Finning Power Systems in association with the UK Combined Heat & Power Association, held a recent webinar, which provided an overview of the benefits of CHP for process and manufacturing industries.

The event was designed to advise on developing a sound business case to meet businesses’ strategic, financial and sustainability goals.

As well as offering operators a range of tax incentives, such as enhanced capital allowances and certain business rate exemptions, CHP also offers low cost of ownership compared to other capital investment in plant and equipment, something the organisers of the event were keen to get across.
Nigel Thompson, Sales Manager, Gas Power Solutions, Finning Power Systems
Nigel Thompson, Sales Manager, Gas Power Solutions, Finning Power Systems told COSPP online, “CHP is a well-established technology, with numerous examples of applications that are realising significant financial savings, through reduced cost of ownership and fast payback periods.  As a proven method of on-site power generation, the actual commissioning and installation of CHP plant is already well tried and tested, yet, there is at times, a lack of knowledge which may prevent operators from fully exploring the options available.”

“In particular, confusion around the legislation governing CHP and the associated tax incentives or grants available may prevent some organisations from assessing viability for their sites.”

As a general rule, operators should expect payback within three to four years, depending on the difference between their gas and electricity supply prices. The higher the demand for power and heat, the greater the achievable savings.

In particular, the use of an embedded generator enables the owner to import less power from the grid or distribution network operator (DNO) and reduces the impact of triad charges if the owner is able to reduce electricity demand during these peak periods.

CHP also provides a practical method of stabilising a power supply that may be at, or near capacity and can offer a lower cost option than having a high voltage line extended to cope with increased demand.

It is also a sustainable option for businesses keen to improve their environmental credentials.  Compared to traditional methods of using a combination of power from the grid and on site boilers, CHP provides significant carbon reductions, which not only improve the site’s environmental performance but also help to reduce ongoing utility costs significantly.

Part of the webinar also concerned mindfulness of certain criteria before commissioning the installation of a CHP package.

Firstly operators should first carry out a feasibility study and general site survey to ensure suitability and to make any necessary modification to site infrastructure.

The likelihood is that there will be a natural gas line in to the site, in which case, it is important to assess whether there is sufficient pressure and if the supply is interruptible as well as the volume requirement for gas, as CHP actually increases the amount of gas consumed.

Next, operators should establish site demands for heat, power, steam and cooling – whether this is continuous or cyclical and whether this may increase or decrease over the next five years.

CHP installations should normally be sized to meet the base load consumption.  It is important that this is based on the demand profile during a full production year to account for peaks and troughs in output and that it includes an assessment of yearly gas and electricity bills.  It is also worth noting that some DNOs may raise their tariff is the site reduces its consumption, so this needs to be factored in to the overall equation.

In some instances, to achieve the power-to-heat ratio necessary, it can be more economic to oversize the package to deliver slightly more power than the base load requirement, with the option to sell any excess electricity generated back to the grid at a profit. In other applications, it can be more profitable to size to the building’s lowest average heat demand, with the CHP system acting as the lead boiler and backup boilers picking up additional heat requirements.

This initial feasibility study will enable the operator to establish whether the site is viable for CHP or whether to revisit the concept in three-to-four years’ time when requirements may have changed.

If the decision is made to proceed, then there are a number of technical factors that also need to be considered, such as whether the CHP plant will be installed inside or outside and whether there are any noise restrictions that must be adhered to.

Finally, it is important to account for the site operating regime, including the number of operating hours and over what period of time as this will affect any operating and maintenance (O&M) contract that is entered in to.

In conclusion, purchasing a CHP unit is not the same as buying a diesel generator set.  The CHP must be configured precisely to meet each site’s requirements, offering high reliability, durability and electrical efficiency.  It is a long-term investment and therefore, there should be a trusting partnership in place between the operator and the supplier, who, ideally, should be required to meet contractual obligations for the ongoing operation and maintenance of the equipment for many years to come.