New Report Looks at the Role of Micro-CHP in the UK’s Energy Future

26 Mar 2013

Micro-CHP Report_EcuityLeading companies in the micro combined heat and power sector in the UK have set out a strategic vision for the role of micro-CHP (including fuel cell micro-CHP) as a key component of an emerging smarter energy environment, presented in a report produced by Ecuity Consulting LLP. The report sets out how this emerging family of technologies could revolutionise home heating and suggestions for a support framework to allow consumers who let their heating system also power their house be rewarded for the full value they bring to the energy system.

The electricity generated by micro-CHP, in tandem with the smart grid and energy storage innovations, can help the grid to cope with capacity constraints and short-term spikes in demand. Alongside power generation benefits, micro-CHP is also the most cost-effective gas fuelled individual home heating solution that generates on-going benefits of up to 4.3 pence per kWh of heat delivered in comparison to incumbent technologies.

Solid support is necessary to bring this novel solution to mass market. An effective policy framework in Japan has led to rapid market gains and a 25% unit price reduction between 2010 and 2012. Similar cost reductions should be expected in the UK if an equally visionary policy were followed.

The group of companies aims to use this joint report as a framework for constructive collaboration with a range of policy and industry stakeholders in the UK based on the objectives below.

Provide an initial boost:

Backing for flagship distributed generation projects, such as virtual power plant applications, would drive rapid cost reductions and serve as a means of demonstrating the capacity of micro-CHP to support security of supply and alleviate the need for local network reinforcement due to load growth. Such projects could be financed by the Green Investment Bank and supported by the Low Carbon Networks Fund,

Reflect the benefits of micro-CHP to the wider energy system

Aggregated and controllable micro-CHP applications fulfill the main objectives of the capacity market, designed under the Electricity Market Reform, and therefore should be eligible for this mechanism. The industry would also encourage a review of the current export tariff design to seek ways to reflect the real value of exported electricity by micro-CHP as a result of its capability to generate power at the point of use and typically at times of peak demand.

Enhance consumer incentive

An increase in the feed-in tariff for micro-CHP to at least 17p/kWh, as the industry has jointly argued since 2010 (FIT RPI adjusted), would generate improved consumer incentive, bringing it closer to other supported low carbon heating technologies. This would start to enable the considerable potential of micro-CHP to contribute to low-carbon economy objectives to begin to be realized and start to drive scale and rapid cost reductions.

The report is available online at:

A dedicated webpage to provide consistently updated information on micro CHP technologies and micro CHP market developments can be accessed at:

Source: Ecuity Consulting LLP


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