CHP is an acronym for the term Combined Heat and Power. Another term for it is Cogeneration. These terms are used interchangeably.
Cogeneration, or CHP is a stand-alone system that is decentralised from the national grid and based on the site where the power and heat is to be used. A Cogeneration system uses primary energy to produce usable heat and electricity in a single process.
When coal or gas is used to generate electricity at a power station, as much as 60% to 80% of that fuel is wasted and released into the atmosphere as CO2 and heat. Only around 30% of the energy is used to produce the electricity. With Cogeneration, heat and electricity are produced simultaneously in one process. A Cogeneration plant uses more than 90% of the energy. This means that far more electricity is produced for the same amount of fuel.
Currently, CHP technology is far more cost-effective for industrial, institutional or commercial applications. Although it has become increasingly affordable for residential properties such as body corporates to consider Cogeneration as well.
There is an immense number of different industries that can benefit from CHP. These include:
The ROI scenario for a CHP system can be as low as 1-2 years. This figure will be driven by the relative advantage of generating electricity and thermal energy on-site, rather than depending on electricity from the grid. Although there are many other factors that will come into play for a pre-feasibility assessment.