An introduction to Combined Heat and Power (CHP) Projects
Produced in partnership with Matthew Collinson
An introduction to Combined Heat and Power (CHP) Projects

The following Energy practice note Produced in partnership with Matthew Collinson provides comprehensive and up to date legal information covering:

  • An introduction to Combined Heat and Power (CHP) Projects
  • What is a CHP project?
  • How are CHP projects financed?
  • How are end customers charged for the heat supply?
  • How are end customers charged for the electricity supply?
  • Are other electricity revenue streams available?
  • Key issues and contracts in a CHP project
  • Fuel supply
  • Energy centre
  • Networks
  • More...

What is a CHP project?

Combined heat and power (CHP) is a shorthand to cover a wide range of projects featuring ‘co-generation’; this is where electricity is produced by a generating station on-site (usually called an ‘energy centre’ in this context) and the heat created by the generation process is used to produce hot water or steam. This ‘heat’ is then transported around the site under pressure, through a circuit of pipes to locations where the heat can be used productively. It might be used to heat one or more domestic buildings or as part of an industrial process. The ‘cold’ water is then returned to the energy centre so the process can be repeated.

At the same time, the electricity from the energy centre will be exported from the generator and onto a network for delivery to end customers. This network might be a private wire (ie a distribution network owned and operated by a licence-exempt person) or it might be owned and operated by a licensed distribution network operator. For further information on licensing of electricity distribution, see Practice Note: An Introduction to Electricity Licensing in Great Britain.

How are CHP projects financed?

CHP projects require significant up-front capital expenditure to cover the cost of the energy centre, the heat network and the electricity network, as well as supporting infrastructure such as gas network connections (if

Popular documents