Energy Savings by CHCP Plants in the Hotel Sector

Executive Summary

The CHOSE project

Combined Heat and Power (CHP) has during several years been an important and prioritised area for the EC SAVE-programme. In combination of a cooling system, the technical and economical viability of the CHP-system is likely to increase.

The aim of the project has been to investigate the technical and economical viability of combined heat, cooling and power plants, CHCP, in the hotel sector, as well as the energy saving potential through this action. The project has resulted in a method as well as in guidelines on how to measure and evaluate the suitability for CHCP-installations in different types of hotels. The project has chosen to focus on only studying CHP- and CHCP-systems with gas based fuels; such as natural gas, biogas etc.

The project period has been January 1999 to March 2001. The project has been funded through the SAVE II-programme as well as through National Governments, Energy companies among others. Partner Countries of the project have been Cyprus, Greece, Italy, Portugal and Sweden, the latter as a Co-ordinating partner.

Energy consumption in hotels

There are two aspects why hotels are an interesting target group to study in the respect of CHCP potential. First, in the coming years a large increase in number of tourists is expected, which will create a need for more hotels. Secondly, energy generally makes up the largest portion of hotel running cost, after the cost of staff.

In total, the EU hotels use 39 TWh of energy yearly, and about half of the energy used is electricity. The estimated energy saving potential through CHP is 8 TWh per year, which is 20% of total energy used by the hotels. Market demand has developed the hotel sectors quite differently in the partner countries, and created separate characteristics of the hotel sector in each country. The need for energy in hotels is dependent on a large number of factors; customer category, the type of hotel, its geographic location, age and condition of the energy-using systems and last, but not least, the energy management skills.

Due to large differences between hotels, it is difficult to arrive at general consumption figures. However, the project describes a generalised distribution of energy consumption in a hotel. Heating and climatisation makes up for almost half of the hotel's energy consumption. The rest is divided between catering 25%, hot water production 13%, lighting 7% and other services 7%. Ventilation is identified as an area where good management can increase energy efficiency significantly.

The combined Co-generation and Cooling System - CHCP

Co-generation, CHP, is the term universally applied to the simultaneous production of electricity and heat, and has been studied in a variety of projects. This project has gone further, and analysed the possibilities to reduce the energy consumption by combining heat, cooling and power production, CHCP. The systems has several advantages, both on a national and a business level:

Reciprocating engines and gasturbine systems are commonly used in a co-generation application to produce electricity and heat. The selection of prime mover depends on the type of demand placed on the system. There are, however, other forms of systems that use the power from the prime mover shaft and the recovered heat. These have not been the main targets of this study.

There are several types of combined energy production systems available in the market today. CHP with turbine engine and CHP with standard temperature reciprocating engine are composed of CHP-systems and are normally developed as a complete package, which are relatively simple to install. They are also small enough to be located in existing boiler rooms and effectively replace the main boiler, linking into the existing heating distribution system. These two system types constitute the basic form of co-generation suitable for a majority of hotels and are generally sized to cover only the base load of domestic hot water needs. These systems can also be designed as to operate to meet the thermal load and the electricity base load of a hotel. By doing so, the result is a simple system, which can meet most of the energy demand of the hotel without having to be equipped with a configuration of electricity export to the local grid.

High temperature reciprocating or turbine engine and absorption chiller, the CHCP plant, saves more energy than the first two configurations, but is more complex and expensive to install and requires larger space for installation. The CHCP plant must operate almost continuously for extended periods of time and, ideally, a thermal need must exist to completely utilise the majority of the waste heat recovered from the on-site engine-generator. The combination of co-generation with absorption chillers increase the module operating time at high thermal load through additional utilisation of exhaust heat with a summer load, and decrease the connected electrical load and therefore reduces the energy costs.

Case study overview

A number of representative hotels from each country were selected for case studies. The main objective of the case study was to find appropriate CHCP-plants for different types of hotels as well as finding energy profiles for the hotel sector. A second objective was to identify some general parameters. In order to be able to evaluate the hotels, it was essential to know the load and load-duration curves for heating, cooling and electricity. However, for the predominate part of the hotels the data on energy consumption, if at all available, were aggregated and presented either as total energy consumption or in the form of heat and electricity load on a monthly basis. Separate data of the heating- and cooling loads have in general not been historically measured, and therefore no relevant information was available for the project. Since the required information on load and load-duration on an hourly basis was not available for the selected hotels, a method of energy auditing was used in the project. First a short energy audit was conducted in 60 hotels. It was followed by a detailed energy audit performed on those 44 hotels assessed as having a potential for CHCP installations.

The method of evaluating the cost effectiveness of CHCP was the following: the possible revenues in the forms of energy savings and co-generated electricity that could be sold by the hotels were compared to the expected cost of energy production with CHCP. The economic savings from the operation of a CHCP system were then estimated by comparing the operating costs for an alternative system that would be adopted if a CHCP system were not installed. The alternative systems are in most cases electrical power purchased from the local Distribution Company, combined with heat generation from boilers.

The project aimed to receive equivalent output from all calculations regardless of in which partner country the case study had been accomplished. In order to reach this, a computer software program was developed. Input required in the model was: prices for fuel for heating, fuel for CHP, interest rate, time span to be used and capacity charges for electricity in Euro/kW per year. There are significant variations between the partner countries in these variables.


In the majority of the cases studied it is recommended that before considering a CHP system, every effort must be made to reduce the energy requirements, especially the electrical energy consumption. This is to be done through the incorporation of simple energy saving technologies. However, the most important thing is to reduce the energy consumption for space heating. The reason is that the heat load will determine the size of a CHP or a CHCP. With the heat load being unneccessary high due to poor energy efficiency the installed CHP or CHCP will not be optimized. With the installation of absorption machines, the need for electrical power and energy will be reduced. In the future, there will be an increase in the demand for electricity, which may cause inconvenience for electrical generation in many countries, shortage of power, as well as difficulties with transmission.

The cost-effective analysis of CHCP shows the following payback periods for the investments (years):








> 6


> 15






> 15

  1. With actual prices, none of the cases has a real cost-effective CHP solution. A price difference of 12 Euro/MWh between gas for boiler and gas for CHP gave pay back periods of 4,4 - 7,0 years. Until January 2000 there are no differences in Natural gas prices for CHP and for boilers in Portugal.

Investments in CHP - Investments in CHP in Cyprus, Greece and Italy are likely to be economical viable for the examined hotels sites. The suitable form of CHP for the majority of the examined hotels would consist of a mimi-CHP package set with a heat recovery system to provide mainly domestic hot water, meet the baseload and run over 4 000 hours a year. In Sweden and Portugal, CHP is not an option with present fuel and electricity prices.

Investments in CHCP - The results indicate that the concept of tri-generation system is most likely to be economically viable in Italy. However, investments in CHCP are not likely to be viable with the present fuel and electricity prices in Sweden, Portugal, Greece or Cyprus.

Sensitivity of results - CHP and CHCP investments are capital intensive. A subsidy on the initial investment cost would greatly influence the financial results of the investment. In Cyprus for instance, a subsidy of 30% on initial cost would reduce the pay back period on a CHCP investment from 8,4 to 4,2 years. The fuel cost is another issue of concern. Examples from Cyprus indicate that a 20% reduction in LPG price would result in pay back periods of 3-4 years instead of 9 years. Similar examples from Greece show that a 30% increase in natural gas prices would result in reducing the net present value by 65%.

The result show that although significant levels of energy efficiency can be reached by introducing CHCP-concepts, it is difficult to recieve viable investments with the prevailing fuel costs and electricity prices. If the European Societies value the benefit of energy efficiency, incentives are needed for energy actors in order to make the investments.

When optimised the CHCP technique shows promising results in energy efficiency since less fuel is needed to produce energy compared to other techniques. It is also possible to use efficient exhaustion techniques, which in addition to the reduction in fuel consumption assist in decreasing the emissions from the energy production. Obviously this is an environmental benefit.

As the results indicates, the installation of the proposed CHP mini-package is resulting in primary energy savings of between 5,5 to 20%. The magnitude of the fuel savings was calculated taking into account the efficiency of electricity generation from the conventional units of large central power stations connected to a national electric grid. Estimates of environmental benefits also show that in comparison to separate production of heat and electricity, the CO2 reduction with CHP and CHCP plants varies from 20% to 31%. The technique does not seem to imply any negative side effects on the hotel activity, i.e. the hotel guest will not notice any changes.

Consequently, power production is an area where introducing new techniques on a large scale could have a great positive impact on the environment. Installing CHCP units have the technical potential of being one of these techniques.

Dissemination of results

In order to stimulate discussions and cross sector experiences, the information was disseminated through seminars in each country. The seminars were also held in order to encourage the creation of networks to support work in the field of energy conservation. The target groups for the seminars were hotels, hotel associations, energy consulting companies, institutions and companies of public sector related to energy, energy technicians, tourism schools, managers in building- and real estate companies. The seminars were well attended and the number of participants varied from 20-60. Newsletters in the participating countries have been written and distributed to stake holders. Newsletters have so far included invitations and information of the seminar, intermediate results of the projects etc.


(in Adobe Acrobat format)

Dissemination actions


  • Italy, Rome - 16th November
  • Sweden, Malmoe - 30th November, 2000
  • Greece, Thessaloniki - 15th December 2000
  • Portugal, Coimbra - 15th December 2000
  • Portugal, Lisbon - 8th February 2001