a future where your energy strategy is no longer reactive, but fully in your control. Where you generate power on site, make better use of every unit of fuel, and reduce what you need to buy from the grid. That is the shift CHP enables. By producing both electricity and heat in one process, CHP systems improve efficiency and cut wasted energy, helping to lower overall demand and reduce bills from day one. As more of your energy is generated on site, your exposure to rising and unpredictable prices falls, giving you greater confidence over future costs and stronger operational resilience. Over time, the savings you unlock can be reinvested back into operations or growth, turning energy from a pressure on your budget into a lever for long term value.

Download your Combined Heat and Power (CHP) Playbook

Get practical recommendations with your step‑by‑step guide to Combined Heat and Power for smarter onsite energy.

Maintaining your CHP system

CHP systems work continuously to deliver reliable power and heat but they need regular care to keep performing at their best.

Without proper maintenance, efficiency declines, faults can escalate, and cost savings are reduced. Think of maintenance as your CHP system’s MOT, keeping it safe, efficient and dependable. With the right service plan in place, you can:

  • Maximise efficiency: regular servicing helps maintain optimal performance and fuel efficiency across the system’s lifetime
  • Avoid disruption: proactive inspections identify issues early, reducing the risk of unplanned outages
  • Protect your investment: planned maintenance extends asset life and supports long term return on investment
  • Stay in control: monitoring and diagnostics provide clear visibility of system performance and condition

Unlock the value of CHP without upfront cost

For many organisations, investing in CHP begins with a simple challenge: how to unlock the benefits without tying up capital. That is where flexible financing can change the conversation. Instead of large upfront costs, you can move forward by paying for the energy your system produces, with operations and maintenance taken care of along the way. From Discount Energy Purchase (DEP), CHP Rental-as-a-Service to Flexible Term Agreement (FTA) options, it means you can start seeing savings sooner, reduce exposure to energy price volatility, and build a more resilient energy strategy, without the financial pressure that often holds projects back.

Joined-up thinking for maximum CHP success

Your energy needs are constantly evolving. CHP could be the right solution today, but tomorrow it might be solar, heat pumps, battery storage or EV charging. Few providers can bring multiple energy solutions together as seamlessly as we can.

When design, planning, financing, installation and maintenance are managed under one roof, everything runs more smoothly. No managing multiple suppliers or unclear responsibilities. Just one team, working together to deliver the outcome you need. 

We don’t just install and walk away. We partner with you to deliver long term performance and value. With Centrica Business Solutions, you gain a trusted advisor and ongoing support, ensuring your CHP system operates efficiently while you stay focused on running your business.

Frequently asked questions about Combined Heat and Power

Do you have a Combined Heat and Power project in mind?

Are you a large organisation that consumes over 500,000 kWh of electricity and is planning to start a new energy project in the next 12 months?

As a leading Combined Heat and Power supplier and operator, we can help you reach your cost and carbon-saving goals. Tell us about your project by completing our simple form to get the conversation started.

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