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Combined Heat and Power

Puget Sound Energy's CHP Unit in Sumas, Washington

Combined Heat and Power (CHP), or Cogeneration, describes the process of using a heat engine or power station to simultaneously produce electricity and useful heat. All thermal power plants produce waste heat during the production of electricity; cogeneration makes use of this wasted heat. This differs from Trigeneration, or Combined Cooling, Heat, and Power (CCHP), which produces useful cooling along with heating and electricity as in Cogeneration.

Every year, the heat waste produced in the generation of power in the U.S. is greater than the total energy use in Japan.[1] This wasted energy is cut in half by CHP. The U.S. has currently installed more than 82 gigawatts (GW) of power from Cogeneration units, which accounts for 8% of production capacity. Based on energy goals set forth by President Obama, the implementation of Cogeneration will increase.

Cogeneration technologies are termed "topping cycles" if the electric or mechanical power is produced first, and the thermal energy exhausted from power production is then captured and used, as with gas turbines.[2] These technologies are termed "bottoming cycles" if the systems produce high thermal energy (such as steel reheating or aluminum remelting), and then recover the waste heat to produce electricity or mechanical power.

Types of CHP Plants

This section contains various types of CHP plants. These vary based on the primary source of power, which changes how waste heat is gathered. Types of CHP plants include:

  • Boiler/Steam Turbine - these plants primarily produce power using Biomass, Landfill Gas, Digester Gas, and Bagasse.[3] Unlike other power generation processes in which heat is a byproduct of electricity generation, steam turbines generate electricity as a byproduct of heat (steam).[4] In CHP applications, steam at lower pressure is extracted from the steam turbine and used directly in a process or for district heating, or it can be converted to other forms of thermal energy including hot or chilled water.
  • Combined Cycle - these plants primarily produce power using Coal.[3] Combined Cycle power plants using coal are similar to biomass boiler and turbine systems.[4] Implementation of CHP applications is similar to biomass systems as well.
  • Combustion Turbine - these plants primarily produce power using Natural Gas and Propane.[3] Gas turbines produce exhaust heat at high temperatures that can be recovered in a CHP configuration to produce steam for process use.[4] Such CHP configurations can reach overall system efficiencies (electricity and useful thermal energy) of 70 to 80 percent. Gas turbines also have very low emissions compared to other fossil-fuel based systems.
  • Fuel Cell - these plants primarily produce power using Oil, Distillate Fuel Oil, Jet Fuel, Kerosene, and Residual Fuel Oil.[3] Fuel cell systems employ an entirely different approach to the production of electricity than traditional combustion based prime mover technologies.[4] Fuel cells are similar to batteries in that they both produce a direct current (DC) through an electrochemical process without direct combustion of a fuel source. However, whereas a battery delivers power from a finite amount of stored energy, fuel cells can operate indefinitely, provided the availability of a continuous fuel source. The heat produced in the chemical reaction can be gathered for CHP applications.
  • Microturbine - these plants primarily produce power using Waste, Waste Heat, MSW, Black Liquor, Blast Furnace Gas, Petroleum Coke, Process Gas.[3] Microturbines, as the name implies, are small combustion turbines that burn gaseous or liquid fuels to drive an electrical generator, and have been commercially available for more than a decade.[4] Microturbines are well suited to be used in CHP applications because the exhaust heat can either be recovered in a heat recovery boiler, or the hot exhaust gases can be used directly.
  • Biofuel Engine - these plants primarily produce power using a reciprocating engine adapted to use a biofuel for combustion. Wood and Wood Waste can be converted to biofuel through gasification.[3]

Visual Representation of Cogeneration


Cogeneration plants can use the waste heat from power production to create electricity, or they can make use of the waste heat in other ways. The CHP plant shown above, located in Sumas, Washington, has the ability to produce electricity or use excess heat to treat wood products.[3] This plant is one of several owned by Puget Sound Energy in Washington State. A CHP plant is being designed to produce 18 MW for the U.S. Capitol building and Congressional buildings as well.[1] Cogeneration is becoming increasingly prevalent in the U.S. because the use of waste heat can improve efficiency of systems up to 80%.[5]

Currently, economically feasible CHP operations recover waste heat with temperatures above 500°F.[6] Aside from being used in electricity generation, CHP can be used in industrial practices as well. The most viable industrial applications include:

1. Primary Metals Manufacturing - Primary metals manufacturing, such as steel milling, has various processes in which waste heat can be recovered. Heat can be recovered from coke ovens, blast furnaces, oxygen furnaces, electric arc furnaces, and melting furnaces as well. Heat can also be recovered in many operations in metal foundries.

2. Nonmetallic Mineral Product Manufacturing - Waste heat is generated in the process of making cement, glass, and other mineral goods. Key sources of usable waste heat inlude kilns, ovens, and furnaces used in manufacturing these goods.

3. Petroleum Refining - Basic processes used in petroleum refineries include distillation (fractionation), thermal cracking, catalytic, and treatment. These processes use large amounts of energy, and many involve exothermic reactions that also produce heat. While modern refineries often recover excess heat from these processes, there are still processes which generate unused heat. For example, the exhaust from petroleum coke calciners is 900°F to 1000°F.

4. Chemical Industry - There are several major segments of the industry (petrochemicals, industrial gases, alkalies and chlorine, cyclic crudes and intermediates), plastics materials, synthetic rubber, synthetic organic fibers, and agricultural chemicals (fertilizers and pesticides), in which high-temperature exhaust is released that could be recovered for power generation. There are currently 5 CHP systems in U.S. ethanol plants, which have a combined capacity of 17 MW.

5. Fabricated Metals - Processes generating waste heat include metal pre-heating, heat treatment, cleaning, drying, and furnace heating.

6. Natural Gas Compressor Stations - There are more than 20 Cogeneration systems installed at natural gas compressors in North America, which have a capacity of 105 MW.

7. Waste to Energy Systems - Landfills that use reciprocating internal combustion engines or turbines to produce power could generate additional power with CHP systems using exhaust gases. Small scale WTE systems are only marginally economically without the employment of Cogeneration.

8. Oil and Gas Production - There are a number of flared energy sources in oil and gas production that could utilize CHP.

A good example of Cogeneration can be seen with the proposed design of the University of Calgary's new natural gas power plant[7].

University of Calgary's Proposed Cogeneration Facility

The proposed plant will produce 12 megawatts (MW) of electricity (the equivalent of powering 12,000 homes), produce less noise pollution, and make the campus more self-sufficient. The University of Calgary is interested in this design, however, because of the Cogeneration aspects. As seen in the diagram above, the plant will operate a combined cycle gas turbine to produce electricity. The natural gas turbine operates on the Brayton cycle, which typically has an efficiency around 30%.[8] From here, waste heat is recovered from the exhaust by the Rankine cycle (through a waste heat recovery unit.) This brings the overall efficiency of the system up to 50-60%. From there, more heat is recovered from the exhaust by the incorporated hot water system. This system will bring hot water (205°C) to the campus through underground pipes and tunnels, supplying space heating and hot water. Overall, the efficiency of the system can reach 75%. The University of Calgary claims that this will effectively 'retire' their existing heating equipment.

Coors Facility in Golden, CO

The image on the left shows the Coors brewery in Golden, CO. The energy needs of the facility are met by a coal and natural gas plant housed on-site.[9] This boiler system at the facility includes one large boiler capable of burning coal or natural gas, and three smaller exclusively natural gas boilers. The three smaller boilers are used during maintenance of the larger coal boiler. Steam produced by these boilers, at high pressure (800 psig), is fed into three turbines with a total capacity of 40 MW. Two of these turbines are duel-extraction turbines, which output steam at both medium (400 psig) and low (50 psig) pressure. The medium pressure steam is primarily used for steam chilling processes, which exhaust into the low pressure steam. The low pressure steam is used for processes including brewing, malting, container manufacturing, and domestic heating and cooling at the neighboring Colorado School of Mines.

GDF Suez manages the energy production at the MillerCoors facility, which produces a base load of 20 MW with an overall efficiency of 60% (made possible by Cogeneration practices). The facility produces more than a million gallons of beer per day.


Cogeneration has been used in the U.S. for more than 100 years.[1] Thomas Edison used Cogeneration in the worlds first commercial power plant, and Cogeneration subsequently became the foundation for the power industry in early America. As the central utilities were just developing, on-site Cogeneration was an economical and convenient way of meeting power needs.[10] However, as central utilities became more reliable and less costly, Cogeneration remained economical only in industries requiring large amounts of steam.

Utilities continued to become more sophisticated and prevalent, and they also became more protective of their market. By the 1970s, Cogeneration was targeted by a number of anti-competitive tactics that restricted its growth. These tactics include refusing to purchase power from Cogenerators and prohibiting customers from connecting to Cogenerators. The Public Utility Regulator Act of 1978 (PURPA) was designed to combat these practices and promote Cogeneration because of its efficiency benefits. The provisions stated in PURPA addressed many of the regulatory and competitive barriers limiting the use of Cogeneration. Also, it provided the opportunity to sell electricity to utilities at a higher price, which stimulated the development of non-utility generators.

One of the unforeseen results of PURPA was the development two separate markets within industrial Cogeneration: traditional and non-traditional. Traditional Cogeneration facilities provide steam to industries as their primary function. Non-traditional facilities are designed to produce electricity for sale to utilities, with steam as a secondary product.

With the recent goals set by President Obama, as well as the current energy market growth, Cogeneration is likely to see a similar increase in utilization that was seen at the implementation of PURPA. With the current shift to more energy efficient systems, older coal power plants are being shut down and new natural gas plants are being put in place. This presents an enormous opportunity for CHP to grow in the near future.


Many U.S. states have incentives for the installation of CHP units, ranging from commercial to state governments, from industrial sectors to private sectors. These incentives aim to reduce business costs, create jobs, and reduce carbon pollution.[1]

State incentives are used in Cogeneration deployment to increase the use of technologies that benefit state residents, as well as the state overall.[11] These incentives take various forms: loans, grants, tax exemptions, rebates, and bonds.

  • Loans - States offer low-interest loans for a wide variety of energy efficiency measures. Rates and terms vary with location, but a maximum 10 year term is common.
  • Grants - Most grant programs are designed to offset the cost of technologies. Some grants programs are aimed at the research and development (R&D), while some programs are aimed at supporting project development.
  • Tax Exemptions - While less common than loans and grants, tax exemptions follow a similar logic. Tax exemptions are designed to increase the affordability of energy efficiency measures such as CHP by decreasing the taxes on the system. The implementation of tax exemptions vary from state to state.
  • Rebates - The state of New York is offering technical assistance and cash rebates in new buildings or significantly renovating existing buildings for the installation of various energy efficient measures, including CHP.
  • Bonds - The use of bonds to incentivize Cogeneration is rare. New Mexico has authorized the use of bonds to finance energy efficiency upgrades in government buildings and schools.