CHP for industry

  • Continuous power - providing the primary electricity supply. Natural gas engines are the most common in these installations because of their low operation and maintenance costs, high efficiency and clean emissions. However, diesel units often serve remote sites, such as mines, that have no local gas supply.
  • Prime power - serving intermittent, variable loads, often at sites where the utility grid is unreliable or insufficient to meet local demand, especially at utility coincidental peaks. Common applications include customer-dispatched peak shaving and utility-dispatched load management. Systems operated for only a few hundred hours per year typically use diesel engines because of their high power density and low first cost; those operating for extended hours more commonly use natural gas.
  • Standby power - generally operated only when utility power fails. Most standby systems use diesel-fuelled generators because of their simplicity and low installed cost. (Diesels are also preferred because life-safety codes for emergency power systems require an on-site fuel supply.)

CHP can be economically attractive in continuous and prime power installations. Most CHP systems use natural-gas-fuelled generator sets, primarily because they comply more readily with national and local air-quality regulations in longer hour applications, but also because they enable easy heat recovery, especially from the exhaust circuit.

The industrial sector offers the world's largest CHP opportunity because many production facilities have large heat and electrical requirements. At present, the chemical, electronics manufacturing, textile and food industries appear to have the greatest potential for industrial CHP as classically defined: large, continuous-duty systems serving substantial heat loads.


Five Caterpillar G3516 natural gas gensets being used for CHP at Kuntz Electroplating in Kitchener, Ontario, Canada. Heat from the generators is used for parts cleaning and in electroplating tanks

However, potential also exists in other process industries, including pulp and paper, pharmaceuticals, electroplating and processing of agricultural and forest products. Furthermore, almost any industrial facility can benefit from limited-duty, less intensive heat recovery associated with distributed generating systems.

Broadly speaking, industrial applications for engine-driven CHP include:

Moving towards a Directive

The European market for cogeneration has been difficult for some time now. However, plenty of changes to energy policies are planned - on meeting emissions targets, emissions trading, further energy market liberalization, and reduction of both demand and wastage. The most important development for cogeneration, though, is the proposed European Directive, writes Simon Minett.

In energy policy we sit at a crossroads today. This year, most likely, the Climate Change Agreement of the Kyoto Protocol will come into force legally when Russia ratifies. This commits the industrialized countries to cutting greenhouse gas emissions. The European Union has a commitment to cut emissions by 8% based on 1990 levels during the first commitment period of 2008-2012. The implications of this commitment are just starting to be realized in European countries.

The EU is in the final stages of an agreement on an emissions trading scheme for Europe. This will cover all large industrial sites and electricity generation. The core of the scheme will be the allocation of property rights to emit carbon dioxide. As you can imagine, a lot is at stake because, if you do not get a full allocation for your activity, then you will need to purchase additional emission permits from others in the market or face a fine of €100 (US$120) per tonne. Cogeneration, with its high efficiency and low carbon emissions, should be a winner in this process. However, the key to our success is the allocation method and COGEN Europe is working hard on this area.


In Paris, France, The Concorde Lafayette Hotel has a 90% efficient CHP plant that supplies 100% of the hotel's heat and power, making it independent of the grid (Caterpillar)

The second major change is the structure of the European energy market: both gas and electricity markets are now opening up to competition. This has been a very rough experience for many of us. For cogeneration, falling power prices and high natural gas and oil prices have squeezed our market. However, the process is coming towards a conclusion and we are hopeful that the market will start to stabilize and cogeneration will start to grow once again.

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