Powering energy recovery through performance-linked CHP contracts

The challenge: Underperforming CHP assets increasing cost and compliance risk

A major UK water utility company’s CHP fleet, critical to its renewable energy strategy, was underperforming by 45%, generating only 76 miles kWh versus a target of 139 miles kWh. This shortfall led to significant total annual costs and increased fossil fuel dependence, risking ODI performance and environmental compliance penalties.

The approach: Linking supplier incentives to performance

Efficio led a market tender introducing an “Overall Equipment Effectiveness” (OEE) contract model linking supplier payments to uptime, generation, and efficiency. The approach incentivised suppliers to boost output while improving data-driven planning, monitoring, and predictive maintenance. A balanced 50/50 commercial-quality evaluation ensured sustainability and reliability were at the contract’s core.

The results: Higher energy output, lower emissions, and cost savings

The initiative delivered 20% annualised savings through cost reduction against the previous maintenance model, whilst delivering a further 21% savings in cost avoidance and energy savings by mitigating downtime and improving outturn. 

Fossil fuel usage dropped, cutting 3,500 tonnes CO₂e and reducing EA regulatory risk linked to biogas flaring. The OEE model aligned supplier incentives with ODI energy recovery targets, securing long-term efficiency and resilience across all CHP sites.