The Gasification/Biomass Combined Heat and Power (CHP) system could very well be the holy grail of the renewable energy world. CHP captures otherwise wasted heat to provide useful thermal energy such as steam or hot water. But – and there is always a but – it is not for everyone and there are some key considerations when looking at investing in this relatively new technology.

CHP has a lot to recommend it. It produces a large amount of constant heat, it generates electricity, it reduces the energy costs of running a rural business and it could generate employment. And as with all renewable energy technologies, there are financial incentives geared towards encouraging uptake and assisting with paybacks. Some developers are suggesting it will take between three and five years to see a return, but taking into account additional costs and teething problems, it may be more realistic to assume a period of up to eight years.

The arguments for investing in CHP are compelling, especially if you are a farmer with high electricity demand and access to your own timber supply. However, when I meet any client who is considering doing so, I ask two specific questions. Do you have or intend to gain the technical skills to establish a CHP system? And are you suited to running one?

Like all machinery, a gasification or biomass CHP system requires regular servicing. CHP is a relatively young sector in the UK and manufacturers are still improving their technologies. I strongly recommend securing a large maintenance budget (perhaps twice the amount advised by any manufacturer) as it will require servicing every 500 hours (or about once a month) and the engine will need to be replaced several times throughout its lifetime. 

The fact that the system is in constant heat production is actually one of the largest risks to a CHP project so it is important to think very carefully about your energy use or what it might be in the future. The common solution is to run a woodchip enterprise and use the system for the drying process. You may need 750 tonnes of dry wood for your own needs but the heat produced will allow you to dry 3,000 tonnes per year.

Fuel quality needs to be higher than that used for a standard biomass boiler. A gasification system does not like dust so you will need to pay attention to quality. Wet fuel will create tars so you will have increased maintenance tasks and reduced lifespan on the engines. An ORC (Organic Rankin Cycle) or steam system is less fussy on fuel quality. 

In any event, careful thought needs to be given to whether there is a local market to allow you to sell the woodchip. 

Gas is clearly a dangerous substance and, therefore, a heath and safety risk. It is vital to choose the right technology to match your capabilities and needs, and to undertake strict due diligence on both manufacturer and installer. Are they qualified? What do they know about the technology? What is their track record? Do they offer on-going training and support?

Finally, do you have a connection to enable you to export your electricity to the national grid? And, of course, who is going to buy your electricity? Have you secured a contract to supply electricity through a Power Purchase Agreement (PPA)? What rate have you secured and how long is the contract period?

If you cannot answer all of these questions positively, don’t be afraid to go back to the drawing board and think again.

It is also worth having a frank discussion about whether CHP is for you. Are you mechanically minded? Can you strip down and rebuild an engine within a 12-hour period? Are you meticulous in your quality control, and importantly, do you have time to spend on maintenance or can you afford to employ someone who does?

The sector may be fairly new, but I do believe it is an exciting prospect and for the right rural business owner or manager, who either has or is prepared to learn the expertise and gain the necessary knowledge, there will be good rewards ahead.

Further information

Contact Savills Energy, Utilities & Infrastructure