Flexible CHP: Supporting a Modern Electric Grid

Mar 11, 2021


By Lynn A. Kirshbaum, Deputy Director 

Combined heat and power (CHP), also known as cogeneration, is a technology that uses a single fuel source to generate both heat and electricity. CHP systems generate electricity and capture the heat that would otherwise be wasted to provide useful thermal energy, such as steam or hot water, that can be used for space heating, cooling, domestic hot water, and industrial processes.

CHP systems are typically located at facilities where both electricity and thermal energy are needed and designed to produce onsite, baseload electric and thermal energy for a facility. However, flexible CHP systems can also provide generating capacity to the grid when demand increases or intermittent renewable resources are not available.

Flexible Combined Heat and Power (CHP) Systems – The Concept

Source: U.S. Department of Energy: The Office of Energy Efficiency and Renewable Energy. “Flexible Combined Heat and Power (CHP) Systems.”

This flexible CHP approach provides a distributed energy resource that the grid could call upon during times of high demand. While much of our electricity is generated at central power plants and distributed through transmission and distribution systems, distributed generation allows electricity to be generated close to where it will be used, serving a single facility or as part of a microgrid. Distributed energy resources can contribute to overall electric grid reliability and energy security, and can provide power to an individual facility or several as part of a microgrid. In addition, CHP owners could generate revenue from selling the excess electricity to partly offset the costs of owning and operating a CHP system.

Flexible CHP systems can also support renewable energy resource deployment by facilitating the integration of intermittent renewables, such as wind and solar, while providing locational value to utilities. An ICF paper noted that models in Europe show that flexible gas-fired CHP systems may be the most affordable and practical option to balance the increase of renewable loads with variable output.

A recent analysis by Oak Ridge National Laboratory shows that the availability of CHP can provide significant value to the grid through the provision of energy, as well as contingency and regulation ancillary services. The report noted that some of the ways that CHP can help the grid are difficult to monetize, such as a reduction in grid stress hours.

In addition to providing electric reliability for the host facility and increasing reliability for the surrounding utility grid by reducing congestion, CHP systems can also provide essential grid services through frequency response, voltage control, and ramping capabilities. Increasing the use of CHP to serve offsite loads and support the electric grid could provide system-wide benefits, such as lower wholesale energy costs, decreased transmission congestion, and improved grid stability.

At their fall 2020 CHP workshop, the U.S. Department of Energy’s Advanced Manufacturing Office (DOE AMO) noted that while many of the technologies required for flexible CHP systems are currently available, additional research and development will be needed to ensure that CHP systems can be integrated into complete CHP packages that can interface seamlessly with the grid while remaining affordable for system owners. DOE AMO’s CHP research and development project portfolio aims to enable private-sector development of flexible CHP systems that can play a role in stabilizing the electric grid and improving its resilience. As climate-related impacts increase risks for critical, interconnected systems, resulting in grid outages, CHP’s high level of resiliency can help facilities to maintain operations, either individually or as part of a microgrid.

Flexible CHP systems can provide a variety of benefits to CHP site hosts and their communities, utilities, and the gird system as a whole, including electric reliability, resiliency in the face of severe weather or other grid outage events, reduced emissions, integration of intermittent renewable resources, and cost savings. Additional research and analysis to further integrate flexible CHP systems into the electric grid can help to achieve the realization of these benefits.

Learn more about CHP’s emissions and resiliency benefits by reading our reportCHP and a Changing Climate: Reducing Emissions and Improving Resilience.

Learn more about CHP’s role as a resilient resource and in microgrids by reading our recent blog posts.

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