What is Cogeneration?

Understanding cogeneration, also known as combined heat and power (CHP). The fundamentals behind the technology, its applications, and benefits. 

Cogeneration, also known as combined heat and power (CHP), is transforming how businesses and industries generate and use energy. It offers high efficiency, cost savings, and sustainability benefits. We interviewed Jason Kaplan, Vice President and General Manager of the Energy Resilience Group at CoolSys Energy Solutions, and Standa Soucek, Director of Technical Services at CoolSys Energy Solutions, who oversees the engineering and maintenance of cogeneration units.

In this interview, we break down the fundamentals of cogeneration, explore its applications, and highlight its advantages.

Note: The interview responses have been edited for clarity and length

 

CHP is commonly used in Europe, and while it is increasingly adopted in the U.S., many may still be unfamiliar with it. Could you explain this technology in simple terms?

Cogeneration is basically energy production from one fuel source in the place where both the electricity and the heat are used. It means that the cogeneration units are really efficient. They don’t have transient losses. CHP unit means combined heat and power in the facility where these energies are utilized.

Jason Kaplan

Cogeneration is the simultaneous production of electricity and heat or thermal production—whether it’s heat or cooling—out of one fuel source. That fuel source can be natural gas, biogas, renewable gas, syngas or hydrogen gas. Pretty much any type of gas is the ideal fuel source for cogeneration.

Standa Soucek

The European grid is more decentralized, and the CHP units are used for grid balancing and interconnection. One big difference is that the electricity cost per kilowatt hour in Europe is higher than in the U.S. The possibility of balancing the grid and covering the peak creates many opportunities for CHP units. The U.S. market is growing, and there are a lot of opportunities.

Jason Kaplan

Energy prices in Europe have traditionally been higher than in the U.S., and the dynamics there are starting to change due to macroeconomic forces. So, whereas very inexpensive energy in the U.S. has been a staple for a long time, as the cost of energy increases, the commercial and industrial segments of the market will look for a way to reduce their energy costs. Cogeneration, a tried-and-true tested technology in other parts of the world, is a natural solution for this problem mainly because natural gas is abundant in the U.S. Natural gas is the ideal fuel source for cogeneration. Out of it, the high efficiency and lower cost and actual reduction in greenhouse gases can be realized from the cogeneration technology.

Standa Soucek                                                                                                               

The first cogeneration unit was created in the U.S.  in New York at the Pearl Street station by Thomas Edison [CC1] 148 years ago. CHP technology is not new for the U.S, but the market has been growing slowly.  A  big driver is costs per kilowatt hour. Generally, the cost of energy and electricity in Europe is more expensive than here in the United States and the European companies were really forced to find the most efficient solution.

 

What Are The Benefits of Cogeneration?

Jason Kaplan

Key benefits of cogeneration include high efficiency. We’re able to extract a lot more of the energy out of the fuel than you can otherwise receive from the grid by itself. By putting the power plant at the same location as the energy that is going to be consumed, you reduce the losses in heat and transmission losses that would otherwise occur from buying grid electricity. So, a high efficiency system means that you’re going to end up paying less for the usable energy that comes out of it.

Standa Soucek

Another benefit is CO2 saving. If you compare the grid in the U.S. and the CO2 production on average one year ago, the average for electrical production was roughly 1300 pounds per megawatt hour of CO2 created. Comparably, if you install a 1.5-megawatt CHP unit, you produce only 650 pounds of CO2 per megawatt hour. It means that the CHP unit is still greener than the current grid.

Jason Kaplan

The other benefit of CHP is the fact that it’s immediately dispatchable unlike some of the other renewable technologies, wind or solar, require the atmospheric conditions to be just right to produce the maximum amount of power. With a CHP plant, you can hit the button, the engine will start and you will immediately have the power production. That provides a high degree of resiliency. It is more reliable than technologies that rely on the transmission grid. As long as gas is present, power can be generated unlike those other technologies.

 

Can Cogeneration be Used With Different Sources of Fuel?

Standa Soucek

The most typical is natural gas, but a cogeneration unit can use and burn different types of fuel. Biogas is very popular, as is liquefied petroleum gas (LPG), liquefied natural gas (LNG), or right now there is a growing interest in hydrogen as a fuel for CHP units.

Jason Kaplan

Hydrogen gas is not readily available. However, cogeneration technology has evolved to a place where most engines can burn up to 40 % hydrogen without any real modification. Cogeneration is a bridge to get from now until hydrogen gas is available. A cogeneration unit placed in service today can burn natural gas, biogas, renewable gas, and blend in hydrogen, and then can be easily converted over to a 100% hydrogen engine when the fuel is available. Putting in a cogeneration unit today is not going to preclude you from using hydrogen, which is emission free, in the future.

Standa Soucek

To follow up what Jason said, infrastructure rules and code need to be created to properly operate and maintain the hydrogen. However, there are several pilot projects where they are using 100 % hydrogen and there are several CHP manufacturers who are spending development on the hydrogen. But hydrogen is a new fuel, the engine can be modified to burn the hydrogen, but it’s not there yet.

 

What types of facilities benefit most from cogeneration?

Jason Kaplan

The facilities that benefit most from cogeneration, are those that need high reliability of their energy sources including hospitals, hospitality, multifamily buildings, and heavy industrial plants. If a company is making paint, for example, and it needs to be stirred all the time, you need high reliability and electric power cogeneration would be a good fit. Also, wastewater plants and supermarkets are good candidates as well. Pharmaceuticals are another great place where cogeneration can be beneficial, again, owing to the need for reliable power during the production process.

Standa Soucek

The CHP unit burns fuel and produces electricity and heat. But this heat can be converted, for example, to cooling if CHP unit is combined with an absorption chiller. The absorption chiller can utilize the heat from exhaust gases. Then, we can create a source called trigeneration where we can produce electricity, heat, and cooling to satisfy, for example hotels over the summertime. There are also several projects called quad generation, and as an output from quad generation, its electricity, heat, cooling, and CO2 captured from exhaust gases. So, it means that the CHP unit can be used in many different facilities; plants, multifamily buildings, et cetera. We are using, installing and maintaining CHP units from 30 kW up to several megawatts. For example, a 10 megawatt plant will be combined with several small sources, but we can design, integrate, and maintain the CHP unit at this big range.

Standa Soucek

For pharmaceutical facilities, it makes sense to produce steam. Therefore, the CHP unit is combined with the equipment called Heat Steam Recovery Generator. Heat Steam Recovery Generator utilizes exhaust gases from the engine and produces steam. Steam from 15 PSI up to 120 PSI depends on what type of facility we are talking about.

 

Can this technology be integrated across a broad range of facilities, or is its application limited to specific industries or operations sizes?

Jason Kaplan

This technology can be applicable to a broad range of facilities. I would say that the screening mechanism for whether cogen is applicable would start with these questions:

• • Is reliable power important to your facility?

• • Is the facility in operation more than 5,000 hours a year?

• • Is there any need for equipment refurbishment or replacement in the near future?

• • Is thermal recovery from cogeneration something that could be used in either heating, cooling, or steam production?

If the answer is yes to any of these things, it’s likely CHP is a suitable technology to reduce operating expense and increase reliability for the facility.

 

When is cogeneration the right solution? Is there a clear benchmark that companies can use to determine whether cogeneration can help lower costs, reduce emissions, or enhance energy resilience?

Standa Soucek

Cogeneration can be used in different kinds of facilities. A fast decision as to whether the CHP unit is the right source, is if the electrical rate is higher than 7 cents per kilowatt hour. It’s also really important for ROI to consider heat utilization and find a way to use available incentives.

Jason Kaplan

I would add that it’s important to realize that cogeneration, in many cases, can reduce greenhouse gas emissions and an analysis of the location and the particulars are needed to quantify the savings. But generally speaking, cogen is less greenhouse gas emitting than the than the grid and using the technology results in a savings of greenhouse gas emissions.

What is the typical ROI?

Jason Kaplan

For typical ROI on our projects, we aim to be under five years. And we usually see a return in the range of two to three years. That is of course utilizing the available incentives. There are federal, state and local incentives that typically come into play with these projects. And when you can utilize those incentives, the ROI is typically two to three years.

 

Can you give an example of one of the more successful implementations of these systems?

Jason Kaplan

We were able to implement a cogeneration system in a hospital that took the hospital off of the district steam loop in the city where it’s located. And because of that, by converting to a hot water system, the facility was able to reduce the cost of that energy as well as significantly increasing the reliability of the plant. In fact, by being able to do climate control and humidification and these things from a cogeneration plant that is highly reliable, owing to the natural gas grid being highly reliable, they were able to safeguard against natural disasters that would otherwise force them to use diesel generators for power at the expense of some of their climate control. So, cogeneration was successfully implemented to give them a redundant, resilient space for patients even during grid outages.

Standa Soucek

The successful implementation of CHP units that we see are in really big multifamily buildings and colleges, where the CHP unit was installed to produce heat cooling and be island capable. Meaning that if the multifamily building lost the grid, the CHP unit would be able to start and produce the electricity for critical lighting and elevator operations. We had an instance when a CHP unit was utilized over the wintertime to produce and cover boiler outage. When the boiler failed and the second boiler also failed, the CHP unit was only heat source. Because our remote monitoring technician and our 24-7-365 monitoring center was working continuously, we were able to provide heat and electricity for over 200 tenants in the facility, and they didn’t have to be relocated. This is one of the most successful stories that we have.

Jason Kaplan

Another successful implementation of cogen is in the scenario where a facility wants to expand and will need more power, but the power from the grid is unavailable. So, in circumstances where the expansion of a facility for example, would exceed the power available in the local substation of the grid, one great use of cogeneration is to provide a bridge to grid, as it’s called. Which is to say that a cogen plant could be installed in a much faster manner than any sort of substation upgrade or transmission line upgrade. That cogen plant can provide power to the facility in an off-grid situation until such time as the grid is available, then that grid can be interconnected and the cogen plant can be converted to other forms of power like a peaker plant [CC2] or standby power, et cetera.

 

What services does CoolSys Energy Solutions offer related to cogeneration?

Standa Soucek

The services we provide to our clients really start from initial study and cost analysis, and go through electrical interconnection design, integration, installation, and then after- sales maintenance. This after-sales maintenance is heavily supported by our 24-7-365 monitoring center. We have a monitoring center located in the United States and in Europe where we can cover a whole year, 24 hours a day. And our technicians are certified and skilled technicians with decades of experience in the industry and are ready and trained to support each of our installations. We also create reports monthly and annually to analyze the downtime.

One of our key offerings is predictive maintenance, where we try to predict failure and inform the client or maybe notify dispatch.  We schedule the technician to do more than routine maintenance to increase the efficiency of the CHP unit and cut down the downtime. We want to make sure that the CHP unit is very well maintained and running 24-7-365, if possible.

Jason Kaplan

The services that we provide include consulting services upfront for looking into the feasibility of a cogen plant for a client. We have turnkey installation, whether that’s CHP, a gas heat pump, a heat recovery steam generator, or any of those equipment types. We do full corrective and preventative maintenance. We also perform all the engine overhauls in-house. And we provide 24-7-365 monitoring through our redundant monitoring centers.

 

What should readers do if they want to learn more about cogeneration?

Jason Kaplan

I would advise that anybody that wants to learn more about these services that we offer should go to our website at CoolSys.com. Additionally, to reach us directly, you can email us at energysales@CoolSys.com.

CoolSys Energy Solutions can work and perform these services nationwide. We are licensed in all 50 states for engineering. We have service technicians throughout the country able to service nearly every state. CoolSys Energy Solutions perform services related to the energy supply that we were discussing today, as well as a whole host of energy demand reduction initiatives as well, serving all 50 states from our main office in Princeton, New Jersey.