The concept of combined heat and power generation is not new. Indeed, the potential for combining the generation of electricity with the generation of heat was recognized early in the development of the electricity-generating industry. In the United States, for example, at the end of the 19th century city authorities used heat from the plants they had built to provide electricity for lighting to sup- ply hot water and space heating for homes and offices too. These district heating schemes, as they became known, were soon being replicated in other parts of the world.

In the United Kingdom, around that time, a small number of engineers saw in this a vision of the future. Unfortunately, their vision was not shared and uptake was slow. It was not until 1911 in the United Kingdom that a district heating scheme of any significance, in Manchester city center, was developed.2 Fuel shortages after World War I, followed by the Great Depression, made dis- trict heating more attractive as electricity generation expanded in Europe during the 1920s and 1930s. Even there, however, take up was patchy. Nevertheless, by the early 1950s district heating systems had become established in some cit- ies in the United States, in European countries such as Germany and Russia, and in Scandinavia. In other countries like the United Kingdom there was never any great enthusiasm for CHP and it gained few converts, though a number of schemes were built after World War II as regions devastated by bombing were rebuilt.

This pattern of patchy exploitation has continued and the situation is complicated by the fact that it is almost impossible, economically, to build district heating infrastructure in modern cities that lack it. The centralization of the electricity supply industry must take some blame for this lack of implementation. Where a municipality owns its own power-generating facility it can easily make a case on economic grounds for developing a district heating system. But when power generation is controlled by a centralized, often national body, the harnessing of small power plants to district heating networks can be seen as hampering the development of an efficient national electricity system based on large, central power stations—unless, that is, the CHP approach is already a part of the philosophy of the national utility.

Power industry structure is not the only factor. Culture and climate are also significant. So, while countries such as the United Kingdom failed to make significant investment in district heating, Finland invested heavily. Over 90% of the buildings in its major cities are linked to district heating systems, and over 25% of the country’s electricity is generated in district heating plants. Many Russian cities, too, have district heating systems with heat generated from large local power stations. Even some nuclear power plants in Russia are harnessed in this way.

District heating was—and remains—a natural adjunct of municipal power plant development. But by the early 1950s the idea was gaining ground that a manufacturing plant, like a city, might take advantage of CHP too. If a factory uses large quantities of both electricity and heat, then installing its own power station allows it to control the cost of electricity and to use the waste heat pro- duced, to considerable economic benefit. Paper mills and chemical factories are typical instances where the economics of such schemes are favorable and many such plants operate their own CHP plants.3

While this idea slowly gained ground, technological advances during the 1980s and 1990s made it possible for smaller factories, offices, and even housing developments to install CHP systems. In many cases this was aided by the deregulation of the power supply industry and the introduction of legislation that allowed small producers to sell surplus power to the local grid. Since the middle of the 1990s the concept of distributed generation has become pop- ular and this has also encouraged CHP.

Recent concern for the environment now plays its part too. Pushing energy efficiency from 30% to 70% or 80% more than halves the atmospheric emissions from a power station on a per-kWh basis. Thus, CHP is seen as a key emission control strategy for the 21st century. But while environmentalists call for expanded use, actual growth remains slow.

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