The best way to assess the attractiveness of a cogeneration project is to conduct a detailed financial analysis and compare the returns with the market rate for investments in projects presenting similar risks. Well-conceived cogeneration facilities should incorporate technical and economic features that can be optimised to meet both heat and power demands of a specific site. A comprehensive knowledge of the various energy requirements of the site, as well as of the cogeneration plant characteristics, is essential in order to derive an optimal solution. A cogeneration project is the same as any other commercial energy efficiency project that requires high investment, has a relatively long payback period and presents some potential financial risks. Therefore, the steps that would normally be followed in developing a cogeneration facility would be the same as those that are employed for any investment project. Projects will obviously vary from one to another on the basis of who is the project developer, what is the size of the project, who is financing the project and so on.

Chapter Contents:

• 5.1 Operation modes of cogeneration systems
• 5.2 Distribution of heat
• 5.3 Silencers
• 5.4 Factors to consider
• 5.4.1 Fuel supply
• 5.4.2 Demand
• 5.4.3 Regulatory
• 5.4.4 Subsidies and financing
• 5.4.5 Environmental
• 5.4.6 Construction and operation
• 5.5 What systems are suitable?
• 5.6 Project risks

Inspec keywords: power generation economics; cogeneration

Other keywords: economic feature; energy requirements; cogeneration facility; financial risks; investment project; financial analysis; cogeneration plant characteristic; energy efficiency project

Subjects: Thermal power stations and plants