Combined heat and power has a number of key advantages over traditional power generation and a number of disadvantages. Here we examine the benefits and drawbacks of CHP in detail.

Advantages of Combined Heat & Power

CHP is an integrated system that harnesses wasted energy in traditional power generation. It offers a wide range of advantages including financial, efficiency, ecological and legislative.

Financial Benefits

  • Reduces energy costs

A single appropriately sized CHP system can offer energy savings of up to 40% + offering a consistent ongoing reduction in site energy costs to the stakeholder due to on site electrical generation thus removing the need for 3rd party electrical procurement.

  • Zero cost outlay options available

For larger scale systems Helec can look to provide a zero cost capital funding option so that you can finance the system cost effectively over an agreed affordable repayment time scale.
Contact the office on 01934 862264 for more details.

  • Power Purchase Agreement

A PPA contract can allow the user to install a CHP system with generlaly no up front capex cost as they will engage in an agreed fixed term contract with a funder to purchase the electricity generated on site (via the CHP installed) at generally a lower rate to the energy market costs.
This route to market has several benefits as it can
a) fix the energy rate for a known period to aid production costs
b) reduces the local DNO sub station demand
c) provide a capex free solution to cogenerate thermal heat & electricty on site.

  • Enhanced Capital Allowances Eligible

Tax can be claimed back on procurement of large and small-scale CHP systems for use in commercial buildings or district heating schemes.

  • Renewable Obligation Certificate Compliant

Biomass and other sustainably fuelled CHP systems may qualify for Renewable Obligation Certificates (ROC) which function in a similar fashion to the feed in tariff – providing an income from your system dependant on metered run hours.

  • Renewable Heat Incentives

Heat pumps (Ground Source & Air Source), Solar Thermal and biomass CHP systems are eligible for renewable heat incentives – financial incentives designed to increase the uptake of renewable technologies.

Environmental Benefits

  • Reduced CO2 and S02 Emissions

CHP systems reduce CO2 emissions with biomass and biogas CHP being essentially carbon neutral.

Helps New Construction Meet Carbon Legislation Compliance

Carbon legislation compliance in construction is greatly helped by CHP systems thanks to the energy savings and environmental benefits of the systems.

  • Reduces Transmission Losses from the Grid

CHP systems help to reduce loss from the grid by providing a regular and consistent supply of energy.


Efficiency Benefits

  • Increases Energy Security

CHP systems can operate entirely off grid or supplement larger energy demands. This provides exceptional energy security.

  • Fuel Choice Benefits

CHP systems can be operated with a variety of fuels including Biomass woodchip & pellets, Biogas, Natural gas, LPG and other fuel types.

Legislative and New Building Benefits

  • Helps with Part L Compliance
  • Helps meet CRCEES targets

CHP systems help you meet the CRC Energy Efficiency Scheme targets.

  • Helps new buildings avoid the Climate Change Levy

The climate change levy applies to industrial, commercial, agricultural and public service sectors and applies to electricity, gas and solid fuel consumption.

CHP can use the thermal heat which is traditionally wasted in power stations enabling energy savings of up to 40%.

CHP is a recognised sustainable way of generating electricity which can be sold back to the National Grid or used within a private wire network to supply homes and businesses.

CHP used in community energy schemes can assist with planning applications and consent, as well as assisting to meet regional carbon emission targets and support energy reduction strategies.

CHP generation also contributes towards reducing CO2 emissions against standard plant room boiler use and obtaining electricity from conventional coal fired power stations.

Disadvantages of Combined Heat and Power

The main initial ‘disadvantages’ of a combined heat and power system is that it is capital intensive and that it is not seen as a “true” sustainable energy source (being predominately fuelled by natural gas) unless it can be used with renewable fuels such as Biogas produced from AD plants


  • Not Suitable for All Sites

CHP systems are only suitable for sites where there is a need for heating and hot water systems. For larger scale systems heat and power demand need to remain fairly consistent for maximum efficiency. This particularly applies to heating which is powered continuously on larger systems.

  • Financially Intensive

The initial capex cost for a commercial CHP system can be high especially where there is no current support funding, or Government initiatives as previously seen with tariffs such as RHI & FIT.
This tends to make it prohibitive for smaller scale (non-domestic) installations to be specified and delivered below 16kWe due to long term payback periods from the on site generated electricity.


For more information related to CHP systems or to request a quote or feasibility study please do give us a call on 01934 862264 or contact us using our contact form.