In very simple terms, a CHP unit generates electricity from a single fuel, which could be natural gas, LPG, oil or some form of bio-fuel, and uses the heat produced in the generation process as thermal energy for space and/or water heating or industrial processes. In conventional centralised power generation this heat would normally be directed into cooling towers, discharged to the atmosphere and wasted – leading to low overall plant efficiencies.

CHP can offer energy cost savings and a significant reduction in carbon dioxide emissions, with some units being capable of delivering overall fuel efficiencies of up to around 90 percent. When compared to electricity generated from a centralised power station and the use of conventional heat only boilers, a 30 percent reduction in primary energy needs can be achieved.

In the UK the CHP market is mature, so there’s a combination of end users with varying experiences of the technology. Originally CHP was designed for properties with large thermal and electrical demands, and traditional applications included, for example, hospitals, industrial plants, hotels and leisure centres. This was predominantly due to a limitation of the electrical and thermal outputs of the CHP products available from manufacturers and systems integrators.

Until very recently, smaller properties with relatively low thermal and electrical demands had not been able to take advantage of CHP technology. Effective, efficient and reliable CHP solutions for smaller applications were simply not available, and specifying an oversized unit would have resulted in reduced annual operating hours of the CHP unit, with consequential implications on the economic and environmental benefits delivered by the installation.

However, in more recent years, micro and mini-CHP units have been developed and introduced into the UK market, and the technology is now suitable for a wider variety of commercial and public sector buildings. The growth of smaller scale CHP is encouraging news. Now the technology is suitable for a wider range of properties, more organisations will be able to gain access to the benefits of CHP and make a positive contribution towards reducing greenhouse gas emissions.

We have found much wider acceptance of mini-CHP in the public sector than in the commercial arena. Due to carbon reduction initiatives such as Local Agenda 21 and Kyoto Protocol commitments, and, in some cases, the introduction of corporate environmental policy, there has been a huge shift in attitude towards environmental sustainability within the public sector and recognition that CHP can assist property, energy and facilities managers in meeting emission reduction targets. CHP products may also help to achieve higher BREEAM (Building Research Establishment Environmental Assessment Method) ratings on new buildings by reducing carbon dioxide emissions and assist with planning consent where there is a requirement to incorporate renewable or low carbon technologies to minimise the carbon footprint of the property.

We are also finding that some individuals working within the public sector feel they have a social responsibility towards reducing harmful greenhouse gases; they are personally driven by environmental sustainability and carbon dioxide emission reductions.

DACHS mini-CHP units have been installed in a number of public sector premises in the UK including sheltered housing, residential care homes, extra care schemes and social housing developments. We are also encouraged by the fact that applications have now extended from residential schemes to other public sector buildings including a police station, a fire station, a primary school and two community resource centres.

CHP is an important element of the Energy White Paper, which aims to achieve a 60 percent reduction in carbon dioxide emissions by 2050. In the year 2000 the UK government set a target to achieve at least 10,000MWe of installed ‘good quality’ CHP – that is CHP plants which meet the efficiency criteria as defined by DEFRA (Department for the Environment, Food & Rural Affairs) within its CHP Quality Assurance Programme) – by 2010.

The UK Government has put the public sector at an advantage where CHP funding is concerned, with two schemes currently available to help with the capital cost of an installation, whether this is a new build property or part of a refurbishment or expansion of an existing scheme.

The Energy Saving Trust’s (EST) Community Energy Programme offers funding of up to 40 percent of the capital cost associated with a community heating scheme, although to date the average award on a single project has been in the order of 25 percent. Grants are also available to provide up to 50 percent funding towards the development work associated with such a project. The grant could help cover the costs of Option Appraisal, Business Planning and the Preparation of Tender Documentation.

However, the basis for funding allocation under the Community Energy Programme is the level of financial support requested versus the amount of carbon savings offered by the project. Proposed schemes effectively bid against each other for the funding allocation. As a result of this process, and the detailed and lengthy application procedure, the Community Energy Programme appears to favour larger scale community heating schemes with larger output CHP solutions. Having said this, we do have experience of a new build 32 bed sheltered housing scheme incorporating two DACHS units which received funding from the Community Energy Programme in 2004.

The second scheme is the Energy Efficiency Commitment (EEC), now in its second phase, which is critical to the UK Government’s aims for improving energy efficiency, particularly within low income households. As well as applying to domestic dwellings, the scheme also covers a number of types of public sector multi-occupancy accommodation including sheltered housing schemes, extra care facilities, social housing developments and key worker accommodation. Under EEC, energy suppliers contribute an amount per customer towards funding energy efficiency measures, helping to tackle issues such as affordable warmth and fuel poverty.

The level of funding depends on the energy supplier and the amount of carbon savings offered by the project, which could be delivered through a variety of measures – including mini-CHP. The DACHS is included in the category of CHP units which received a 50 percent uplift in funding under the second phase of this programme (EEC2) announced in 2005, to enhance the support offered by utilities to encourage the uptake of the technology.

Despite government support and the funding options and fiscal incentives available, we admit the CHP market in the UK remains challenging. Suppliers and products have come and gone – predominantly due to a slow uptake on new projects – and a dramatic fall in electricity prices coupled with even steeper rises in gas tariffs over the last few years has made it increasingly difficult to present a strong economic case for CHP. Financial expectations and short payback periods have become even more difficult to achieve, particularly for small-scale CHP. However, rises in electricity and gas prices, both experienced over the last few months and those predicted for the year ahead, will improve the economic case for CHP, in some instances dramatically.

We have been encouraged by a huge shift towards environmental sustainability, and we’ve been forging ahead successfully with projects that consider carbon savings to be more important than the payback period. In fact, the DACHS has caused something of a stir – proving to be efficient, reliable and well suited to the applications we are proactively pursuing. The DACHS offers a proven mini-CHP solution, which has enjoyed success across Europe for many years. In fact over 12,000 units have already been installed throughout Europe by the manufacturer of the DACHS, Baxi Group company Senertec GmbH, and its partner network.

The DACHS produces 12.5kWth of heat output and generates 5.5kWe of three phase electricity. If operated for between 5,000 and 6,000 hours a year, a single DACHS unit would reduce carbon dioxide emissions by around five tonnes a year – the equivalent of around 20 percent emission reduction when compared to centralised power generation and heat only gas fired boiler plant.

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