Micro combined heat and power

Micro combined heat and power or micro-CHP is an extension of the idea of cogeneration to the single/multi family home or small office building in the range of up to 50 kW. Local generation has a higher efficiency as it lacks the 8-10% energy losses when transporting electricity over long distances and the 10–15% energy losses on heat transfer in district heating networks due to the difference between the thermal energy carrier (hot water) and the colder external environment. The most common systems use natural gas as their primary energy source and emit carbon dioxide.

Combined heat and power (CHP) systems for homes or small commercial buildings are often fueled by natural gas to produce electricity and heat. A micro-CHP system is a small fuel cell or a heat engine driving a generator which provide electric power and heat for an individual building's heating, ventilation, and air conditioning. A micro-CHP may primarily follow heat demand, delivering electricity as the by-product, or may follow electrical demand to generate electricity and heat is the by-product. When used primarily for heat in circumstances of fluctuating electrical demand, micro-CHP systems may generate more electricity than is instantly being demanded.

The heat engine version is a small scale example of cogeneration schemes which have been used with large electric power plants. The purpose is to utilize more of the energy in the fuel. The reason for using such systems is that heat engines, such as steam power plants which generate the electric power needed for modern life by burning fuel, are not very efficient. Due to Carnot's theorem, a heat engine cannot be 100% efficient; it cannot convert anywhere near all the heat produced from the fuel it burns into useful forms such as electricity. So heat engines always produce a surplus of low-temperature waste heat, called "secondary heat" or "low-grade heat". Modern plants are limited to efficiencies of about 33–60% at most, so 40–67% of the energy is exhausted as waste heat. In the past this energy was usually wasted to the environment. Cogeneration systems, built in recent years in cold-climate countries, utilize the waste heat produced by large power plants for heating, piping hot water from the plant into buildings in the surrounding community.

...
Wikipedia