About Combined Heat & 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. CHP is a type of distributed generation, which, unlike central station generation, is located at or near the point of consumption. Instead of purchasing electricity from a local utility and then burning fuel in a furnace or boiler to produce thermal energy, consumers use CHP to provide these energy services in one energy-efficient step. CHP’s inherent higher efficiency and the avoidance of transmission losses in the delivery of electricity from the central station power plant to the user result in reduced energy use and lower greenhouse gas (GHG) emissions.


Every CHP application involves the recovery of otherwise-wasted thermal energy to produce useful cooling, heating, or process thermal energy or electricity. The most common CHP configuration is known as a topping cycle, where fuel is first used in a heat engine or prime mover to generate power, and the waste heat from the power generation equipment is then recovered to provide useful thermal energy to the site. As an example, a gas turbine or reciprocating engine generates electricity by burning fuel and then uses a heat recovery unit to capture useful thermal energy from the prime mover’s exhaust stream and cooling system. Alternatively, steam turbines generate electricity using high-pressure steam from a fired boiler before sending lower pressure steam to an industrial process or district heating system. Waste heat streams can be used to generate power in what is called bottoming cycle CHP-often called waste-heat-to-power. In this configuration, fuel is first used to provide thermal energy to an industrial process, such as a furnace, and the waste heat from that process is then used to generate power.

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. For optimal efficiency, topping cycle CHP systems typically are designed and sized to meet the users’ thermal baseload demand.

CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, but it has quietly been providing highly efficient electricity and process heat to some of the most vital industries, largest employers, urban centers, and campuses in the United States. While the traditional method of separately producing usable heat and power has a typical combined efficiency of 45 percent, CHP systems can operate at efficiency levels as high as 80 percent.

The great majority of US electric generation does not make use of the waste heat. As a result, the average efficiency of utility generation has remained at roughly 34 percent since the 1960s. The energy lost in the United States from wasted heat in the power generation sector is greater than the total energy use of Japan. CHP captures this valuable wasted energy.


The United States currently has 85 gigawatts (GW) of CHP electric generating capacity installed, representing almost 9 percent of total generating capacity. This installed base of CHP generates about 505 million megawatt-hours (MWh) of electricity annually, or more than 12 percent of total electricity generated in the United States.

The size of CHP systems can range from 5 kW (the demand of a single-family home) to several hundred MW (the demand of a large petroleum-refining complex). For CHP systems to operate efficiently, a continuous thermal demand is required. This demand can be for laundry or pool-water heating in a hotel, space heating or cooling in a commercial office building, or material drying at a gypsum board factory. The type of thermal demand is unimportant, but must be present close to 24 hours a day for CHP systems to achieve the high efficiencies they are capable of.

CHP can be utilized in a variety of applications. Eighty-eight percent of US CHP capacity is found in industrial applications, providing power and steam to large industries such as chemicals, paper, refining, food processing, and metals manufacturing. CHP in commercial and institutional applications is currently 12 percent of existing capacity, providing power, heating, and cooling to hospitals, schools, campuses, nursing homes, hotels, and office and apartment complexes.

What a CHP System Produces

CHP is unique among electricity-producing technologies and methods because it generates more than one output. For most industrial applications, the thermal energy produced by the systems is the most valued output; electricity is considered a secondary, yet beneficial, by-product. CHP systems can provide the following products:

  • Electricity
  • Direct mechanical drive
  • Steam or hot water
  • Process heating
  • Cooling and refrigeration
  • Dehumidification

CHP Electric Technologies

CHP systems are integrated systems that consist of various components ranging from prime mover (heat engine), generator, and heat recovery, to electrical interconnection. CHP systems typically are identified by their prime movers or technology types, which include reciprocating engines, combustion or gas turbines, steam turbines, microturbines, and fuel cells. These prime movers are capable of consuming a variety of fuels, including natural gas, coal, oil, and alternative fuels, to produce shaft power or mechanical energy. Although mechanical energy from the prime mover is most often used to drive a generator to produce electricity, it can also be used to drive rotating equipment such as compressors, pumps, and fans. Thermal energy from the system can be used in direct process applications or indirectly to produce steam, hot water, hot air for drying, refrigeration, or chilled water for process cooling.

Steam Turbines


Courtesy: Siemens

Steam turbines generate electricity from the heat (steam) produced in a boiler, converting steam energy into shaft power. Steam turbines are one of the most versatile and oldest prime mover technologies used to drive a generator or mechanical machinery. The energy produced in the boiler is transferred to the turbine through high-pressure steam that in turn powers the turbine and generator. This separation of functions enables steam turbines to operate with a variety of fuels, including natural gas, solid waste, coal, wood, wood waste, and agricultural by-products. The capacity of commercially available steam turbines ranges from 50 kW to more than 250 MW. Ideal applications of steam turbine-based CHP systems include medium- and large-scale industrial or institutional facilities with high thermal loads, and where solid or waste fuels are readily available for boiler use.

CHP Thermal Technologies

Each of the CHP prime mover technologies produce excess heat that is recycled for another thermal energy need, such as space heating, domestic hot water, air conditioning, humidity control, process steam for industrial steam loads, product frying, greenhouses, or nearly any other thermal energy need. The end result is significantly more efficient than generating power, heating, and cooling separately. Below are descriptions of some of the technologies that run on the recycled thermal energy. Which one you employ obviously depends on what output you need and on the temperature and quantity of the excess heat available. It is often possible to employ more than one of these, either at the same time (i.e. air conditioning and humidity control) or seasonally (i.e. cooling in the summer and heating in the winter).

Efficient capture and effective use of thermal energy is essential for maximizing the energy savings and economic return of CHP. Cooling is often an especially-useful add-on, as it allows customers to reduce seasonal peak electric demand and allows future electric and gas grids to operate with more level loads.

In most topping CHP applications, the exhaust gas from the electric generation equipment is ducted to a heat exchanger to recover the thermal energy in the gas. Generally, these heat exchangers are air-to-water heat exchangers, where the exhaust gas flows over some form of tube and fin heat exchange surface and the heat from the exhaust gas is transferred to make hot water or steam. In the majority of installations, a flapper damper or “diverter” is employed to vary flow across the heat transfer surfaces of the heat exchanger to maintain a specific design temperature of the hot water or steam generation rate. The hot water or steam is then used to provide hot water or steam heating and/or to operate thermally activated equipment, such as an absorption chiller for cooling or a desiccant dehumidifier for dehumidification.

The next frontier in thermally-activated technologies for CHP – especially absorption chillers and desiccant dehumidifiers – is to factory design pre-engineered, integrated, packaged systems using standard, modular equipment, as opposed to using custom-designed and custom-engineered systems for each particular site. Some companies are making strides in smaller-scale integrated systems (small, medium and large commercial sites or small industrial sites); larger sites will still require custom work.

Heat Recovery Steam Generators

Heat Recovery Steam Generators (or “HRSG,” often pronounced “herzig”) are essentially boilers that capture or recover the exhaust of a prime mover such as a combustion turbine, natural gas or diesel engine to create steam.

The system consists of a bank of tubes that is mounted between the prime mover and the exhaust stack. Exhaust gases at temperatures of 800˚F to 1200˚F heat these tubes. Water is then pumped and circulated through the tubes and can be held under high pressure to temperatures of 370˚F or higher resulting in the production of high pressure steam. Since the flue gas never comes in direct contact with the water, the steam can be safely used in thermally activated cooling equipment.

HRSGs, which range from 10-250 megawatts and have an efficiency of 60-85%, are typically found in many combined cycle power plants.

Heat recovery from a reciprocating engine is much more complicated than with a gas turbine due to the number of different heat streams that need to be tapped, as shown in the figure below.

Fuels for CHP

CHP is not a fuel-specific technology. Even with price volatility in natural gas markets in recent years, natural gas is still the predominant fuel for CHP systems. While natural gas will continue to be an important fuel, the ability of CHP systems to operate on diverse fuels – including coal, oil, biomass, wood, and waste fuels such as landfill and digester gas—makes them key to developing a balanced and sustainable energy portfolio.

CHP Emissions

CHP systems, both topping and bottoming cycles, typically reduce total air emissions compared to grid-supplied power and separate onsite thermal systems. However, CHP systems are still required to meet environmental permitting requirements that regulate the emission of pollutants into the air.

Air Pollutants

Operation of any fuel-fired power generating equipment results in emissions of exhaust gases. Principal among these are carbon dioxide (CO2), water vapor (H2O), oxides of nitrogen (NO and NO2, generally referred to as NOx), oxides of sulfur (SOx), carbon monoxide (CO), unburned hydrocarbons (UHC), and particulates. The environmental permitting requirements for on-site generation impose restrictions on emissions of NOx, SOx, CO, and particulates because of their contributions to smog and acid rain. Regions of the U.S. with significant air quality problems are classified as “Non-Attainment Zones” and severe limits are placed on annual emissions of these pollutants in those areas. As a consequence, requirements for pollution abatement equipment are more stringent in those areas.

The rates of emissions depend on the quantities of fuel consumed, the type of fuel used, and the temperature of combustion. “Thermal” NOx emissions are a consequence of the high combustion temperatures; the higher the temperature level, the greater the formation rate for NOx. This is true no matter what fuel is used. “Fuel based” NOx emissions are negligible in systems using natural gas, but they can be a significant source of pollution when fuel oil is used. SOx formation is a consequence of sulfur contained in the fuel and is insignificant for natural gas but must be considered when fuel oil or other fuels are used. Generally, technologies for reducing NOx and SOx emissions increase emissions of CO and UHCs.

Pollution Abatement Technologies

The least expensive mechanisms for reducing NOx emissions are based on lowering the combustion temperature to lower thermal NOx. This can be accomplished by injecting water or steam with the combustion air or by specialized designs of the combustion chambers. Exhaust gas treatment can be performed with non-selective or selective catalytic reduction (NSCR or SCR). NSCR causes CO to react with NOx in the presence of a catalyst to form CO2 and N2. In the case of SCR, an ammonia or urea solution is sprayed into the exhaust gases from the power generator where NH3 reacts with NOx in the presence of a catalyst to form nitrogen (N2) and water vapor (H2O). NSCR is commonly used in conjunction with rich-burn IC-engines while SCR is applied more often to gas turbines. Efficient operation of SCR requires careful control of the ammonia spray and the exhaust gas temperature. SCR can add $500 to $900 per kW to the cost of small gas turbines (<5 MW) and on the order of $250 per kW or less to larger turbines. Low NOx burners cost about the same as water or steam injection. Scrubbers can be used to reduce SOx emissions. This is accomplished by injecting calcium carbonate (CaCO3) in the form of a lime or limestone solution with SO2 in the exhaust gases to produce CaSO3 and CO2. Carbon monoxide can be forced to react with oxygen in the exhaust using a catalyst to form CO2. Wet and dry equipment are available to reduce particulates in the exhaust.

SCR and other catalytic processes can be added to reciprocating engine generators to reduce their emissions, as is commonly done with gas turbines. In both cases the reduced emissions come at the cost of increased maintenance and operating costs and may affect operating efficiencies.

Conversion of Units

Emission rates for equipment can be reported in ppmv (parts per million, volume), pounds per million Btu of fuel (lb/MMBtu), or milligrams per mega-Joule of fuel (mg/MJ) and they are generally regulated in terms of tons per year. The conversion between units is not entirely straightforward, however, particularly when changing from ppm to lb/MMBtu or mg/MJ. This change is complicated because ppm incorporates the air flow rate which is not the same for all equipment. The amount of air required to oxidize a specific fuel is fixed (stoichiometric requirement), but different engine types use different amounts of “excess” air. Lean burn internal combustion engines may operate with around 100% excess air (200% of the stoichiometric rate) while gas turbines use 300 to 400% excess air; microturbines may use more the 800% excess air.