CHP How It Works

A typical power plant converts 35-60% of fuel to electricity and dumps the rest as waste heat. A combined heat and power (CHP) plant captures that "waste" and pipes it to buildings or industrial processes, pushing total fuel utilization to 80% or higher.

CHP (also called cogeneration) produces electricity and useful heat from a single fuel source. The key tradeoff: diverting steam to heating reduces electricity output. A turbine that could generate 100 MW of electricity might produce only 70 MW when 30 MW worth of steam is extracted for district heating. Total fuel utilization rises because the "waste" heat becomes a product, but electrical efficiency drops.

Compare the energy flows. Conventional plant: 100 MW fuel in, 40 MW electricity out, 60 MW waste heat. CHP plant: 100 MW fuel in, 30 MW electricity out, 50 MW useful heat out, 20 MW waste heat. Total useful output: 80 MW vs. 40 MW.

Calculate fuel utilization. Conventional: 40/100 = 40%. CHP: (30 + 50)/100 = 80%.

Is 80% fuel utilization the same as 80% electrical efficiency?

Distinguish the metrics. No. Electrical efficiency fell from 40% to 30%. Fuel utilization rose because heat is counted as a useful product. CHP makes thermodynamic sense only when there is a nearby, steady demand for heat: hospitals, universities, district heating networks, or industrial processes.

CHP works best in cold climates with dense urban areas or industrial sites that need continuous heat. The technology is identical everywhere; what differs is which countries have built the market rules to reward it.

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