Environmental guidance for your business in Northern Ireland & Scotland

Combined Heat and Power maintenance

Maintaining a CHP system

The economic and environmental benefits you can gain from your Combined Heat and Power (CHP) system will depend on how it is set up and maintained - as reflected in the relationship between the annual operating costs of the plant and capital outlay.

There are three different types of maintenance for CHP systems - the 'design and manage' approach, the 'turnkey' approach, and using a contract with an energy service company (ESCO).

Design and manage maintenance

With a design and manage approach:

  • you will have maximum control over the development of your CHP system - you will pay for and own the plant
  • you will fully benefit from the cost savings achieved
  • you will be involved in debt finance or a hire purchase arrangement to meet the capital costs of running the plant
  • the costs of CHP maintenance will appear on the company balance sheet.

Turnkey maintenance

If you use turnkey arrangements for your CHP system:

  • you will use a contractor for the design, procurement, installation and testing of the CHP plant
  • you will pay for the plant on completion - with or without debt financing - and you will own it once it has been completed
  • you will either take full responsibility for the operation and maintenance of the plant, or you can outsource the operation and maintenance to a contractor
  • the costs of the CHP maintenance will appear on the company balance sheet.

Using an ESCO

If you use an ESCO for the development of your CHP system:

  • the ESCO will provide the facility and designs, and they will install, own, operate and maintain the CHP plant
  • you will establish and facilitate the initial contract and receive a reduced level of cost savings
  • the costs of the CHP itself will not appear separately on the company balance sheet.

Further information

CHP Focus: CHP Schemes database

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