What is CHP?
Combined Heat and Power (CHP) is an efficient and clean approach
to generating power and thermal energy from a single fuel source.
CHP is used either to replace or supplement conventional separate
heat and power (SHP). Instead of purchasing electricity from the local
utility and burning fuel in an on-site furnace or boiler to produce
needed steam or hot water, a facility can use CHP to provide both
Figure 1: CHP Process Flow Diagram (Source: US DOE)
energy services in one energy- efficient step (Figure 1). Every CHP
application involves the recovery of thermal energy that would otherwise be wasted to produce additional power or useful
thermal energy; as such, CHP can provide significant energy efficiency and environmental advantages over separate heat
and power. It is reasonable to expect CHP applications to operate at 75% or greater, a large improvement over the national
average of 45% for these services when separately provided.
Illinois Public Sector CHP Pilot Program
The CHP Public Sector Pilot Program is being offered by DCEO as part of their Illinois Energy Now Program. The
program will provide incentives for the development and operation of CHP projects in public sector applications.
Eligible projects must receive utility delivery service from ComEd, Ameren, Peoples Gas, North Shore Gas, and/or Nicor.
For Conventional CHP systems, the minimum measured performance level must be an annual energy efficiency of 60%
with at least 20% of the system’s waste heat energy output in the form of useful thermal energy utilized in the facility. For
additional requirements, visit the DCEO webpage shown below. Final applications requiring an engineering feasibility
analysis are due November 21, 2014.
Incentive Structure
The performance based incentive structure is designed to provide financial assistance during various stages of a project,
including after the design phase, commissioning, and after 12 months of measured operational performance.
Type
Incentive Value1
2
Issue Date
Design Incentive
$75/kW capacity
Completion of the design phase
Construction Incentive
$175/kW capacity3
$0.08/kWh (η ≥ 70% HHV) OR
$0.06/kWh (60% ≤ η < 70% HHV)
of “useful electric energy” produced
Successful commissioning of the system
After 12 months of operation based on
meeting the measured operating
requirements of the system
Production Incentive
(Conventional CHP)
More Information
For more information visit http://www.illinois.gov/dceo/whyillinois/KeyIndustries/Energy/Pages/CHPprogram.aspx
or contact Patrick Brown at (312) 996-5055 or [email protected].
1
Total Incentive (Design + Construction + Production) capped at $2M or 50% of the project cost, whichever is less
Design Incentive is capped at $195,000 or 50% of design cost, whichever is less
3
Construction Incentive capped at 50% of construction cost or $650,000, whichever is less
2