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CHP Project Development

In this section the guide takes you through the project development process of the packaged CHP in a step-by-step fashion concentrating on those topics that are of particular importance. The Packaged CHP project development flowsheet provides a simple step by step representation of the issues to consider at particular points in the project development process. The two main issues of concern are:

1. How to determine project feasibility


The main purpose of a feasibility study is to identify whether or not the project is suitable for development. It is important to do this at the earliest possible stage so that the feasibility of a project is known before significant effort or resource is committed to the project.

Assessing feasibility is the first step in the project development process once the initial decision to investigate the potential for CHP has been agreed.

The basic steps for assessing the feasibility of a CHP scheme can be summarised as follows:

  1. Determine Site heat and power demands.
  2. Select CHP plant of an appropriate rating and type.
  3. Assess operating costs/savings when using the CHP plant.
  4. Determine where/how the CHP unit will be installed and connected to fuel, heat and power systems.
  5. Assess the capital costs of installation or the energy supply costs if an energy supply contract is being considered.
  6. Assess the economic, energy and environmental benefits of the installation.
  7. Assess the nature of other relevant issues, e.g. permits or consents.

The economics of small-scale CHP plant normally do not allow for the major use of consultants or in-house staff and Suppliers will normally offer some form of turnkey project. In practice, any assessment will require some in-house effort even if most of the work is undertaken by consultants or suppliers. In-house staff will need to evaluate these proposals and the assumptions on which they are based to see if they match expected business needs. The financial aspects and the legal aspects will require in-house or specialist advice.

A number of disciplines are likely to be involved at different stages of the assessment process:
  • Engineering – electrical, mechanical, building services, control and instrumentation, structural, acoustic and environmental.
  • Finance.
  • Legal.

2. Project implementation procedures

Once an appropriate rating and configuration for the CHP plant has been agreed, the next step is to convert the findings of a positive feasibility study into an operational plant. This will involve several steps:unit specification, Invititations to tender, tender analysis, contract placement, plant installation and commissioning. In the following sections these steps are considered in further detail. 

Unit Specification.

An appropriate specification of CHP will pay dividends with all projects. It is important to remember that the specificaiton should focus on the outputs to be delivered rather than on how delivery of those outputs will be achieved. An enquiry specifications should cover the following issues:

  1. Preferred conditions of contract.
  2. Guarantees, liquidated damages.
  3. Quality.
  4. Health and safety.
  5. Insurance.

Invitations to Tender (ITT) for the equipment and its installation

The companies to which ITT will be issued should be selected carefully. Pre-selection may be by a formal pre-qualification exercise or by informal means. In either case the objective is the same, to establish companies that have: 

  1. Relevant experience.
  2. An appropriate standing as regards finance, insurance, quality assurance and health and safety.
  3. The capacity to carry out the work required.

It is important to specify a date by which completed Invitations to Tender must be returned. The timescales set should not be too short, nor should deadlines be set for contract signature: failure by either party to give full consideration to all the issues involved may result in a contract that is unsatisfactory.

Tender Analysis

Completed tenders should be examined carefully for:

  1. Compliance with the Invitation to Tender.
  2. Assumptions made.
  3. Inclusions.
  4. Exclusions.
  5. Commercial issues.
  6. Price/tariffs.
  7. Programme.
  8. Payment schedules.
  9. Guarantees, after sales service and maintenance.

On the basis of the tenders received, it should be possible to rerun the initial feasibility study to revise/confirm project viability and value.

Contract placement

Contract placement, particularly where contracts are of significant value, as is the case with a CHP installation, will often be the responsibility of a purchasing group within an organisation. The purchasing group may be unaware of the nuances of CHP but very familiar with contracting.

It is essential, therefore, that the CHP Project Leader and the purchasing group work closely together to ensure that all commercial and technical matters are fully closed out before the contract is placed.

Plant installation

For packaged CHP, the major installed item is the ‘box’. However, the installation programme may also include:

  • Removal of redundant equipment.
  • Relocation of retained equipment.
  • Preparation of CHP foundations.
  • Preparation of access routes.
  • Interconnection to a gas supply.
  • Interconnection to electrical services.
  • Interconnection to heat services.
  • Installation of flue systems.
  • Installation of heat rejection equipment.

During installation, appropriate note must be taken of Health and Safety issues, particularly:

  1. Construction (Design and Management) Regulations.
  2. Electricity at Work Regulations.
  3. Gas Safety (Installation and Use) Regulations.
  4. Noise at Work Regulations.
  5. Confined Space Regulations.

A reputable supplier/installer will explain the installation process and confirm that it is acceptable to the client. The supplier, like the client, wants the process to be swift and trouble-free.

Commissioning & handover

Commissioning the CHP plant is normally simple. An important point in the case of small-scale packaged CHP is that the packaged unit should have been extensively tested at the factory, thereby reducing the time and risk involved in testing on-site. Nonetheless, a significant amount of testing is still required prior to handover.

For each item or system, the commissioning sequence should be built up from:

  • Installation checks to confirm that all items installed are as specified in the drawings.
  • Static system checks:
    • Flushing and pressure testing of pipe systems.
    • Electrical line checks.
  • Dynamic running checks of individual equipment/systems:
    • Tests of all control and safety devices.
    • Generator and switchboard performance and safety trials.
    • Tests of all normal and alternative modes of operation.
  • Plant performance and reliability trials.

All tests and trials should be planned in advance to determine:

  • The purpose of the test or trial.
  • The condition of the test or trial, how and by whom.
  • The timing of the trial, time of day or night and duration.
  • Recording and witnessing arrangements.

A list of defects, if any, should be raised at every stage of the commissioning process. For any defect raised its resolution should be identified by the responsible party. In some cases, correction of a defect is essential before the next stage of the trial can commence. In other instances, the defect can be allowed to remain until a general defect rectification period.

Commissioning will culminate in plant handover. Handover, which may constitute a significant milestone for payment, should be agreed only if accompanied by all the appropriate documentation, for example:

  • Plant operation and maintenance manuals.
  • Drawings.
  • Commissioning records.


Other Topics


Next:  CHP Technology

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