CHP: A Smart Way to Generate Power and Heat for Industrial Manufacturing (PART 1)

Combined Heat and Power (CHP) systems, or cogeneration plants, integrate electricity generation with thermal energy recovery to achieve total thermodynamic efficiencies of 65% to over 90%. By deploying an onsite prime mover—such as a reciprocating gas engine or gas turbine—facilities can capture exhaust gases and cooling-jacket heat that would otherwise be rejected to the atmosphere. This recovered thermal energy is converted into high-pressure steam, hot water, or chilled water, displacing the fuel consumption of separate utility boilers and reducing reliance on the electrical grid.

This article details the mechanical configurations of industrial CHP plants, provides the thermodynamic equations used to evaluate their performance, and outlines their technical integration into low-carbon manufacturing processes.

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What is CHP and What is it Used for in Industrial Manufacturing?

CHP stands for combined heat and power (also known as cogeneration). It is an integrated energy system that generates both electricity and useful thermal energy (heat) from a single fuel source, such as natural gas, biomass, biogas, or hydrogen. A typical CHP plant is designed to capture the thermal energy that would otherwise be wasted in conventional power generation systems and repurpose it for onsite industrial processes.

In a conventional system, electricity is imported from the grid while process steam or hot water is generated separately using onsite boilers. This separate generation model suffers from high thermodynamic losses, with up to 50% of the fuel's energy rejected as waste heat at the utility power station and lost during transmission. An onsite industrial CHP installation avoids these transmission losses and recovers thermal energy directly at the point of generation.

Primary Applications of CHP in Industrial Manufacturing

• Providing power and heat for industrial processes: Many manufacturing processes require both electricity and high-pressure steam or hot water. Key sectors include chemical processing, metal manufacturing, oil refining, pulp and paper, and pharmaceuticals. A CHP plant can supply electricity and heat across various voltage and temperature ranges, from low (<1 kV and <100 °C) to high (>10 kV and >400 °C), tailored to specific industrial needs.
• Providing power and heat for industrial buildings: Factories, large-scale warehouses, and assembly workshops require reliable space heating, ventilation, and cooling. CHP systems can deliver electricity and thermal energy at lower ranges, typically <1 kV and temperatures between 35 °C and 55 °C, depending on the HVAC and building integration.
• Providing power and heat for district networks: For clustered industrial areas, such as industrial parks, science campuses, or manufacturing hubs, a centralised industrial CHP plant can distribute power and thermal energy to multiple facilities. This shared infrastructure minimises capital costs per user and maximises system-wide efficiency.

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How Efficient is a CHP Plant for Industrial Manufacturing?

The overall thermodynamic efficiency of a CHP plant depends on several design factors, including the type of prime mover used, fuel quality, and the matching of electrical and thermal loads.

To evaluate performance, the overall system efficiency (${\eta }_{\text{total}}$) is calculated using the following formula:

$${\eta }_{\text{total}}=\frac{P_{\text{electrical}}+Q_{\text{thermal}}}{E_{\text{fuel}}}\times 100$$

Where:

• ${\eta }_{\text{total}}$ is the total thermodynamic efficiency of the CHP system (expressed as a percentage).
• $P_{\text{electrical}}$ is the net electrical power output of the generator.
• $Q_{\text{thermal}}$ is the useful thermal energy recovered and delivered to the manufacturing process.
• $E_{\text{fuel}}$ is the total energy input of the fuel, evaluated using its lower heating value (LHV).

The Type of CHP System

The core of any CHP plant is its prime mover—the technology used to convert fuel energy into mechanical energy, which then drives the generator. The four most common configurations in industrial CHP applications are:

• Reciprocating Engines: These internal combustion engines use natural gas, biogas, or diesel to drive an alternator. High-temperature exhaust and jacket cooling water are passed through heat exchangers to produce hot water or low-pressure steam. They offer rapid ramp rates, frequent start-stop capabilities, and operational flexibility.
• Gas Turbines: Fuel is combusted to drive a turbine connected to an electric generator. The extremely hot exhaust gas (typically >450 °C) is channelled through a Heat Recovery Steam Generator (HRSG) to produce high-pressure superheated steam, which is ideal for heavy industrial processes.
• Steam Turbines: Often used in heavy industries with abundant solid fuel or waste products (e.g., pulp and paper mills burning black liquor, or biomass plants). Fuel is burned in a high-pressure boiler to produce steam, which drives a steam turbine to generate electricity. Lower-pressure steam is extracted from intermediate stages of the turbine for process heating.
• Fuel Cells: An electrochemical device that converts fuel (often hydrogen or reformed natural gas) directly into electricity and high-quality heat without mechanical combustion. Though capital costs remain high, fuel cells offer exceptional electrical efficiency and near-zero local criteria emissions.

The Electrical Efficiency

Electrical efficiency represents the fraction of fuel energy converted directly into net electricity. This parameter is highly dependent on the choice of prime mover and the size of the installation. For industrial-scale installations, typical electrical efficiencies range from 25% to 50%. Large gas turbines and advanced fuel cells generally occupy the upper end of this range.

The Thermal Efficiency

Thermal efficiency measures the proportion of fuel energy successfully recovered as useful heat for industrial processes. Thermal efficiency depends heavily on the temperature requirements of the factory and the design of the heat exchangers. Typical thermal efficiencies for industrial CHP installations range from 40% to 60%.

When combined, the total system efficiency of a modern CHP plant routinely reaches 65% to over 90% in state-of-the-art, tightly integrated facilities. This represents a major thermodynamic improvement over separate grid-supplied electricity (which averages 35% efficiency due to generation and transmission losses) and dedicated thermal boilers (which operate at roughly 50% to 80% efficiency).

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What are the Pros and Cons of CHP for Industrial Manufacturing?

Before deploying an industrial CHP project, developers must balance several technical, financial, and operational trade-offs.

Advantages of Industrial CHP

• Lower Operating Costs: Generating power onsite is often cheaper than importing electricity from the grid, particularly when there is a strong "spark spread"—the difference between the price of natural gas (or alternative fuel) and the price of grid electricity.
• Superior Energy Efficiency: Because they generate power and heat simultaneously near the point of use, CHP plants reduce energy waste and transmission losses, lowering overall primary energy consumption.
• Enhanced Grid Resilience: A properly configured CHP plant can operate in "island mode." This allows the manufacturing facility to disconnect from the public grid and maintain continuous power supply during grid outages, protecting continuous processes from expensive shut-downs and equipment damage.
• Substantial Emissions Reductions: By displacing fossil-fuelled grid power with thermodynamically optimised onsite generation, industrial facilities can significantly lower their greenhouse gas emissions, especially when utilising transition fuels or renewable feedstocks.

Challenges of Industrial CHP

• High Capital Expenditure: The upfront cost of purchasing, installing, and integrating a CHP system—especially when retrofitting an older, operational factory—is substantial. Payback periods can range from 3 to 8 years depending on local utility tariffs.
• Technical Complexity: Designing, operating, and maintaining a high-pressure steam and electrical generation system requires dedicated onsite engineering expertise or long-term service agreements with specialised contractors.
• Regulatory and Grid Connection Obstacles: Operators must navigate complex regulatory frameworks to obtain air permits, fuel storage licences, and grid connection agreements (such as EREC G99/G100 compliance in the UK) if they intend to export surplus electricity back to the public network.
• Fuel Supply and Price Volatility: Because CHP systems are fuel-dependent, severe fluctuations in the price of natural gas or biomass can directly impact the economic viability of the plant.

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How Much Can CHP Contribute to Net Zero and Decarbonisation Goals?

Industrial manufacturing is one of the most challenging sectors to decarbonise due to its high-temperature heat requirements. A well-designed CHP plant offers a practical pathway to immediate emissions reductions while cleaner technologies mature.

According to data from the International Energy Agency (IEA), wider deployment of CHP could reduce global carbon dioxide (CO₂) emissions from industrial manufacturing by up to 1.7 gigatons per year by 2050, representing a 17% reduction in industrial emissions and a 5% reduction in total global emissions.

The role of industrial CHP systems in reaching net-zero targets is evolving. While historically reliant on natural gas, modern CHP systems are increasingly designed to run on low-carbon and renewable fuels, such as:

1. Biogas and Biomethane: Captured from organic waste streams, agricultural residues, or wastewater treatment facilities.
2. Green Hydrogen: Produced via water electrolysis powered by renewable electricity.
3. Sustainably Sourced Biomass: Utilising forestry residues or industrial wood waste to generate high-temperature process steam.

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Is CHP Future-Proof for Industrial Manufacturing?

To remain viable in a decarbonising economy, industrial CHP plants must adapt to changing fuel supplies and grid dynamics. Several factors are key to ensuring that investment in a CHP plant remains future-proof:

• Fuel Flexibility and Hydrogen Readiness: Modern turbine and engine manufacturers now offer units capable of running on hydrogen-natural gas blends (often up to 20% hydrogen by volume) with pathways to upgrade to 100% pure hydrogen as supply networks expand.
• Integration with Hybrid Microgrids: Modern CHP systems can be integrated alongside onsite solar photovoltaics (PV), wind generation, and battery energy storage systems (BESS). An intelligent energy management system can forecast and recommend optimal dispatch strategies, enabling operators or building-management systems to run the CHP plant during validated change windows when renewable output is low or grid tariffs are high.
• Carbon Capture, Utilisation, and Storage (CCUS): For large-scale industrial CHP plants, capturing CO₂ directly from the exhaust stream offers a path to carbon-neutral or even carbon-negative power and heat generation when paired with bioenergy (BECCS).
• Proactive Policy and Regulatory Alignment: Success depends heavily on supportive national policies, such as carbon pricing, clean energy subsidies, and streamlined grid-interconnection processes that reward high-efficiency cogeneration.

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CHP in the Food Industry: A Closer Look

The food and beverage sector is an ideal fit for industrial CHP installations due to its continuous, coincident demand for low-to-medium temperature thermal energy and reliable electricity.

Case Study: A Large-Scale Brewery

Consider the high energy demands of a commercial brewing facility:

• Boiling and Pasteurisation: Brewing requires continuous high temperatures to boil the wort and pasteurise the finished product. An onsite CHP plant can generate electricity to run packaging lines and pumps while routing its exhaust through an HRSG to generate the clean, low-pressure steam required for these thermal processes.
• Process Refrigeration (Trigeneration): Once brewed, beer must be chilled and stored at low temperatures. By integrating an absorption chiller into the CHP system (a configuration known as Combined Cooling, Heating, and Power, or CCHP), the plant can use waste heat to drive an absorption refrigeration cycle (commonly using a lithium bromide or ammonia-water solution). This converts waste heat directly into chilled water for fermentation tank jackets and cold storage units.
• Sterilisation and Clean-in-Place (CIP): Strict hygiene standards require frequent sterilisation of vats, pipework, and kegs. The CHP system provides a continuous, reliable source of hot water and steam, eliminating the fuel costs associated with running auxiliary standby boilers.
• Carbon Footprint Reduction: Under growing consumer and regulatory pressure to reduce emissions, breweries can install CHP units designed to run on biogas generated from their own wastewater treatment plants. This creates a circular, highly decarbonised onsite energy system.

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Conclusion

The deployment of Combined Heat and Power systems provides a thermodynamically proven method to optimise industrial energy use. By generating electricity and thermal energy simultaneously from a single fuel source, a CHP plant can lower operating costs, improve power reliability, and significantly reduce carbon emissions.

While the upfront capital requirements and grid integration processes are complex, the versatility of industrial CHP technology makes it a key tool for transition planning. As industries move toward net-zero targets, the ability to transition these plants to run on biogas, biomethane, and green hydrogen ensures that CHP will continue to play a central role in sustainable manufacturing.