The combination of CHP + SPS + ESS: how to maximise savings

Power cuts, rising tariffs, and an unreliable grid are forcing businesses to seek their own energy sources. A single technology — a combined heat and power plant (CHP), a solar power station (SPS) or an energy storage system (ESS) — does not meet all of a company’s needs.

The solar power plant generates energy during the day, the gas-fired power plant covers the evening peak, and the energy storage system smooths out fluctuations. According to estimates by market participants and specialist integrators, the payback period for hybrid energy systems for businesses in Ukraine, given high electricity tariffs, can be 3–4.5 years, depending on the consumption profile, the cost of gas, and the level of self-sufficiency. 

Combining multiple generation and storage sources creates a hybrid energy system — a microgrid model in which a business becomes a mini-grid with full control over its electricity and heat.

This article is aimed at owners of energy-intensive businesses who wish to achieve genuine energy independence for their business and maximise savings.

Why a single source of power generation is not enough

Each of the three technologies is effective in its own way. However, each has significant limitations that make it vulnerable when used on its own.

SPS restrictions

A solar power station is the most cost-effective way to enter the hybrid generation sector. However, it is dependent on the time of day and the weather. The standard configuration without an ESS does not allow operation during a power cut (off-grid mode). The peak generation at 12:00 rarely coincides with the peak consumption at 18:00.

• operates only during the day — there is no output at night;
• depends on cloud cover, the season, and shading;
• the standard SPS without a storage unit does not support off-grid operation;
• any surplus daytime energy that is not fed into the grid or sold is simply lost.

For businesses operating around the clock, SPS alone is not a solution.

Restrictions imposed by the State Administration

A combined heat and power plant provides a stable supply of electricity 24/7 and allows the heat to be utilised — this is its main advantage. It requires a constant supply of fuel (natural gas or biogas). Partial loading reduces efficiency:

• requires fuel: dependence on gas prices or the availability of biogas;
• minimum effective operating mode — 50% of rated power;
• during the transitional seasons, the thermal load decreases and energy consumption falls;
• higher operating costs compared to solar power plants.

However, for facilities with constant heat demand, a CHP plant is the most efficient solution. For more details on its cost-effectiveness, see the article on the cost of a cogeneration plant.

Restrictions on the ESS

An energy storage device (battery) is a key component of a hybrid power system. It does not generate energy, but merely stores and releases it when needed. Precisely because of the way it works, the energy storage device has a number of technical and economic limitations: 

• does not generate electricity, but supplies it when needed — it relies on an external source;
• limited capacity: cannot replace a CHP during prolonged power cuts;
• higher capital costs per kWh compared with other technologies;
• requires a BMS system to manage charging and protect the cells.

Every technology has its strengths, and each one compensates for the weaknesses of the other two. It is this combination that creates a synergistic effect.

How a hybrid power system works

In a properly designed hybrid power system, each technology plays a specific role. It operates at its own optimal efficiency and compensates for the limitations of other generation sources, forming a microgrid, a local power system with its own generation, storage and control.

The division of roles in combined generation

Solar energy — free energy during the day.

• covers the company’s daily consumption from sunrise to sunset;
• surplus energy is fed into the distribution network or sold to the grid;
• according to the industry best practice for commercial solar power plants and the consumption patterns of businesses, solar generation can cover 30–60% of daily electricity consumption, depending on the load profile.

CHP — base load and evening peak.

• takes place during the peak-price hours on the day-ahead market (DAM);
• provides uninterrupted stand-alone operation in the event of a power cut;
• recycles heat for heating, hot water or industrial processes.

The ESS acts as a buffer and covers peak demand.

• charges overnight when electricity rates are low, or during the day using solar power;
• is discharged in the evening, when off-peak electricity prices are at their highest;
• instantly compensates for load fluctuations — something that a CHP cannot do instantly.

Example of a daily work schedule

Below is a typical operational scenario for a hybrid power system at an industrial facility, illustrating the division of roles between the solar power plant, the gas turbine unit, the storage facility and the grid in combined generation mode.

This allocation makes it possible to minimise purchases from the grid and maximise the sale of surplus energy during peak hours.

Combination scenarios for different businesses

The choice of configuration depends on your consumption profile, access to fuel, and budget. Here are the three main models of combined generation.

Scenario 1: CHP + ESS (without SPS)

This option is suitable for businesses where long-term off-grid operation is important, and roof space for a solar power system is limited.

• unlimited island mode duration;
• according to the technical specifications of cogeneration systems and IEA industry data, the overall efficiency of cogeneration with full heat recovery can exceed 80% and reach 85–90%, depending on the type of plant;
• the ESS compensates for peak loads and ensures an immediate response to changes.

The drawbacks include ongoing fuel costs and higher operating costs compared to solar power plants.

Scenario 2: SPS + ESS (without CHP)

The ideal choice for businesses operating mainly during the day, without access to mains gas, where stand-alone operation is required for just a few hours.

• the lowest capital expenditure of the three scenarios;
• zero fuel costs once the system is up and running;
• a simple operating system that requires no complex maintenance.

The limitations of this scenario lie in the short duration of off-grid operation and the fact that the system’s efficiency depends on the season, weather conditions, and the level of sunlight. 

Scenario 3: SPS + CHP + ESS — the full combination

Maximum energy self-sufficiency for businesses. Suitable for large-scale manufacturing facilities, shopping centres, hotels, and agricultural enterprises with their own biogas. It is precisely these comprehensive Pro-Energy solutions that are being implemented for industrial and commercial sites across Ukraine.

• the lowest energy costs and the highest energy self-sufficiency thanks to the synergy of three sources;
• the enterprise’s full-scale autonomous operation in stand-alone mode;
• maximum revenue from selling surplus electricity to the grid;
• flexible control: EMS optimises performance in real time.

The drawbacks include higher initial investment costs, more complex integration of all components, and the mandatory implementation of an EMS (Energy Management System) for the automatic control of combined generation. 

The economics of integrated solutions

A hybrid power system enables businesses to save money not only through on-site generation but also through flexible load management, taking advantage of off-peak tariffs, and reducing reliance on the grid. However, cost-effectiveness depends directly on the system configuration, consumption profile, and the level of self-sufficiency required by the business. 

A comparison of payback periods and reliability

Below is a comparison of five combined generation configurations based on key parameters. This allows for an assessment not only of the return on investment but also of the stability of the plant’s operations within an unstable power grid.

* These figures are indicative and depend on tariffs, consumption and fuel costs. The figures provided are approximate and are based on market prices for equipment in Ukraine as of 2025–2026, average RDN tariffs, and a typical consumption profile for industrial enterprises. 

Sources of savings in a hybrid system

The combination of these three technologies generates multiple streams of savings simultaneously.

• where self-consumption is high, combined generation can reduce the amount of electricity purchased from the grid by more than half;
• day-ahead price arbitrage — charging the battery storage system at night when tariffs are low, discharging during the evening peak;
• sale of surplus electricity — up to 50% of the contracted capacity may be sold to the grid;
• avoiding penalties for exceeding the contracted capacity — the ESS instantly smooths out peaks;
• utilisation of heat from the CHP plant — heating, hot water and process requirements without additional gas costs.

Provided the configuration is correctly selected, combined heat and power generation with solar panels and a storage unit can significantly reduce electricity and heating costs compared to running solely on the grid.

Technical requirements for integration

Combining these three technologies into a single hybrid power system requires expert engineering integration.

EMS control system

The EMS (Energy Management System) coordinates the operation of all components of the hybrid energy system in real time. Without automated control, CHPs, solar power plants, and heat storage systems operate less efficiently, which can reduce the system’s overall economic performance by 30–40%.

• automatic real-time balancing of generation and consumption;
• forecasting the load and output of solar power plants based on weather data;
• optimisation of operating modes based on RDN prices — the EMS decides for itself when to sell and when to store;
• managing the switch to island mode when the external grid is disconnected.

Relay protection and automation

Proper synchronisation of all sources ensures system security and compliance with the requirements of the distribution system operator (DSO).

• synchronisation of all sources prior to parallel connection to the grid;
• backfeed protection during island operation;
• automatic shutdown in the event of faults in the external network or within the system itself.

ASKOE — an automated accounting system

Two-way metering is essential for accurate billing by the distribution system operator and for participation in the market. ASKOE ensures transparency for all market participants.

• separate metering for each generation source;
• bidirectional metering — consumption and feed-in to the grid;
• telemetry: online transmission of data to the distribution system operator.

Stages of implementation of the combined project

The installation of a solar power station with a battery and a CHP unit is a complex engineering project in which the correct selection of equipment, proper design, equipment synchronisation, and the control system are of critical importance. This is particularly true given factors such as the technical and market challenges of implementing cogeneration in the current conditions of the Ukrainian energy market. 

Below, we have outlined the key steps for successfully implementing such a solution. 

1. Consumption analysis — hourly load graph, peak values, heating requirements.
2. Selecting a configuration — determining the optimal balance between SPS, CHP and ESS.
3. Feasibility study — payback period calculation, IRR, comparison of scenarios.
4. Design — wiring diagrams, selection of EMS, relay protection and automation.
5. Approval by the DSO — obtaining the status of an active consumer or producer.
6. Procurement and installation — phased or parallel implementation to reduce lead times.
7. Commissioning works — configuring the EMS, testing island mode, and all transitions.
8. Putting into operation — obtaining legal status and connecting to the electricity market.

For more information on small and medium-sized enterprises, please read our article “Cogeneration for small and medium businesses“.

Common mistakes when combining technologies

Errors in the design of business microgrids end up costing significantly more than commissioning a properly prepared feasibility study from the outset.

• an imbalance in power capacity — a solar power plant that is too large in relation to consumption leads to restrictions imposed by the distribution system operator;
• the absence of an EMS — without a control system, the CHP and SPS compete with each other rather than complementing one another;
• savings on ESS storage capacity — a storage unit that is too small cannot cope with the evening peak and does not generate arbitrage income;
• Failure to utilise heat from the CHP plant — heat recovery accounts for 40–50% of potential savings; without it, the payback period increases by 1–2 years;
• Underestimating integration costs — synchronisation, relay protection, and automated control systems account for 10–20% of the equipment cost.

For an in-depth analysis of the market situation and the prospects for cogeneration, please read our detailed report “Cogeneration in Ukraine in 2026“.

Conclusion

The combination of a solar power plant, a gas-fired power plant, and a wind farm allows each component to complement the others’ technical specifications. Such a hybrid power system ensures the enterprise’s complete energy independence and a payback period of 3–3.5 years.

The choice of configuration depends on your energy consumption profile, access to fuel, and budget. The key to success is a high-quality EMS control system, which integrates three independent sources into a single, efficient microgrid for your business.

Contact the Pro-Energy team to receive a feasibility study and a hybrid energy system configuration tailored to your consumption profile. 

Frequently Asked Questions

What is a hybrid power system?

A hybrid power system is a combination of several generation sources (solar power plants, gas-fired power stations) and storage systems (battery storage), integrated by an EMS control system. Each technology plays its own role: solar power plants generate electricity during the day, gas-fired power stations operate during peak hours, and battery storage systems smooth out fluctuations and store surplus energy.

What is the payback period for the CHP + SPS + ESS combination?

The payback period for a complete hybrid generation system is 3–3.5 years. This is longer than for a standalone solar power plant (2–3 years), but the system ensures complete energy independence for the business, off-grid operation during power cuts, and maximum revenue from the sale of surplus energy.

Is it possible to combine a solar power station with a combined heat and power plant?

Yes, this is the ideal combination. Combined heat and power (CHP) with solar panels creates a synergy: the solar power plant generates free energy during the day, whilst the CHP plant covers the evening peak and provides off-grid operation. In addition, the CHP plant produces heat for heating. Together, they deliver savings of 60–70% on energy costs.

What is EMS, and why is it needed?

EMS (Energy Management System) is an energy management system. It automatically balances generation and consumption, optimises operating modes based on off-peak electricity prices, manages the charging and discharging of the energy storage system, and handles the transition to island mode. Without the EMS, the efficiency of the hybrid system is reduced by 30–40%.

What are the minimum system requirements for standalone mode?

For short-term stand-alone operation (2–4 hours), a solar panel + battery is sufficient. For prolonged stand-alone operation (24 hours or more), a generator + battery is required, or the full combination solar panel + generator + battery.

Sources used in writing this article:

• https://uabio.org/
• https://www.irena.org/
• https://www.ieabioenergy.com/
• https://expro.com.ua/
• https://mev.gov.ua/
• https://www.oree.com.ua/
• https://zakon.rada.gov.ua/laws/show/v0310874-18
• https://www.nerc.gov.ua/
• https://zakon.rada.gov.ua/laws/show/2019-19
• https://reform.energy/