The 30-second guide to combined heat and power plants

Those who use CHP will be exempt from the climate change levy, which comes into force in April; the reason is that they use energy to produce electricity more efficiently than conventional power stations, and emit 10-50% less carbon dioxide in the process.

Power stations waste the energy they produce in two ways: first, energy used to power the generators is discharged as heat straight into the environment; second, energy is lost when electricity is transmitted through power lines. The Combined Heat and Power Association claims that, by the time the electricity reaches our homes, 60% of the original energy has been wasted.

Because CHP units generate electricity close to the point of use, and recover the heat that would be wasted, they can be 70-80% more efficient per kWh of energy delivered. Typically, CHP might be installed in new housing association schemes or to provide power for industry or hospitals. Smaller units, with outputs of less than 5 kW, known as microCHP, are suitable for small applications such as hotels, and even houses. In the future, the conventional domestic gas boiler could be superseded by microCHP plant.