CHP is an advanced and highly- efficient approach to generating electric power and useful thermal energy from a single fuel right at the point of use. Every CHP application involves recovering otherwise-wasted thermal energy and putting it to use for heating, cooling, process thermal energy, or electricity. CHP already supplies 8% of our nation's electricity, and can and should supply more.

CHP is highly efficient for two reasons. First, CHP is located right near where the energy is used, so less gets lost in power lines along the way. Second, CHP captures and recycles thermal energy that would otherwise be wasted.

Traditional electricity generation involves burning fuel at distant power plants, and transporting that electricity over long distances across transmission and distribution wires (and losing some along the way). Businesses and factories then burn additional fuels in a furnace or boiler for heating or steam, or purchase additional electricity for cooling.

The average efficiency of power generation in the United States has remained at 34% since the 1960s — the energy lost in wasted heat from power generation in the U.S. is greater than the total energy use of Japan. Combined with a typical boiler, separate heat and power is only 45% efficient. In contrast, CHP systems operate at up to 75% efficiency or higher

In CHP configurations known as “topping cycle,” fuel is combusted in a prime mover such as a gas turbine or reciprocating engine, generating electricity or mechanical power. Energy normally lost in the prime mover’s hot exhaust and/or cooling systems is capture and reused for:

• Steam or hot water
• Process heating
• Cooling and refrigeration
• Dehumidification

In many industrial applications, the thermal energy produced by the systems is actually the most valued output; electricity is considered a secondary, yet beneficial, by-product. Most of these systems are sized to meet all of a facility’s thermal needs.

CHP configurations known as “bottoming cycle,” also referred to as “waste heat to power,” capture and reuse thermal energy leftover from industrial processes, such as steel mills, glass manufacturers, or cement plants, and convert that otherwise-wasted thermal energy into electricity. These configurations typically use no additional fuel besides the waste heat and produce no emissions.

CHP has been an important resource for the U.S. for many decades. The existing 82 GW of CHP capacity at over 3,700 U.S. industrial and commercial facilities represents approximately 8 percent of current U.S. generating capacity and over 12 percent of total MWh generated annually. A database of known CHP installations in the U.S. is located here.

CHP has been used for over 100 years, in every state of the nation. CHP is a distributed energy resource that is, by definition, strategically located at or near the point of energy use. CHP technology can be deployed quickly, cost-effectively, and with few geographic limitations.

CHP can be used in a variety of applications. Eighty-seven 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. Thirteen percent of CHP capacity is in commercial and institutional applications, providing power, heating, and cooling to hospitals, schools, campuses, nursing homes, hotels, and office and apartment complexes.

Some CHP systems provide electricity and thermal energy for entire neighborhoods, college campuses, industrial parks, military bases, urban developments, or other groups or buildings. These are known as district energy or microgrids.

• Cost savings
• Improved efficiency - up to 2/3 savings in fuel costs
• Improved power quality, reliability, and business continuity in the event of power outages
• Improved energy cost stability and predictability
• Energy independence

• More resilient, reliable, and secure energy infrastructure
• Increased global competitiveness of U.S. manufacturers
• Reduced harmful smog-forming emissions and climate-change emissions
• No ratepayer investment required in generating, transmitting, or distributing power
• Reduced land-use impacts and NIMBY objectives
• Reduced fresh water use
• Optimized natural gas use and reduced price volatility - up to 40% greater efficiency than conventional units
• Creation of new high-tech manufacturing sector in domestic and export markets

• Reduced energy losses in transmission lines - current transmission losses are about 10%. CHP requires no remote transmission and therefore sustains no transmission losses.
• Reduced upstream congestion on transmission lines
• Reduced or deferred line and substation upgrades
• Optimized use of existing grid assets, including the potential to free up transmission assets for increased wheeling capacity
• Improved grid reliability
• Higher energy conversion efficiencies than central generation
• Faster permitting than transmission line upgrades
• Ancillary benefits including voltage support & stability, contingency reserves and black start capability

CHP is not a fuel-specific technology. Current CHP installations in the United States use a diverse set of fuels, although natural gas is by far the most common fuel at 72 percent of installed CHP capacity. While natural gas will continue to be an important fuel, the ability of CHP systems to operate on diverse fuels - including coal, biomass, wood, waste heat, and waste fuels such as landfill and digester gases - makes them key to developing a balanced and sustainable energy portfolio.

The size of CHP systems can range from 5 kilowatts (the demand of a single-family home) to several hundred megawatts (the demand of a large petroleum refinery, for instance.) The physical size of CHP systems range from approximately the size of a small refrigerator to the size of a large room.

CHP systems are integrated systems that consist of various components including a prime mover (heat engine), generator, heat recovery, and electrical interconnection. See more information on types of CHP electric technologies and CHP thermal technologies in our pages following this one.

Although this varies based on the geographic area, market sector, baseline energy costs, site configuration, and technology, topping cycle CHP systems tend to make the most economic sense in applications that have a large and constant need for heating, cooling, or steam.

The thermal energy can be used 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, year-round, for CHP systems to achieve their highest efficiencies.

For bottoming cycle CHP systems, also called waste heat to power, the most economically feasible systems are at sites with constant, high-temperature, high-quality source of waste heat, 24 hours a day, year-round.

CHP can provide lower energy costs for businesses, factories, and communities by displacing higher priced purchased electricity and boiler fuel with lower cost self-generated power and recovered thermal energy. CHP is not automatically cost-effective for every site or application. The amount of savings that CHP provides depends on the difference between the cost of electricity from the grid and the cost of the fuel used by the CHP system, plus the cost of the CHP equipment and ongoing maintenance. In other words, CHP is more cost effective in areas with higher grid electricity prices and/or lower fuel costs.

The increase in fuel use efficiency of CHP, combined with the use of lower carbon fuels such as natural gas, translates into reductions in smog-forming emissions and climate change emissions compared to separate heat and power. The table below compares the annual energy and CO2 savings of a 10-megawatt natural gas-fired CHP system with separate heat and power from utility-scale generation sources, including renewables.

This shows that CHP can provide overall energy and CO2 savings on par with comparably sized solar photovoltaics (PV), wind, and natural gas combined cycle, and at a capital cost that is lower than solar and wind and on par with natural gas combined cycle plants.

Source: COMBINED HEAT AND POWER: A CLEAN ENERGY SOLUTION, DOE 2012. SEE REPORT FOR DATA SOURCES AND ASSUMPTIONS.

Compared to the average fossil-based electricity generation, the entire existing base of CHP saves 1.8 Quads of energy annually and eliminates 240 million metric tons of CO2 emissions each year (equivalent to the emissions of over 40 million cars).