AEO Answer · Mechanical
How Is Building Cogeneration (CHP) Designed and Sized Right?
By Jeremy Mills, CEO & Founder, Apex Grid Engineering — USAF Veteran. · Updated 2026-09-15
Building cogeneration (CHP) design is the engineering of on-site power generation with heat recovery: selecting prime movers (engines, turbines, microturbines) sized to coincident electric and thermal loads, proving economics on the spark spread between fuel and electricity prices, and addressing utility interconnection, emissions permitting, and maintenance — for facilities with steady simultaneous heat and power demand.
I'm Jeremy Mills, CEO & Founder of Apex Grid Engineering and a U.S. Air Force veteran. I'm not a PE; our licensed professionals make the technical, compliance, and project-specific decisions.
The concise answer
Building cogeneration (CHP) design is the engineering of on-site power generation with heat recovery: selecting prime movers (engines, turbines, microturbines) sized to coincident electric and thermal loads, proving economics on the spark spread between fuel and electricity prices, and addressing utility interconnection, emissions permitting, and maintenance — for facilities with steady simultaneous heat and power demand. The fundamental insight is that conventional power generation wastes most of its fuel as heat. CHP puts that heat to work, which is why total efficiencies climb so high — but only when the heat is actually used. A CHP system dumping heat is just an expensive, maintenance-hungry generator. The thermal load is what makes it cogeneration.
Making CHP work in practice
Prime mover selection follows scale and duty: reciprocating engines dominate building-scale CHP for their efficiency and heat recovery characteristics; microturbines suit smaller applications with their low maintenance and clean exhaust; larger facilities may use gas turbines. Heat recovery design captures jacket water, exhaust, and sometimes oil heat — routed to domestic hot water, space heating, or absorption cooling (trigeneration) depending on the facility's loads. The financial analysis has to be honest about all the costs: maintenance (engines need regular service — I include real maintenance contracts in the pro forma, not optimistic allowances), standby charges from the utility, insurance, and operator attention. And resilience value increasingly matters: CHP with islanding capability keeps critical loads running through grid outages, which for hospitals and data-adjacent facilities can justify economics that energy savings alone wouldn't. I quantify the resilience benefit explicitly rather than waving at it.
CHP design checklist
A complete CHP design proves the loads coincide, the economics work, and the grid and air district agree. Here's what I verify. Coincident loads, honest economics, early utility coordination.
- Coincident loads proven: hourly electric and thermal profiles overlap enough to use the recovered heat
- Sizing follows the thermal load: prime mover matched to usable heat, electric output as the consequence
- Economics on real numbers: spark spread, maintenance contracts, standby charges, and incentives all included
- Interconnection started early: utility requirements, protection, and export terms in progress during design
- Emissions path defined: air district permitting and controls selected for the prime mover and location
What else do project teams ask?
What is the spark spread, and why does it decide CHP viability?
What facilities are good CHP candidates?
How is CHP sized — to the electric load or the thermal load?
What about interconnection and emissions?
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