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Micro-CHP: Unleashing the Benefits of Cogeneration in the Residential Sector

By David Landolfi, DGA 2021 Winter Intern

Combined heat and power (CHP), or cogeneration, is a technology that generates heat and electricity in a single system. These units can support applications with a range of power and thermal loads, including military bases, hospitals, and schools. Micro-CHP systems are generally no greater than 50 kW in size, compared to the average CHP size of about 17 MW. This makes micro-CHP an effective solution for sectors with relatively low energy demand, such as residences and small commercial buildings. These systems have the potential to reduce fuel usage, thereby cutting emissions and lowering consumer energy costs. These units also provide an additional layer of resiliency for households and small commercial buildings in the face of increasingly severe natural disasters and grid outages.

Micro-CHP systems operate on the same fundamental principles as larger CHP units and boast a similar level of customization. Smaller CHP systems’ capacity factors are as high as 95 percent, maximizing fuel efficiency and reducing energy costs. They can be powered by traditional fuels such as natural gas or propane, but also have the potential to integrate with low-carbon fuels like biogas, renewable natural gas (RNG), or hydrogen. Similarly, micro-CHP units can utilize a variety of engines, including microturbines, reciprocating engines, and fuel cells. Micro-CHP systems are a similar size and shape to standard domestic boilers, allowing high versatility for installation locations.

The deployment of micro-CHP in the United States has been almost nonexistent, while Europe and Japan have dominated global installations. Despite this, the potential for installing micro-CHP units in the U.S. residential and small commercial buildings sectors is significant. The residential sector alone consists of 122 million households that consume 21 percent of the nation’s total final energy. Households rely heavily on conventional boilers and the grid for their energy, and micro-CHP systems provide an economic, efficient, and resilient alternative.

Although micro-CHP is not widely adopted in the U.S., there are a few examples of successful deployments. In Rexburg, Idaho, the AmericInn Lodge & Suites installed a 38-kW micro-CHP system after their conventional boilers struggled to meet the facility’s high thermal load. The CHP unit now meets 100 percent of the inn’s thermal demand and supplies around one-third of its electricity. The inn saves roughly $9,500 in annual energy costs and expects a full payback eight years after installation. The micro-CHP unit is able to support the facility’s continuous thermal and electric loads, providing a reliable source of energy and significantly reducing costs.

Also in Rexburg, Idaho, the Towers II student apartment complex at Brigham Young University deployed a 15-kW packaged micro-CHP system to lower energy costs and increase the facility’s competitiveness in the housing market. The CHP unit provides heat throughout the 75,000 square foot facility and supplies electricity to the building’s common areas, reducing the reliance on grid energy. Towers II saves over $15,000 on annual energy costs and is expected to have a payback time of five years. The system is fueled by natural gas, which allows the facility to maintain its power in the case of an unexpected grid outage.

As the examples above highlight, micro-CHP systems have several benefits when compared to conventional power and thermal sources. The cogeneration of heat and electricity reduces reliance on the grid, which is vulnerable to natural disasters and prone to unexpected outages.  CHP units are usually installed on-site, which mitigates any energy losses or costs due to transmission and distribution.

Micro-CHP units also have higher capacity factors over traditional generation, which lowers costs, fuel use, and emissions. To cut costs and emissions even further, micro-CHP systems can be integrated with low-carbon fuels, such as biogas, RNG, or hydrogen, a next-generation fleet of CHP systems known as “CHP 2.0.”

Buildings are acknowledged as an area that will be difficult to decarbonize, and small-scale CHP systems can make significant strides in lowering their energy consumption. Moreover, micro-CHP units can add another level of resiliency in the case of unexpected outages, keeping the lights on in millions of homes during a grid failure.

Learn more about CHP as a climate change solution by reading our report, CHP and a Changing Climate: Reducing Emissions and Improving Resilience.

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