Beneficial CHP – Is that a Thing? Considering CHP in the Context of Beneficial Electrification
For decades, combined heat and power (CHP) has been promoted and embraced as a cost-effective technology for meeting on-site thermal and electric needs more efficiently and with fewer emissions than separate procurement of those resources. But climate change concerns are leading to a reevaluation of CHP’s benefits. Significantly, natural gas, the most common fuel for CHP and until recently regarded as an environmentally preferable “bridge fuel” in the energy transition to renewables, is increasingly being reexamined amid calls for deep decarbonization and emerging clean energy policies that limit the use of natural gas. Given this trend, electrification has gained traction as a net zero carbon energy strategy. With natural gas being a preferred fuel for CHP, policymakers and others are beginning to question CHP’s role in a cleaner, more electrified future. However, CHP fueled by low carbon fuels such as renewable natural gas and hydrogen may be a more viable path to decarbonizing industrial processes that are difficult to electrify due to technology limitations or cost, and for applications where energy resilience is a critical requirement. This paper seeks to add clarity to a complex issue. It offers a framework for assessing industrial applications where natural gas CHP will provide significant GHG reductions in the near term and provide a more economic and practical path to deep decarbonization in the long term through a transition to low carbon fuels.