N O -RISK COGENERATION

Abstract

Cogeneration facilities, also called combined heat and power
(CHP), typically achieve thermal efficiencies of 80-85 percent. The most
efficient conventional electric generation plants typically do not exceed
thermal efficiencies of 50 percent. The key to cogeneration’s efficiency is
the availability of a sizable “heat load.” A heat load is the requirement
for heat, usually in the form of steam, used in the manufacture of a
product, such as in the refining of oil, production of chemicals, or the
processing of food. Although electric power equipment is available to
anyone with sufficient capital, sizable heat loads are relatively scarce.
Therefore, the availability of a heat load is the determining factor for
achieving the superior efficiencies and resulting superior economics of
cogeneration facilities. All economically viable cogeneration projects
typically must satisfy heat loads of sufficient size, so that all engine ex-
haust can be absorbed by the facility’s processes. Succinctly, efficient and
economically cogenerated electric power production is a slave to its heat
load.
A large heat load that is not being used also to produce electric
power is a valuable, but wasted, asset that can pay its owners substantial
dividends. The purpose of this article is to demonstrate how heat load
owners can extract the wasted value of a heat load without contributing
capital, or assuming risk in the construction of a cogeneration facility.