CHP Modeling Report: Assessment of CHP Systems and Technologies

This report provides a comprehensive analysis of Combined Heat and Power (CHP) systems. It begins with an abstract highlighting the benefits of CHP, including reliability, efficiency, and cost-effectiveness, and introduces key concepts like net present value (NPV). The introduction emphasizes CHP's role in energy efficiency and environmental sustainability. The report then offers a technical overview of CHP technology, detailing its components (engine/prime mover, generator, heat recovery system, and control system) and various fuel options, with a focus on natural gas. It discusses the CHP assessment tool and its capabilities in evaluating potential CHP installations. The report then explores the advantages of CHP, such as increased efficiency, reduced energy costs, improved power reliability, and enhanced environmental quality. It also addresses the financial intensity of the systems. The discussion section focuses on the reciprocating engine as a prime mover within the topping cycle, comparing its advantages with other internal combustion engines, and the report concludes with a discussion on the feasibility and cost-effectiveness of CHP systems, considering factors like return on investment (ROI) and the availability of natural gas infrastructure.

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Authors name
Class name
Tutors name
Institution affiliation
City/state where it is located
Date

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ABSTRACT
Combined heat and power systems have a wide range of benefits to users especially in the areas
of reliability, efficiency, environmental and cost effectiveness. CHP systems have over the years
risen to provide increased amounts of electricity and thus considered to be one of the
contributing factors to a growing global energy market. The importance of CHP cannot be
stressed enough because we need to understand how they operate and in turn improve it further
so that the application of such a technology can be widespread. As a result, we would be able to
tell the different types of CHP systems and how well to apply them in order to suit our specific
needs.
Keywords; Combined heat and power systems (CHP), natural gas (NG), net present value
(NPV).

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Introduction
The main purpose of Combined Heat and Power, (CHP) is to achieve high levels of efficiency
during operation while also saving energy by consuming less and reducing the emission of
harmful gases into the atmosphere (Breeze, 2017). These systems basically convert one form of
energy to another and in most cases, it is mechanical to electrical energy coupled with some
useful heat. They are usually used in areas such as campuses/ schools as will be seen in this
paper thus offering efficiency, sustainable design opportunities and ease of system maintenance
(Beith, 2011). The first part in this paper highlights CHP technology and explanation of what the
assessment tool is all about. Then the advantages and disadvantages of the various combined
heat and power, and finally the discussion and conclusion of the results obtained from the
assessment tool.
Technical overview of CHP technology
CHP uses a single source of fuel or energy to produce both heat and power near or at the location
of use (Beier, 2017). Such systems are usually designed to meet the standards of various energy
users be it city-wide levels, industries or even buildings. It can broadly be viewed as a producer
of electricity and a source of heat. There are different systems that can be referred to as CHP but
all of which still have an integrated system that proves to be efficient by recovering heat at the
same time producing electricity.
They usually consist of four main parts namely the engine/prime mover, a generator, a system to
recover heat and a control system. Heat is generated by the prime mover as it drives the engine,
this heat can then be recovered at the recovery unit.

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CHP can be driven by any fuel but natural gas has proven to be more dominant (Khalid Rehman
Hakeem, 2014).
figure 1. showing a schematic diagram of a combined heat∧ power system
Figure 1 can be referenced at (United States Environmental Protection Agency, 2013)
Prime movers
These are technologies that are reliable, mature and have been proven over the years. They
include reciprocating engines, gas turbines, combined cycle systems and even steam turbines. All
of which operate in a similar manner whereby the fuel is burned, mechanical energy is formed or
either steam is formed first then converted to mechanical energy. This energy in turn spins the
generator which produces electricity (Gus Wright, 2017).
Generators and recovery of waste heat
As usual generators convert the mechanical energy received from the prime mover to electrical
energy (Zied Driss, 2017).
The prime mover and generator both produce heat during their operations. These heat is captured
by heat recovery unit which then transfers it to the building on site.
CHP assessment tool

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This is a form of an online application that allows different users to acquire a direct valuation
and get the exact potential options of setting up a CHP on a specific site (GOV.UK, 2010). Helps
those who don’t have enough knowledge of cogeneration by guiding them step by step into
determining whether the place in question is suitable for installing CHP.
The simple user interface provides a learner with a quick way to determine a number of options
that would help in CHP analysis. These include, capital cost, CHP capacity, net present value
(NPV), primary energy savings and cost savings.
Advantages of Combined heat and power
1. Increased efficiency due to reduced energy consumption
Cogeneration is usually employed because of the potential increase in electricity and heat
production efficiency. Previous power plants usually loose almost 2/3 of their energy to waste
heat. CHP generally increase their efficiency from about 33% to over 70% (Thomas, 2010). The
significant improvement of environmental quality and power reliability while it functions also
makes it a better pick. This system generally uses low fuel and produces more electricity while
increasing both the electric and individual performance efficiency.
2. Reduced cost of energy
Because of their high efficiencies, they generally use less energy. This can be determined by
checking the initial cost of setting up a CHP technology which will be discussed in the following
sections of this paper. The initial cost can then be related to the electricity produced by the
system and that used by a conventional system. Apart from the reduced energy cost, CHP
systems also eliminate the need of setting up chillers or boilers as seen with conventional power
production and thus reduces the initial cost of setting up.

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Furthermore, cogeneration also offers the flexibility of offering electricity to neighbouring
locations incase the prices of electricity go up and with them being onsite they reduce the need of
complex transmission and distribution lines, thus reducing the losses (Cory, 2011).
3. Better power reliability
CHP will operate continuously given that there is continuous supply of natural gas unlike the
national grid that can be shut down for maintenance or encounter a fault which will leave it off
for a while. The continuous supply provided by CHP allows them to be a good choice when the
cost of fuel is low and the price of electricity is high, thus allowing sites to tend to their thermal
and electrical needs (Frangopoulos, 2017). Instead of generators CHP can be used to provide
uninterrupted power supply.
4. Improved environmental quality
This can be said to be as an effect of the increased efficiency of CHP systems. Due to the fact
that they consume less fuel and still produce heat and electricity equivalent to the conventional
methods. This means that they produce less pollutants in the air while burning less fuel. As a
result, greenhouse gas emissions such as carbon (iv) oxide, sulfur dioxide and nitrogen oxide
have gone down over the years (Flin, 2010).
5. Technology
Advancements in technology have made all industries to follow suite including application of
CHP technology. It has a wide range of applicability from industrial, residential and commercial
processes such as schools, which is the main focus of this paper and will be discussed in the
sections that follow.
Disadvantages of combined heat and power

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1. Intensive financially
In case of no funding from external sources, setting up a CHP system can be high. This is
why they cannot be installed on smaller scale/domestic use. They are only feasible in places
that operate large machinery or commercial buildings that house people (Goodhew, 2016).
2. There are some CHP technologies that use fuels which are not environmentally friendly
(Milton Meckler, 2010). But this will not be the main goal of this paper as we will
discuss a specific type of CHP model that uses natural gas as the raw material.
3. In most cases, some CHP are also not suitable for all sites. They are mainly important in
areas that require hot water and heating systems. In order to achieve maximum
efficiency, the demand for heat and power for larger scale systems need to maintain a
constant value ((EREC), 2010). Especially for heating purposes which is normally done
nonstop on larger systems.
An overview of the CHP technology has been highlighted by going through the various
advantages and disadvantages. The following sections now discuss the results obtained from the
CHP assessment tool by answering some outlined questions and shares in depth the different
types of CHP technologies especially the one involving reciprocating engines.

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Discussions
The following points can be drawn from the results obtained from the CHP model and also
coupled with some theoretical knowledge of the same.
1. The prime mover being selected by the CHP tool is the reciprocating engine which is also
a type of internal combustion engine. This is because it first produces electricity and the
excess heat produced in the process is used to heat rooms and other devices that might
need thermal energy. Prime movers are usually used to identify different CHP systems,
which are then divided into two types in terms of their generating priorities (Smil, 2010).
Namely the topping cycle CHP and the bottoming cycle CHP. The former produces
electricity first then utilizes the excess heat in cooling or heating applications while the
latter does the reverse and is usually referred to as the ‘waste heat to power’ process.
Prime movers commonly used in bottoming cycle include the steam turbine and organic
Rankine cycle turbine. From this discussion we can point out that this specific CHP
system observes the topping cycle system and hence the use of a type of internal
combustion engine (American Society of Heating, Refrigerating and Air-Conditioning
Engineers, Ashrae, 2015). Inappropriate selection of a prime mover usually leads to the
reduction of benefits gained by employing cogeneration. Therefore, considering the
performance characteristics of a prime mover is imperative in having a good generating
process. Other prime movers that can be used in the topping cycle include gas turbine,
fuel cell, microturbine and any other form of internal combustion engine.
Here are just some other advantages that make reciprocating engines a better choice than
other internal combustion engines.

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 They are flexible and can be used in a variety of areas.
 They rarely sacrifice efficiency even when the load is increased over a certain
period of time. They have the power to delegate duties to other units to
counterbalance losses that might be within the grid and maintain balance while a
few of the units remain online (Schobert, 2014).
 They have the ability to operate at part load (lower than 26%) without
compromising fuel efficiency.
 When compared to gas turbines, they need less maintenance procedures over the
years.
 And with the rise in technological advancements, the reciprocating engines have
evolved over the years and are now able to output more than 20 MW which is a
double rise compared to the value recorded a decade ago. This explains the rise in
engine-based power plants worldwide (Wang, 2014).
 They also have the rare ability of using NO water during their cycle as they rise to
full power in just less than 5 minutes.
 Based on their output, the reciprocating engines are significantly cheaper.
 They are also common because industries would like to cooperate with the new
federal emission limits by reducing emission of greenhouse gases (Mattair, 2013).
 All in all, the low price of natural gas beats all the advantages as it serves as the
main reason why industries would want to change their prime movers. The only
hinderance would be the lack of well established natural gas infrastructure in the
country and also globally which is something that will be tackled with time.

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2. It would be technically feasible to install a CHP system while not very cost effective at
the same time for this specific system. In order to positively affect the models, return on
investment (ROI) a high performing CHP is required (Ryszard Bartnik, 2017).
Technically it would be possible because of the wide integration and applicability that
CHP offers to industrial, residential and commercial process. Installations range from
small scale to large scale and apart from that there is the factor of CHP systems using a
variety of fuel options and use of various technologies in this case the reciprocating
engines which are readily available and suit institutions and commercial buildings that
require hot water and use space heating. The heat boiler that has been serving the
building for 7 years needs to be done away with because of its disadvantages such as
emission of greenhouse gases into the atmosphere which is not an issue when it comes to
using a CHP as a form of generation of electricity and heat. There would be a
significance increase in the efficiency of heat utilized in the building for this type of
system because the excess heat would not need to be transferred over long distances to
achieve its purpose. Furthermore, these CHP systems are mass-produced as fully
packaged units that require simple connections to the heating systems, electrical
distribution network and gas supply (D. Dowson, 2017). They can just be put in an
external plant compound or within a plantroom. However, the CHP site assessment tool
recommends using cogeneration when the current prices of gas and electricity have
changed thus making any engine, reciprocating engine, in this case cost effective.
On the other hand, it would be economically impractical to install this CHP system
because of the results obtained from the assessment tool. Firstly, the discount rate chosen
for this system arrives at a negative net present value (NPV) which defines the difference

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between the present value of cash outflows and cash inflows over a specific period of
time, the payback period in this case. The NPV can be calculated by first knowing the
present value (C. Arcoumanis, 2009).
The present value is usually calculated using the following formula
PV = FV
¿ ¿
where PV = present value
FV =future value
r =interest rate
n=number of years
Therefore, NPV can be obtained by adding and subtracting all present values.
From the results obtained, specifically the first column we can observe that the fuel
consumption of the CHP system is 449 MWh/yr. while the electricity generated and heat
recovered stands at 136 MWh/yr. and 209 MWh/yr. which is lower than the values seen
at the end of year 2016 in terms of consumption of the building, This can be seen as
saving but considering the initial cost of setting up a CHP and the number of years, 8.7
years (see first column of tool results ) that will be used to recover the money proves it
economically unfeasible. But after the number of years of recovery, the project would be
cost effective considering that the natural gas boiler that existed operated for 7 years and
the results of option 1 would only need a year and a half more to gain back the initial
investment. In this case maybe using a lower discount rate would have increased the NPV
to positive figures thus making the project economically viable. However, it is important
to note that an indicative check such as the spark spread which by definition is the

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difference between the price of NG and incumbent electricity tariff shows if a model is
viable that is if it between 4 and 8 (Alexander Eydeland, 2003). This is true for this case
because the difference is (10 p/kWh – 4 p/kWh) giving 6. This is just but an indicator
which does not match the overall results that are obtained from the CHP tool that clearly
indicates not viable.
3. The tool gives five options of CHP system that can be installed within the institution all
of which have different economic performances due to some difference they possess
which will be talked about in the following sections. But first it is important to know the
different aspects of a CHP system that actually make them differ in terms of their
economic performance.
There are different types of CHP systems as discussed previously, but our topping cycle
CHP can be built in various sizes/capacity which causes a huge difference in the options
provided by the tool. A system with a huge capacity would definitely consume more
natural gas than its smaller counterparts. The size of a plant can be said to directly affect
the costs incurred during a project i.e. directly proportional meaning an increase causes
an increase and vice-versa.
Apart from size, the economic performance of cogeneration can be directly influenced by
the location of the site where CHP has been installed (Mohammad Shahidehpour, 2003).
Those that are far from the building they serve might often encounter losses to the
environment especially those that transport the excess heat for heating and cooling
applications. But this doesn’t really affect this system because of its suitable location.
Option 1