Reduced Greenhouse Gas Emissions
Combined heat and power (CHP) can reduce greenhouse gas emissions significantly, depending on the power plant technology used. This is because it generates electricity in a more efficient way—through the recovery of otherwise wasted energy. CHPs typically achieve efficiencies of between 55% and 80%, whereas conventional electricity-only power plants have typical efficiencies of 33%. The higher efficiency of CHP leads to fewer carbon dioxide emissions per kWh. For example, instead of producing 1 tonne of CO per MWh when combusting coal, CHPs produce 0.4 tonnes when co-firing with natural gas or 0.14 tonnes when using biomass fuels.
The CO2 emissions from electricity generated by a mixture of gas, coal, oil, and nuclear power stations are around 430g per kWh delivered at an overall efficiency. If you use natural gas instead to produce your own clean green energy with 83% effectiveness then the estimated total reduction will be 52%.
Reduced Energy Costs
Mains electricity is expensive, but gas makes up for it by being cheaper. A typical price of 14–19 p per kWh can be found with mains-fed power sources. However, when you use this same source in conjunction with natural fuels like coal or oil, which are both much more affordable at 2–4p per kilowatt-hour (kWh).
This makes up for the initial higher cost of gas and results in an overall lower energy price.
CHP System Integration
Investing in combined heat and power can yield multiple benefits for organisations, including savings on energy costs, reduced emissions, operational efficiencies, and greater resiliency to power outages. CHP systems are more efficient compared to buying energy from the grid. For every 3 kW of electric energy produced by a power station, there is a high percentage of transmission loss before it reaches its point of use. Compare this to generating power at source with no transmission losses and substantially reduced emissions. This means that payback periods for combined heat and power generation can be as little as 2 years. As the spark Gap between gas and power prices increases, the payback return on investment is only getting better.
Combined heat and power plants can use heat to meet other needs, such as space or water heating. If the waste heat is used for space or water heating, the combined heat and power plant can provide two services at once. This “heat-and-power” effect has led to the development of combined heat and power (CHP) plants that produce both electricity and heat.
Climate Change Levy Exemption
Organisations that use combined heat and power are exempt from the UK Climate Change Levy if their combined heat and power system has an electrical output of less than 20 MW. The exemption applies where the generating capacity is below this threshold for 90 per cent or more of the time since it was commissioned.
The exemption only applies to the electricity produced by combined heat and power systems, not to heat or steam produced.
Enhanced Capital Allowances
The government is making it easier for businesses to purchase modern technologies, and they can do so with a single payment. This new programme permits companies of all sizes from across the country to take advantage by offsetting 100% on their tax bill in year one instead of having spread payments over say, 10 years, saving around 7-8%.
This is a one-off spend and the money spent is paid back in year one. This is an excellent incentive from the government to assist every business in finding, managing, and monitoring their energy use.
Improved SBEM Results And Energy Ratings
The Simplified Building Energy Model (SBEM) result achieved by using CHP and heat pumps is significantly better than for any system incorporating oil or gas-fired boilers. This means that your building will be more likely to achieve a pass against Part L of the Building Regulations and receive an improved energy rating on its certificate as recorded by UK government programmes like the Heating Change Over Programme (HCoop). In addition, your building will be more likely to qualify for Feed-in Tariffs and Renewable Heat Incentives.
The result of a combined heat and power system is that you can actually generate energy from your own resources, which means that you won’t have to worry about how much you’re paying every month. The benefits of using coal for your own energy needs are not only financial but also environmental as well, and this is a great way to make a difference.