The economics of cogeneration and district energy are described and examined, starting with fundamentals and general economic considerations such as methods for estimating TCI, performing economic evaluations and calculating revenue requirements. A detailed case study on the economics of cogeneration is provided. For the scenario considered in the case study, the fixed and TCI, as well as fuel costs, start-up costs, and working capital (WC), are explained. The cogeneration project economics are provided, and the facility investment, modified accelerated cost recovery system and product costs are described. Modern and historical applications of the case study are examined. Various economic considerations involved in integrated cogeneration-based district energy systems are considered, including economic considerations for generation and distribution as well as economic considerations for consumers. An analogy is presented between allocating wastes for cogeneration among products, and allocating economic costs among products. Optimization schemes and procedures involving economics are discussed, to provide a foundation for detailed routines and computer codes for assessing, comparing and optimizing the benefits of such systems. Various investigations of economics of cogeneration and district energy are described.

Chapter Contents:

• Overview
• 8.1 Introduction
• 8.2 Fundamentals
• 8.3 General economic considerations
• 8.3.1 Estimation of TCI
• 8.3.2 Economic evaluation
• 8.3.3 Revenue requirements
• 8.3.4 Profitability evaluation methods
• 8.4 Cogeneration economics case study
• 8.4.1 Case-study scenario
• 8.4.2 Fixed and total capital investment
• 8.4.3 Cogeneration project economics
• 8.4.4 Fuel costs, start-up costs and WC
• 8.4.5 Plant facility investment and modified accelerated cost recovery system
• 8.4.6 Product costs
• 8.5 Applications of cogeneration economics case study
• 8.5.1 Historical application
• 8.5.2 Modern application
• 8.6 Economic considerations for cogeneration/district energy systems
• 8.6.1 Economic considerations for generation and distribution
• 8.6.2 Economic considerations for consumers
• 8.7 Analogy between allocating wastes and economic costs for cogeneration
• 8.8 Investigations of economics of cogeneration and district energy
• 8.8.1 Heating and district heating
• 8.8.1.1 Heating
• 8.8.1.2 District heating
• 8.8.2 Cooling and district cooling
• 8.8.2.1 Vapor-compression chilling
• 8.8.2.2 Absorption chilling
• 8.8.3 Cogeneration and district energy
• 8.8.3.1 Diesel engine cogeneration
• 8.8.3.2 Gas turbine cogeneration
• 8.8.3.3 Combined cycle cogeneration
• 8.9 Closure

Inspec keywords: optimisation; power generation economics; cogeneration

Other keywords: product costs; TCI; general economic considerations; facility investment; WC; modified accelerated cost recovery system; cogeneration project economics; start-up costs; district energy systems; fuel costs; optimization schemes; working capital

Subjects: Optimisation techniques; Power system management, operation and economics; Thermal power stations and plants