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Frequently Asked Questions

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What is combined heat and power (CHP)?

Combined heat and power (CHP), also known as cogeneration, is:

  • The concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy.
  • A type of distributed generation, which, unlike central station generation, is located at or near the point of consumption.
  • A suite of technologies that can use a variety of fuels to generate electricity or power at the point of use, allowing the heat that would normally be lost in the power generation process to be recovered to provide needed heating and/or cooling.

CHP technology can be deployed quickly, cost-effectively, and with few geographic limitations. CHP can use a variety of fuels, both fossil- and renewable-based. It has been employed for many years, mostly in industrial, large commercial, and institutional applications. While CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, it has quietly been providing highly efficient electricity and heat to some of the most vital industries, largest employers, urban centers, and campuses in the United States. It is reasonable to expect CHP applications to operate at 65-75% efficiency, a large improvement over the national average of ~50% for these services when separately provided.

How does CHP work?

Every CHP application involves the recovery of otherwise-wasted thermal energy to produce useful thermal energy or electricity. CHP can be configured either as a topping or bottoming cycle.

In a typical topping cycle system, fuel is combusted in a prime mover such as a gas turbine or reciprocating engine to generate electricity. Energy normally lost in the prime mover’s hot exhaust and cooling systems is instead recovered to provide heat for industrial processes (such as petroleum refining or food processing), hot water (e.g., for laundry or dishwashing), or for space heating, cooling, and dehumidification.

CHP topping cycle

In a bottoming cycle system, also referred to as “waste heat to power,” fuel is combusted to provide thermal input to a furnace or other industrial process and heat rejected from the process is then used for electricity production.

CHP bottoming cycle

Why is CHP more efficient than conventional electricity generation?

CHP is a form of distributed generation, which is located at or near the energy-consuming facility, whereas conventional generation takes place in large centrally-located power plants. CHP’s higher efficiency comes from recovering the heat normally lost in power generation to provide heating or cooling on site. CHP’s inherent higher efficiency and elimination of transmission and distribution losses from the central power plant results in a reduction in overall energy use and lower greenhouse gas (GHG) emissions in providing energy services to the facility.

How do CHP system efficiencies compare to central station combined-cycle generation?

Properly applied CHP systems are more efficient in generating electricity than marginal natural gas central station generation due to thermal energy recovery and elimination of T&D losses. The chart below shows that the Effective Electric Efficiency of four typical CHP systems is higher than that of state of the art natural gas combined-cycle and simple cycle gas turbine power plants.

CHP Deployment
Source: U.S. DOE AMO Deployment Program

Is CHP widely used in the United States?

The U.S. currently has almost 81 GW of CHP capacity in use at over 4,600 industrial and commercial facilities. CHP represents approximately 8 percent of current U.S. generating capacity and over 12 percent of total annual electricity generated. CHP is used in every state, and is primarily found in areas with high concentrations of industrial and commercial activity, high electricity prices, and policies favorable to CHP.

CHP Deployment CHP Deployment
Source: DOE CHP Installation Database (U.S. installations as of August 31, 2020)

What kinds of facilities use CHP?

CHP can be utilized in a variety of applications that have significant electric and thermal loads. Eighty-two percent of existing CHP capacity is found in industrial applications, providing electricity and steam to energy- intensive industries such as chemicals, paper, refining, food processing, and metals manufacturing. CHP in commercial and institutional applications is currently 17 percent of existing capacity, providing electricity, steam, hot water and chilled water to hospitals, schools, university campuses, hotels, nursing homes, office buildings and apartment complexes.

What are the benefits of CHP for the energy user?

  • CHP reduces energy costs for the user.
  • CHP reduces the risk of electric grid disruptions and enhances energy reliability for the user. This is particularly useful for hospitals, research institutions, or industrial facilities where electric power outages are particularly disruptive and costly.
  • CHP provides predictability in the face of uncertain electricity prices.
  • CHP reduces carbon emissions from most electric grids to meet goals

What are the benefits of CHP for the United States?

  • CHP reduces emissions of GHGs and other air pollutants by as much as 40 percent or more.
  • CHP consumes essentially zero water resources in generating electricity (a typical coal fired power plant consumes 0.2 to 0.6 gallons of water per kWh1).
  • CHP offers a low-cost approach to adding new electricity generation capacity.
  • On-site electric generation reduces grid congestion and improves the reliability of the electricity distribution system.
  • CHP defers the need for investments in new central generating plants and new transmission and distribution infrastructure, helping to minimize increases in electricity costs.
  • CHP uses highly-skilled local labor and American technology.

How do the benefits and costs of CHP compare to other clean energy technologies?

Category 10 MW CHP 10 MW PV 10 MW Wind 10 MW NGCC
Annual Capacity Factor 85% 26.1% 37.4% 57.6%
Annual Electricity, MWh 74,460 22,864 32,762 50,458
Annual Useful Heat Provided, MWhth 97,505 None None None
Annual Energy Savings, MMBtu 265,086 203,042 290,950 115,074
Annual CO2 Savings, Tons 33,533 17,159 24,501 18,403
Annual NOx Savings, Tons 38.5 12.5 17.9 26.0
Savings based on EPA eGRID Non-Baseload Generation (2018 data) as a first level estimate of displaced marginal generation - January 2021

How are CHP systems being used in microgrids?

  • CHP system can provide efficient, resilient, baseload power and localized thermal energy
  • CHP system support increased integration of renewable energy sources
  • Storage adds additional flexibility and can help optimize CHP system sizing and operation
  • CHP systems support the move toward a resilient, distributed, more renewable grid
  • Currently 264 operating microgrid systems across the U.S.
  • 83 operating microgrids are anchored with CHP systems
  • Total operating microgrid capacity in the U.S. is 2.54 GW
  • Total CHP systems capacity operating in microgrids within the U.S. is 1.07 GW

Are there CHP solutions for ultra-low carbon and even zero carbon emissions?

  • CHP technologies currently use renewable fuels, low carbon waste fuels, and hydrogen mixtures where available, and will be ready to use higher levels of renewable natural gas (RNG) and hydrogen in the future.
  • CHP can support the transition to a low carbon economy by enabling greater integration of renewables in the distribution grid, microgrids, and individual facilities, while helping businesses adapt to changing conditions by enhancing energy resilience and security
  • CHP’s efficiency, emissions, flexibility and resilience advantages will remain as the natural gas infrastructure decarbonizes
  • CHP can ultimately be carbon free by using RNG/hydrogen and/or carbon capture - CHP can decarbonize thermally based industrial processes that are difficult to electricity and critical facilities that rely on dispatchable on-site generation for resilience

1 EPRI, Water & Sustainability: U.S. Water Consumption for Power Production – The Next Half Century, 2002

2 McKinsey & Company, Unlocking Energy Efficiency in the U.S. Economy,