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Summary and conclusions

Summary and conclusions

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It was recognized in the 1970s and beyond that cogeneration can be a strong instrument in primary energy savings and in reducing CO2 and other emissions. Thus, promotion of cogeneration has been one of the goals in energy policy and for this purpose, special laws and regulations started being issued, first in the United States of America and then in other countries worldwide as well as in the European Union. Also, the International Energy Agency in Paris recommends cogeneration as an effective means to reduce fossil fuel consumption. Among other subjects, rules for the cogeneration systems to be eligible for financial and economic incentives have been issued, as well as for their participation in the electricity market. The gap between the fuel and electricity price affects crucially the economic viability of cogeneration. Furthermore, it is noted that cogeneration may have difficulty in penetrating both `close-to-slow-opening' and fully liberalized electricity markets. Thus, the regulatory and legal framework needs to be updated from time to time.

Inspec keywords: power markets; power generation economics; cogeneration; government policies; incentive schemes

Other keywords: financial incentives; electricity price; International Energy Agency; cogeneration; regulatory framework; primary energy savings; economic viability; close-to-slow-opening electricity markets; economic incentives; legal framework; fully liberalized electricity markets; fossil fuel consumption; fuel price; energy policy

Subjects: Thermal power stations and plants; Power system management, operation and economics; Energy and environmental policy, economics and legislation

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