Recommended CHP scheme reduces costs and improves security of supply
Ricardo Energy & Environment’s specialists worked with a major UK food and drink company to identify the optimum combined heat and power (CHP) solution for its needs now and into the future.
The company wanted to undertake a major expansion at its main manufacturing site, but was constrained by the capacity of its connection to the electricity grid. In addition, the highly automated site experienced frequent power supply quality issues, leading to costly down time and some product rejects.
The client was keen to investigate the use of CHP technology as a means of providing electricity, heating and cooling services at a greater efficiency and lower cost than providing them separately.
Efficient on-site power generation would have the added benefits of improved reliability and increased throughput by reducing reliance on the grid connection, allowing production to continue in the event of the external supply failing.
CHP is often a cost-effective solution for companies that have a consistent demand for heating and/or cooling that coincides with a demand for electricity.
Ricardo Energy & Environment was contracted to assess the feasibility of using CHP technology at the site and suggest the most suitable scheme.
Initially, experts from our CHP team implemented a monitoring plan to determine the site’s demand for power, heating and cooling, and to identify how these levels varied over time. Using these data, we developed a series of CHP implementation options to identify a scheme that provided the greatest overall benefit in terms of cost savings and security of supply. The options included the following considerations:
- Technology – gas engines or gas turbines.
- Operating philosophy – priority given to electricity generation versus priority given to meeting heating/cooling demand.
- Cooling – options were considered with and without an additional absorption chiller plant to provide cooling as well as heating services.
- Operating off grid – options were considered with and without installing equipment necessary to enable the CHP scheme to operate during external power failures.
Our team used advanced energy systems modelling to quantify the extent to which each option would meet the energy demands of the site. This was followed by a full financial analysis to identify those options that delivered the highest return on investment, taking into account additional capital and operating costs, and additional revenues and/or cost savings that the scheme could achieve.
We also provided insight into how sensitive the financial results were to factors such as energy price fluctuations, and analysed the implications of the client being subject to a climate change agreement (CCA). Our specialists then provided support during the next phase of the project development process, including developing a business case for submission to the company’s board.
Through Ricardo Energy & Environment’s expert knowledge of CHP technologies and the financial and environmental benefits that Good Quality CHP (as defined by the UK Government’s CHP Quality Assurance (CHPQA) programme) can provide, our client was provided with a full range of practical implementation options and a detailed understanding of the long-term benefits provided by its investment. We recommended the most beneficial CHP options for the site and provided detailed financial data to enable the company to develop a powerful investment case.
Our unrivalled understanding of UK Government policies, enabled us to maximise the value of the installation by taking account of all available fiscal benefits, such as climate change levy exemption on fuel consumption, enhanced capital allowances (ECAs), and the impact on the client’s CCA target.
Our recommended option provided the client with an opportunity to achieve cost savings of £520,000 per year, rising to £960,000 per year when the planned site expansion has been completed. The scheme would also reduce the site’s annual carbon dioxide emissions by up to 16,000 tonnes.
“Our deep technical knowledge of CHP and unrivalled understanding of UK Government policy landscape enabled us to take account of available technologies and fiscal benefits to identify the most beneficial options. Our recommendation provided the client with the opportunity to reduce energy costs by £520,000 per year, rising to £960,000 when a planned site expansion has been completed.” said Mahmoud Abu-Ebid, Ricardo's Chief Consultant.
Combined Heat and Power (CHP)
Sustainability case studies
Sustainability for the food and drink sector
Sustainability for the chemicals industry
Sustainability for the NHS and healthcare sector