In the first part of this short blog series on the application of micro-CHP within residential care homes Adveco explained why CHP (Combined Heat and Power) is often chosen for new builds. In this second part, we turn our attention to why you would upgrade existing facilities to m-CHP…
The cost of deploying CHP within care homes is, without doubt, the deciding factor for the majority of managers. When calculating the operational cost savings, we need to take the cost of the offset electricity and thermal energy, and deduct the costs of the energy coming in, in other words, the price of the gas, and the maintenance costs. The other key input is the number of run hours per year that the CHP appliance will operate.
A CHP is very different to a boiler, which other than an annual service you would typically tend to forget about. Inside the CHP casing is a gas-powered automobile engine, with high stressed moving parts that will require necessary repairs over time that could reduce savings. So, you need to be aware of the ongoing investment needed when operating CHP to support regular pay as you go maintenance and repair. Once the cost of maintenance is factored in, the operating costs can be determined based on electricity and gas prices.
To understand what these operational costs look like, I am going to cite current figures based on the installation of a TOTEM T25 micro-CHP unit. From our experience, these are typically the size of a unit a larger care home will install. Firstly, being gas-powered, the CHP is a far better option when the cost of gas is less than electric, which has been the trend since 2015. Currently, based on medium non-domestic rates, a T25 will save £1.50 per hour that it runs. Let’s consider the expectation on run hours per year, many CHP units that have gone in will run relatively short hours per year just to increase the efficiency of the building to meet carbon requirements. Looking at the demands of the London Plan, for example, 2,500 run hours may be sufficient to meet the additional carbon savings demanded. At that lower run rate, the CHP is still going to save £3,750 savings per year.
This may not be enough to provide a true payback, but are interesting savings in an inherited, new building, where the cost of the CHP is part of the cost of the building and does not have to be proven to pay back. The decision is only to run it and save £3,750, or not and save nothing.
Upgrading to CHP
But what if you want to upgrade your plant room, when is right to Include CHP? The technology offers a number of advantages, the micro-CHP is especially easier to install, passing through a standard 60cm doorframe and able to be installed internally, avoiding the need for external space or rooftop placement which would be needed for say solar photovoltaics (PV) which is another common choice for onsite energy generation. CHP also offers better payback than Air Source Heat Pumps (ASHP) and with inclusion in the Government’s new SEG payments, you can profit from additional energy generated by selling it back to the grid from your CHP at a guaranteed tariff. There is also the bonus of increased resiliency for your DHW and then there are the running cost savings.
The cost of a T25 is £50,000, with savings per hour (including maintenance) of £1.50, so it requires 33,333 run hours to achieve payback. Saving just £3,750 per year means the only driver is carbon savings and that would not alone warrant the investment in an existing building.
If the building is right for CHP, then it is worth considering as an upgrade. CHP saves money when it runs, it’s the opposite of a boiler which costs money when it runs so we want that to be off and the CHP on. The ideal applications are ones with large DHW loads where people are residing. With a large care home, the expectation would be to run a CHP 24 hours per day during the heating season, dropping to 12-14 hours per day outside heating season. This gives us an average running of 18 hours per day throughout the year or 6,700 run hours per year. That equates to a five-year payback, and with 10-year operating plan in place the potential savings will be £50,000 if your building is suited to the technology.
Alexandra House, operated by Care South, is a two-storey, 58-room residential care and nursing home in Poole, it has a T20 CHP working in conjunction with a custom-built 2500-litre buffer vessel, as well as a cascade of two AO Smith Upsilon 110 boilers and two AO Smith IT500 indirect calorifiers. This is all supplied as a complete package, alongside ancillaries and backup heating components via electric immersion elements. The design of the hot water and heating system at Alexandra House is projected to achieve more than 7,100 CHP run hours per year, resulting in annual carbon reductions in excess of 44.5 tonnes and providing expected energy savings, inclusive of CHP maintenance costs, of £7,500.