Combined Heat Power
"new technologies now make it possible to generate electricity at the level of the home, business, or urban building. This technology, called Combined Heat Power (CHP) or cogeneration (lots of resources are available on this topic). In microCHP systems, you either generate electricity as a byproduct of heating or heating as a byproduct of electricity generation. It does the following:
It allows production of electricity within the structure it will be used. Eliminating transmission losses.
Waste heat generated by the production of electricity can be used to heat water or the home/building. That means the 80% of the energy that would have been lost is now put to use.
It makes electricity both resilient and clean. Transmission breakdowns have zero effect on the end-user. Further, the power is clean/smooth, generating little damage to connected equipment." (http://globalguerrillas.typepad.com/globalguerrillas/2008/10/resilient-commu.html)
R. Neal Elliott and Mark Spurr:
"Combined heat and power (CHP) systems (also known as cogeneration) generate electricity (and/or mechanical energy) and thermal energy in a single, integrated system (see Figure ES-1). This contrasts with common practice in this country where electricity is generated at a central power plant, and on-site heating and cooling equipment is used to meet non-electric energy requirements. The thermal energy recovered in a CHP system can be used for heating or cooling in industry or buildings. Because CHP captures the heat that would be otherwise be rejected in traditional separate generation of electric or mechanical energy, the total efficiency of these integrated systems is much greater than from separate systems.
CHP is not a specific technology but rather an application of technologies to meet end-user needs for heating and/or cooling energy, and mechanical and/or electrical power. Recent technology developments have "enabled" new CHP system configurations that make a wider range of applications cost-effective. New generations of turbines, fuel cells, and reciprocating engines are the result of intensive, collaborative research, development, and demonstration by government and industry. Advanced materials and computer-aided design techniques have dramatically increased equipment efficiency and reliability while reducing costs and emissions of pollutants.
Conventional electricity generation is inherently inefficient, converting only about a third of a fuel's potential energy into usable energy. The significant increase in efficiency with CHP results in lower fuel consumption and reduced emissions compared with separate generation of heat and power. CHP is an economically productive approach to reducing air pollutants through pollution prevention, whereas traditional pollution control achieved solely through flue gas treatment provides no profitable output and actually reduces efficiency and useful energy output.
Energy losses in power generation represent a huge and growing source of carbon emissions during a period in which the United States will be seeking to reduce total emissions to below 1990 levels (see Figure ES-2).
Since there are two or more usable energy outputs from a CHP system, defining overall system efficiency is more complex than with simple systems. The system can be viewed as two subsystems, the power system (which is usually an engine or turbine) and the heat recovery system (which is usually some type of boiler). The efficiency of the overall system results from an interaction between the individual efficiencies of the power and heat recovery systems.
The most efficient CHP systems (exceeding 80 percent overall efficiency) are those that satisfy a large thermal demand while producing relatively less power. As the required temperature of the recovered energy increases, the ratio of power to heat output will decrease. The decreased output of electricity is important to the economics of CHP because moving excess electricity to market is technically easier than is the case with excess thermal energy. However, there currently are barriers to distributing excess power to market.
CHP can boost U.S. competitiveness by increasing the efficiency and productivity of our use of fuels, capital, and human resources. Dollars saved on energy are available to spend on other goods and services, promoting economic growth. Past research by ACEEE (Laitner et al. 1995) has shown that savings are retained in the local economy and generate greater economic benefit than the dollars spent on energy. Recovery and productive use of waste heat from power generation is a critical first step in a productivity-oriented environmental strategy." (http://www.aceee.org/pubs/ie983.htm)