Applying combined heat and power systems

Cogeneration systems, often referred to as combined heat and power (CHP) systems, generate both electricity and thermal energy. As they become more common in the United States, engineers must understand the nuances and design strategies for successful application.


This article is peer-reviewed.Learning objectives:

  • Explain combined heat and power (CHP) and how it can be applied in commercial buildings.
  • Develop a strategy for applying CHP equipment in the built environment.
  • Evaluate and calculate the energy efficiency of the CHP system.

Combined heat and power (CHP) systems are being applied in commercial facilities because of energy efficiency, reliability, and return on investment (ROI). CHP equipment can be a key element in a microgrid for a facility or group of buildings in close proximity. The characteristics of a microgrid system include energy-generating equipment directly serving consuming equipment through an onsite electrical distribution system. The robust nature of the onsite generating equipment typically determines if supplemental energy from a grid source is required.

Other examples of energy-generating equipment found in microgrids include generators, fuel cells, batteries, and renewables. The increasing use of microgrids in the built environment can be attributed to the advancement of cogenerating technologies like CHP. The onsite energy generation reduces the reliance on electricity from the grid, adding resiliency against power outages, brownout, and other disruptions.

The most common type of CHP technology applicable for commercial projects is the topping cycle, where fuel is first used to generate electricity or mechanical energy at the facility and a portion of the waste heat from power generation is then used to provide useful thermal energy. The main components of a CHP module include a prime mover, generator, heat recovery, and electrical interconnection. The term "prime mover" is a generic description used in this application for the device that consumes the fuel and powers the generator to produce electricity. The prime mover also produces thermal energy that can be captured and used for other onsite processes that use steam or hot water. There are several commercially available prime movers including turbines, microturbines, reciprocating engines, and fuel cells.

Figure 1: The new Marriott AC Hotel in downtown San Jose, Calif., is a 7-story, 210-room lifestyle-branded hotel, situated within walking distance from the famed HP Pavilion. The hotel will include various hospitality amenities on the first level, such as

CHP systems are available in many sizes and design variations, but the premise among these variations is the same. A fuel source, most commonly natural gas, is consumed by the CHP equipment, which produces electricity and thermal energy.

A strategy for maximizing the ROI of energy-efficient equipment is finding applications that allow continuous operation at the peak-efficiency point and the ability to consume all of the thermal energy generated by the CHP. Energy efficiency for CHP systems is generated in two ways: production of two energy sources with one fuel and the added efficiency associated with producing electricity onsite to avoid transmission losses.

One of the defining characteristics of CHP systems is that thermal energy produced can be up to five times greater than the electricity generated. Other CHP technologies have different thermal-to-electric ratios. For instance, a natural gas drive engine produces about the same of amount of thermal and electric energy. CHP systems based on combustion turbine technology generally produce twice as much thermal energy than electricity. Therefore, facilities with significant and continuous hot-water demands would be good choices for applying CHP systems. The design challenge is selecting the CHP equipment with characteristics most suitable for the requirements of the facility and providing the necessary auxiliary equipment to maintain operation as hot-water demands naturally fluctuate.

Building applications

A specific facility type and equipment performance are used to provide a basis for the discussion. The process for application will remain as generic as possible to ensure this technique may be applied with other design parameters. Hospitality occupancy will be used as the model for applying CHP equipment in the built environment. Other facility types that also may be good choices for applying this technology include multifamily housing, prisons/jails, health care, and industrial applications with continuous hot-water demands. The project under consideration is a 210-room full-service hotel with onsite commercial laundry, three restaurants, and a lounge. This example will study only how the CHP can supplement the domestic hot-water service. Clearly, there is an application for a CHP system to serve as a hydronic heating system. Heating systems pose an added complication to the analysis due to climate and system operation issues.

The energy flow through the micro-CHP system includes 100% fuel coming into the system, with 75% thermal energy, 20% electricity, and 5% exhaust exiting the system. These values are based on the higher heating value of the fuel. The performance characteristics of this equipment are smaller than most CHP systems, thus, the term micro-CHP is used to describe this unit. The micro-CHP equipment is usually applied as multiple units to maximize operating time near the highest performance levels.

The CHP equipment considered for this case study is based on a Stirling cycle that uses natural gas as the fuel to produce 6 kW of electricity and 35 kW (120 kBtu/h) thermal energy at design conditions. At these design conditions, the equipment is rated at 95% efficiency and the supply-water temperature for the thermal energy is 160°F. The electricity production can vary by manufacturer. The electricity produced in the example is minimal as compared with the thermal energy and will be completely absorbed within the facility, so utility interconnection is a minor issue. There are other examples of cogenerating equipment where the electrical production has a much greater role in the overall design decisions. The electricity generated by onsite sources like CHP equipment play an important role in the energy efficiency story for this system.

Domestic hot-water use was profiled for the facility. A majority of the morning and evening hot-water use is by occupants in the guestrooms. The laundry and restaurants are primary hot-water users during the daytime. There are other small energy losses included in the hot-water calculation, such as in the recirculation pump and piping.

There are several assumptions included in this hot-water-use profile, such as average hotel occupancy, hot-water consumption by guests, restaurant occupancy, and laundry equipment performance. These values can vary drastically depending on the application, so it is important for the engineer to identify the quantity and use patterns for a particular application when preparing the design calculation.

Figure 2: This simplified diagram shows how CHP equipment can be integrated into a domestic hot-water heating system. Courtesy: DLR GroupDesign strategy

The value of a CHP system in this application is the electricity that is produced along with the thermal energy. The efficiency of hot-water production in CHP systems nearly approaches most condensing-type water heaters. Maximizing the electricity production and consuming all of the thermal energy is the value proposition for this system. The criteria for electricity production include maximum operating of the CHP equipment at the highest efficiency point.

There are a couple of obvious conclusions when analyzing the thermal requirements of the facility and the hot-water production of the CHP equipment. First, the thermal production of one CHP unit is not large enough to meet the thermal requirement of the facility. An approach for organizing the system may be installing enough CHP capacity to meet the maximum thermal demand of the facility. This approach would result in a large initial investment and extended periods when a large part of the installed capacity is dormant.

A second approach is to undersize the CHP equipment as compared with the thermal requirement, resulting in maximum operating time but missing out on additional thermal and electric production. The solution to be investigated uses some type of thermal storage equipment that can be used to satisfy the thermal peaks and prolong CHP equipment operation.

Figure 2 shows a simple diagram of how CHP equipment supplementing a domestic hot-water system can be organized. The calculation to be solved as part of this system design is the optimization of the storage tank size, output of the CHP equipment, and consumption of the domestic hot water by the facility. The financial viability of the design requires the CHP to operate at the most efficient point for the maximum duration possible while consuming all of the energy produced.

The CHP system is a closed loop that preheats the domestic hot water through a heat exchanger and thermal storage tank. The discharge of the thermal storage tank serves the domestic hot-water system. Project specifics may require additional storage tanks, conventional hot-water generation, thermostat mixing valves, and other traditional components.

Figure 3: This figure highlights the expected thermal storage tank temperature at full-load operation of one, two, and three micro-CHP modules. Courtesy: DLR GroupThe starting point for the system design simulation was using a thermal storage tank with a capacity approximate to the size of the hot storage tank required by the traditional calculation for the domestic hot-water system. This seemed like a reasonable point to reduce or eliminate the need for any additional hot-water storage. The final size of the thermal storage tank will eventually be affected by heat-exchanger performance, number of CHP modules, and facility requirements.

Figure 3 shows the calculated thermal storage-tank temperature with one, two, and three CHP modules operating at 100% performance using a 3,000-gallon tank size. The optimized hot-water temperature for the CHP equipment is 130°F, and assumed approach temperature of the heat exchanger is 4°F. Therefore, the realistic setpoint temperature of the thermal storage tank is 135°F. Figure 3 predicts tank values greater than 135°F. Using those assumptions, the CHP would modulate its output as a response to achieving setpoint temperature in the thermal storage tank.

The first point of the analysis is determining a reasonable combination of CHP units, thermal storage tanks, and heat exchangers that result in a stable operating condition. Once the stable combinations are determined, the lifecycle cost analysis can be performed to select the best course for the project. The equipment combination identified with the optimal cost of ownership can be compared with a traditional domestic hot-water system to determine the ROI.

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