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John Herbert, hong kong energy saving expert, BEAM expert
John Herbert
December 2004

Cogeneration or CHP (combined heat and power) is defined as the simultaneous production of electricity and heat using a single fuel such as natural gas, although a variety of fuels can be used.

Before explaining diving into cogeneration, first it is necessary to understand a little about traditional power generation methods.

Most power generation is based on burning a fuel predominately coal, although oil and gas are used, to produce steam. It's the steam pressure that spins the turbines that drive the generators to create electricity, unfortunately this is inherently an inefficient process.

No more than approximately one third of the energy potential within original fuel can be converted into steam pressure and useful work.

Electricity, a must in modern day society, is a double edge sword. The traditional generation process feeds our need for power and lighting, yet the process creates vast quantities of heat energy and pollution. Without a local use, this precious resource has little economic value and is dumped to the atmosphere using the ubiquitous cooling towers or other convenient techniques.

Additionally, generator plants tend to be situated in remote locations requiring an extensive power transmission network to reach the end user. This demands numerous voltage transformations, coupled with lengthy cabling, creating significant I2R transmission losses.

In contrast, cogeneration uses the excess heat, usually in the form of relatively low-temperature steam or hot water exhausted from the power generation turbines. Such steam or hot water is suitable for a wide range of heating applications such as building heating, process heating, air conditioning or domestic hot water heating.

Therefore effectively displacing the combustion of fossil fuels that would have otherwise been required for these applications, with all the obvious environmental implications.

Cogeneration is a highly efficient means of generating heat and electric power at the same time from the same energy source, making it significantly more environmentally friendly than conventional power plants. By displacing fossil fuel combustion with heat that would normally be wasted in the process of power generation, cogeneration reaches efficiencies that triple, or even quadruple, conventional power generation.

The positive environmental implications of cogeneration stem not just from the inherent efficiency, but also from its decentralized character.

It is impractical with current technologies to transport heat energy over any distance, therefore cogeneration equipment is physically located close to its heat demand. A number of environmentally positive consequences flow from this fact:

1. Power is generated close to the consumer, reducing transmission losses, stray current, and reducing the need for distribution equipment;

2. Cogeneration plants tend to be smaller, and owned and operated by smaller and local companies;

3. Generally built closer to populated areas, which requires them to be held to higher environmental standards;

Onsite cogeneration is well established overseas, especially in North America, Germany and Scandinavian countries with other European countries following close behind. Clean burning natural gas, with propane or landfill gas as a backup can fire cogeneration equipment.

Cogeneration solutions provide a very efficient, 85% or more, local, on-site, power generation system that utilizes waste heat to drive heating, process and even air conditioning requirements. Moreover, it is presently the best technology solution for use of fuel, having the potential to reduce human greenhouse gas emissions by more than any other technology except perhaps public transit.


Cogeneration solutions simply reduce waste, with only 10%-15% losses, compare that with the 55% or more using traditional generation methods and it is clear that cogeneration uses fuel more efficiently.

Cogeneration reduces waste, its that simple


Cogeneration uses fuel more efficiently its really that simple - more watts per dollar. Buying electricity from the utility companies means we, the users, must pay the full cost for the fuel burnt, yet most of the energy is lost to the atmosphere and the users must also cover the cost for the extensive distribution network and transmission loss.

Cogeneration is a smarter choice, compared to traditional methods, saves up to twenty four percent of the total energy costs, when the spare heat energy is utilised for heating, process, or air conditioning.

It also reduces pollution, provides lower transmission losses and benefits the environment too. The greenhouse gas emission (GHG) reduction is a significant benefit.

Energy security is a key driver for many businesses. During blackout periods, grid maintenance or brownouts, cogeneration keeps business operational.

In addition to the energy savings and the environmental benefits, cited herein the Kyoto protocol offers another opportunity. Cogeneration systems, installed within non-Annex I countries (that includes Hong Kong and China) qualify, under the Clean Development Mechanism (CDM), to trade the credit (saved emissions) providing revenue.


Engineers abhor waste, must be a genetic thing and any wasted energy is particularly troubling.

The waste heat energy available at distal power stations, generally classified as high grade heat energy from the steam turbines, has the potential to drive heating, air conditioning systems (using absorption chiller plant) or serve other process needs.

Europeans, especially in Germany, cognisant of the need for winter heating, employ systems that utilise the heat by-product to drive district heating systems serving homes, schools, industry, offices and shops without the need for the further burning of a primary fuel.

However, unless planned from the outset, it is simply not economical, with generator plants remotely located many miles away from the potential users. However, cogeneration provides both the electricity and heat energy, where it is needed most, near the demand.

Steam Driven Air Conditioning

Here in Asia the primary consideration for the built environment is cooling. The sub-tropical, high humidity climate drives the demand for air conditioning throughout most of the year. And although this may seem a strange concept at first, it isn't heat energy can provide chilled water for Air Conditioning systems.

Primarily driven by heat energy, the absorption refrigeration cycle generates chilled water for use in air conditioning systems. It is a simple and mature technology with few moving parts compared to convention mechanical refrigeration systems and exhibits long life.

A detailed analysis of absorption refrigeration is beyond the scope of this article, however, I am sure some meat on the bone would be pertinent at this point.

Absorption refrigeration uses heat instead of mechanical energy to provide chilled water which can then be used to air conditioning buildings.

In an absorption chiller, the mechanical vapour compressor is replaced with a thermal compressor, and comprises an absorber, a generator, a pump, and a throttling device. Single stage absorption chillers, have been supplemented with double effect models, improving efficiency.

In operation, a refrigerant vapour from the evaporator is absorbed by a solution mixture in the absorber. This solution is then pumped to the generator. Where using a heat source (could be waste heat) the refrigerant re-vaporises.

The refrigerant-depleted solution is returned to the absorber via a throttling device. The two most common refrigerant/absorbent mixtures presently used in absorption refrigeration are water/lithium bromide and ammonia/water.

In contrast to traditional refrigerants, absorption refrigerants have no ozone-depletion potential and no global-warming potential. Therefore increasing expensive, climate damaging CFC's and HCFC's are unnecessary.

If accidentally released, they are not harmful to the the environment. However, since Ammonia is toxic for humans Ammonia/water systems demanding special consideration to monitor and manage the risk associated with handling and leakage.

Absorption refrigeration was once the domain of large complexes, university campus, hospitals, power stations, and the like, where the over-riding requirement for steam production provided an opportunity to choose large capacity absorption chillers.

Single Stage Absorption Chiller courtesy of Trane

However that has changed, today manufacturer's have developed lower capacity units, powered by steam or hot water. It is noteworthy that hybrid absorption chillers have been developed, these units provide direct gas fired backup

Design Strategy

It goes without saying that the design strategy for a particular project or application needs to careful consideration and a detailed load analysis is an essential element.

For example, a complex with seasonal requirements, say situated in Beijing, could be designed to use waste heat to provide heating during the winter and power absorption refrigeration to provide chilled water for the air conditioning system in the summer.

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Additionally, other loads including domestic hot water or process hot water requirements can be served.

Further energy savings can be achieved if effective energy techniques are employed, utilising heat rejected from air conditioning plant, heat pumps or free cooling, all of which lower the operational energy footprint.

Whilst it might thought that 100% capacity, providing total energy security might be ideal, often economics dictate alternative part load solutions. Base load, demand limiting or load levelling strategies are equally sound solutions, dependant on the country, the utility, available incentives, and client requirements.

Under certain climatic conditions, excess heat energy may still require heat rejection, this will be unavoidable. However, the designer must carefully consider the part-load requirement, and system characteristics in the financial model.

Distributed Energy (DE)

Distributed Energy (DE) or DG (Distributed Generation) utilises a larger number of lower capacity units interconnected over the transmission network. DE provides a better overall efficiency, since they are located where the both the power and thermal energy is actually needed.

These power systems, often located onsite or “inside the fence”, are designed and engineered to suit the end users power and energy requirements. Locating generation facilities near the point of use, has numerous advantages, efficiency improvements reduce GHG emissions and lowers transmission losses mentioned herein.

However, onsite generation requires careful consideration, since the environmental impact formerly remote, is brought to the doorstep. Releasing combustion contaminants, and noise needs careful diligent assessment and most likely compliance with stricter environmental standards.

In other countries, deregulation of the power generation market provided the necessary legal framework for DE, permitting renewable energy, cogeneration and micro-CHP systems the opportunity to co-exist on the transmission grid, and sell power back to the utility company.

Cogeneration also provides new opportunities for co-operation leveraging advantages to improve competitiveness. A simple example would involve two adjacent industrial facilities, one a heavy power user, the other heavy steam user. Using a joint cogeneration plant both needs are met, dramatically reduce their respective utility costs.

In addition to commercial capacity cogeneration installations, micro-CHP plants, and micro-turbines, about the size of domestic washing machines, are increasingly offering the benefits of cogeneration for the residential sector, particularly where heating is a prime consideration.

Micro-CHP systems, often marketed in Europe as a drop-in replacement for the conventional central heating boilers, will likely have little impact in our sub-tropical climate where air conditioning for comfort is the key consideration.

WhisperGen AC Micro-CHP courtesy of Whisper Tech

Having said that it is technically possible to couple micro-CHP systems with small capacity absorption refrigeration to providing electricity, heat and air conditioning. Residential capacity, direct gas fired absorption units are rapidly developing, which may be better suited to conditions found in this part of the world.

Barriers, Barriers, Barriers

In the USA, the NREL conducted a wide ranging study, covering more than sixty five case histories and identified numerous technical and organisational barriers[1]. Most, if not all, stemming from utility company citing lack of experience, poor equipment familiarity or various charge backs schemes.

In some cases, utilities demand technical standards or requirements not demanded from equivalent installations, in others, anti-islanding provided via inverter circuit boards was usurped demanding 19th century mechanical relays. This mindset often blocks viable projects whilst significantly delaying others.

Cogeneration in Asia does not require reinventing the wheel to succeed, barriers must be overcome from day one, and that requires a utility company mindset change.

Future Outlook

With increasing market acceptance of cogeneration, it must be realised that cogeneration, including micro-CHP systems, etc, interaction with the electricity network can occur.

A critical limitation, in many cases, will be the voltage variation due to electricity feed-in. Whilst large capacity conventional generating stations dominate, the grid can and will provide a stable reference voltage. However, increasing numbers of DE systems may increasingly cause voltage variations across the network, effecting cogeneration and renewable energy systems connected to the grid.

Cogeneration not only poses problems for Distribution Transmission (T&D) infrastructure, but can also offers advantages to the grid such as congestion relief, load levelling, and load shedding.

Its important to note that many of these impacts are interpreted against the background of our current network, dominated by a unidirectional system layout and large capacity power stations.

With a future power network moving towards bi-directional electricity and distributed generation, both the generation structure, backup, and the T&D system will have to adapt to this lively development.

Uptime and reliability is a key issue, indeed the traditional generators may be called upon to provide back-up power helping lower capital costs. However billing arrangements need to be carefully examined.

In summary, compared to the traditional generation, the provision of ancillary power control services by cogeneration or micro-CHP plants is more complicated but possible, it requires an intergrated approach from day one.


For this purpose, one key challenge will be grid interconnection, and virtual grids featuring many cogeneration and micro-CHP plants forming virtual power plants. These plants may also be able to reduce network operation costs, especially if their operation can be controlled within a virtual power plant.

Still in its infancy across Asia, the wider acceptance of DE, the forth coming grid connection code in Hong Kong and availability of natural gas provides both opportunities and challenges to pursue cogeneration.

Certainly barriers still exist and these must to be resolved, including entrenched utilities, revisiting the legislative framework, and planning regulation amendments, all these need to be tackled before the sale of value-added "green" electricity to the grid provides revenue.


1. Making Connections Case Studies of Interconnection Barriers and their Impact on Distributed Power Projects, NREL, June 2000

About the Author

John Herbert is a veteran chief engineer with more than 30 years international engineering experience, educated in the United Kingdom, he has worked in the United Kingdom and then across Asia for more than two decades engaged by international and local companies. He is a Hong Kong Registered Energy Assessor (REA), a BEAM Professional, and stationed in Hong Kong.


14 April 2014: Well nearly ten years later little has changed, the opportunities still exist for intergrated approach, and the need for lower carbon intensity remains unresolved.

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