Micro-combined heat and power (micro-CHP)

Two for one

Micro Combined Heat and Power (micro CHP) systems simultaneously produce useful heat and power from a single compact unit fitted inside the building they supply.

They have several environmental and economic advantages. On the one hand, fuel is used more efficiently compared to installations that produce either heat or electricity as the waste heat from the generation of electricity is used on site. This reduces fuel expenditures. On the other hand, as electricity is produced right where it is consumed, the energy losses from transmission and distribution of power are reduced. This results in an increase of the overall efficiency of energy supply and a substantial reduction of CO2 emissions.

Effectively, a micro CHP unit replaces a (conventional) heating boiler, providing heat and hot water as usual, but additionally also providing some of a building's electricity needs. Electricity that is not used in the building could be transported to the grid. Homes and buildings that need long, uninterrupted heating (think about commercial and public buildings, as well as larger homes and farms) are most suitable. Micro-CHP is therefore particularly applicable in rural homes and buildings, which are often larger and have higher energy demand as urban ones. A micro-CHP system can also serve as a power back-up in case of grid black outs which may regularly happen in some more remote areas.

The investment required for a micro CHP system is usually higher than that of a conventional heating boiler. This is compensated by lower fuel costs due to the more efficient use of fuel. Savings depend particularly on fuel prices (electricity, gas or heat), grid charges and electricity export reward tariffs in case the electricity is fed into the grid. Several governments in Europe provide support.

General Info

What is it?

Micro-CHP (also known as micro-cogeneration or micro combined heat & power) is the simultaneous production of useful heat and power. Micro-CHP systems will cover the demand for space heating and hot water in a similar way a conventional boiler would. In addition units also generate electricity. While historically, systems are large and widely used in the industrial sector, micro-CHPs are developed to fit the individual needs of households and small businesses.

What are the benefits?

Low carbon: Micro CHP plants may contribute to a reduction of GHG emissions because they can increase the efficiency of energy supply and are able to run on renewable and low-carbon fuels (see below).

Energy efficient and reduction of fuel needs: Well-designed micro CHP systems are more efficient than conventional heating boilers, thereby reducing fuel needs and yearly fuel bills.

Improved performance of energy systems: Systems may also increase the overall performance of an energy supply system (in a region or country) by producing both heat and electricity on-site (where it is used). It can also contribute to improving the efficiency of the power network by reducing electricity demand from centralised power plants, therefore reducing power losses from transmission and distribution over larger distances.

Flexible: Micro CHP systems can run on various renewable fuels such as biogas, liquid biofuels as well as on low-carbon fuels including LPG. This not only makes them environmentally friendly, it also makes the very attractive in regions with no or limited natural gas or electricity grid connectivity.

How does it work?

Systems usually consist of a heat engine attached to a power generator that produces electricity. The system can be fuelled by a wide variety of fuels such as natural gas, gasoil, biogas and liquid biofuels. Micro-CHP systems are able to recover the waste heat from the engine (from the exhaust gases and the refrigeration circuits). This heat can then be used for several purposes such as hot tap water and space heating.


Most suitable are buildings that need long, uninterrupted heating such as commercial and public buildings, farms, as well as larger houses. Micro-CHP is particularly well-suited to rural buildings, which are often larger and have higher energy demand as urban ones. A micro-CHP system can also serve as a power back-up in case of grid black outs which may happen in more remote areas.

Installations are about the same size as ordinary (central) heating boilers and can provide all the heating needs and part of the electricity of a building. Systems are dimensioned to meet these needs. Electricity that is not used in the building could be transported to the grid, provided that (net-metering) schemes are available.

Detailed Info

Costs, Savings, Earnings

Investment costs of micro -CHP are higher than those of a conventional set-up, i.e. a boiler for heat and a grid connection for electricity. However, well designed systems save on electricity and fuels costs due to higher efficiencies. Operating costs can be lower, depending mainly on electricity tariffs and grid charges. Local generation of electricity is in some countries cheaper than buying it off the grid. However, as a part of the electricity generated locally is surplus, cost savings also depend on the level of export reward tariffs for exporting excess electricity to the grid. This differs from country to country.

Currently, government and/or utility-company support are usually needed to make micro CHP financially viable.

Environmental Impacts

Environmental impacts (local air pollution and GHG emissions) of micro CHP systems are usually lower to those of conventional and condensing heating boilers. Environmental impacts are reduced in proportion to the efficiency gain and the reduction of fuel use. Micro CHP systems can lead to GHG emission reductions by avoiding generation of electricity in conventional power plants. The result depends on the energy 'mix' (the share of different types of power plants e.g. nuclear, coal, gas, renewables) of the country or region where the system is installed.


Typically 70-80% of the energy value of the fuel is converted to heat for central heating and hot tap water purposes. Of the remainder, between 10% and 25% is additionally converted to electricity, and the remainder (10-15%) is waste, lost with flue gases. Compared to the separate supply of heat by a conventional or condensing boiler and electricity from the grid, micro-CHP systems are more efficient.

Commercial Maturity

In Europe, micro-CHP vendors and installers are particularly active in Germany and the UK, with less prominent presence elsewhere. Awareness among installers in other countries is low. The technology is nearing the point of being ‘plug and play’. While installation and servicing are largely based on the same skills as those required for traditional heating installations, some additional training may be necessary, for example to dimension the system appropriately.

Level of Maintenance

MEDIUM: Micro-CHP systems require a similar level of maintenance as conventional and condensing boilers, with an annual inspection including a change of the engine oil in the case of internal combustion engine.

Technical Details

The most common installations in Europe are based on Stirling and Internal Combustion Engines. Fuel cell micro-CHP systems are being introduced in Europe as part of field trials such as ene.field (http://enefield.eu/);these systems offer higher power-to-heat ratios and are appropriate for new buildings with lower heat demand. Typical domestic micro-CHP systems installed in the UK have peak thermal outputs in the range of 8-15kW and peak electrical outputs in the range of 1-3kW. (Carbon Trust, 2011. Micro-CHP Accelerator. Available from http://www.carbontrust.com/media/77260/ctc788_micro-chp_accelerator.pdf)

In Germany, the majority of newly installed micro-CHP installations have an installed electrical capacity ranging between 4-6 kWel. (http://www.izes.de/cms/upload/pdf/EMSAITEK_Teil_3.pdf ) Electrical and thermal efficiencies, as well as heat-to-power ratios, vary among the different micro-CHP technologies. The specific energy needs in a home as well as economic considerations will dictate the appropriate micro-CHP technology to choose.

Regional variations

Climate variability between different regions in Europe plays a role. In more southern regions, where the heating needs in buildings are relatively lower, ‘trigeneration’ systems (which produce power, heating and cooling) or other technologies may be more appropriate.

Likewise, the national differences between support levels for micro-CHP also have an impact on the economic viability of systems. Several EU countries in Europe provide economic support on the electricity produced by micro-CHP systems, for instance UK, the Czech Republic, Germany and Belgium.

Trade associations

Cogen Europe