Micro combined heat and power: potential impact on the electricity supply industry

Micro CHP is a "disruptive technology". It has the potential to substantially disrupt the established electricity supply industry both economically and technologically. It has a predicted capacity of similar order of magnitude to the existing nuclear generating capacity in the emerging liberalised energy markets in Europe. A range of micro CHP technologies are approaching commercial launch and the remaining challenges relate less to core technology and more to peripheral and interface components and commercial packaging. It is at this stage that the implications for energy companies, suppliers and network operators, are becoming clearer. In general these challenges fall into two main areas, commercial and technical. Within the commercial area, the complexity of metering and settlement of domestic import/export represents a formidable challenge, whilst the technical standards appropriate to integrating numerous very small generators raises entirely new issues both at the customer interface and throughout the LV network. This paper summarises the status of micro CHP technologies, potential applications and scope of markets. It describes the potential commercial and technical impact on existing electricity companies, their networks and customer base as well as identifying likely new market entrants.