The diagram compares the efficiency of a combined heat and power system (CHP) with that of a conventional power plant.

Combined heat and power systems provide energy efficiency and emissions reduction for industries across the nation. The Department of Energy's Industrial Technologies Program has identified combined heat and power (CHP) as one of the most important opportunities available today for increasing energy efficiency and reducing emissions. Accordingly, the program has pledged to help the United States achieve 20 percent of CHP power generation by 2030. By providing on-site power generation, waste heat recovery and system integration, CHP offers a realistic, near-term solution for exceptional energy efficiency and emission reduction, says organizers of the DOE program.

Reaching 20 percent generation capacity by 2030 would save approximately 5.8 quadrillion BTUs annually, and avoid 848 million metric tons of CO2emissions. This is equivalent to removing more than 150 million cars off the road.

Combined heat and power, or cogeneration, is the simultaneous production of electricity and heat from a single fuel source. A CHP system recovers the heat normally lost in electricity generation for use in cooling, heating, dehumidification and other processes. Compared with separate generation of electricity and heat, CHP systems can operate at more than 80 percent efficiency.

CHP is not a single technology but an integrated energy system that can be modified depending on the needs of the energy end user. CHP can use many different fuels to provide reliable electricity, mechanical power or thermal energy for industrial plants and other large energy consumers - wherever power is needed. Compared with separate heat and power production, CHP systems provide many benefits, including:
  • Energy Efficiency. CHP systems recycle waste energy and use it to heat and cool, enhance fuel-use efficiency, and increase the benefit to the customer from each cubic foot of natural gas or propane consumed.
  • Emissions Reduction. Efficient CHP technologies decrease emissions of pollutants and greenhouse gases. CHP can use clean, renewable fuels such as biomass or biogas to provide electrical and thermal energy.
  • Energy Reliability and Quality. CHP can operate in parallel with the grid to enhance power reliability and support operations, or supply onsite generating capacity. CHP technologies deliver the high-quality power required by computer systems and sensitive manufacturing processes.
  • Energy Security. CHP systems can operate independently of the grid to sustain critical services such as health care, communications, shelter, and public safety after disasters.
  • Economic Development. CHP systems directly relieve grid congestion, reduce or eliminate power purchases, and avoid the need to construct new power plants. In the case of alternate fuels, CHP systems enable the use of local energy resources and support high-tech manufacturing industries.
  • Job Creation. Further development of and investment in CHP technologies will generate new jobs for highly skilled technical workers and boost local economies.
Despite its proven benefits, a number of hurdles must be overcome to realize the full potential of CHP in the marketplace. Technical, regulatory, policy and institutional barriers persist, despite successes at the state and regional level and recent federal legislation to boost tax credits for CHP.