With significant progress being made recently towards decarbonisation of electricity generation portfolios in many developed counties, policy attention has turned to the production of heat – where efforts to take carbon out of the supply options have barely begun.
With heat, there is no equivalent, yet, to the widespread and accelerating use of wind and solar power, although biomass and waste combustion, solar thermal and heat pumps are all beginning to gain a foothold.
But isn’t this also an area where combined heat and power should take its rightful place – even CHP fuelled with natural gas? Though it can be seen as a local power generation technology with a heat spin-off, CHP is usually designed as a heat production option with power use (and export) spin-offs. Where significant quantities of power are exported to the grid, these spin-offs can be a major benefit to grid operators as well as to the host consumer.
Director of COGEN Europe Roberto Francia (right) has made just this point in a recent interview with the European Commission’s on-line magazine SETIS. Francia says that heat customers that are also able to self-produce electricity can support the functioning of the grid – helping to balance intermittent generation.
Used in Europe’s industrial sector, which is responsible for 37% of Europe’s overall heat demand, CHP reduces a manufacturing plant’s exposure to fluctuating power prices as well as serving the heat load. Revenue from power exports is a third benefit available to the host company, and grid operators see their own benefits in terms of capacity and predictability of supply. In a modern electricity system, CHP operators can gain revenue from these services.
On the other hand, the fact that there is no market value to the host for primary energy, and thus carbon, savings generated is one of the major barriers to the wider use of CHP. Maybe that’s why Europe’s CHP sector, dominated in capacity terms by large-scale industrial schemes, is gradually declining. But remember that the amount of power generated in traditional, central power-only plants is also declining, due to new renewables, falling demand and falling wholesale power prices.
The inherently high efficiency of CHP – even when gas-fired – delivers economic, and power system benefits to users and grid operators, but not, it seems, enough to expand the technology in today’s changing and falling power markets. It is somehow wrong that its efficiency-driven emission reduction advantages continue to go unrewarded.