Analysis of cost and CO2 savings from combined heat and power (CHP) for new-built apartment applications

In the UK's domestic sector, heat is conventionally generated on-site by gas boilers and electricity is generated off-site by large centralised power plants and distributed to homes through the electrical grid. There are, however, considerable energy losses associated with this arrangement, in particular thermal losses due to electricity generation and distribution. Switching households to distributed generation, such as small-scale Combined Heat and Power (CHP) generators has the potential to avoid these losses. CHP uses a single fuel to cogenerate electricity and heat. Due to the efficient use of fuel, these generators are commonly regarded as an efficient use of fuel, which can ultimately reduce CO2 emissions. Given their high capital costs, small-scale CHPs are suitable for applications with continuous demand for heat. Considering this, CHPs are typically coupled with communal heat networks. These networks connect multiple dwellings or buildings via hot water carrier pipes. Such infrastructure provides the basis to transport cogenerated heat to the point of consumption. Apartment blocks are among the common applications of communal heat networks in the UK. Due to variation in energy consumption patterns in dwellings, the overall heat and electricity demands of the apartment blocks tend to diversity over time. This provides the suitable basis for CHP s operation. This study evaluates the economic feasibility and CO2 savings of CHPs for new-built apartment blocks. Initially, the energy demand profiles of various sizes of apartment blocks are modelled. Additionally, outputs of the cogeneration systems are simulated, where attention is paid to model the operational losses of the CHP units. The CO2 savings of the generation systems with CHPs are calculated based on the CO2 intensity of the displaced electricity. The results showed that the economic feasibilities of the cogeneration systems depend on the operating periods of the CHP units. Furthermore, the impact of temporal diversification of heat load on the operating period of the CHP units reveal that less insulated apartment blocks which contains larger dwellings tend to provide better economic returns. This study mainly indicated results based on CHP s operating annual operating hours. The analysis indicated that none of the cases in which the CHP unit operates below 2000 hours/year, achieved economic feasibility. The outcome from the simulations suggested that the payback periods range between 5.6 to 15 years. The tolerable capital cost analysis showed that the economic contribution of the increasing operating period, decreases after operating for 5000 hours/year. Additionally, this study separately evaluated the short-run (first year of operation) and long-run (lifetime savings) CO2 savings of each case. The short-run CO2 savings suggested that the cogeneration systems displace an average of 0.52kgCO2/kWh. It was highlighted that the short-run CO2 intensities are significantly higher than values which would neutralise the savings of gas-powered cogeneration systems. Considering the expected decarbonisation of the grid, the long-run CO2 savings of the cogeneration system were assessed for two scenarios. It was found that the decarbonisation of the electricity delivered by the grid is not quick enough to significantly impact the long-run CO2 savings of the cogeneration systems.