Weighing the Benefits of a Cogeneration Plant
August 26, 2015 | Jamie Landers, Electrical & Controls Engineer
Is cogeneration the right match for your organization’s energy requirements? In order to determine the answer, you’ll need to consider your institution’s energy use and profile, utility company tariffs and regulations, and future energy needs.
The right time
Typically, organizations that utilize Combined Heat and Power have significant, continuous, specialized, or mission-critical heating and power needs: institutions such as universities, hospitals and industrial facilities with 24×7 production schedules.
Installing a cogeneration unit is a significant investment. For many institutions, the suitability of CHP is a question of timing. Many university, hospital, and industrial facilities were built over fifty years ago. Their utility infrastructure is aging, inefficient, and ready to be replaced with a more contemporary system.
The need for a system-wide overhaul makes these institutions strong candidates for CHP. They will have to make a significant investment one way or another; by investing in a system that allows for more efficient and predictable fuel economics, they may ensure that they receive the anticipated return on investment.
For the same reason, cogeneration could be a strong value proposition for new chemical and petrochemical plants that expect to operate for decades. For organizations that are planning for the long-term, an investment in CHP at the outset can be highly effective.
There are a number of ways to approach funding a cogeneration plant:
- Some organizations fund the unit entirely on their own
- There are many third-parties who are willing to fund a plant, recouping their investment through a utility rate agreement
- Many organizations may be eligible for federal, state, and local incentives
If your institution is interested in cogeneration, you will want to explore these strategies thoroughly. Furthermore, it will be essential to calculate your prospective energy and cost savings at the outset.
CHP is a powerful tool, and one of its greatest assets is its ability to help institutions plan for the future. Make certain that its requirements and capabilities align with your long-term organizational goals and needs.
A more efficient way
Combined Heat and Power delivers a valuable balance of benefits: efficiency, reliability, and sustainability.
While both markets and regulations fluctuate over time, CHP allows organizations to take a confident step forward with a new sense of resilience and certainty. For institutions looking to implement a more contemporary heating and power system — or to develop cutting-edge facilities that will stand the test of time — cogeneration may be the right solution for the challenge.