High energy costs encourage efficiency. Combined Heat and Power (CHP), which is also commonly called cogeneration, distributed generation (DG) and distributed energy (DE), is one of the most powerful approaches to improving fuel-use efficiency. With CHP, the thermal energy produced when generating electricity is used for either hot water or space heating rather than being wasted. Most smaller CHP installations (less than 100 kW) use reciprocating engines to drive electrical generators and useful heat is recovered from the engine's cooling loop and/or exhaust. Microturbine and fuel cell applications for CHP are also becoming more common.
Occasionally, a CHP installation will be expanded to include an absorption chiller, i.e, CHP becomes Building Cooling, Heating, and Power (BCHP). However, as with solar applications, an absorption chiller may make the combined system harder rather than easier to sell. The advantages that liquid-desiccant air conditioners offer over conventional electric units reverses this situation by giving the customer more effective control over indoor humidity and allowing higher ventilation rates. Typically, the recovered heat from CHP systems that produce between 60 kW and 75 kW are a good match with the thermal requirements of a 6,000 LDAC.