Володимир Конончук — 17.03.2026
Electricity and heating costs are gradually rising, and the reliability of the energy supply remains a key concern for Ukrainian businesses. In this climate, entrepreneurs are increasingly looking for more reliable and predictable solutions. One such solution is cogeneration — a technology simultaneously produces electricity and heat from a single fuel source. It enables businesses to optimise costs, improve energy efficiency and reduce dependence on centralised networks.
This article will be useful for owners and managers of small and medium-sized businesses: hotels, restaurants, manufacturing facilities, farms and healthcare establishments. We will examine the specific benefits of cogeneration, how it affects a business’s finances, and in which sectors its implementation is most appropriate.
A combined heat and power (CHP) plant is a small power station that generates both electricity and heat simultaneously. The engine burns fuel (natural gas or biogas) to generate electricity, and the heat from the engine’s cooling system and exhaust gases is not wasted — it is used for heating, hot water supply or process requirements.
The key advantage of this approach is its efficiency. A conventional power station converts only around 38% of the fuel it burns into useful energy. A combined heat and power (CHP) plant achieves an efficiency of 85–92%, as it utilises almost all the heat that would otherwise simply be released into the atmosphere.
For small and medium-sized businesses, systems with a capacity of 50–500 kW are in the highest demand. This range covers the majority of facilities.
CHP offers businesses seven key benefits, from significant energy savings for businesses to complete energy independence. Let’s look at each of these in more detail, using specific figures and examples.
The principle is simple: a single unit of fuel provides both electricity and heat. Whereas without a CHP unit, a business pays for electricity at the grid tariff and buys gas for heating separately. All in all, this works out considerably more expensive.
If a 200 kW CHP unit is installed, the reduction in energy costs compared to a traditional setup (grid + gas boiler) could reach approximately €48,000 per year — that is over 39% of total expenses.
| Option | Electricity (€/year) | Heating (€/year) | Total (€/year) | Savings |
| Mains + gas boiler | 95 000 | 28 000 | 123 000 | – |
| 200 kW gas turbine | 60 000 | 15 000 | 75 000 | 48 000 (39%) |
Note: Calculation based on typical production; figures are approximate
This issue is particularly relevant for Ukraine. Attacks on energy infrastructure and planned power cuts have become a regular occurrence. In fact, autonomous power supply via a CHP means that a business can continue to operate even during power grid failures.
A CHP can operate in parallel with the mains supply or switch to standalone mode during power cuts, depending on the configuration set. For businesses where even a few hours of downtime can lead to significant losses, business continuity is an essential requirement.
The typical payback period for a CHP unit is 3–6 years. Several factors influence this figure: the electricity tariff, the price of gas, the number of operating hours per year, and the degree of heat utilisation. The higher the electricity tariff and the longer the plant operates (ideally over 4,000 hours per year), the faster the payback period for cogeneration will be.
Thanks to their high energy efficiency — 85–92% — cogeneration plants consume significantly less fuel to produce the same amount of energy than a traditional setup comprising a separate power station and boiler house. As a result, CO₂ emissions are reduced by 30–50%.
If the plant runs on biogas, its carbon footprint is virtually zero. The CO₂ released during the combustion of biogas is part of the natural biological carbon cycle and does not increase the overall concentration of greenhouse gases in the atmosphere.
This approach aligns with ESG standards, helps businesses reduce their environmental impact, and enhances the company’s reputation among partners, investors and customers.
A company that has introduced in-house electricity generation benefits from more stable production or service costs and is less vulnerable to fluctuations in electricity prices. Whilst competitors face ever-increasing bills or have to suspend operations during power cuts, your business continues to operate as normal.
The CHP plant can be expanded in a modular fashion: if the business grows, simply add another unit. This system integrates easily with existing infrastructure — boilers and the electricity grid, solar power plants and heat distribution networks. This combined approach offers even greater flexibility and reduces reliance on a single fuel source.
CHP systems are ideal for businesses with combined electricity and heat consumption. Let us consider five sectors where the benefits of cogeneration are most significant.
Hotels and restaurants consume electricity (for lighting, kitchen operations and air conditioning) alongside large quantities of hot water and heat for heating. The round-the-clock operation of hotels and long shifts in restaurants ensure the necessary number of operating hours for a quick return on investment.
Uninterrupted power supply is critical here, as guests must not notice any disruptions. Cogeneration for hotels and restaurants ensures consistent comfort even during power cuts in the external grid.
The five-star Kempinski Berchtesgaden Hotel (Bavaria, Germany). The property comprises 126 rooms, 12 suites, three restaurants and a spa area. A 2G agenitor 406 combined heat and power unit with a capacity of 250 kW of electricity and 264 kW of heat supplies the entire hotel with energy. Thanks to the unit’s high efficiency, a surplus of electricity is generated, which the hotel feeds into the grid.
Food production facilities combine high electricity consumption for processing equipment with a need for steam or hot water for their production processes. In such conditions, cogeneration for production ensures a stable energy supply and predictable production costs. A continuous cycle of 16–24 hours a day makes CHP a particularly effective solution.
albi GmbH (Germany) is one of the leading producers of premium fruit juices, with an annual turnover exceeding €100 million. The production facility is equipped with two 2G agenitor 406 cogeneration units, each with a capacity of 2 × 250 kW of electricity and 2 × 264 kW of heat. In addition to electricity and heat, the system generates steam for process applications and cooling via an absorption chiller. 100% of the energy produced is used directly on site.
Livestock farms require electricity for milking parlours, ventilation and watering systems, as well as heating for the buildings. Greenhouses require lighting, heating, ventilation and irrigation — practically around the clock.
A particular advantage for the agricultural sector is the possibility of combined energy production using biogas derived from livestock waste or plant matter. The facility closes the production cycle: waste is converted into fuel, and fuel is converted into heat and electricity.
For hospitals, clinics and rehabilitation centres, uninterrupted operation is a matter of patient safety. Life-support equipment, operating theatres, sterilisation equipment and laundry facilities cannot be allowed to stop, even for a few seconds.
In addition to uninterrupted operation, the healthcare facility benefits from a steady supply of hot water and heating, as well as the opportunity to save on utility bills. The 24-hour operation ensures that the CHP unit will run for the necessary number of hours to achieve a quick return on investment.
Heating swimming pools is one of the largest heating loads among small and medium-sized businesses. It also includes hot water for showers, ventilation, air conditioning, and lighting for large areas. The cogeneration plant meets all these needs simultaneously.
The Europa-Park water park and its Rulantica water complex (Germany). To meet the heating requirements of the 32,600 m² facility, two 2G avus 500b combined heat and power units have been installed, each with an electrical output of 670 kW and a thermal output of 933 kW. The system’s overall efficiency reaches almost 95% in an extended configuration with condensing heat recovery. In summer, surplus heat is directed to the hotel’s air conditioning via an absorption chiller — the heat is utilised all year round. The electricity generated by the CHP units is consumed directly by the water park.
Before making a decision, it is important to carry out a basic analysis. This consists of four steps.
Pro-Energy is a company with practical experience in implementing cogeneration projects across various sectors of the economy: from the agricultural sector to municipal infrastructure and commercial property. Businesses choose us because we deliver tangible results.
Cogeneration is a practical tool for reducing energy costs and enhancing business reliability, and is increasingly seen as an effective avenue for development in the field of renewable energy.
The benefits of cogeneration include savings of 30–40%, protection against power cuts, a payback period of 3–6 years, and environmental responsibility. Hotels, restaurants, manufacturing facilities, farms and healthcare facilities stand to gain the most, as they require both electricity and heat.
Once the payback period has ended, the CHP generates an annual projected economic return that exceeds its operating costs.
To find out whether cogeneration is the best option for your business, please contact the Pro-Energy team. We will carry out a preliminary calculation and provide you with actual figures based on your specific site.
How much can you save on energy with cogeneration?
Small and medium-sized businesses save 30–40% on energy costs compared to purchasing electricity and gas heating separately. The exact figure depends on tariffs, operating patterns and the extent to which heat is utilised.
What is the payback period for a CPH for small businesses?
The typical payback period for cogeneration is 3–6 years. This figure is influenced by the price of gas, the electricity tariff, the number of operating hours (ideally over 4,000 hours per year) and the efficiency of heat utilisation. When running on biogas, the payback period is shorter.
Will the CHP continue to operate during a power cut?
For example, the CHP for small businesses can operate independently during power cuts. This requires a system that automatically connects to and disconnects from the external power supply. This is crucial for hotels, healthcare facilities and manufacturing plants.
What is the minimum capacity of a gas heating unit that is best suited for a small business?
For small businesses, systems with a capacity of 50 kW or more are ideal. These are suitable for restaurants, small hotels (20–30 rooms) and bakeries. CHP units with a capacity of less than 50 kW rarely pay for themselves due to their high unit cost (€/kW).
Can biogas be used for cogeneration?
Yes. The benefits of biogas-fired cogeneration plants are particularly significant for farms and food processing facilities that generate organic waste and have biogas plants on site. Biogas is produced directly on-site, reducing dependence on natural gas prices.
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