HOW BIG A ROLE FOR CHP IN A LOW CARBON FUTURE?
This note addresses some of the questions that need to be asked in order to determine whether or how big a role CHP might play in addressing the problems of getting to a low carbon future.
Measures of effectiveness
Examination of the contribution of CHP in the context of carbon emissions policy tends to use three measures – energy efficiency, carbon efficiency, and economic efficiency. They may sometimes point in the same direction, but they are in reality very different concepts.
Energy or thermal efficiency in this context is usually defined in technical terms – the percentage of the energy content of the primary energy source that is not “lost” when coal or heavy fuel oil is converted into a high value output, electricity, and a not very useful “wasted” output, large quantities of lukewarm water.
Carbon efficiency reflects the output of electricity for a given CO2 emission; it will differ from energy efficiency according to the type of fuel in use. For example heat input from a sustainable source, such as biomass, may be more carbon efficient than gas-fired generation, even if it is input to a process that is less energy efficient.
The reality for CHP has indeed been that the economic measure predominates, albeit without an effective inclusion of any social or climate costs from carbon emissions. One incidental feature of CHP very relevant to its economics is that, in order to produce water at a sufficiently high temperature to be of any practical use, it may be necessary to scale down the more valuable electricity production from a CHP plant in order for the by-product of waste heat to have a potential market. The most efficient mode of operation for electricity production, taken by itself, leaves a residual waste heat that has very little potential economic value or practical use. The mode of operation is therefore itself an economic trade-off between high value electricity and lower value low grade heat.
The other big practical and economic issues for CHP are first the capital costs, particularly where retrofitting is involved, and second the balancing of power and heat loads within the relevant consumer base. Of course these problems can be overcome, for example by using national and local interconnection to spill power or receive back-up, but this is inevitably at some cost to economic viability.
Increasing efficiencies in power generation and domestic boilers
Carbon Efficiency. Effectiveness of CHP in meeting CO2 targets.
CHP first came to major prominence in energy policy debates after the first oil crisis of the 1970s. Notwithstanding the fact that CHP has not achieved a substantial impact in the decades since then, we might expect that the importance attaching to CO2 emission reduction would now place a huge premium on energy efficiency, and open up new opportunities for CHP. In addition power generation technology has developed and arguments have been put forward for much smaller scale forms of CHP, operating at a highly localised or even household level, obviating some of the issues associated with large capital investment in CHP “hot water” distribution networks.
However other technologies have also moved on, and CHP is in competition, within the context of low carbon energy policies, with a number of alternatives. These include not only sources of power generation that do not lend themselves to CHP, such as scale large nuclear or most forms of renewable energy (other than geothermal heat), but also with the various approaches to carbon capture and storage (CCS).
Questions for CHP
It follows from the above that the most obvious questions to be addressed in determining the potential contribution of CHP to the future energy balance are therefore the following:
1. How significant are the energy efficiency savings associated with CHP considered to be, given the very large improvements that have occurred in recent decades both in power generation technology (CCGT) and in domestic boilers? This latter is obviously particularly important in considering the potential of smaller scale CHP designed to meet the power and heat requirements of domestic consumers.
2. In relation to building or retro-fitting CHP schemes around coal-fired plant, or other large thermal plant, has there been any change in assessment of the capital costs of the necessary networks for distribution of the waste heat? Hitherto retrofitting has rarely if ever been seen as economically or commercially viable, primarily because of capital costs, but much higher valuations attaching to CO2, particularly if these better reflect the real social cost of carbon rather than the inadequate numbers emerging from current carbon trading schemes, might alter the balance.
3. Any viable long term scheme for CHP associated with conventional fossil plant must require that it be associated with carbon capture. Given the cost and feasibility of building CO2 gathering networks, the emphasis may well be on fitting carbon capture to the largest point sources of power generation. To what extent will this limit the options, and hence the potential aggregate contribution, particularly for smaller scale CHP schemes?
4. Load balancing, between the electrical load and the demand for space and water heating that can be supplied through CHP, is likely to impact on the pattern of loads placed on local networks and the national grid. Given that some analysis already anticipates significant potential issues for the grid arising from the intermittency of some renewables, will CHP create any new problems for power networks?