Space heating using electricity is monstrously wasteful and inefficient. Moneypoint power station, Ireland's largest, converts only a third of the energy in the coal it burns into electricity and then 14 % of that is wasted in line losses as the power makes its way to the customer. Gas-fired power stations perform rather better. Huntstown turns 55% of the energy in the gas it burns into electricity but, thanks to the line losses, only 47% of the energy from the gas actually gets delivered.
All told, 20% of all the energy in the fuels burned in Ireland gets wasted being turned into electricity. That amounted to the equivalent of 3 million tonnes of oil in 2004. Such massive inefficiency was acceptable in an era of very cheap fuel but that's no longer the case. Electricity is a premium fuel, which needs to be reserved for the jobs it does best, such as lighting, powering motors and running electronic equipment. The bulk heating of water and air needs to be done in some other way.
Getting the heat from a combined heat and power system is one approach. If fuel is burned in a good conventional boiler, 85% of its energy can be turned into heat and only 15% is lost to the atmosphere. However, if that fuel were to be burned in a CHP plant instead, the losses would stay at 15% but perhaps 25% of the fuel's energy could be turned into electricity, which has a much higher market value than just common-or-garden heat. This makes CHP not only an energy-efficient approach to heating but also a cost effective one.

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Illustration 1: Why CHP is attractive. The first arrow shows what happens in the present Irish electricity system – on average 63% of the fuels' energy is wasted by the power stations and then more is lost on the way to the consumer. The second arrow shows what would happen if those fuels were used just to generate heat – the losses would fall to 15%. The third arrow shows the outcome if both heat and electricity were generated. The losses would stay at 15% but up to 25% of the energy could get turned into a form more valuable than heat; electricity. And if that electricity was used on site, the waste on the way to the consumer would be avoided.
CHP can be used on a domestic scale. A micro-CHP plant can be installed in an individual house to replace the gas central heating boiler and provide the majority of the family's electricity needs in addition to heat and hot water. Powergen, a major British electricity and gas supplier, expects that one day, micro CHP will provide 20% of Britain's electricity generating capacity, more than is provided at present by nuclear power.

Moneypoint Power Station
The company has committed itself to installing 80,000 Whispergen units by 2010 and will purchase any surplus electricity from its customers at 3p per unit, rather less than the 12p price it charges for a unit at present. This is very good business for the company, particularly as it expects that its customers will be producing power at times of peak demand when its costs are highest. Nevertheless, it expects that its Whispergen customers will get reduced bills.
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