Cogeneration: regulation economics and capacity. Volume 2. Economics and capacity

Technical Report · Thu Sep 01 04:00:00 EDT 1983

OSTI ID:5838648

Jess, M; Mayes, F

This report provides a framework for analysis of the role of cogeneration in providing electric generating capacity. Cogeneration can be defined as the dual production of useful thermal and power energy from a single heat source. In most applications, cogeneration is used to produce electricity and some other form of useful heat. The report has been published in 2 volumes. This volume summarizes available technologies for cogeneration of heat and electric power. It develops a theoretical model that describes the elements of an economic decision used by an industrial firm to determine whether or not an investment in cogeneration facilities would be beneficial. Once the elements in this decision have been identified, the role of the price of electricity in determining benefits is analyzed. Legislation that has established new regulatory standards for prices of electric power produced and consumed by cogeneration facilities is analyzed to provide insights into the relationship between cogeneration and regulated electric utilities. An estimate of the output of industrial cogeneration is constructed in order to provide perspective on the importance of cogeneration in supplying electricity in the United States. This analysis shows that the economic capacity decisions of cogeneration are determined by balancing the economic benefits of electricity production against increased capital and operating outlays. In this theoretical model, the outcome of the trade-off between additional benefits and costs depends critically on the price of electricity. The analysis of the FERC rules that set the price of cogenerated electricity suggests that if the rules are properly implemented, they will improve the efficiency of electric power production. However, the long-run output and distribution of benefits will depend on the dynamic processes of market adjustment.

• Research Organization: Oak Ridge National Lab., TN (USA); USDOE Energy Information Administration, Washington, DC. Office of Coal, Nuclear, Electric and Alternate Fuels
• DOE Contract Number: W-7405-ENG-26
• OSTI ID: 5838648
• Report Number(s): DOE/EIA-0421-Vol.2; ON: DE84000132
• Country of Publication: United States
• Language: English

Related Subjects

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CAPACITY
COGENERATION
COST
COST BENEFIT ANALYSIS
DEUS
ECONOMICS
ELECTRIC POWER
ENERGY SYSTEMS
MARKET
POWER
POWER GENERATION
STEAM GENERATION