Answer by Dale Blundell (Atkins)
CHP systems are rarely designed to meet the full demand for a site all of the time. Normally the CHP system would be connected in parallel to, and synchronised with, the distribution network (or ‘grid’) via the on-site electrical HV or LV interface. This ensures that if the site demand exceeds the CHP electrical output, then the site can top up the CHP power by importing it from the grid under its normal supply arrangement.
Similarly when the CHP is not operational, for example when it is off-line for maintenance, then all the site’s power can be imported from the grid.
If the site demand is less than the output from the CHP system, then it may be possible to export the excess power to the network. The power market prices (and forecast) and the network charging arrangements will determine whether this gives a sound business case. Where it is not, then it may be more economical to throttle back the CHP to limit its output to match the site demand, or to select a smaller system at the specification stage.
When considering sizing of the CHP it is important to understand the demand for power, and the likelihood that the generated power shall exceed site demand. Some network operators will allow short term limited amounts of ‘spill’ (exported power) to the grid, but anything of a more regular and sizeable amount of export would need to be by agreement with the network operator. The network operator may provide a payment for each unit of power, but the economics depend critically on the market prices and capacity margin (difference between supply capacity and demand). Where the price paid is lower than the cost of generation, the cost of this ‘spill’ will decrease the financial return of the CHP system.
Alternatively excess power could be sold to a neighbouring business(s) through a Private Wire, although this would incur additional resource to implement and administer.