Cogeneration
A CHP plant can convert
over 90% of its fuel into
something useful.
If you’ve started looking at Combined Heat and Power for your business, one number keeps coming up: a CHP plant can convert over 90% of its fuel into something useful. That’s well above what conventional grids and boilers deliver, and for any operator paying serious energy bills it’s worth understanding where the number comes from.
When a power station produces electricity from natural gas, only a portion of the fuel’s energy ends up as power on the grid. The rest escapes as heat through cooling towers, exhaust stacks, and transmission losses on the way to you. By the time the electricity reaches an end user, around 40-50% of the original energy in the fuel has been delivered as electricity. The rest is gone.
The boiler that heats the same building works at much higher local efficiency, but it pays a different price. It burns fuel of its own, producing heat the building doesn’t always need; the excess goes up the flue.
The two systems run in parallel. You pay for both. You pay, in effect, for the heat that was thrown away at the power station, and again for the heat your boiler is producing on site.
CHP is the idea of doing both jobs with one fuel input, in one place. The engine produces electricity for the site. The heat that would have been wasted, from the exhaust and from cooling the engine, is captured and used for hot water, space heating, or industrial processes. The same gas does two jobs.
That’s where the 90% figure comes from. The fuel hasn’t changed, the use of it has.
Strip away the brand names and the casing, and a CHP plant is built around a familiar piece of equipment: an internal combustion engine, similar in size and format to the engine of a heavy truck or a ship, but tuned for continuous duty rather than acceleration. The engine drives a generator that produces electricity. What makes CHP different is everything else.
When the engine runs, it produces heat in several distinct places:
In a conventional engine, all of these heat flows are losses. They vent into the air through radiators and exhaust pipes. In a CHP unit, each of them passes through a heat exchanger first. The cooling water becomes the building’s hot water. The exhaust gases pre-heat the same circuit, often via a flue condenser that pulls out the last available temperature before the gases vent. The combined output is hot water, or steam, superheated water, or thermal oil, depending on what the site uses.
The engineering of a CHP plant isn’t in the combustion, which has been understood for over a century. It’s in the recovery chain. Every stream of heat that comes off the engine is collected and converted into something the site can use.
At this point a CHP discussion stops being purely technical and becomes financial. The 90% efficiency figure assumes one thing: the site consumes all the heat the unit produces, every hour the unit is running.
If a CHP plant generates 500 kW of electricity and 600 kW of heat, but the building only needs 400 kW of heat in that moment, the surplus has to go somewhere. The standard fallback is a dry cooler, essentially a radiator, that releases the unused heat into the air. The electricity is still being produced. The efficiency on the data sheet is unchanged. But the real efficiency, as measured on the fuel bill, has dropped, because you’re paying for fuel and getting nothing in return for part of it.
Properly sized CHP plants are designed around the heat demand of the site, not the electricity demand. A hotel with 24/7 hot water and a heated pool, an industrial laundry, a hospital, a food processing site, a wastewater treatment plant: these are good candidates because the heat demand is high and continuous. An office building that mostly needs electricity for lighting and computers, with limited hot water demand, usually isn’t.
There’s a simple ratio behind the question. Every CHP unit has a fixed proportion of heat output to electrical output, often quoted as the heat-to-power ratio. Every site has its own ratio, which varies through the day and through the year. The job of the engineer designing the system is to match the two as closely as possible. Size the unit to the peak heat demand and you’ll be short on electricity for most of the year. Size it to the peak electricity demand and the heat will be released to the atmosphere for half the operating hours. The right size sits between these two limits, and finding it is the most important decision in the project.
When a CHP installation underperforms its business case, this is almost always why. The technology did what it was built to do; the sizing didn’t match the site.
The 90% figure is what a CHP plant achieves at design conditions: full load, all the heat absorbed by the site, properly maintained. Real installations spend most of their hours close to those conditions, but not all of them.
Several things shift real performance away from the brochure.
The first is hours of operation. A CHP unit running 8,000+ hours a year on a site with continuous demand is in a different economic universe from one running 3,000 hours a year on a site that doesn’t really need it.
Then there’s modulation. Some sites can keep the unit at full load most of the time. Others have demand that swings hard, requiring the engine to throttle up and down, which costs efficiency at the margins.
The recovery chain has its own effect. A unit with a flue gas condenser will extract more heat than one without, but only if the hot water return circuit is cool enough for the condenser to work. If the return water is too hot, the condenser stops doing its job. It’s the kind of detail that’s invisible to anyone who hasn’t looked closely at the system design.
Then there’s monitoring, both during commissioning and for the years that follow. A modern CHP unit reports its performance continuously: fuel input, electricity output, thermal output, hours of operation, deviation from expected ratios. A plant that’s tracked against its design figures keeps delivering close to them. One left to run without anyone watching the numbers tends to drift, and the drift only shows up later, on the utility bills.
In the UK, this distinction between nameplate efficiency and operational efficiency is formally recognised through the CHPQA scheme, which assesses whether installed CHP plants deliver the performance they were sold on.
The 90% efficiency of Combined Heat and Power is real. It comes from one engineering principle: using the same fuel for electricity and heat at the same time, and from the discipline of capturing the heat the engine throws off rather than letting it escape.
Whether a given business sees that efficiency on its own bills depends on whether the site needs the heat the plant produces, and whether the plant has been sized to match that demand.
So for any business considering CHP, the question to start with isn’t which unit to buy. It’s how the site uses energy, hour by hour, across the year. The equipment follows from that.
CHP stands for Combined Heat and Power. Cogeneration is the same thing. The two terms are used interchangeably, with “CHP” more common in the UK and “cogeneration” more common across continental Europe.
Most CHP plants run on natural gas. The same technology also runs on LPG, biogas from agricultural or wastewater sites, biomethane, and in some cases vegetable oil or syngas from wood biomass. The fuel changes the engine setup and the environmental profile. The principle of recovering the heat doesn’t change.
No. Units range from micro-CHP of a few kW, sized for a small hotel or leisure centre, up to industrial plants of several megawatts. What matters is whether the site has a steady demand for heat, not the size of the business.
The engine is the part that wears. A well-maintained CHP engine runs for tens of thousands of operating hours before it needs a major overhaul, after which it can continue for years more. Lifespan depends heavily on running hours, fuel quality and maintenance.
Yes. A CHP plant gets far more useful energy out of each unit of fuel than separate generation and a boiler, so it burns less fuel for the same output. Less fuel burned means lower CO2. The reduction depends on the fuel: a biogas-fuelled plant cuts emissions further than a natural gas one.
CHP produces electricity and heat. Trigeneration adds a third output: cooling. It uses an absorption chiller to turn some of the recovered heat into chilled water. That suits sites that need refrigeration or air conditioning, such as food logistics hubs, data centres or large hotels, and works well where heat demand drops in summer, when the same energy can go to cooling instead.
