POWER February 2015 - 30

COMBINED HEAT AND POWER
few years has taken place in China.
As with the overall power mix, the large
majority of Chinese CHP is coal fired, though
gas-fired CHP, primarily combined cycle, has
seen recent growth (Figure 3). The most recent
Five-Year Plan specifically calls for an
increase in gas-fired CHP.
Most CHP in China serves the industrial
sector. Still, China's DH network is the second
largest in the world after Russia's, most
of it serving the densely populated northeast
regions, which frequently face severe winters.
About one-third of these DH needs are
served by CHP, with the rest coming from
heat-only boiler stations. The need to reduce
air pollution caused by these mostly small,
overwhelmingly coal-fired boilers has been
part of the incentive to increase the use of
more efficient CHP.
For more on the development and future of
CHP and DH in China, see " Optimizing Combined
Heat and Power in China " in this issue.
Japan. Japan and South Korea both represent
potential growth markets for CHP and
DH because of their dense populations, cold
winter climates, and national concern with
energy efficiency, but in both countries, CHP
has lagged behind other resources.
The upheaval in Japan's energy markets
following the March 2011 earthquake
and tsunami has also roiled plans
for expanded use of CHP. According to
IEA data, Japan's installed CHP capacity
has remained stagnant at around 9.5 GW
since 2007, which has meant a shrinking
share-now about 4%-of the national
mix as other resources have grown. Unlike
other developed nations, Japan's electricity
demand has remained flat since 2000,
and high costs of imported fuel-especially
liquefied natural gas (LNG)-remain a
challenge for thermal generation.
Still, observers believe CHP has room
for expansion in Japan because of ongoing
needs to improve efficiency, thus reducing
fuel needs and carbon emissions.
Most CHP capacity in Japan is either gas
turbine- or engine-based, with 85% of
applications relying on gas or oil. Fossil
fuel-powered CHP does not qualify for incentives
designed to encourage renewable
energy development.
Approximately 79% of CHP capacity
in Japan is industrial, and CHP remains a
minor player in supplying DH, with an estimated
300 MW in total CHP-powered
DH. (DH in general is not commonly used
in Japan.) Still, the trend for CHP in Japan
is downward in size: According to IEA
data, the average size of new CHP installations
has fallen to 0.25 MW, with most being
commercial and residential rather than
industrial or utility. Much of this reflects
30
concerns of end users-driven by the 2011
earthquake-for keeping the lights on in the
event of a loss of grid power.
Another encouraging trend for CHP in Japan
is the development of micro-CHP technologies
designed for residential use. Though
One good example of where South Korea
is headed with CHP can be seen in the new
834-MWe and 290-MWt Ansan combined
cycle plant, which came online in early January.
Built by Siemens and POSCO, the twounit
LNG-fired facility supplies both power
Fuel cell micro-CHP is believed to be a potentially
large growth market because of its
greater efficiency and low emissions, and it
is rapidly taking market share from traditional
engine-based systems as the technology
improves and costs continue to decline.
these engine- and fuel cell-powered systems
are very small, around 5 kW, and though
total installed capacity is around 200 MW
nationwide-maybe 3% of installed CHP
capacity-the total numbers are impressive:
Japanese gas companies have installed almost
200,000 such systems.
Fuel cell micro-CHP is believed to be
a potentially large growth market because
of its greater efficiency and low emissions,
and it is rapidly taking market share from
traditional engine-based systems as the
technology improves and costs continue
to decline. Domestic manufacturers such
as Panasonic have thus far dominated the
market, but foreign firms such as Ceres
Power Holdings are looking at expanding
into Japan. The national government has
set a goal of equipping 10% of households
nationwide with fuel cell CHP by 2030,
which would represent more than 5 million
systems. However, experts believe fuel cell
costs will need to decline substantially to
meet this ambitious target.
South Korea. This nation's energy market
has seen similar upheavals in recent
years, but unlike Japan, they have been
driven by skyrocketing demand rather than
natural disasters. The national utilities have
been adding capacity at a breakneck pace to
stay ahead of the curve, efforts that have not
always been successful.
Much as in Japan, CHP has lagged in
South Korea at about 7% of the national mix
since the late 2000s. Capacity has expanded,
however, and currently stands at 7.7 GW. Unlike
Japan, most CHP in South Korea-about
two-thirds of the total-is integrated into
DH applications, which represent the main
source of growth in recent years. The nation
currently supplies about 15% of its population
with DH.
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and DH for the city of Ansan and was completed
in just 24 months.
Meanwhile, industrial CHP growth has
been stagnant largely because of high LNG
prices. DH already supplies many of the large
urban areas in South Korea, so future growth
in that area may be limited (for another example,
see " KOMIPO Relocates an Entire
Combined Cycle Plant " in the August 2014
issue). South Korea has an unusual approach
to gas imports for Asia, in that large users are
allowed to directly import LNG themselves,
which has increased the cost effectiveness of
large-scale gas-fired CHP.
South Korea has its own national fuel
cell CHP initiative, though on a smaller
scale, with a target of 100,000 systems by
2020. FuelCell Energy is currently one of
the major suppliers of fuel cells in South
Korea, with several projects under way.
Total installed capacity of fuel cell CHP
stands at 62 MW.
The small-scale CHP/DH market is already
fairly saturated, and this is not seen as
an area of significant future growth. Renewable
CHP is gaining attention, however, with
several biomass-, biogas-, and solid waste-
fueled plants in operation.
India. With its mostly mild climate, India's
CHP sector is overwhelmingly industrial.
The perennial unreliability of the
national grid means captive generation is
an important element of the national mix,
representing about 15% of total capacity
and 43 GW of installed generation. Though
nationwide data is difficult to come by, it is
thought that a significant percentage of CHP
capacity in India, about 3 GW, is biomassfired,
since the sugar industry is the largest
user of CHP. Fertilizer and petrochemical
plants are also users of CHP, but CHP is
thought to be underutilized in Indian indusPOWER
| February 2015
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POWER February 2015

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