Combined Heat and Power maintenance

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

Return to the menu of the Combined Heat and Power (CHP) benefits and opportunities for business environmental topic