ef·fi·cien·cy : efficient operation (1) effective operation as measured by a comparison of production with cost (as in energy, time, and money) (2) the ratio of the useful energy delivered by a dynamic system to the energy supplied to it.
Combined heat and power (CHP), also known as cogeneration, is a highly efficient form of distributed generation, which, unlike typical utility 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, end users such as industrial/manufacturing plants, universities, hospitals and other commercial users take advantage of CHP to provide these energy services in one energy-efficient step. As a result, CHP improves efficiency and reduces greenhouse gas (GHG) emissions significantly compared to the traditional utility model.
CHP may not be widely recognized outside industrial, commercial, institutional, and utility circles, but it has been quietly 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 electricity has a typical combined efficiency of 40-50%, CHP systems typically operate at efficiency levels of 75-90%. To achieve the highest efficiencies, CHP systems are often sized to meet the users’ baseload thermal requirements, typically in the form of steam, hot water, or refrigeration.
CHP is not a single technology but a suite of technologies that can use a variety of fuels to generate electricity or power at the point of use. Natural gas is the overwhelming fuel of choice, but liquid fuels, biofuels and process off-gases are also utilized. Gas turbines are common, but gas fired reciprocating engines can also have advantages, especially in situations where a large amount of power is desired relative to the thermal energy use.
The great majority of U.S. power generation does not make use of the waste heat that results from the production of electricity. As a result, the average efficiency of utility generation has remained at roughly 35% since the 1960s. The remaining 65% of is lost through condensing and evaporation via a cooling tower, cooling reservoir or once-through river cooling. CHP instead captures this valuable wasted energy and recycles most of it back into a thermal process. This allows for dramatic improvement in overall fuel efficiency, resulting in lower costs and CO2 emissions.