Understanding the benefits of gas combined heat and power generation
Energy transition Technology
How LCP specialists advised government on the case for policy intervention in the Gas CHP market
Background
LCP were commissioned by BEIS (then DECC) to help them understand the benefits associated with additional gas-fired Combined Heat and Power (“gas CHP”) generation.
Our solution
Our analysis was used to inform their decision on whether new forms of policy support for gas CHP would be beneficial.
We performed a quantitative review of the costs and benefits to the wider electricity system under varying levels of CHP deployment. As part of this project, we developed our EnVision model to CHP plant in more detail, including the flexibility of these plant to run in power, heat or combined heat and power modes, and the economics behind these decisions.
Our analysis focussed on:
- Estimating the potential deployment levels of Gas CHP under various support policy options.
- Assessing the change in carbon intensity at various levels of CHP deployment, determining the duration of benefit provided by new CHP capacity.
Quantifying the value, in terms of Net Present Value (NPV) using the BEIS social discount rate, of the various policy options over the 2018 to 2045 period. The final report can be accessed here.
The results
A series of workshops were held with BEIS and industry groups, to ensure stakeholder challenge and feedback was incorporated within the results. Our findings were then published in a final report of the BEIS website.
