Making The Case

The best way of looking at the business case for CHP – as for any energy technology – is to consider all of the costs and all of the benefits over the full lifetime of the project. For a district heating project, this would mean considering:

• The capital costs of the district heating network, CHP or other prime mover, and installations of equipment in people's homes or in other buildings
• The ongoing costs of operation and maintenance of a system
• The benefits associated with the scheme, including the income generated from selling heat and / or electricity to customers within the network or through the grid, and the money saved in comparison to an alternative way of supplying heat and power
• Other benefits, such as avoided costs of the EU ETS or CRC Energy Efficiency Scheme or income from feed-in tariffs or the renewable heat incentive (see below).

The Treasury Green Book provides guidance on appropriate discount rates to apply over time for public sector schemes

The DECC website provides guidance on financing CHP.