CHP – How does it work?

Combined heat and power (CHP) – also called cogeneration – is the simultaneous conversion of primary fuel into electrical/mechanical energy and useful heat which can be used for heating purposes or as process steam in industrial applications.

CHP is a highly efficient process to meet existing parallel electricity and heat demands and thus represents a “bridge” between the heat market and the electricity market.

While in conventional power plants between 45 and 65% of the energy contained in the fuels burned to produce electricity is dispersed in the atmosphere and/or water as waste heat, the efficiency of CHP production is up to 40% higher than separate production based on the same fuels. And the choice of fuels is almost unlimited.

CHP in district heating

District heating is the supply of heat (from any source) on the basis of a contract and through a heat carrier medium. Or, in simplified terms: a heating system in which water is heated in one or several larger units and then delivered in the form of hot water or steam via pipes to other places (buildings or industrial processes) where the heat is extracted from it.

Modern, pre-insulated pipes act as highly sophisticated thermos flasks, reducing heat losses over the distance to a minimum.

In Western Europe, about 70 to 80% of district heat is produced in CHP mode.

Most of the biggest European cities have District Heating and/or cooling networks: Amsterdam, Belgrade, Berlin, Bratislava, Budapest, Copenhagen, Frankfurt, Gothenborg, Hamburg, Helsinki, Lyon, Milan, Moscow, Munich, Nottingham, Paris, Prague, Riga, St. Petersburg, Sofia, Stockholm, Tallinn, Vienna, Vilnius, Warsaw&

District heating systems provide the necessary heat load for high-efficiency CHP plants and, at the same time, make it also possible to use renewable energy sources (RES) such as geothermal heat and biomass for urban heat demands. District heating systems deliver now 1 EJ annually in EU, out of all domestic and industrial heat demands of about 20 EJ .

Industrial CHP

CHP is also used for industrial purposes to meet demands of both electricity and heat (e.g. in the form of process steam). Energy-intensive industries like the paper and chemical industries are very familiar with CHP. Process steam is generally required at higher temperatures than district heat.

Industrial CHP installations are often located at the place of consumption. However, some district heating systems may also supply heat for industrial applications.

Where there is a district heating network with CHP, it is in specific cases more efficient to connect these buildings to the DH network than to install a localised CHP.

A newcomer: district cooling

Using the principle of the refrigerator, it is also possible to use the same infrastructure to provide heating in winter and comfortable indoor cooling in summer. This technology (trigeneration) is significantly more energy-efficient than the separate production of electricity, heating and cooling. The demand for comfort cooling is steadily increasing in all European countries. This leads to greater demand for electricity especially during summer. Recent years have seen a rise in the number of air-conditioning systems in southern European countries. This creates considerable problems at peak load times, increasing the cost of electricity and disrupting the energy balance in those countries (examples: Italy and Greece).

Technologies applied in the production of district cooling include large heat pumps, absorption technology and so-called “free cooling” with lake/deep sea water. District cooling systems can be found amongst others in Paris, Stockholm, Gothenburg,Toronto, Chicago and Pacific Hawaii.

Why is it important?

District heating and cooling, often labelled as mature technologies, can expand further in an extended EU and offer higher energy efficiency and higher security supply with the benefit of lower carbon dioxide emissions.

According to official EU sources , the EU imports more than 50 % of its currents energy needs and if current trends persist the figure could be 70 % in the year 2030. The largest single user of final energy is the heat market. CHP/DHC is thus extremely well placed to help preserve precious resources and, at the same time, deliver a significant contribution to reducing carbon dioxide emissions. Besides saving fuels and thereby avoiding CO2 emissions, the centralised production of heat saves other emissions (SO2, NOX, particulates, etc.) which can be better filtered than in smaller units.

In addition the fuel neutrality of CHP/DHC, which can use a wide range of different fuels from biomass to coal and gas, also contributes to a greater diversity in the fuel mix thereby further decreasing the dependency.

As regards renewable and waste fuels, these are often low-grade fuels such as biomass (straw, wood chips and wood pellets, waste from the agricultural and wood processing industry, household waste) and relatively difficult to use for combustion compared to natural gas and oil. CHP/DHC systems, provide an optimal infrastructure to use these fuels as efficiently as possible and in an environmentally safe way. In addition they provide the precondition for the large-scale expansion of geothermal energy, heat pumps, and fuel cells in the heat market.

Who benefits?

CHP/DHC systems offer the opportunity for local communities to combine in an ideal way numerous functions and services which need to be taken care of – from the supply of heat, cold and electricity to waste management and industrial processes. They facilitate the integrated use of all kinds of local resources, from waste (households, industry, forestry) to geothermal heat, biomass and sewage gases. What cannot be used within one customer’s activities and can be made available to others. As a consequence individual chimneys disappear and local emissions are significantly reduced – while local employment is secured.

The customer benefits from gentle supply of heat and warm water as well as from consistent safety and reduced space demand: no fuel storage, no burning flame inside the building, no boiler room, no hassle with maintenance. Furthermore the flexibility of the systems allows CHP/DHC companies to optimise the fuel use for the sake of price stability.

Think globally, act locally: change needs cooperation

If policymakers, local communities, investors, operators and consumers team up, tremendous opportunities open up for improving the ecological balance of energy supply activities.

At the beginning of 2004, the European Union has adopted a Directive on the promotion of cogeneration based on a useful heat demand in the internal energy market ( This Directive must now be transposed into national legislation by the Member States. Successful implementation measures will be paramount for the success of the Directive – and the success of CHP/DHC in Europe.

Which are the national potentials for increasing the use of CHP/DHC? The first step is to analyse the current situation and to spot unexploited opportunities. How big is the heat load and where? How are the heat and cold demands likely to develop? How much losses occur at which stage in the conversion and distribution chain? Which energy sources are being used and which other sources are/could be made available? Can waste heat be recovered? Which are the costs of different options and how can options be combined in an economically and ecologically favourable way?

With this information, effective legislation, measures and projects can and should be conceived in line with the requirements of the Directive – including timetables, costs and benefits.

Euroheat & Power

Euroheat & Power unites the CHP/DHC sector throughout Europe and beyond, with members in 32 countries: all existing national district heating associations in EU countries, utilities operating CHP/DHC systems, industrial companies, manufacturers, reseach institutes, consultants etc.

The association works for energy supply in balance with ecology, promoting the advantages of CHP/DHC in general and the use of waste heat and renewables in particular, and pursues international measures to enhance innovation and the further development of the sector. It represents the interests of the sector at the political level, in particular in relations to the European institutions, and provides a contact point for expert advice and analysis for CHP/DHC related issues to all interested parties.


Sabine Froning
Euroheat & Power
Av. de Tervuren 300
1150 Brussels

Phone: +32-2-7402110
Fax: +32-2-7402110

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