In line with what the industry has experienced for many years, the gap between electricity prices and gas prices – often referred to as the spark gap – continues to widen.
According to the latest report from the Department for Business, Energy & Industrial Strategy (BEIS), the price of gas for non-domestic customers fell slightly between Q2 and Q3 last year, while electricity experienced an increase. The average cost per kW/h for electricity was 10.39 pence while gas was 2.37 pence.
So, as energy prices continue to be a pain point for many UK businesses, the case for implementing a combined heat and power (CHP) system grows stronger. CHP systems burn natural gas to generate heat, while providing electricity to supplement or replace the grid supply. By generating electricity on site, energy bills can be reduced by around 20% compared to conventional power generationaccording to reports.
Gary Stoddart, Technical Sales Director at Remeha CHP, explains: “Energy costs are often one of the main overheads for any business, large or small. And, according to the Carbon Trust, firms are wasting on average 20% of their annual spend through energy inefficient equipment – so it’s no surprise businesses are concerned about recent price rises.
“By using a CHP system, businesses can produce electricity at gas prices, which is cheaper than buying it directly from the grid as electricity is approximately 8 pence more expensive per kW/h. Also, in comparison to purchasing from the grid, CHP electricity doesn’t suffer losses resulting from moving power over large distances, resulting in a more efficient process.
“By generating heat and power simultaneously CHP can reduce carbon emissions by up to 30% compared to conventional methods. At the same time, where the ‘waste’ heat from the generation process is lost at gas power stations, the heat generated by CHP can be reused in the heating/hot water system. This is particularly effective when the method is designated as the lead heat source.
“The advantages of CHP are clear, particularly for energy-intensive buildings such as hospitals. Indeed, a recent report by the Sustainable Development Unit (SDU) found that implementing CHP could save the NHS around £26.4m per year. And, if the spark gap continues to widen as it has in recent years, this case will only grow stronger.”
