The growing importance of energy efficiency in recent years has led to increasing interest in combined heat and power as a way to reduce energy costs and environmental emissions. One area now attracting attention is CHP based on reciprocating gas engines.

Tim Scott, gas engine project engineer at Caterpillar, comments that current estimates suggest that CHP plants will contribute around 14 per cent of Europe’s energy needs by 2000, but adds that CHP is not the ideal solution to every energy efficiency problem. He points out that the success of each plant is dependent upon a number of variables, including fuel and electricity prices, deregulation and environmental considerations.

CHP plants using reciprocating gas engines range in size from a few kilowatts to over 5 MWe. Efficiency ranges from 34 to 41 per cent, depending upon the size of the engine. In addition, thermal efficiency is typically 40 to 50 per cent, so total plant efficiency can be up to 89 per cent. Emission levels range down to half the levels required by the TA Luft regulations, or 250 mg/Nm3 NOx.

Tim Scott comments that the first consideration for any potential user of CHP is the creation of a revenue stream that will make the project a sound investment. The required payback varies dramatically from country to country and between types of project. An industrial CHP project generally demands a three year payback.

Fuel costs comprise the largest portion of total costs during the life of a project, so the price difference between the gas bought and the electricity sold is an important factor in determining the viability of a CHP project. For instance, in Denmark the ratio of electricity to fuel price is currently around 2.2. Under these conditions a 1 MW engine installation operating at 40 per cent efficiency would not be profitable, based on selling electricity alone. However, when the value of heat is taken into account, the project becomes viable.

A question asked by many investors is how deregulation will affect energy prices. Consumers are seeking lower electricity prices but this does not necessarily promote the energy savings offered by CHP. This is because while consumer pressure forces lower energy prices and reduced differences between gas and electricity costs, investors require higher prices, a wider spread and stability before they will invest. Tim Scott feels that legislation is therefore likely to be needed to drive further uptake of CHP.

One of the main areas where CHP can have an impact is in reducing greenhouse gas emissions. Electricity production accounts for 31 per cent of the CO2 emissions in EU countries. Use of natural gas with reciprocating engines reduces fuel consumption by around 35 per cent compared to a coal fired power plant and reduces CO2 by around 50 per cent. NOx levels are also significantly reduced, and SO2 emissions are practically eliminated.

Energy efficiency can be promoted through legislation that governs NOx levels because NOx emissions from lean burn reciprocating gas engines are currently at around half TA Luft levels, or 250 mg/Nm3 at five per cent O2. At levels lower than this, engines either need a selective catalyst or have to revert to stoichiometric operation and use three way catalysts. Changing to stoichiometric operation causes a fall in efficiency of three per cent and a ten per cent drop in power. Using a selective catalyst adds significant capital and operating costs.

“Emission regulations must be structured to reflect the environmental benefits of CHP,” comments Tim Scott. “It is important that NOx levels remain in the TA Luft to half TA Luft range. This maintains high efficiency, high power and low emissions of greenhouse gases

“Efficiency can also be promoted via NOx regulations. Two countries today recognise efficiency within their NOx regulations: Denmark and The Netherlands. Denmark, for example, regulates that NOx should be 650 mg/Nm3 at five per cent O2 corrected to 30 per cent electrical efficiency.

He concludes that prospective plant owners and operators must remember that CHP is sensitive to energy price fluctuation and spreads, and that deregulated markets do not automatically provide the stability necessary for investors to find CHP attractive. However, CHP can achieve reduced emissions compared to traditional power generation and can offer energy planners flexibility and cost savings in meeting future power growth.