What Is Combined Heat and Power (CHP) and How Does It Cover 90%+ of Some Sites' Electricity Demand?
5 Minute Read
By
Jake Loggie
How Combined Heat and Power works, which UK businesses benefit most, and a real case study showing 91% electricity demand coverage and £354k in annual savings.
What Is Combined Heat and Power, and How Does It Work?
Most conversations about commercial renewable energy start with solar. Solar panels are visible, easy to picture, and easy to explain. Combined Heat and Power, or CHP, gets far less attention, despite often delivering a bigger share of a site's energy savings than solar does.
CHP is a single system that generates electricity and useful heat at the same time, from the same fuel source, on-site. A gas-fired engine drives a generator to produce electricity. The heat that engine would normally waste is captured and redirected into the site's hot water or process heating systems instead of being vented or cooled away.
For a site with constant heat demand alongside its electricity use, hotels, leisure facilities, hospitals, manufacturing plants, commercial laundries, this single system replaces two separate costs: buying electricity from the grid, and burning gas separately just to produce heat.
Why CHP Often Outperforms Solar on Coverage
Solar generates during daylight hours only. It's strongest during peak sunlight and contributes nothing overnight or on a site's heating load.
CHP runs continuously. It's sized against a site's baseload, the steady, round-the-clock demand that never really switches off, which makes it particularly effective for sites that operate 24/7 or have heavy, constant heat requirements.
A Real Example: CHP at a UK Golf and Spa Resort
A Real Example: CHP at a UK Golf and Spa Resort
Ardora Energy recently structured and funded a CHP installation at a golf and spa resort in the South East of England, alongside a complementary solar PV system. The site has the kind of energy profile common to many hospitality and leisure businesses: constant demand from kitchens, laundry, and spa facilities, plus high daytime demand across the clubhouse and grounds.
The CHP System
System size: 350 kWe / 439 kWt
Share of site electricity demand covered: 91%
Capital cost: £907,283, fully funded with zero capital outlay from the client
Annual net savings: £354,159
Payback period: 2.5 to 2.6 years
Indicative IRR: 38%
10-year projected savings: £4,238,667
The waste heat captured by this system feeds directly into hot water and process heating across the site's kitchens, laundry, and spa facilities, costs that would otherwise need to be met through gas boilers running entirely independently of the electricity system.
Which Businesses Suit CHP Best?
Which Businesses Suit CHP Best?
CHP tends to deliver the strongest results for sites with:
A constant, 24/7 baseload rather than demand concentrated in daytime hours only
A genuine, ongoing heat requirement (hot water, steam, process heating) running alongside electricity use
High overall energy spend, where covering 80-90%+ of demand makes a meaningful difference to the bottom line
This typically points toward hotels and leisure facilities, commercial laundries, manufacturing and food production sites, hospitals, and any site running heavy kitchen or processing operations around the clock.
Why Pairing CHP With Solar Often Makes Sense
CHP and solar cover different parts of the same demand curve. Solar is strongest in daylight hours at zero marginal fuel cost. CHP covers everything solar can't reach, including the baseload and the heat requirement. Combined on a single site, as in the case study above, the two technologies together can cover 90%+ of total electricity demand, a result neither technology would achieve alone.
Is CHP Right for Your Site?
If your business runs a constant heat load alongside high electricity use, particularly in hospitality, manufacturing, healthcare, or food production, CHP is worth a closer look. Ardora Energy can model a feasibility assessment based on your actual usage data, showing projected coverage, savings, and payback before any commitment is made.
Get in touch to find out what CHP could deliver on your site.
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Jake Loggie
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