Powered On: Big Benefits and Rapid Returns with CHP



By McKenzie Roberts, Research Assistant, Energy and Environment and Deborah Nabaloga, Associate, Energy, Climate, and Policy Practicum

This post is an excerpt from an article which appears in the March/April issue of the IREM Journal of Property Management (JPM) article.

Improving asset value, lowering operating costs, and increasing tenant satisfaction is the trifecta of property management goals. Maintaining optimal building operations is not only key to tenant comfort and productivity but also improves energy efficiency, reduces utility costs, and decreases carbon emissions. Combined Heat and Power (CHP), or cogeneration, is one technology that can hit the mark on all these needs. For decades, property managers have been privy to the benefits of CHP to provide electric and thermal energy to buildings. The ability to simultaneously and efficiently produce electric and thermal energy from a single fuel source on-site can provide myriad energy efficiency, operational, and resilience benefits by keeping the lights and the air conditioning (or heat) on when/if the power grid goes down.

How CHP Works

Typically, the power used by commercial buildings comes from the electrical grid with an on-site water heater and a boiler or furnace providing heat.  CHP is a type of distributed generation that provides a way to meet the same needs at higher efficiency using less overall energy and reducing peak demand. By being able to be used on or near site, CHP can reduce transmission and distribution losses therefore resulting in high efficiency, and lower energy costs.  CHP technologies can produce both electricity and heat (used for facility heating and cooling) from a single source at the point of consumption through a single process.

However, CHP is an integrative technology that can be used by a multitude of drivers and a variation of fuels and CHP systems vary by size and type from large industrial and utility-scale systems to smaller package systems that are applicable to residential uses – so CHP can meet numerous needs. If one wants a reliable energy source that can provide thermal/cooling on demand, then CHP is the right fit.

Why CHP?

CHP provides an amalgam of benefits to end-users such as reliability, resiliency and energy savings. Among the more popular benefits are the resilience and reliability factors that CHP carries. The ability to keep the lights on when the power goes out is critical when it comes to natural disasters or any disruption to the grid.  As CHP can operate in island mode when the grid is down, it makes it a perfect technology to weather any storm.

As extreme weather events are becoming more common, the frequency and cost of grid outages are increasing. Nationally, the number of power outages has been increasing; there were over 270 in 2019 compared to less than 50 in 2000. CHP technologies, which are designed to function 24/7, can be very helpful in alleviating the pressure on the grid. These technologies, when run parallel to the grid, ensure that critical infrastructure stays functional during power outages and in turn lessens their adverse effects. The value added by CHP technologies to buildings cannot be overlooked, they range from facilitating sustainability,   to improving resilience with shelter in place benefits amongst others. These benefits are especially attractive to commercial buildings because of the added efficacy and desirability which in turn attracts clients.

Future Opportunities

Commercial facilities have several qualities that make them ideal candidates and are a fast-growing market for new CHP installations. The Department of Energy has been leading the effort to assist with the adoption of CHP to improve facility resilience and reduce operating costs through the development of tools and resources including the CHP Resiliency Accelerator and the  (CHP TAP).[1] The TAPs provide property owners and managers across the country with no-cost feasibility studies and technical assistance to determine if CHP is a good fit for a facility. As businesses look to  improve energy reliability, efficiency and safety, the versatility of CHP systems can help meet those energy challenges.


[1] energy.gov/chp-CHPTAP