The latest UK government statistics show that Combined Heat and Power (CHP) is making a valuable and growing contribution to the UK energy mix, says Hugh Richmond, CEO of Edina.
CHP, also known as cogeneration, creates electricity and useful heat together in a single process, allowing organisations to reduce energy costs, while also supporting energy resilience and sustainability.
For the right sites, high efficiency CHP provides typical energy cost savings of 30-40% compared to grid supplied power and heat from boilers. This can often deliver a return on investment within 2 to 3 years.
Cogeneration provides sustainability benefits and can also boost energy resilience by providing an off-grid power supply. This guards against the growing risk of electricity supply disruption.
The Digest of UK Energy Statistics (DUKES) provides a comprehensive picture of energy production, with specific chapters addressing an element of the contribution to the UK’s energy requirement.
1. UK CHP capacity increased 66MWe to 5,985MWe l
2. The amount of electricity generated by CHP increased by 5% in 2018
3. Percentage of renewable fuels used in CHP increased to 17.4%
4. Spark spread remains positive
The figures show that the number of CHP schemes in the UK increased by 64 to 2,473 between 2017 and 2018 as more industrial sites, businesses, public sector organisations, district heating schemes and others invested in cogeneration.
Overall, the UK’s CHP capacity increased by 66MWe, while the amount of ‘good quality’ electricity produced increased by 5% in 2018. CHP accounted for 6.9% of all electricity supplied in the UK.
“Cost saving is the fundamental driver of CHP uptake, with businesses of all types and sizes investing in cogeneration to reduce heat and electricity bills”, said Hugh Richmond.
Edina’s MWM CHP engines achieve extremely high efficiencies of 85% – 90%, almost twice as efficient as taking electrical energy from the grid and thermal energy from on-site boilers. This results in substantial savings on utilities costs.
Hugh Richmond added: “The economic success of CHP is also determined by the positive ‘spark spread’. This is a simple calculation that compares the price of energy with the cost of fuel used to generate that energy.
“Given that most CHP units are fuelled by natural gas, which over recent years has been significantly cheaper than grid electricity, there is a spark spread price advantage, which is illustrated by the latest UK energy statistics.”
In the last decade, the spark spread value for natural gas has been consistently positive. It reached a peak of 5.2 in the third quarter of 2016 and has since fluctuated just below this mark. In the final quarter of 2018, the spark spread stood at 4.5.
For organisations investing in CHP, this healthy spark spread leads to energy cost savings and rapid financial returns. In many cases, CHP generators have provided payback times as quickly as two or three years, which can prove to be a smart investment when you consider that a typical CHP system has a lifespan of 10 to 15 years.