CHP generates electricity whilst also capturing usable heat that is produced in this process. This contrasts with conventional ways of generating electricity where vast amounts of heat is simply wasted. In today’s coal and gas fired power stations, up to two thirds of the overall energy consumed is lost in this way, often seen as a cloud of steam rising from cooling towers. 
Their relative sophistication means that the overall efficiency of CHP plants can reach in excess of 90% at the point of use. This compares with the efficiency of CCGTs, which is between 49% and 52%. Coal-fired plant fare less well with an efficiency of around 38%.
As an energy generation process, CHP is fuel neutral. This means that a CHP process can be applied to both renewable and fossil fuels. The specific technologies employed, and the efficiencies they achieve will vary, but in every situation CHP offers the capability to make more efficient and effective use of valuable primary energy resources.
CHP plants generally meet local energy needs; certainly heat, also power and increasingly cooling. As such, it normally also avoids additional efficiency losses of around 7% incurred through transmission and distribution of electricity through the National Grid and local distribution networks – as energy is lost traveling long distances to reach its end user. When taking account of these losses, the respective efficiencies of both coal and CCGT plant fall further at the point of use.
CHP can be incorporated into a ‘tri-generation’ scheme , as opposed to cogeneration, to provide cooling alongside heat and power from the same energy source. Here excess heat produced is cooled by absorption chillers linked to the CHP system. This provides chilled water for cooling to be circulated around a building or community. This is particularly useful for schemes that require a large amount of air conditioning. This is also known as combined cooling, heat and power (CCHP).
CHP is first and foremost an energy efficiency technology. It provides a means to substantially reduce fuel, or ‘primary energy’, consumption without compromising the quality and reliability of the energy supply to consumers. Consequently it provides a cost-effective means of generating low-carbon or renewable energy.
The efficiency benefits of CHP go on to provide a range of wider advantages. Delivering the same energy more efficiently, using less fuel in the process reduces energy costs, enhances security of our energy supply and helps mitigate our dependence on imported fuels.
- minimum 10% energy savings, but typical markedly higher
- cost savings of between 15% and 40% over electricity sourced from the grid and heat generated by on-site boilers
- minimum 10% CO2 savings for good quality natural gas CHP in comparison to conventional forms of energy generation
- high overall efficiency – up to 80% or more at the point of use
- additional guarantee of continuity in energy supplies for operator & consumer
- proven and reliable technology with established supplier base
+ These in turn deliver a range of beneficial outcomes:
- a reduction in the cost of energy, improving the competitiveness of industry and business, helping alleviate fuel poverty and lowering cost in delivery of public services
- enhanced security of supply, making energy go further, through more efficient use of fuel – regardless of whether the fuel is renewable or fossil
- increased flexibility and reliability of energy supply, both nationally and locally – as CHP can complement and enhance other forms of energy generation
- flexible and responsive heat supplies – the thermal energy (heat or cooling) produced by CHP can be easily stored and later delivered to meet demand
- reduced overall demand from centralised, such as large scale coal or gas fired power stations – thus reducing stress on the electricity grid
