Combined Heat and Power (CHP) – Frequently Asked Questions
Will CHP Work For Me?
There are 3 key factors to consider before implementing a CHP system, all of which are interlinked:
1. The ability to use the heat –for heating or hot water throughout most of the year. For example: a 200-bedroom hotel with a swimming pool would more likely be a very successful application; whereas a 10-bedroom guest house would probably not be viable. CHP provides benefits when applied across a number of industries. Please ask us for details.
2. Using a significant amount of electricity. Savings come mostly from reductions in your electricity costs. Therefore, if your electricity spend is not significant to start with, then the potential savings from CHP will be smaller. A viable CHP solution can save many £1,000’s from energy bills every year, but for CHP to deliver optimum savings, existing electricity spend needs to be at least £150,000 – £200,000 p.a.
3. The difference in electricity & gas prices. CHP burns gas to produce cheap electricity, so the relationship between these two costs is important. This is known as your ‘Spark Ratio’.
I have heard of Spark Ratio’s. What are they and do I need one?
What is a Spark Ratio? – Sometimes known as the ‘Spark Gap’, this is an industry-standard term for the difference between the prices per kWh of your gas and electricity supplies.
Why is a Spark Ratio Important? – CHP‘s burn natural gas to create less expensive, greener electricity and heat. The cost saving comes from using a cheaper fuel (gas) to generate electricity on-site, instead of buying it from the grid. The cheaper your gas and the dearer your electricity, the greater your savings will be on a CHP system.
Why are Gas and Electricity bills so important?
The best way to determine if CHP is appropriate for your site is to provide us with your last 12 months of gas and electricity bills. We prefer copies of the actual bills, because they tell the whole story. We take your bills and run a free, no obligation desktop study to determine CHP suitability. If you think your existing energy spend might be too small for a CHP to be viable, give us a quick call first and we’ll be happy to advise. However, if you receive very high bills and feel that a CHP system will work for you (see ‘Will CHP work for Me?’) then we would be very glad to hear from you.
Typically what savings can be made with CHP?
Savings depend on your spark ratio and the amount of heating/electricity you are currently using and will potentially use in the future. Savings of circa £40,000 per annum are possible with a medium-sized CHP system and savings of £100,000 or more per-year are achievable on larger applications. Savings all depend on individual circumstances and for larger industrial schemes, substantially more can be saved.
Do I need planning permission for a CHP system?
This is not normally needed, unless your CHP installation is in an area where the public view of your building may be affected. Often, the unit can be installed indoors if existing space permits. With any development planning you should always check with your local planning department and shentongroup will always provide photographs and CAD drawings when required. Compliance with building regulations and other standards, such as air quality requirements, will always be mandatory.
What about CHP maintenance?
CHP maintenance has traditionally been regarded as an issue. Years ago, upkeep costs could potentially consume most of any savings.
GOOD NEWS: shentongroup CHPs all come with our unique Infinium24 maintenance package, whereby shentongroup carries-out all of the servicing, provides all of the parts, all of the labour and conducts any call outs, all for a guaranteed fixed cost. There is literally nothing else to pay.
shentongroup takes complete responsibility for all of the upkeep and all of the potential risks fall on us. We even replace critical components on a time-life basis to ensure your unit remains as-new throughout its lifespan. We also provide real time remote monitoring and control, something our engineers use to sustain the system in a state of optimum performance. The client has open access to monitoring reports, providing transparency and peace-of-mind.
MORE GOOD NEWS: maintenance costs are not hidden away within the pricing. They are factored in at the very first feasibility stage and are always fully visible to the client, fixed priced, and guaranteed. All savings and payback figures quoted include maintenance so that what you see is what you get. The savings are truly yours to keep.
Does my CHP need to be connected to the National Grid?
To have your own CHP system generating your own electricity on site normally requires it to be synchronised with the mains electricity grid. This is so it can run in conjunction with your incoming supply. We take care of this whole process for you, supplying the equipment to harmoniously link up to the grid. Your electricity network operator will require a G59 mains protection relay to be installed. This protects your CHP system from trying to power the wider area in the event of a power cut. We provide this for you and take care of the application to the network operator, along with the subsequent installation and testing.
What’s the typical return on my investment with CHP?
A shentongroup CHP system is one of the biggest single steps you can take towards reducing your energy bills. The Use of Capital Employed is impressive, and the Return On Investment even more so. For example, a client located at a very suitable site where the electricity was expensive and the gas cheap, along with a constant demand for hot water all year round, could expect a £40,000 saving per-year on an installed cost of £120,000. Site circumstances vary enormously, but in this real-world example, the client company had its investment repaid in 3 years. Thereafter, the savings continued at circa £40,000 per annum, which is a very respectable improvement to the bottom line.
What effect will CHP have on my carbon footprint?
Installing CHP is one of the biggest single actions you can take to reduce your carbon footprint. Electricity is a carbon-intensive fuel and significant losses in the power station/national grid network mean that its supply to you is very inefficient.
By contrast, a CHP system generating your own heat and electricity on site is more efficient and one of the most significant indicators of this is the amount of carbon saved. In many cases, this is so successful that various forms of funding and/or tax relief are available.
How do I qualify for external funding for a CHP?
There are a wide variety of external financial benefits ranging from CCL relief, through Enhanced Capital Allowances, to fully-funded schemes such as Discount Energy Purchasing or Power Purchase Agreements. However, this is a complex field and suitability varies from one type of client to another. Contact us with your requirements and we’ll be glad to advise.
Do I need a Survey?
Yes. No two systems are the same. shentongroup will conduct a free site survey and make recommendations on the most viable solution for your specific application.