Cogeneration Partnerships -- A "Win-Win" Approach for All Parties

Abstract

"Historically, electric utilities in the US have tended to discourage the deployment of cogeneration installations in their own service territory because the resulting electricity sales reduction would be greater than normal load growth, and thus there would be a negative impact on earnings. For an island-based utility such as Jamaica Public Service Company (JPSCo) that is experiencing strong load growth, however, the situation is quite different.

• There is a need to provide new electrical resources on a continuing basis. • There is a need to support the manufacturing sector, to help to grow the economy. • There are no indigenous fuels; expensive imported fuel oil is virtually the only energy source available.

Cogeneration is recognized as a proven technology that provides an economical, efficient, and environmental friendly way to increase electricity supply in appropriately sized increments. By facilitating, cogeneration installations and sharing in their ownership, the utility can protect-and under some circumstances even increase its overall revenue stream.

The basic concept is as follows: a JPSCo-owned Cogeneration Plant will supply: (1) electricity to the JPSCo grid, and (2) ""energy products"" (such as chilled water, steam, or hot water, and perhaps compressed air) to manufacturing businesses operating within a specific geographic area. Some non-manufacturing facilities in the same area may also be served. The ""energy products"" would be supplied via a local District Energy piping network. The large manufacturing entities who are customers for one of more of the ""energy products"" would be billed for electricity supplied by JPSCo under an new Industrial Park Tariff that is about 10-15% lower than the standard tariff. Ideally, the price charged for each of the ""energy products"" would be competitive with each customer's total cost to produce the same product on-site, or as a minimum each customer's total annual cost for electricity and fuel would be lower.

The results of a feasibility study of the concept using data for a specific Industrial Park will be presented in this paper. The rated net electrical capacity of the cogeneration plant is 15 MW (four 4 MW medium-speed diesel engines serve as prime movers.) A total of eight industrial plants are served with electricity, chilled water, and steam. "