Definition of Combined Head and Power (CHP)
Combined Heat and Power (CHP) is also known as co-generation. It is an integrated system which produces electricity on-site and recovers its by-product, heat. The heat recovered by the system is used for heating or cooling buildings. The system captures the thermal energy instead of rejecting it as waste and therefore, it is comparatively a very efficient system. The source of fuel for CHP can be fossil as well as renewable such as natural gas, propane, fuel oil, coal, wood-chips, and biogas.
CHP systems are used to produce a portion of electricity needed by a facility whereas the rest is purchased from the utility. CHP offers an energy efficient system and helps reduce emissions.
CHP systems are most suitable in locations where electricity rates are high, fuel costs are low and for facilities that need both electric and thermal energy. Typical customers of CHP are:
- Industrial companies requiring electric and thermal energy
- Institutions such as schools
- Multi-family residential facilities
- Facilities considering upgrades or replacement of boilers