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Heat/power combination packs a punch

National Post: Jim Harris - November 13, 2009

We can double the efficiency of our current electrical system with a technology that's practical, proven, readily available, inexpensive and technologically simple.

Conventional power plants, whether coal, gas or nuclear, vent waste heat into the atmosphere. Two-thirds of the fuel's energy is wasted as heat. Natural gas-fired power plants only achieve 36% efficiency while for nuclear reactors in Ontario, it's only 33%.

By contrast, combined heat and power (CHP) -- also known as co-generation or co-gen-- uses the waste heat for heating water and nearby buildings. This more than doubles the efficiency to 75% to 90%, depending on the co-gen plant. Using "waste" heat, CHP achieves 200% to 250% higher efficiency in burning fuel than centralized power plants.

Denmark generates a staggering 54% of its power from co-gen. Europe Union Energy Commissioner Andris Piebalgs told the European Parliament in 2008 that energy security starts with energy efficiency, and that the most sustainability energy is saved energy.

CHP plants can be installed in hospitals, schools, offices, factories, apartment buildings and shopping centres. And the heat can be used for a single building or a district heating system, where a series of building are linked by underground insulated steam pipes that carry heat to all the buildings in the loop. Facilities that use a lot of hot water -- such as hospitals and senior citizens residences -- receive even more benefit by cutting the cost of continuously heating water.

Hospitals already have the equipment to benefit from CHP, because they have backup power generators to ensure electricity-powered medical equipment continues to operate in a blackout. The generators can be used then to create both heat and electricity.

A McKinsey & Company 2009 report, Unlocking Energy Efficiency in the U.S. Economy, points to US$130-billion of annual savings in the U.S. economy that is going unrealized. "Energy efficiency offers a vast, low-cost energy resource." All the savings identified are net-present-value positive.

More than $1.2-trillion can be saved by 2020 from energy efficiency, more than $15,000 for a family of four over the next decade. The savings would reduce projected U.S. energy demand by 23% and can be achieved with an investment of roughly half the savings -- $520-billion. The study looked at 675 energy saving measures, and co-gen is one of the largest opportunities identified.

For businesses, co-gen means lower energy bills because of reduced heating, electricity and hot water costs.

As if doubling energy efficiency at a lower capital cost than other forms of generation wasn't enough to convince policy makers that this should be a driving focus, co-gen has two hidden benefits:

Diversified power Co-generation increases the reliability in the grid. Instead of building a 1,000-megawatt power plant which, if it goes offline, has a major effect on the system, having 50 20MW co-gen increases the reliability of the whole grid, because rarely would more than one be down at once. Reduced line loss Canada's grid is built on a philosophy of large electricity generators shipping electricity by high-voltage transmission lines over long distances. This results in an average line loss of 10%-15%. Line loss can peak at 20% during heatwaves, when everyone has their air conditioning on high. High temperatures and high line load mean high transmission loss. In other words, the line loss is highest when we are most in need of power and demand is peaking. CHP projects eliminate line loss as the electricity is consumed where it's generated and reduce the need for new high-voltage transmission lines.

It's time for governments and utilities to have a concerted focus on promoting CHP.

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Jim Harris is the author of Blindsided, a No. 1 international bestseller published in 80 countries. He speaks at 40 conferences and seminars a year around the world. E-mail him at

jimh@jimharris.com.