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In line with the London Plan, energy supply through CHP is becoming the norm in new London developments. The Mayor has introduced mandatory use of CHP in developments of 500+ dwellings through planning guidelines. Nonetheless, Richard Hodkinson Consultancy is experiencing an increasing number of London based Local Authorities demanding CHP on new residential developments, even on schemes as small as 50 units.

But is this viable?  Firstly it is very important to remember that when assessing CHP viability, it must be considered within the overall context of the development. Areas to consider when assessing the viability of a community heating strategy compared to the installation of individual boilers include the CO2 benefits, build costs and operational costs.



CO2 benefits

Firstly, smaller developments are being forced to scale-back on fabric efficiency measures as a substitute for the installation of CHP, as well as to marginally increase the heat demand in order to make the installation of a CHP engine more feasible. This will have a positive impact on viability, but surely goes against the grain of the London Plan principles of reducing energy use and fuel poverty.

Nonetheless, since smaller CHP engines are less efficient, they are unable to achieve CO2 savings on the same scale as larger engines; e.g. only a c.15% reduction in regulated CO2 emissions may be achievable on a 50 unit scheme, compared to c.30%+ reduction on a 300+ unit scheme. This means that smaller developments are subsequently required to meet the shortfall to a 25% CO2 reduction (London Plan Policy 5.2) through other renewable energy measures, most likely to be solar PV, as other heat producing renewables will conflict with CHP. However, this is very restrictive and there are many cases where PV may not be feasible, particularly in London where neighbouring buildings may inflict significant shading or roofs are required for green amenity space.

Table 1 below provides efficiency and heat:power ratio data of some CHP engines, in increasing engine size order. It is important to note that the heat:power ratio has a significant impact on potential CO2 savings.


Rating (E) kW Heat:Power Ratio Mechanical Efficiency Thermal Efficiency % Total
4 kW 2.00 25.0% 50.0% 75.0%
10 kW 1.73 27.7% 47.9% 75.6%
25 kW 1.54 30.3% 46.5% 76.8%
70 kW 1.49 31.0% 46.0% 77.0%
210 kW 1.54 30.3% 46.8% 77.2%
500 kW 1.05 35.0% 36.7% 71.7%
1027 kW 1.38 32.4% 44.6% 77.0%
2000 kW 1.088 38.3% 41.7% 80.0%



Build costs

Economies of scale will often determine whether a communal heating strategy is more cost effective to build. The tipping point will vary between developments depending on the complexities and site constraints of designing and building a plant room and distribution network. Development density has a major impact on heat infrastructure build costs.


Operational costs:

Again, economies of scale will determine the efficiency savings that can be made in terms of the running costs of a community heating system. The greater the number of units and the broader the heat demand profile is, the more hours the CHP engine can run for, resulting in a more efficient operating system.

What’s more, resident behaviour is also a vital consideration. We are experiencing a number of high-end new build developments in London, purchased by foreign investors, which are barely inhabited. The result is a significant reduction in the actual heat demand of the building, in some cases reducing it to as low as half of the predicted heat demands. The result is a CHP engine that is incorrectly sized and thus inefficient and expensive to run.

We have also experienced reluctance of energy services companies (ESCOs) to take on the management of small scale generation plant. Building management companies without the expertise must outsource the management of specialist plant, typically at a higher cost.

In terms of viability, it is important to consider the effect that operational costs have on the saleability of units, something which, at present, is unclear. Nevertheless, as more CHP developments come into fruition and public recognition of the technology becomes heightened, a greater sense of operational costs on build viability should become apparent.