Cogeneration - CHP
CHP is a form of a decentralized energy technology. CHP systems are typically installed onsite, supplying customers with heat and power directly at the point of use, therefore helping avoid the significant losses which occur in transmitting electricity from large centralized plants to the customer. CHP systems can be employed over a wide range of sizes, applications, fuels and technologies. The heat produced during power generation is recovered and can be used to raise steam for a number of industrial processes, to provide hot water for heating, or with appropriate equipment installed, cooling. Because CHP systems make extensive use of the heat produced during the electricity generation process, they can achieve overall efficiencies in excess of 90% at the point of use. Installing CHP is a way of making savings when compared to traditional systems. Due to the high fuel efficiency of CHP plants, the carbon dioxide emissions per kWh of electricity or heat generated are relatively low. A well-designed and operated CHP plant will therefore improve energy efficiency and significantly reduce carbon dioxide emissions.

The diagram (see Image 1) illustrates the simplified operation of a typical cogeneration power plant. This technology utilizes waste heat while generating electricity for on-site consumption.

The separate production of electricity and heat, as widely applied in most US buildings and industrial facilities, results in low efficiency.

The diagram (see Image 2) illustrates the simplified operation of a typical heat production next to purchasing electricity trough the utility grid, generated at a conventional power plant (centralized power generation facility).  cogeneration power plant. A smart decentralized CHP cogeneration solution uses less fuel and achieves much higher efficiencies.

The significant increase in efficiency with CHP results in lower fuel consumption and reduced emissions compared with separate generation of heat and power. CHP is an economically productive approach to reducing air pollutants through pollution prevention, whereas traditional pollution control achieved solely through flue gas treatment provides no profitable output and actually reduces efficiency and useful energy output. CHP can boost a company’s competitiveness by increasing the efficiency and productivity of fuel use. Dollars saved on energy are available to spend on other goods and services, promoting economic growth. Independent research has shown that savings are retained in the local economy and generate greater economic benefit than the dollars spent on energy. Recovery and productive use of waste heat from power generation is a critical first step in a productivity-oriented environmental strategy.

The actual Situation without CHP
Most recently the U.S. Government, through its Department of Energy and the National Renewable Energy Laboratory, conducted a research project to analyze current energy inefficiencies and to define effective ways to reduce energy losses. The blue chart (see Image 3) shows the actual situation.

Two-thirds of our natural resources that are burned to produce electricity (mostly coal and natural gas) are lost as heat to the environment. Today’s traditional power plants are only 33% efficient. Most electricity consumers are not aware about the fact that the generation and distribution of electricity through the national grid is notoriously inefficient. Conventional power plants emit the heat created as a by-product of electricity generation into the environment through cooling towers, flue gas, or by other means. Also in most engines and standard diesel & gas generator sets,  more than half of the available energy is lost as excess heat.

Already in 1978, the U.S. Congress recognized that efficiency at central power plants had stagnated and sought to encourage improved efficiency with the Public Utility Regulatory Policies Act (PURPA), which encouraged utilities to buy power from decentralized and private energy producers. However, the bill left implementation and enforcement up to individual States, resulting in little or nothing being done in many parts of the country. Relatively low prices for raw materials like coal, fossil fuel, and natural gas created further complacency.

With the arrival of modern and advanced, high-efficiency reciprocating engines, and the prospect of cost- effective cogeneration modules, CHP is now becoming potentially feasible for smaller commercial buildings. This area, sometimes called "self-powered" buildings, involves the installation of a system that generates part of the electricity requirement for the building, while providing heating and/or cooling. Highly reliable packaged systems, such as the 2G® product line, are available for cost-effective operations

CHP is an application of technologies to meet end-user needs for heating and/or cooling energy, and mechanical and/or electrical power. Recent technology developments have "enabled" new CHP system configurations that make a wider range of applications cost-effective. New generations of renewable energy systems, and advanced reciprocating engines are the result of intensive research, development, and demonstration by government and industry. Advanced materials and computer-aided design techniques have dramatically increased equipment efficiency and reliability while reducing costs and emissions of pollutants.