Cogeneration CHP, District Energy, North America

District cooling heads east

Figure 2. Building electrical demand profiles with and without DC

One significant advantage of district cooling is the flattening of the building’s electricity demand profile. Figure 2 shows the peak electrical demand of a 33,000 m2 office building in downtown Cleveland, Ohio, before and after converting from on-site electric chillers to a district cooling service. After district cooling, peak electricity demand was cut by 47% in July and the monthly electricity demand varied by less than 2% over the full year, significantly improving the load factor and attractiveness of that building as an electricity customer. These benefits also transfer in system reliability to the local utility grid, as peak system demand is dampened by shifting air conditioning loads to non-coincident or non-electric sources.

The University of Texas at Austin DE scheme generates 100% of the power, steam and chilled water requirements for its campus


The district energy industry in North America has shown strong growth since 1990. Members of the International District Energy Association (IDEA) have reported over 25 million m2 of new customer commitments since 1990, an average of nearly 2 million m2 per year connecting to district energy systems. In 2003, IDEA members reported customer commitments of nearly 4 million m2. These results are likely to be understatements in terms of true industry growth, as the number of IDEA member companies reporting to ‘DE Space’ is a fraction of the total association membership.

In 2003, district energy growth spanned all building sectors including commercial office space, commercial retail and manufacturing space, entertainment and sporting venues, government space, hotel space, residential space and schools – with hospitals and institutions showing the largest sector growth. Each year, DE Space is published on the IDEA web site ( so that industry members can identify buildings by sizes and categories and more effectively communicate market confidence for the industry to prospective customers.

The prospects for the development of small and medium-scale CHP in China are certain to improve with the projected arrival of supplies of natural gas to its east coast settlements. But with the market ‘culture’ still in its infancy, work needs to be done before a significant market is created for CHP equipment. That work has now started, writes Tim Sharp.

As supplies of natural gas begin to become widely available in China, a new era of small-scale (under 5 MW) distributed industrial and commercial cogeneration is about to dawn. Such activity may always be overshadowed by the traditional, larger than 30 MW coal-fired district CHP systems that seem likely to continue to dominate the Chinese scene. However, it nevertheless promises to provide a very large equipment market while also significantly improving energy efficiency, energy security and the environment.

That said, there are so many hurdles to overcome before full market development can occur that the outlook for the next few years must be quite modest. For example, most of the east coast gas, where most small-scale CHP development can be expected to occur, will not be available (from LNG) before 2006 at the earliest. There are, in addition, substantial gaps in local small-scale gas-fired CHP equipment manufacturing capability as well as little awareness of how to implement a CHP project. Numerous major institutional and regulatory hurdles also exist.

At present there are very few small CHP systems in China. An August 2001 survey of cogeneration market potential to 2005, conducted by the China Energy Conservation Investment Corporation (CECIC) for the San Francisco-based Energy Foundation (EF), found only 304 units smaller than 6 MW in the chemical, paper making and non-ferrous metallurgical industries in 1999. It expected only 3150 MW of new capacity of all unit sizes to be added in these industries by 2005.

Although the survey looked forward to the arrival of significant quantities of natural gas by 2005, it pointed out that in 2001 ‘over 95% of fuel consumed by cogeneration plants in China is coal. There are few combined-cycle cogeneration projects because the availability of natural gas is low and the price is high.’

By mid-2002, Shanghai, which receives very expensive pipeline gas from modest offshore fields, was able to boast one 4 MW gas turbine CHP installation at Pudong International Airport, while a local hospital was then installing a second 400 kW reciprocating engine unit. Both installations have since experienced difficulties with the local grid, partly because ‘wheeling’ is not available. In addition, all CHP generation that might be sold to the grid either cannot compete with much lower coal-fired costs or attracts only minimal tariffs.