Green CHP E-Learning Center

Vergent Power Solutions’ Green CHP E-Learning Center is intended to provide businesses, institutions and communities with a simple guide to better understand the environmental, financial and resiliency benefits of Combined Heat and Power (CHP) and Capstone Microturbines.  As North American policymakers increase programmatic efforts to combat climate change – a trend which we welcome – we feel it is vital to lay out the case for CHP as an environment-positive energy solution that simultaneously provides the energy savings and reliability that the marketplace demands.

See below for answers to commonly asked questions.  If you see a topic that isn’t covered, let us know and we will add it to the guide!

What is CHP?

CHP is simply the production of two or more usable energy outputs from a single burn of fuel in a combustion device, such as a microturbine.  By recovering the waste heat and utilizing it to produce hot water, steam, process heat or chilled water, a CHP system increases a building’s energy efficiency.  Whereas a traditional building purchases electricity from a central utility grid while generating thermal energy from a separate process such as a boiler or chiller, the CHP system does the job onsite with one energy system. 

What is a microturbine?

A microturbine is a small-scale gas turbine that can run on biogas, natural gas, propane and hydrogen blends.  The Capstone microturbine utilizes patented air bearings that require no oil or coolants and has only one moving part.  Capstone microturbines require very little maintenance and have extremely high reliability.  Because they perform a very lean air and fuel pre-mix prior to combustion, they have ultra clean air emissions.  Microturbines can easily be configured in a CHP application to produce hot water, steam, process heat and/or chilled water using free clean exhaust.  There are over 10,000 Capstone microturbines operating across the world. 

How does a CHP system save on energy costs?

A CHP system reduces a building’s energy costs through increased efficiency.  A microturbine can typically produce electricity cheaper than the grid power price.  By recovering waste heat to make usable thermal energy, a CHP system can achieve total system efficiencies of 60-90%, which increases the energy savings even more.  Even when accounting for CHP maintenance costs and the cost of capital, a CHP system can save 20-50% on energy costs for most buildings.

(Source: Pace Energy and Climate Center)

How does a CHP system provide environmental benefits? 

Despite the increasing adoption of renewable energy, the majority of grid power in North America still comes from inefficient fossil-fuel based power plants.  Many buildings’ boiler plants are either old and poor-performing or are oversized and inefficiently operated.  A new CHP plant can be right-sized to a building’s electrical and thermal loads for maximum operational efficiency such that nearly all of the fuel’s energy is used by the building, with very little waste. 

Is all fossil fuel usage bad for the environment?

The reality is that we must use fossil fuels to run our economy.  The right question to ask is “how do we use fossil fuels as cleanly as possible?”  The answer is to pursue energy efficiency and opt for the cleanest fossil fuel options available.  In most cases, natural gas is the cleanest fuel option available to North American energy users.  CHP is the most efficient way to use natural gas. Read further for renewable fuel options.

Isn’t the grid already clean?

Short answer, no – although the addition of more renewable energy is making an impact over time.  However, as more intermittent sources of renewable energy are added to the grid, the need for reliable baseload power grows in order to keep the grid stable.  CHP is reliable baseload power AND thermal energy.  In most of North America, a well-designed and operated CHP system produces less GHG’s than the grid power and separate thermal energy it offsets.  The GHG emissions of non-baseload grid sources vary from state to state, but in almost all U.S. states, a CHP system represents a significant reduction in GHG emissions versus the grid.  For example, in Minnesota, the non-baseload grid sources emit 1,544 lbs/MWh of GHG equivalents, according to 2019 EPA data.  In Massachusetts, which has a much cleaner power grid, the number is around 899 lbs/MWh.  The grid combined with a boiler that emits CO2 at 525 lbs/MWh has a total CO2 emissions rate of 650 lbs/MWh.

By contrast, a hot water CHP system that is 76% efficient and runs on natural gas emits approximately 571 lbs/MWh of CO2, a reduction of 12%.  After factoring in NOx reduction, the GHG equivalency reduction is even greater. So even in states that have fairly clean power grids, like Massachusetts, CHP will produce less GHG emissions. 

Looking at another extreme example, the Canadian province of Ontario has one the lowest emitting electricity systems in the world. In 2020, Ontario’s grid was 94% GHG emission free. Yet even with such a clean grid, Ontario heavily relies on natural gas generation for 28% of total generating capacity to avoid blackouts and fill the void left from intermittent renewable sources. Reducing the reliance on natural gas further would have catastrophic consequences on grid stability and the cost of power for Ontario ratepayers.

Source: IESO Decarbonization and Ontario’s Electricity System, October 2021

A recent ICF assessment has shown that a natural gas CHP system installed in Ontario reduces GHG emissions when compared to the grid; in fact, a 1MW CHP system installed in 2020 running 24/7 reduces more than 9,000 tons of carbon over a 15-year period, showing that an efficient use of fossil fuels in all jurisdictions reduces carbon output when compare to local utility grids.

Source: ICF Assessment of Carbon Emission Reduction Potential for Natural Gas CHP in Ontario, July 2020 

What options are available for ultra clean CHP? 

Many options exist for customers that want to be as green as possible to comply with local air permitting requirements or further their organizations’ sustainability goals, such as: 

1. Use a microturbine. Microturbines have the lowest pollution emissions profile of any commercially available combustion technology.  The NOx and CO emissions of microturbines are ultra clean because of microturbines’ low air-fuel premix and tightly controlled combustion process.  Microturbines’ emissions are so low that they do not require any exhaust after treatment in almost all North American jurisdictions.  If further pollutant reduction is required, microturbines can be outfitted with a passive catalyst that, unlike an SCR, does not use urea. 
2. Use renewable biogas. Microturbines can run on biogas just as well as on natural gas.  There are hundreds of biogas CHP plants in North America running successfully for decades.  The biogas will need to be conditioned prior to injection into the CHP system. 
3. Use Renewable Natural Gas. If a local source of biogas is not available, customers can procure RNG from a variety of sources.  RNG is biogas that has been conditioned to be similar to natural gas and injected into the interstate pipeline system.  RNG CHP systems are considered renewable energy. 
4. Offset with carbon credits or renewable energy credits. Even natural gas CHP can be carbon neutral by pairing with carbon reductions done elsewhere in the form of carbon credits and/or RECs.  This is a fairly simple contractual process that allows the CHP system to offset its local emissions with offsite reductions.  As more renewable energy is added to the grid, customers can increase their usage of low carbon fuels and attributes to produce a greener energy stream. 
5. Go with a hybrid microgrid. CHP is an excellent “backbone” for a renewable microgrid that could contain solar energy and battery energy storage.  By integrating a baseload CHP system to provide the resiliency and thermal energy, the renewable energy systems allow for an overall lower carbon footprint that can even go to Net Zero. 
6. Run on hydrogen. Many CHP systems, including microturbines, can run on some percentage of hydrogen fuel blended with methane.  Many CHP manufacturers, including Capstone Green Energy, are developing CHP systems capable of running on 100% hydrogen.  As more sources of “green hydrogen” (not produced by fossil fuels) become commercially available, hydrogen CHP will be a more accessible option. 

What if my local government is considering programs that discourage fossil fuels?

In most North American localities, natural gas is still viewed as clean fuel and CHP may be eligible for incentives.  However, there are a few states or cities where local governments are pushing for mass electrification of building heat.  Here are some important facts to keep in mind.

1. Electrifying building heat in most places is nearly impossible. Buildings in northern climates require a great deal of heat, much more than the grid infrastructure can currently provide.
2. Mass electrification will be incredibly expensive. The transition will require massive spending on converting boilers and chillers to heat pumps and increasing electrical services in every building.  Building owners, factories and utility ratepayers will be forced to shoulder the economic cost of electrification. Electrifying space heating in Massachusetts with current RPS renewable content is about $.17/ kWh, which is the equivalent of $50/MMBtu gas.  Renewable Natural Gas is available for less than that price so the blended cost would be much less.
3. Under electrification, grid power prices will rise exponentially. The amount of new power generation needed will greatly exceed the current capacity of renewable energy and energy storage.  More power plants will need to be built and they will have to run on fossil fuels.  This cost will drive power prices up significantly very quickly and the grid will become more GHG-intensive.
4. No matter what happens, CHP will still be a smart energy hedge. The high cost of grid power makes CHP a financially attractive prospect for building owners. 
5. Reasonable approaches are needed. CHP can and should be part of the effort to “green” building heating.  The CHP industry and CHP users will need a spot at the table to ensure that commonsense approaches are given full consideration by policymakers. 

How does CHP make buildings more resilient?

Weather-related disasters are increasing in frequency due to climate change.  In addition to the loss of life and property, disasters have exposed the insecurity of the power grid.  CHP provides resiliency to buildings by localizing buildings’ energy supply such that downed power lines and damage to other T&D infrastructure do not impact onsite power sources.  Multi-unit residential buildings, schools and universities, community disaster shelters, data centers, hospitals and many other applications all benefit from the resiliency of CHP systems.  Many building owners choose to install a CHP system rather than a traditional backup generator because a CHP can provide the same energy security but has an economic payback due to its 24/7/365 operating profile. 

According to the U.S. Department of Energy, “Combined heat and power (CHP) has proven effective in ensuring uninterrupted electric service through multiple major disasters in hospitals, schools, and places of refuge. CHP systems simultaneously generate electricity and produce thermal energy, maintaining needed power, hot water and space conditioning services on—site at high efficiency. And, unlike diesel back-up generators, CHP typically does not require over-land fuel deliveries.” 

This is all very complicated; how do I even get started?

Don’t worry, the vast majority of CHP users are not in the energy business.  They are greenhouses, factories, hotels, schools and universities, data centers, hospitals, apartment and condo buildings, municipalities, and the like.  Vergent Power Solutions can develop a CHP project for you and provide a turnkey proposal that is 100% financed and operated by experts.  Contact sales@vergentpower.com or 888.282.2071 to get started on a no-cost feasibility assessment of your building.