Applications Manual

Some preliminary guidelines are available here on a number of technical issues that are important for applying CHP systems for commercial buildings. The information is organized in the following major sections:


The primary technical criterion for applying a CHP system is that the need for electric power for a building should coincide with its need for heating or cooling. Electric power is first generated and then thermal energy is recovered for use in a process that is applicable for the site.

Since on-site generation improves power reliability by making it less dependent or completely independent of grid reliability, CHP systems become attractive where reliability of power is necessary, especially in situations where back-up power is installed or planned.

CHP systems become attractive because they reduce operating cost by savings generated through reduction in demand charges or peak rates for electrical consumption. Not only do CHP systems reduce your electric consumption from the grid because they generate electricity, they also offset the use of electricity by reducing the consumption of electricity to heat and/or cool a building. These savings are higher when the electric energy rates and power demand charges are high, especially if summer and peak demand charges apply, and gas rates are relatively lower. Therefore, consider applying CHP systems where

  • electric energy rate and power demand charge are high relative to gas rate,
  • and the building needs high reliability of power supply.

Even though in deregulated energy markets the prices of electric energy and gas may fluctuate significantly, CHP could remain attractive because many of the central station electric generating facilities that are now being built or considered use natural gas. Therefore, the price of electricity will likely fluctuate in concert with natural gas prices. Since CHP is more efficient, it is conceivable that the cost to provide your facility with both electricity and heat/cooling might become even more financially sound in a deregulated environment. In addition, the use of CHP may actually make the energy market more stable by reducing the peak demand on the electric grid.

CHP systems could be attractive for many types of buildings, including, but not limited to the following:

  • Hospitals
  • Educational facilities
  • Office buildings
  • Data Centers
  • Nursing homes
  • Hotels
  • Supermarkets
  • Refrigerated Warehouses
  • Retail stores
  • Restaurants
  • Theaters
  • Ice Arenas


Design of CHP systems depends on many factors, including the following:

  • Building type
  • Operating schedule
  • Heating and cooling loads
  • Electric and fuel demands
  • Utility rates
  • Electric energy buyback options
  • Importance of power reliability

A couple of examples for integrating power generation equipment with various thermally-activated equipment are shown in the following two process schematics:

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CHP Integration Test Facility graphic
Various power generation equipment are suitable for different ranges power capacity needs. The following table shows the comparative capacity ranges and other information for various power generation equipment.

Table 1 image

When designing a CHP system, it is important to size the system to meet thermal energy needs of the building. The following guidelines can be used for estimating availability of thermal energy from the stated power generation equipment and sizes.

Generation Equipment


Thermal Energy Available


1 MW

3,500 lbs/hr steam @15 psig plus 100-200 GPM hot water

Industrial Turbine

1 MW

8,000 lbs/hr steam @ 125 psig


120 kW

30-90 GPM of hot water @ 200°F or thermal fluid @ 300°F


30 kW

10-40 GPM of hot water @ 200°F or thermal fluid @ 300°F

It is also important to match the temperature of the heat source available from various power generation equipment to that required by different thermally activated equipment. Some general guidelines for such matching are shown in the following diagram.

Recoverable Energy Quality (Temperature) and HVAC Technology Match

Successful CHP systems are based on the realization of the following basic requirements:

  1. The system is sized to not exceed the thermal needs of the process because otherwise the overall efficiency of the system is reduced which reduces the overall savings.
  2. Natural gas is used as the preferred fuel for commercial CHP, because of its low emissions and generally wide availability.
  3. To enable efficient power generation, thermal energy is generated at substantially higher pressure and temperature than that which is needed for its final use. For example, the outlet temperature and pressure of steam from a heat recovery steam generator is significantly higher than the conditions needed to heat hot water for heating or domestic hot water, or to preheat boiler feedwater or ventilation air, or for other typical building thermal loads.
  4. Heat load and power demand occur simultaneous at the plant.
  5. Generally, simultaneous demands for heat and power must be present for at least 4,500 hours a year, although there are applications where CHP systems may be cost effective with fewer hours. The most cost effective applications are those that have 8,760 hours per year.
  6. Heat-to-Power ratio for the plant must not fluctuate more than 10 percent.
  7. Technology for implementing a CHP must be commensurate with the plant's required Heat-to-Power ratio.
  8. The viability of CHP depends on energy prices. The highest potential for CHP occurs when the electric utilities' prices are high while prices for natural gas are low.
  9. The financial feasibility of a CHP system is inversely related to the plant's capital and maintenance cost. In other words, the higher the capital costs or the higher the maintenance costs, the less likely the CHP facility will be financially viable.
  10. The CHP system must have high availability.