Fuel-supply issues for CHP
Ener-G Procurement has published a free guide on how to align energy purchasing and CHP strategies to avoid reducing the return on investment. Installing CHP reduces a site’s demand for electricity while increasing gas consumption. CHP operating hours can vary from initial plans, potentially leading to financial penalties as demand for electricity and gas swing in and out of contractual tolerance bands.
Mark Alston, director of Ener-G Procurement, advises, ‘It is crucial that CHP owners keep forecast consumption under review — rather than relying on historical usage patterns — so they can set new tolerance thresholds with suppliers as necessary. This might involve switching supplier to find a more flexible “CHP-friendly” contract and a better price on gas supply.’
For organisations selling excess power, negotiating a competitive contract with a suitable supplier is crucial to increasing the return on investment of the CHP asset and generating revenue.
CHP systems powered by natural gas or other fossil fuels can reduce carbon emissions by about 20%.