Energy Forum 34: Combined Heat and Power Generation

Cite As:
Grossman Gershon, Evron Yigal. Energy Forum 34: Combined Heat and Power Generation Haifa Israel: Samuel Neaman Institute, 2015.
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In electric power generation using high temperatures (typically by burning fuels or by nuclear fission), a large portion of the heat is rejected at a lower temperature. The amount of heat rejected, perceived as ‘waste heat’, is determined by thermodynamic principles and is, among other considerations, dependent on the operating temperature, as will be explained below.


In major power plants such as those operated by the electric utility, the residual heat is utilized for the production of steam, which is then used to produce additional electric power (Combined Cycle) or, if the temperature of this residual heat is too low, having a low thermodynamic value, it is rejected into the sea or to the air near the power plant. In other cases it is proposed to use the residual heat for water desalination or for district heating where the climate is cold, or for the production of chilled water for district cooling in warm climates.


In contrast, a private power plant (producing both electricity and thermal power), which is a consumer of both heat and electricity, can make use of the residual heat and substantially increase the overall energy efficiency of the primary heat source. An example of such a case is a refining industrial plant which requires process heat (e.g. steam) in addition to electricity, or a hotel that requires both electricity and heat - for heating in the winter and for air conditioning in the summer. In this case, it is advantageous for such a consumer to generate its own electricity, rather than purchase it, and use the residual heat, thereby significantly reducing the total cost of energy. Combined Heat and Power (CHP) generation, is also known as Co-generation.


The efficiency of electricity production from the primary (high temperature) heat source is defined as the ratio between the amount electricity produced and the amount of heat invested, and forms a key consideration for selecting a particular process. The definition above disregards the residual heat, which is typically rejected to the environment. Cogeneration facilities, however, utilize this residual heat and account for it when determining the efficiency of the facility, thus accomplishing energy savings on the national level, reduced dependency on imported fuel, peak power demand leveling, and  larger reserve in the electricity sector, and of course, less pollution. Thus, cogeneration is not only in the interest of the private producer\consumer, but also for the national economy, and the state encourages such projects. The Israeli government has passed two resolutions, which are intended to promote private electric power generation in general (1999), and the use of cogeneration in particular (2004). In light of these decisions, the Ministry of National Infrastructures produced regulations to stimulate private electric power generation entrepreneurship in general, and cogeneration in particular. The regulations are designed to standardize the rules pertaining to private electric power generation, increase its capacity and create a reserve in the Israeli electricity sector.


The purpose of the regulations regarding CHP is to encourage and incentivize the construction and operation of CHP facilities while maintaining the prescribed efficiency and preserving other advantages for the public which are entailed in Co-Generation compared to other electric power generating plants.


Regulation of electricity sales to the grid is carried out by the Electricity Authority. The authority operates in two areas: issuing licenses for production according to the type of producer and grid connection method. The producer may be a self-producer, conventional-producer, CHP producer or renewable energy producer, connecting to the grid at Extra-high, High, or Low voltage.


Cogeneration systems have a greater potential for energy-saving and conservation than any other means known today, including that of renewable energy. The benefits of CHP are reflected not only in consumer energy savings but also in energy savings on the national economy scale, reducing dependence on imported fuel, reducing emissions of pollutants, and forming a strategic advantage in enhancing the overall reliability due to decentralization. Also, CHP facilities do not depend on proximity to power facilities, and may be located in remote locations. According to forecasts by the Electricity Authority, in 2020 cogeneration may produce 1GW of installed capacity, 18% of electricity production in Israel. Despite a substantial increase in the scope of cogeneration in Israel over the past decade, there are several obstacles that prevent cogeneration to take off, including the lack of coordination between the various regulatory agencies, shortage of natural gas, and opposition from a public wary of pollutant emissions.




1. There has to be a coordinated regulatory system, stable and clear for cogeneration producers (and private electricity producers in general). Today there is no coordination, and there is often a conflict among regulators. It is recommended to form a licensing process that will be acceptable to all ministries and authorities related to the approval of a new facility, which will encompass the interests of each of the ministries and institutions. This process and the order of steps in it should be clear. It is proposed to implement this by setting up a roundtable, involving regulators and representatives of various ministries, to solve problems and arrive at an agreed upon solution.


2. Encourage the construction of CHP facilities in industrial zones to serve several factories synergistically. Each industrial area has a services tile; It is proposed to define it as the energy tile, and to establish in it a system that can buy the natural gas, produce electricity, hot water, cold water, steam and water desalination if necessary, and to sell these services to small consumers, of the kind that could not afford to adopt natural gas otherwise. The consumer gets all its energy needs, at lower prices, without concern for maintenance and without retrofitting existing systems.


3. Introduce categorization of cogeneration facilities. The required minimal efficiency is intended to prevent abuse of the tariffs. Cogeneration producers should be classified according to their capacity. A continuous efficiencies function may be defined - it should reach 50% or even 45% at its lower threshold (small producers), and up to 70% at the upper threshold (major manufacturers).


4. Given the special character of the state of Israel, it is problematic to operate certain facilities during the weekend; this problem should be addressed and solved. Efforts should be made to enable maximum utilization of the investments made to construct the system, and enable operation of the equipment on weekends, where possible. Accordingly, efficiency calculation to determine whether or not certain facility is entitled to government incentives must be made on the basis of 5.5 days a week, instead of 7.


5. Open centers that provide up to date information and technical support regarding licensing and regulation in an effort to encourage small enterprises and institutions to implement cogeneration. Much can be learned on this subject form other countries worldwide, especially in the US and Europe.


6. Accelerate the development of natural gas infrastructure and make it available to potential users of cogeneration.


7. Improve PR and public awareness. In many cases the construction of a power plant is prevented, even kilometers away from a residential area, due to non-substantive reasons given by the public opposition, which has no justification. For years, one of Israel’s main problems has been the lacking PR in all respects, even in these areas.

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