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Energy analytics

Understanding
the benefits of gas combined heat and power generation

How LCP specialists advised government on the case for policy intervention in the Gas CHP market

Background

LCP were commissioned by BEIS (then DECC) to help them understand the benefits associated with additional gas-fired Combined Heat and Power (“gas CHP”) generation. 

Our solution

Our analysis was used to inform their decision on whether new forms of policy support for gas CHP would be beneficial.

We performed a quantitative review of the costs and benefits to the wider electricity system under varying levels of CHP deployment.  As part of this project, we developed our EnVision model to CHP plant in more detail, including the flexibility of these plant to run in power, heat or combined heat and power modes, and the economics behind these decisions.

Our analysis focussed on:

  • Estimating the potential deployment levels of Gas CHP under various support policy options.
  • Assessing the change in carbon intensity at various levels of CHP deployment, determining the duration of benefit provided by new CHP capacity.

Quantifying the value, in terms of Net Present Value (NPV) using the BEIS social discount rate, of the various policy options over the 2018 to 2045 period. The final report can be accessed here.

The results

A series of workshops were held with BEIS and industry groups, to ensure stakeholder challenge and feedback was incorporated within the results.  Our findings were then published in a final report of the BEIS website.

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Bespoke modelling solutions

We can help our clients with a wide range of issues from whole system modelling to individual power plant and policy impact analysis.

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Strategic advice aimed at maximising the benefits and minimising the risks associated with the Capacity Market and Contracts for Difference.

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Commercial and operational optimisation

We advise on the optimal dispatch of assets within the wholesale market, forward planning of maintenance activities and valuation of commercial upgrades to plant.

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We provide detailed forecasts of the GB and Irish power markets, using our EnVision modelling framework. This can provide both short-term and long-term forecasts of all key system metrics, from system wide to individual assets.

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Irish market support

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Our understanding of market dynamics and modelling experience allow us to offer evidence-based recommendations on complex policy and regulatory issues that allow fully informed decision-making.

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Transaction support and generation asset valuations

We combine bottom-up unit-level modelling with market and policy insights to quantify the value and understand the risk associated with any generation asset. 

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