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Generator Cost of Combined Heat and Power vs Back-up Power

Some of our clients are often surprised when they see the installed cost of a Combined Heat and Power (CHP) plant.  Their point of reference is often the cost of a back-up generator.  The cost difference between the CHP and the backup generators is significant, even when accounting for the extra mechanical, electrical and venting costs of CHP.

Our response to our clients is that comparing a CHP genset with a back-up power genset is not a fair comparison.  It is like comparing an automobile engine with a snowmobile engine.  At 8,000 km a car engine is barely broken in, whereas the snowmobile engine is ready for its first rebuild.

The following table gives specifics on why a CHP genset can be an order of magnitude more expensive than a back-up genset.

Genset cost comparison

William Pentland wrote in Forbes Magazine compares a backup generator to a primary generator (CHP) by using the analogy that “…it costs less to build a car that only needs to drive 2,000 miles, is not subject to any fuel efficiency requirements or emissions limits than it costs to build a car that can drive 200,000 miles, gets 50 miles per gallon and emits virtually no pollutants.”