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Where is the Cogeneration Business Going?
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Cogeneration proponents are still haling the wonders and marvels of cogeneration in the hope of convincing customers to adopt this energy option. Despite the hype, fewer and fewer cogeneration projects are being adopted. Why? Where is the business going? Is the bloom off the rose? The answer may be all too obvious. Historically (three to eight years ago), cogeneration was pursued largely because of inadequate or, in some way, failing boilers at industrial plants. These steam generators would have to be replaced or upsized anyway and customers used the combination of capital offsets and low operating efficiencies to justify cogeneration. In cases where these industrial firms did not want anything but the end result (i.e., added steam capacity at some reasonable price) they signed up with energy deal makers who sold them steam at some discount from current costs. Where regulatory agencies forced electric utilities to buy power at levelized or in inflated avoided costs, free steam deals were offered to secure an appropriate steam host. But times have changed. Why are customers interested in cogeneration now? Boiler and chiller-related inadequacies are still present, but power quality has risen to the number one driver (outside of regulatory or electric utility incentives). That may seem somewhat of a surprise since electric utilities are historically more reliable than cogenerators. The best cogeneration systems in the United States achieve 98% availabilities. There isn't a major electric utility that delivers less than 99.9+%. Why the interest? The first reason is momentaries. Many electric utilities do not even keep track of their service disruptions shorter than one minute in duration. Reclosers and other system operations that produce multiple cycle interruptions do not effect annual percent availability, but they sure do effect customers! The reason why is also obvious: microprocessors. Customers are increasing their use of computers in process control and office automation. This combination makes customer productivity and performance extremely power sensitive. Banks and insurance carriers are similarly affected. With the power availability scare so prevalent in the Northeast, and the threat of voltage reductions and interruptions, it is small wonder more customers aren't cogenerating. Part of the reason as well is that thermal efficiency, the very backbone of the reason cogeneration was spawned in 1978, is currently almost a dead issue. PURPA compliance is virtually a non-issue. Customers are even dropping in simple emergency generators and foregoing the heat recovery altogether! How can they make this judgement? Simple! The lure of the current low gas prices has lulled them into benign neglect of the intrinsic cogeneration power generation efficiency. They simply cannot justify heat recovery in the cogeneration system design! Isn't that ironic given the rebirth of cogeneration in 1978 to reduce our dependence on foreign oil by taking advantage of this intrinsic power generation efficiency.
Gilbert, J. S. (1989). Where is the Cogeneration Business Going?. Energy Systems Laboratory (http://esl.eslwin.tamu.edu). Available electronically from