Combined Heat and Power Market

The transition away from coal-based power generation has led to a greater adoption of natural gas as a fuel source for combined heat and power (CHP) systems. In many countries worldwide, the share of natural gas in the energy mix is rapidly increasing. There has been a gradual shift from coal- and diesel-powered plants to gas-powered plants on a global scale. This rise in natural gas usage can be attributed to declining prices and increased production, particularly in North America and the Asia Pacific region. The surge in natural gas use for power generation has significantly driven the demand for combined heat and power systems. In the US, advancements in extraction technologies such as hydraulic fracturing (fracking) and horizontal drilling have resulted in a boom in natural gas production. This abundance has led to relatively low and stable natural gas prices compared to other fossil fuels, making it an appealing option for power generation. Natural gas is considered a cleaner-burning fossil fuel than coal and oil because it emits lower levels of greenhouse gases and pollutants, such as sulfur dioxide and particulate matter. As environmental regulations become stricter and public awareness of climate change increases, many power producers are transitioning from coal-fired generation to natural gas-fired generation to reduce emissions. Combined heat and power systems offer higher energy efficiency compared to conventional generation methods by capturing and utilizing waste heat that would otherwise be lost. Natural gas-fired CHP systems are particularly efficient, achieving total system efficiencies of up to 80% or higher. This increased efficiency leads to lower fuel consumption and operating costs for end users, making CHP systems economically attractive.

Natural gas is a vital energy resource for combined heat and power (CHP) plants, making the development of proper infrastructure essential to tap into its potential. However, building natural gas pipelines is a complex and costly endeavor. The construction process is influenced by various factors, including environmental regulations, average capacity factors, gas flow (in cubic meters per day), gas production, and the length of the pipeline. The South Stream pipeline project, which runs through Bulgaria, has faced challenges due to political tensions between Russia and the European Union. Additionally, a significant 30-year gas supply agreement between Russia and China, signed in 2014, involves nearly USD 30 billion allocated for the construction of pipelines and related infrastructure, although the financing details are still pending. Consequently, ongoing concerns about stable natural gas supply and adequate infrastructure pose challenges for the combined heat and power market.

Micro-CHP is a technology that simultaneously generates heat and electricity from the same energy source in individual homes or buildings. The primary output of a micro-CHP system is heat, with some electricity generation at a typical ratio of about 6:1 for domestic appliances. These systems typically have an output of less than 50 kW, making them ideal for sectors with relatively low energy demands, such as residential homes and small commercial buildings. Micro-CHP systems resemble standard domestic boilers in size and shape, which allows for versatile installation in various locations. In the residential sector, electrical capacities usually reach up to 5 kilowatts electric (kWel), with heat capacities up to 20 kilowatts thermal (kWth). In public and small to medium-sized enterprise (SME) buildings, the electrical capacity can range from 5 to 50 kWel, and thermal capacities can go up to 250 kWth.

One of the major challenges in combined heat and power (CHP) plants is understanding the importance of gas pretreatment and developing an effective strategy for it. Biogas-fueled combined heat and power systems utilize prime movers, such as gas turbines, microgas turbines, reciprocating engines, or Stirling engines. These systems operate by oxidizing methane in a combustion chamber, which generates thermal energy and drives a piston or turbine. The resulting mechanical work is then converted into electricity by a generator. In many cases, methane is the primary fuel used in each type of prime mover, and when fuel cells are in operation, methane is oxidized electrochemically. While biogas typically contains nitrogen (N2) and carbon dioxide (CO2), which generally do not damage the prime mover, these gases can dilute the fuel and reduce overall performance. However, trace impurities such as hydrogen sulfide (H2S), carbon monoxide (CO), and ammonia (NH3) can have more harmful effects on the prime mover. When H2S is oxidized, it produces sulfur dioxide (SO2) and sulfuric acid (H2SO4), both of which can lead to corrosion and damage to the prime mover. Additionally, siloxanes present in the biogas can be oxidized in the combustion chamber, generating silicon dioxide (SiO2) in solid form, which adversely affects both turbines and pistons. Although prime movers can tolerate small amounts of these impurities, higher concentrations can significantly shorten the lifespan of combined heat and power systems to just a few years.