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The Essential Guide to Small Scale Combined Heat and Power

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The Essential Guide to Small Scale Combined Heat and Power The essential guide to small scale February 2018 combined heat and power The answer to all your combined heat and power questions in one, easy to read guide... Centrica Business Solutions The essential guide to combined heat and power Contents What is combined heat and power? 4 • About Centrica Business Solutions • Introduction to combined heat and power • Combined heat and power applications • Fuel options • Benefits of combined heat and power Economics of combined heat and power 6 • Stages of feasibility • CHP quality index • CHP selection • Site review to determine actual installation costs Financing the CHP project 10 • Discount energy purchase (DEP) • Capital purchase scheme • Energy savings agreement (ESAs) Integrating CHP into a building 11 • Low temperature hot water systems • Steam systems • Absorption cooling systems CHP technology 12 • The equipment • E-POWER Typical case studies 15 • Alton Towers • Newcastle United • Royal Stoke University Hospital Glossary of terms 18 CIBSE accredited CPD courses 19 Useful contacts and further information 20 2 Centrica Business Solutions ThePanoramic essential Power guide in to action combined heat and power About Centrica Business Solutions With over 30 years’ experience, more than 3,000 units manufactured and an amazing 27 millions tonnes of CO2 saved by our customers, Centrica Business Solutions are the largest provider of small scale CHP units in the U.K. We understand the power of power. As new energy sources and technologies emerge, and power becomes decentralised, we’re helping organisations around the world use the freedom this creates to achieve their objectives. We provide insights, expertise and solutions to enable them to take control of energy and gain competitive advantage – powering performance, resilience and growth. As businesses struggle to balance the demands of growth, cost control and risk with a complex competitive environment, they are under pressure like never before. At the same time, the energy landscape is changing. New energy sources are emerging, from wind and solar to high efficiency batteries, while supply is becoming decentralised, driven by new technology. These changes are putting power in the hands of customers, turning energy from a simple commodity into a critical source of competitive advantage. 3 Centrica Business Solutions The essential guide to combined heat and power What is combined heat and power? Introduction to combined heat and power Combined Heat and Power (CHP) converts a With CHP, an engine which is normally CHP should always be considered when: single fuel into both electricity and heat fuelled by natural gas, is linked to an • Designing a new building in a single process at the point of use. CHP alternator to produce electricity. CHP • Installing or replacing a new boiler plant is highly energy efficient and as well as maximises the fuel and converts it into supplying heat and power, it can deliver a electricity at around 35% efficiency and • Replacing or refurbishing an existing plant number of positive financial, operational heat at around 50%. Heat is recovered from • Reviewing electricity supply and environmental benefits. the engine by removal from the exhaust, • Reviewing standby electricity water jacket and oil cooling circuits. generation or plant CHP is a well-proven technology, recognised worldwide as a viable alternative to Typically a good CHP scheme can deliver an • Considering energy efficiency in general traditional centralised generation. efficiency increase of anything up to 25% • Exploring options towards building compared to the separate energy systems regulation compliance it replaces. • Reducing CO2 emissions and environmental impact. Typical case Conventional Electrical Power Generation 60% Waste Natural 100% Gas 40% Power This Facility Natural Hot 100% Gas 70% water 30% Waste Boiler Cogeneration Cogeneration 35% Power Natural 100% Gas This Facility Heat 15% 50% Waste Combined heat and power applications • Leisure centres • Manufacturers • District heating schemes i.e. • Hotels • Commercial premises offices, residential • Hospitals • Horticulture • Pharmaceutical • Universities • Airports • Anaerobic Digestion i.e. dairy, onfarm. • Military bases • Waste water treatment works • Prisons • Municipal buildings 4 Centrica Business Solutions The essential guide to combined heat and power What is combined heat and power? Fuel options The most common fuel option for a CHP is Developers can choose to fund capital costs Biomass boilers and biogas applications natural gas. This is widely available in many of projects claiming Feed-in Tariffs (FiTs) on that do not have a RHI emission certificate countries through the mains gas network electricity generated from CHP engines and or an environmental permit will not be and offers straight forward and sustainable exported to the grid as well as benefiting eligible for the RHI. access to Combined Heat and Power. from enhanced capital allowances. There Centrica Business Solutions can offer is also potential for additional income via Alternatives to natural gas include biogases, pre-treatment technology required to clean the Renewable Heat Incentive (RHI). bioliquids and biofuels. Using alternative and dry biogas from digestion processes, fuels has its advantages. Payback on Biomass and biogas CHP is eligible for such as effluent and AD this would include anaerobic digestion (AD) and other Renewable Heat Incentive (RHI) support. Siloxane and H2S treatment, and a chiller biogas CHP projects, such as wastewater Any new application for RHI with a biomass to clean/treat gas prior to the engine, applications, can be rapid. Wastewater boiler (including CHP systems) or a biogas depending on the gas quality and feedstock. CHP projects can provide rapid payback CHP (such as part of an anaerobic digestion on investment – usually within 10 to 18 plant or at a waste water treatment works) months. Considering that the lifespan of a must have either an RHI emission certificate typical CHP system is 10-15 years, this can or an environmental permit certifying that provide a significant cash surplus, as well Particulate Matter (PM) and NOx emissions as improving environmental performance. from the site do not exceed maximum permitted levels. Benefits of combined heat and power Reduces running costs Security of supply Reduces CO2 • Reduces sites actual energy costs • Acts as back-up generator • Points for BREEAM assessment • Avoidance of Climate Change Levy • Back-up heat supply • Meet CSR requirement • Claimable Enhanced Capital • Reduces grid dependency • Legislative compliance with part Allowances L2 of building regulations • Stabilises energy costs over a period of time Financial benefits Emission benefits CHP represents a highly efficient use of fuel, which means In the UK, the recent amendments to the Building lower energy costs for the user. In the UK, taxation benefits Regulations, Part L2A and Part L2B seek to reduce both can be obtained through avoidance of Climate Change Levy energy consumption and CO2 emissions by up to 28% (Good Quality CHP) and the possibility of Enhanced Capital compared to the 2002 regulations. All CHP schemes Allowances for eligible organisations. In other countries, a produce reduced emissions compared to the separate range of fiscal support measures also enhance the financial supply of mains electricity and traditional means of site benefit of CHP. Third party or supplier funding options for CHP heat production. A well designed and operated CHP plant means an organisation has the option of outsourcing the CHP can contribute significantly towards Part L compliance. system without capital outlay giving an immediate payback. Impacts can be readily assessed through SBEM or other energy performance modelling software packages. C02 savings are calculated using the following formula: Grid electricity CO2 abated + Boiler fuel CO2 abated - CHP fuel CO2 released = Net CO2 saving The figures to use in this calculation are found in the Building Regulations 2000, Part L2A (2006 Edition) which are: • 0.184kg CO2/kWh for combusted natural gas • 0.483kg CO /kWh mains electricity displaced 5 2 Centrica Business Solutions The essential guide to combined heat and power Economics of combined heat and power Stages of feasibility There are generally three stages to Over the last few years, the availability of Initial feasibility study completing the economic viability for half-hourly utility data is becoming more Having collected and validated the data, CHP once the project has been scoped: and more common. Availability of such data a simple evaluation of whether a CHP can improve the accuracy of a feasibility scheme is likely to be feasible or not can be • Data Collection study since it can provide a greater insight conducted. This is calculated by working out • Initial Feasibility Study – into the operation of the site. the “spark spread” - the difference between desktop calculation the grid electricity tariff and the natural gas Whilst the utility consumption and tariffs • On-site Review – to determine tariff. If the grid electricity tariff is 9p/kWh are the most important pieces of data in a installation options and cost. and the natural gas tariff is 3p/kWh, then CHP desktop feasibility analysis, other site the spark spread is 3.0. Data Collection conditions can have a major effect on the CHP savings. Examples include the Before a CHP unit can be correctly sized and Grid Electricity Tariff 9p /kWh the associated savings accurately calculated, distribution of the consumed
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