What is Combined Heat and Power (CHP) and How Does it Work in the UK?

What is Combined Heat and Power (CHP)?

With UK energy prices remaining volatile and organisations under pressure to improve efficiency, many are exploring ways to get more value from the energy they consume. One proven technology is Combined Heat and Power (CHP), also known as cogeneration.

CHP systems generate electricity and heat simultaneously from a single fuel source. Unlike traditional centralised power generation, which wastes much of the heat produced, CHP captures it and makes it useful. This not only boosts efficiency but also helps UK businesses and public sector organisations reduce energy costs, improve energy security, and future-proof their operations.

CHP vs Conventional Power Generation

In the UK, most electricity comes from large centralised stations. While they generate significant amounts of power, they also waste large volumes of heat by venting it into the atmosphere.

By contrast, a decentralised CHP system generates power directly on-site, e.g., at a hospital, university, manufacturing facility, or leisure centre. This reduces transmission losses, increases resilience, and provides a reliable source of energy even during grid instability.

How Does a CHP System Work?

A typical CHP unit includes:

• An engine that runs on natural gas, biogas, or hydrogen
• A generator that produces electricity
• A heat exchanger to capture waste heat
• Control and monitoring systems for performance and safety

The process works by generating electricity and then using the heat produced by the engine, instead of wasting it for practical applications. CHP can supply:

• Heating and hot water for buildings
• Industrial process heat for manufacturing
• Hot water for swimming pools and leisure centres
• Energy for district heating networks

This dual output makes CHP one of the most efficient energy solutions in the UK, with overall efficiencies reaching 90% or more.

Heat can also be used to generate chilled water via an absorption chiller, a process known as tri-generation, which allows CHP systems to deliver cooling as well as electricity and heat.

CHP Fuel Options in the UK

One of the key advantages of CHP is its fuel flexibility:

• Natural Gas CHP – the most common option, particularly in hospitals and large commercial sites.
• Biogas CHP – ideal for farms, AD operators, and waste facilities, turning waste into usable energy.
• Hydrogen CHP – hydrogen-ready CHP engines are already available from 2G, providing a pathway to low-carbon energy as the UK develops its hydrogen infrastructure.

Who Benefits from CHP in the UK?

CHP is particularly effective for organisations with a consistent demand for both power and heat:

• NHS hospitals and care facilities – where resilience and cost control are critical
• Universities, colleges, and schools – with large campuses and year-round energy demand
• Industrial and manufacturing sites – where process heat and reliable electricity are essential
• Leisure centres and swimming pools – which require constant hot water and heating
• Hotels and spas – providing reliable electricity, hot water, and lower energy bills while supporting sustainability goals
• District heating schemes – increasingly relevant in UK cities and housing developments

CHP and the UK Energy Transition

CHP is a proven way to reduce energy waste, cut costs, and increase resilience. For organisations that need reliable electricity and heat, it’s one of the most effective solutions available today.

And with the ability to run on natural gas, biogas, and hydrogen, CHP offers a future-ready pathway as the UK energy system continues to evolve. Importantly, CHP can also work alongside other technologies such as solar PV, battery storage, and heat pumps to help organisations move closer to the UK’s net zero targets.