Combined Heat and Power

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Combined Heat and Power Systems (CHP)

What is CHP?

Combined Heat & Power (CHP) or Cogeneration is the simultaneous onsite generation of both electricity and heat from a single fuel source, typically natural gas. This simultaneous generation from a single fuel source makes CHP systems highly efficient compared to conventional power generation.

A basic CHP system operates by fueling either a reciprocating or turbine driven generator set with natural gas. Electricity is produced by this process similar to standard generators. The difference is that CHP systems capture the waste heat that is normally exhausted to the atmosphere and utilizes it onsite for thermal processes. This captured thermal energy is used onsite for process steam, process hot water, dehumidification, pool water heating, domestic hot water and/or space heating. Space cooling, process chilling and refrigeration are also available through absorption chilling methods.

Why CHP?

  • Combined energy, economic & environmental benefits
  • Increased energy & operational efficiency
  • Substantial state incentives available
  • Lower utility costs
  • Extend the life of existing central plant infrastructure
Combined Heat and Power

CHP Financing

There are many reasons why now is a great time for CHP. Dynamic Energy can provide multiple financing options including:

Direct Purchase

  • Traditional bank financing
  • Federal 10% Investment Tax Credit
  • Accelerated depreciation (MACRS)
  • Aggressive state level incentives
  • Locked forward natural gas contracts
  • Significant thermal & electrical savings

Power Purchase Agreement

Power Purchase Agreement (PPA) provides the host customer power and heat at a discounted rate, with no capital requirement. A third party investor owns the CHP system and enters into a long term power contract with the host. PPAs provide the following benefits to host customers:

  • No upfront cost or capital required
  • Projects are cash flow positive from day one
  • Predictable energy pricing & hedge against electricity prices
  • No system performance or operating risk and no maintenance
  • Align with organizational sustainability goals
  • Press and media outreach

Operating Lease

An operating lease provides the host of the system with monthly lease payments as well as ownership of the project’s state incentives and generated electricity. A third party investor owns the CHP system and receives all of the tax incentives from the project. An operating lease provides the following benefits to customers:

  • Preserve bank lines and working capital for core business operations
  • Significant upside of current incentives and energy savings
  • Historic low lease rates with fixed monthly payments
  • Expense deduction consideration on full lease payments
  • Up to 100% total project cost financing
  • Own all electricity produced by the system

Memberships & Associations

Combined Heat and Power Partnership
Association for Facilities Engineering

Related Projects

Combined Heat & Power

Combined Heat & Power

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