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Combined heat and power CHP cogeneration plant

Combined heat and power (CHP) cogeneration

by Chris Woodford. Last updated: April 15, 2016.

The world's running out of oil, coal, and natural gas, but that's probably a good thing on balance because these dirty old "fossil fuels" are accelerating the problem of global warming and threatening major change to the climate. Unfortunately, we can't just stop using fossil fuels overnight: something like 80–90 percent of world energy still comes from them. Until renewable energy, such as solar and wind power, comes fully on stream, what can we do instead? One solution is to swap some of our power plants over to a different system called combined heat and power (CHP), also known as cogeneration. CHP plants make better use of the fuel we put into them, saving something like 15–40 percent of the energy in total. They're good for our pockets and good for the planet. So let's take a closer look at how they work!

Photo: A modern CHP power generator. Photo by Dennis Jones courtesy of US Department of Energy/NREL.

How does CHP work?

Photo of coal-fired electricity generating power plant.

A conventional power plant makes electricity by a fairly inefficient process. A fossil fuel such as oil, coal, or natural gas is burned in a giant furnace to release heat energy. The heat is used to boil water and make steam, the steam drives a turbine, the turbine drives a generator, and the generator makes electricity. (You can find out more in our main article on power plants.)

The trouble with this is that energy is wasted in every step of the process—sometimes quite spectacularly. For example, the water that's boiled into steam to drive the steam turbines has to be cooled back down using giant cooling towers in the open air, wasting huge amounts of energy—much of which literally disappears into thin air! Now a fuel-driven power plant has to work by heating and cooling—that's what the laws of physics say—but surely we don't have to waste quite so much energy in the process?

Photo: A typical coal-fired power plant. Photo by Warren Gretz courtesy of US DOE/NREL (US Department of Energy/National Renewable Energy Laboratory).

Instead of letting heat escape uselessly up cooling towers, why not simply pipe it as hot water to homes and offices instead? That's essentially the idea behind CHP: to capture the heat that would normally be wasted in electricity generation and supply it to local buildings as well. Where a conventional power plant makes electricity and wastes the heat it makes as a byproduct, a CHP power plant makes both electricity and hot water and supplies both to consumers. Cogeneration (the alternative name for CHP) simply means that the electricity and heat are made at the same time.

Simple artwork comparing the efficiency of a conventional power plant and a CHP combined heat and power cogeneration plant.

Artwork: How much more efficient is combined heat and power? A conventional plant is at best about 60 percent efficient (for every 100 tons of coal or other fuel it burns, 40 tons is completely wasted); a CHP plant can be 90 percent efficient or even more. That gives a huge saving in fuel and operating costs and a major environmental benefit.

Types of CHP

A micro CHP power turbine

The actual efficiency of a CHP plant depends on how well it supplies the heat it produces. Since the heat is generally carried as hot water, the efficiency is greatest when the power plant is closest to the buildings it's serving. In other words, CHP works best as a decentralized form of energy supply with more and smaller power plants built very close to local communities. Cutting the distance between power plants and consumers also makes the electricity supply more efficient: since the electrical power has to travel down shorter lengths of wire, less energy is lost due to resistance. Taking decentralization to its logical conclusion, it can even work out efficient for offices, schools, hotels, and apartment buildings to have their own mini or micro CHP power plant producing their electricity and hot water where it is consumed and sending any unwanted electricity to the power grid for other people to use.

Photo: A micro-CHP turbine produced by Capstone Turbine Corporation. It's powered by LPG (in this case, propane) supplied from the white tank at the back. Photo by Jim Yost courtesy of US Department of Energy/NREL.

In theory, you could make a CHP plant simply by sending the waste hot water from a conventional plant to local buildings. In practice, CHP plants make energy in completely different ways using entirely different heat engines (the machines that burn fuels to release heat). Smaller CHP plants often use what are essentially internal combustion engines (similar to gasoline engines in cars and diesel engines in trucks) to drive electricity generators, with heat exchangers recovering waste heat in hot water. Larger plants use very efficient gas and steam turbine engines. In future, CHP plants are likely to use fuel cells burning hydrogen gas.

None of this means CHP is a new or untested idea. The world's first proper power plant (built at Pearl Street in New York City by Thomas Edison in 1882) was essentially a CHP design: it supplied both heat and power to nearby buildings in Manhattan. CHP was a brilliant idea we somehow lost in the decades that followed, largely in the rush to create huge power plants that burned inexpensive coal. It's an idea we urgently need to rediscover in these environmentally challenging times.

A compact combined heat and power (CHP) woodchip gasification engine. Inside the compact combined heat and power (CHP) woodchip gasification engine.
Photo: A CHP power unit that runs on woodchips. The chips are loaded in at one end, converted to a gas inside the machine, and then the gas is burned to fuel the heat and power engine. The photo on the right shows the internals of the unit, including the electricity generating unit (colored orange) made by Generac. Both photos by Jim Yost courtesy of US Department of Energy/NREL.

How does micro CHP work?

Here (greatly simplified) are the basic components of a typical micro CHP unit. In practice, there are multiple heat exchangers, noise silencers, and other components I've deliberately omitted for the sake of clarity.

Simple numbered artwork showing the main components of a micro combined heat and power unit and how they work.

  1. Fuel (coal, natural gas, oil, or biomass) is added at one end.
  2. The engine (roughly the same size as a four-cylinder car engine) burns the fuel by ordinary combustion.
  3. An electricity generator is connected to and driven by the engine's driveshaft.
  4. Something like 15kW of electricity is produced, which can be used for conventional power or as an emergency supply.
  5. Exhaust gases from the engine flow through one or more heat exchangers, which remove most of their waste heat.
  6. A catalytic converter (similar to the one in a car) removes some of the pollution from the gases.
  7. The (relatively clean) exhaust emerges through a tailpipe or chimney.
  8. Cold water flowing into the heat exchanger picks up heat from the exhaust gas and exits at a much higher temperature. If it's hot enough, it can be piped directly into radiators or fed into a conventional central-heating boiler for further heating. A unit like this will produce about 40kW of thermal energy (heat).

Artwork: How a typical micro CHP unit works. Units like this are about 1.5m long, 1m wide, and 1m deep, and weigh around 750kg.

Pros and cons of CHP cogeneration

The efficiency advantages of CHP speak for themselves, but there are environmental benefits too. Every tonne of fossil fuel we avoid burning stops carbon dioxide from entering the atmosphere and reduces, just a little bit, the problem of global warming. Burning fewer fossil fuels also reduces air pollution and related problems such as water pollution and acid rain. Replacing huge power plants with more CHP plants that are much smaller makes us less dependent on the centralized energy network and, in theory, major system failures and outages (blackouts). Just like conventional power plants, CHP plants can run off virtually any fuel, from oil, gas, and oil to methane gas produced in landfill sites or power made by burning trash in municipal incinerators.

Pie chart showing total number of CHP installations broken down by fuel type, with fossil fuels representing the majority.

CHP has few obvious disadvantages. One problem is that the technology is currently more expensive and complex, so building CHP plants typically requires greater initial investment. Energy savings eventually pay back the investment, but more money still has to be spent upfront to begin with. Maintenance costs can also be greater for CHP. Another problem is that smaller-scale CHP plants produce electricity more expensively than larger-scale ones. Much more seriously, fossil-fueled CHP plants reinforce our dependency on the very fuels we should be trying to eliminate (though it is possible to run them on greener fuels such as biomass). And some critics argue that CHP is overhyped and less efficient than alternative technologies such as heat pumps, which could be a far better way to tackle climate change.

Chart: Does CHP risk locking us into fossil fuel power? This chart confirms that almost three quarters of current CHP systems in the United States are powered by natural gas, coal, or oil (black and gray slices), with renewables (notably biomass) and various types of waste powering just over a quarter. Please note that it's based on the total number of installations using each fuel type, not the total power generated by each fuel type, which would be a slightly different chart showing (I believe) even greater domination by natural gas and coal. Chart drawn by using data downloaded in April 2016 from the DOE CHP Installation Database, maintained by ICF International Inc. and funded by the U.S. Department of Energy.

Realizing the potential

Generally, there seems to be a growing consensus that cogeneration is the way forward for large-scale electricity and heating supplies, and we're likely to see thousands more CHP plants appearing all over the world in the coming decades. Take the United States as an example. According to a March 2016 report by the US Department of Energy (DOE), "The United States has the potential for more than 240 gigawatts (GW) of efficient CHP in industrial facilities and commercial buildings," at over 291,000 sites, which is equivalent to about 100 large (2–3GW) coal or nuclear power plants. That's about three times more CHP capacity than today (the current US figure, for 2016, is 82.7GW), but a massive 60 times more CHP installations (compared to today's 4400 CHP sites). While existing CHP installations tend to be big units, typically based in places like chemical, refining, or manufacturing plants, the DOE sees massive potential for expansion into a much wider range of large buildings, from retail stores and universities to office complexes, hotels, and hospitals.

Find out more

On this website

On other sites

There are some excellent sources of further reading on the Web. We recommend you try these two sites to start with:



For older readers

For younger readers

Technical documents

Reports ans statistics


If you're looking for much deeper technical detail, patents are a good place to start. Here are a few recent ones covering CHP and cogeneration:

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Woodford, Chris. (2009/2016) Combined heat and power (CHP) cogeneration. Retrieved from [Accessed (Insert date here)]

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