Benefits and potential impacts for combined heat and power

Here are examples of the benefits of using CHP along with a list of some potential issues and environmental impacts.

Benefits of using CHP

The biggest benefit of using CHP is the high efficiency of fuel conversion. This efficiency will depend on the system being well located, sized and designed. High fuel conversion efficiency results in:

  • reduced CO2 emissions
  • efficient use of fuel
  • reduced fossil fuel consumption (resulting in lower emissions of nitrogen oxides (NOx) and sulphur dioxide (SO2) which are controlled and regulated emissions).

Other benefits include:

  • Reduced energy costs - building owners using CHP will have reduced demand charge and reduced peak electric energy costs.
  • Lower costs over the lifespan of CHP - even though the initial cost of CHP for buildings is higher than conventional systems, the life-cycle cost of CHP is often lower because of the energy cost savings over its expected life of 15 years.
  • Energy security - the owners of CHP installations have more control over their electricity and heat supply.
  • Return on investment - through the energy costs savings, CHP in the right location offers attractive returns on the upfront capital investment.
  • Affordable community energy - CHP serving large and suitable areas can provide communities with affordable energy.

Potential issues regarding CHP

  • Very high upfront costs.
  • Infrastructure requiring long-term investment with long payback periods.
  • For industrial district heating or CHP, customers are locked into a single long-term supply contract for electricity and heat giving rise to a monopoly.
  • Other impacts are similar to those highlighted in the biomass and district heating factsheets.

Impacts on the environment of using CHP

  • CHP is a low carbon technology but still releases CO2 emissions.
  • The exhaust gases from a CHP plant can cause nuisance within the local environment if the installation is not correctly designed and operated. Adequate pollutant dispersion can be achieved by ensuring that flues are sufficiently high.
  • Some CHP technologies are noisy - internal combustion engines in particular.
  • Operation of CHP does not generate large quantities of liquid effluent. However, some effluents (for example, oils, cleaning fluids or washing effluent) can cause environmental damage if not controlled.
  • Large scale CHP can have landscape and visual impacts given that plants are large structures, particularly the flue.


1 May 2012

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