Cogeneration Economics

Abstract

Cogeneration of heat power is today receiving more attention by energy economists and policy makers - The enormous escalation of energy prices over the last decade has made energy efficiency an important economic factor for most energy users.

The fact that combined steam - electricity schemes are nearly twice as 'energy efficient' as traditional condensation turbines has helped to make cogeneration increasingly attractive. Cogeneration technology has continued to improve as more efficient and lower costs systems have been developed. The share of industrial self generation capacity as compared to total production varies from one country to another and from one type of industry to another.

Economic evaluation of cogeneration has to take into consideration the evolution expected for the prices of the primary energy sources and the electricity tariffs and the various aids and taxes. In some countries third party financing is offered which enables industrial or commercial steam or heat users to realize the benefits of cogeneration without making the large capital investment or having responsibility for operating the plant. No general conclusion can be given on cogeneration economics: cogeneration of heat and power is definitely an industrial solution to be studied case by case.