There are three main micro-CHP technologies, with the difference between them being the way in which they generate electricity:
Internal combustion engine CHP
This is the most proven technology. These are essentially, and sometimes literally, truck diesel engines modified to run on natural gas or heating oil, connected directly to an electrical generator. Waste heat is then taken from the engine’s cooling water and exhaust manifold and used for heating needs. The engines can have a higher electrical efficiency than a Stirling engine, but are larger and mainly installed in commercial-scale applications.
Fuel cell CHP technology
Fuel cell CHP technology generates electricity by taking energy from fuel at a chemical level rather than burning it. It uses a steam reformer to convert methane in the gas supply into carbon dioxide and hydrogen. The hydrogen then reacts with oxygen in the fuel cell to produce electricity. Waste heat is produced in this process, which is used within a hot water heating system.
A Stirling engine CHP system is essentially a normal boiler with a Stirling engine built in. A Stirling engine is an external combustion engine that heats up when the boiler is being used. When this happens, gas stored in the Stirling engine expands due to the heat, and a piston connected to a generator produces electricity.
While they are much quieter than internal combustion engines, they can only generate electricity when the central heating is being used, so are less efficient.
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Article extract from https://energysavingtrust.org.uk/advice/micro-combined-heat-and-power/