What’s Missing When We Value CHP?

Written by Gita Subramony, ERS for Zondits, May 2, 2018

Combined Heat and Power (CHP) can be a more efficient way to generate electricity. For facilities implementing CHP, the value proposition typically centers on utility bill reduction. Using natural gas to generate electricity on-site can be cheaper than buying electricity from the grid, especially when the heat product from the CHP is used as often as possible and when the system can be utilized to reduce demand charges. CHP has another value proposition as well: resiliency. This benefit is not fully valued, however, when CHP projects are being considered.

A recent ACEEE report describes the lack of data present to accurately value the resiliency benefit of CHP. The report also proposes a distributed energy resource resiliency value (DERRV) framework to present a methodology for better assessing the resiliency value of CHP to facilities, communities, and the grid.

According to the report, CHP can help provide additional grid reliability as well as resiliency. Reliability is defined as the “degree to which an energy resource is available.” An unreliable power supply can incur losses for certain types of customers including hospitals, data centers, and industrial facilities. Resiliency refers to how quickly a system can recover from a major outage caused by disastrous and infrequent events (such as hurricanes).

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