Does Combined Heat & Power Provide a Carbon Benefit?

4 minute read

This post is about finding out if CHP is right for you. If you care about efficiency, then Combined Heat and Power (CHP) is for you. If you care about saving carbon, CHP may or may not be for you.


One of the implications of the Second Law of Thermodynamics is that heat is a necessary byproduct of converting fuel to electricity.

CHP maximizes efficiency by recovering this heat. CHP can achieve total plant efficiencies of 80 % HHV. When generating electricity alone efficiency is typically 40-60 % HHV.

High efficiency is great, but high efficiency does not guarantee a positive carbon impact. The carbon benefit of CHP is dependent on the carbon cost of CHP versus its alternative.


Below is a simple analysis of what carbon benefit a generic CHP plant can bring. The following assumptions are made

  • 1 MWe of electricity demand
  • 1 MW of heat demand
  • our plant always generates the required 1 MWe of electricity
  • we assume a constant CHP efficiency of 80 % HHV

We will also look at how changing electric efficiency affects the carbon benefit of our CHP plant. Figure 1 shows how the gas consumption and heat generation change at two different electric efficiencies.

As electric efficiency increases the amount of gas consumed in the CHP will decrease. Heat generated by the CHP will also reduce. This means at high electric efficiency the CHP plant will not generate the required 1 MW of heat. Additional heat will be generated in a gas boiler.

Figure 1 Figure 1 – The modelled CHP plant at 20% HHV and 60 % HHV electric efficiency

At low electric efficiencies CHP gas consumption is high with an excess of heat generated. Figure 2 shows what happens to total plant gas consumption (i.e. CHP and boilers) as electric efficiency changes.

Figure 2 Figure 2 – The effect of electric efficiency on gas consumption and heat surplus/deficit

To understand what is happening in our CHP plant from a carbon point of view we need to make some additional assumptions:

  • Gas carbon intensity = 0.184 tC/MWh HHV
  • Gas boiler efficiency = 80 % HHV

We need to know what the carbon cost of the alternative to CHP is. The most common alternative is generating heat in a boiler and importing electricity from the grid (referred to as the ‘grid’ solution).

We can calculate the carbon cost of generating heat from a gas boiler from the carbon intensity of gas and the gas boiler efficiency.

The carbon cost of supplying electricity from the grid is variable not just between countries but hour by hour. Here we use the annual averages from three different countries.

Table 1 – Carbon cost for the ‘grid’ scenario for three countries        
    UK US China
Import power carbon intensity tC/MWh 0.507 0.61 1.049
Heat generation carbon intensity tC/MWh 0.23 0.23 0.23
Grid carbon cost (supply of heat and electricity) tC/hr 0.737 0.84 1.279

We are now ready to see what benefit our CHP plant will bring versus the grid scenario. Also modeled is an ‘open cycle’ scenario where our we recover no heat from our CHP. In this scenario the boiler will always be generating our required 1 MW of heat.

Figure 3 shows that increasing electric efficiency reduces carbon cost. This is because we are consuming less gas in our CHP and generating less excess heat versus our 1 MW heat demand.

As we exceed 40 % HHV the benefit of reduced CHP gas consumption is offset by the need to generate heat in the gas boiler.

Figure 3 FFigure 3 – The carbon cost of CHP versus the grid scenario

In China, even an inefficient plant recovering none of the heat will bring a carbon benefit versus our grid and boiler solution. In the US and the UK some degree of efficiency is required to bring a benefit.

Carbon benefit is of crucial importance to the fight against climate change. However, economic benefit is the practical concern. Considerations like capital cost and energy prices will determine how many CHP plants get built and how they operate.

Economics are also important for us to understand what we are paying for our carbon benefit. Perhaps the capital is better spent elsewhere to get a higher carbon saving per dollar. It’s important to remember that any competing technology must supply both electricity and heat.

Like all modelling this analysis is a simplification. Commentary on some of the assumptions made above:

  • The major assumption here is site demands – in reality, site demands are variable.

  • Some sites may also generate heat from coal, biomass or oil – making the carbon cost for the grid solution different.

  • Even with a CHP plant providing the full site heat demand the gas boiler may still be generating heat. For many sites security of supply is critical so they will keep backup heat generating at minimum turndown in case of a CHP trip.

  • Assuming that the CHP plant efficiency is constant at 80 % HHV independent of electric efficiency is a simplification.

  • The quality of heat generated is as important as the amount of heat generated. Here we have simplified the analysis to only look at one quality of heat.

If you would like a copy of the model you can download it using the link below.

Does CHP bring a carbon benefit 2017-01-14.xlsx

Thanks for reading!

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