Waste Heat Recovery
One of the primary advantages of distributed generation is the possibility of waste heat recovery, which is a result of producing electricity at the site of the user. The diagram below shows the differences in energy consumption of CHP and the generation of heat and power separately. CHP can generate electricity and heat with a total efficiency of 85 percent versus 47 percent efficiency when they are generated separately. Thus, by taking advantage of CHP, it is possible to reduce the energy consumption of the building, which will lead to the reduction of energy costs and the emissions of green house gases (CO2).

Energy flow comparison [1]
[1] U.S. Combined Heat and Power Association, “National CHP Roadmap”, March 2001, http://uschpa.admgt.com/CHProadmap.pdf
1. Heating Water
Generally, hot water is generated by boilers, which consumes oil or natural gas, or electric water heaters. The energy used to run these devices can be saved when waste heat recovery is used to generate the hot water instead. Generating hot water as a by-product of electricity is one of the most common applications of combined heat and power (CHP). Hot water is necessary for several daily activities such as bathing, cooking, and washing. Several types of commercial buildings such as hotels and hospitals need large amounts of hot water. In particular, hotels which have a heated swimming pool or spa need a large amount of hot water.
2. Absorption Cooling
Absorption chillers use heat energy instead of mechanical energy to provide refrigeration, so they can be powered by lower cost fuel or waste heat. Heat required for the chiller is typically provided by steam or water from a boiler or combustion turbine, but can also be provided by an integral, direct gas-fired heater. Other energy use occurs in pumping fluids around the process, pumping condenser water, and driving cooling tower fans. Cooling towers are larger with absorption chillers than with electrical chillers because they have to reject the cooling load plus the input heat to drive the process.
Absorption chillers involve a complex cycle of absorbing heat from a driving source to create chilled water. Steam or hot water from a boiler, or from a heat recovery unit is used to boil a solution of refrigerant/absorbent, with most systems using water/lithium bromide for chilling and ammonia/water for refrigeration as the working solutions. The absorption chiller then captures the refrigerant vapor from the boiling process, and uses the energy in this fluid to chill water after a series of condensing, evaporating, absorbing steps are performed. This process is essentially a thermal compressor, which replaces the electrical compressor in a conventional electric chiller. In doing so, the electrical requirements are significantly reduced, requiring electricity only to drive the pumps that circulate the solution.
The process described above is employed by single-effect chillers. Two types of absorption chillers are commercially available: single- and double-effect systems. Triple-effect systems are under development. In multi-effect systems, higher temperature heat drives the first stage or effect, and heat off the first stage is used to drive a second stage or effect, increasing the overall efficiency. Single-effect units offer coefficients of performance (COPs) of about 0.7, which means that 7 units of cooling are produced for every 10 units of waste heat recovered. Double-effect units add another boiling and condensing step at higher temperature, thus attaining higher COPs of about 1.1. This means that the cooling tower required for a double-effect chiller is smaller than for a single-effect chiller by about 40 percent. The figure below shows a schematic of a single-effect absorption cycle, where the relative position of the heat exchangers of the cycle indicates their operating pressure and temperature.

Annual cooling costs are heavily dependent on fuel and electrical costs. Facilities with 1500 hours per year or more of air conditioning loads, low fuel costs, high peak demand costs, and waste heat sources should consider installing an absorption chiller.
Absorption chillers can be used to reshape the thermal and electric profile of a facility by shifting cooling from an electric load to a thermal load. The shift can be very important for facilities with time-of-day electrical rates or high cooling season rates. Some facilities with very high peak time-of-day rates are finding it economical to install hybrid chiller plants with both electrical centrifugal and direct-fired absorption chillers. These applications operate the absorption chillers when electric rates are high and operate the centrifugal chillers when electric rates are low. They also operate the absorption chiller to avoid higher peak demand charges.
For combined heat and power (CHP) plants, absorption chillers provide an effective year-round thermal load factor since cooling predominates during the warmer season and space heating is required during cooler seasons. More thermal load in the cooling season then allows for more electrical generation.
3. Desiccant Drying
Desiccant drying systems can be used for humidity control and offer several advantages over cooling based drying systems. Desiccant drying systems can control humidity independent of temperature, so a building does not need to be over cooled to remove the moisture. Humidity can also be controlled at low temperatures and requires less energy than systems that use cooling to reduce humidity.]
Desiccants are materials that can absorb water vapor from the air. The figure below shows how these materials can be used to construct a desiccant drying system. The desiccant material is constructed into a wheel that is rotated. Two streams pass through this wheel. On one side the humid outside air passes through the desiccant material, which removes the moisture, and then enters the building. The wheel is rotated so the desiccant material that has already absorbed large amounts of moisture will then be exposed to the second air stream. The second air stream is heated in order to remove the moisture from the desiccant material. In most cases the air is heated by using natural gas. However, the waste heat produced from distributed generation can be used to provide the heat necessary for desiccant drying.

Desiccant
drying has several applications for commercial buildings and hospitals.
In hospitals the operating rooms need to control both the temperature and
humidity in order to provide maximum comfort for the surgeons. Having dry
air in the ventilation system can prevent the growth of mold and mildew,
which can negatively impact health. Commercial and retail building tenants
and owners can benefit by needing less energy to provide the same level
of comfort for employees and customers.