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Case Study: Micro-CHP Feasibility Multi-Residential Complex

Efficiency Engineering recently completed a Combined Heat and Power (CHP) feasibility study under the Process & Systems program offered by the government of Ontario. The purpose of the study was to show the building owner how to conserve energy costs by installing a behind-the-meter CHP system. The study was performed at a 110 unit apartment complex, located in Southwestern Ontario. CHP systems simultaneously produce heating and electricity from a single source of fuel (e.g. natural gas) using a generator. This reduces energy costs by offsetting thermal and electrical loads and taking advantage of the low cost of natural gas in Ontario.

The multi-residential apartment building has a space heating plant (2 boilers) and a domestic hot water heating plant (2 boilers and 2 storage tanks). Both heating systems require natural gas fired boilers to operate to maintain their desired temperatures of hot water storage and delivery. By installing a CHP system, they will provide a significant amount of heat demand from the recommended CHP generator. Heating demands drive the efficiency of a CHP system, and therefore influence the way the CHP can operate and perform for your building. Generally speaking, the higher the thermal demands of a building, the easier it becomes to utilize the waste heat from a CHP generator.

The following table shows a quick financial analysis of installing a CHP system at the building:

Cogeneration systems have been known to be high cost investments, but understanding the achievable savings and government funding by performing an engineering study will ultimately motivate building owners and to implement this technology. As the cost of natural gas in Ontario remains low relative to electricity, CHP systems will continue to emerge in new and existing buildings as a way of conserving energy in Ontario.The Capital Payback internalizes all projected costs including maintenance, inflation, capital expenditures, incentives, fuel cost escalations etc. The “Net Present Value” (NPV) was calculated based on a 20 year lifecycle. The recommended system size will be 65 kW and will operate behind the meter, meaning all electricity produced from the CHP is consumed within the building. The recommended CHP system will produce 80% of the building’s annual electricity, while offsetting 40% of its annual natural gas consumption. The building will have higher natural gas costs, but will have a larger reduction in electricity costs resulting in total savings of over $40,000 per year.


  1. Post comment

    Hi Mike,

    Thanks for this case study.

    I’d be interested to know more about this case study and the micro-CHP in multiresidential applications. What would be a good resource to review the regulations for micro-CHP, design / good practises, risks and considerations?

    If these are information you can share, can you send me a brief note?




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