Cogenerated electricity shows promise in Texas

Journal Article · · Energy Studies; (United States)

OSTI ID:6301753

Texas utilities pay a certain price for cogenerated electricity under firm contract. This price is set to be no higher than the cost of avoided capacity, which is basically the amount saved by the utility by eliminating or postponing future power plants. The other half, the cogeneration not under firm contract, is sold at a lower price: that of avoided energy cost, which primarily is the cost of only the fuel saved. Both these prices are set by state and federal regulation. Utilities are required to buy all cogenerated power offered to them by qualifying facilities. We have estimated that the ultimate technical potential for industrial cogeneration in the state is about 20,000 megawatts. To evaluate the cost-effectiveness of cogeneration, a computer simulation was constructed. Preliminary results of a case study show that cogeneration can be economic under a variety of conditions. At low purchase rates, the cogenerator benefits most by using the electricity itself. At rates of 92 to 100% of the utility's avoided costs, the sale is economic for both the utility and the cogenerator. At higher prices, the effect is to increase the cost of electricity to nongenerating customers. Cogenerators in Texas are competing to fill only those firm power needs of the utilities that are above and beyond the utilities' own resource schedules. These firm power needs are far less than the amount of potential cogeneration supplies. One can argue that this policy tends to hold down the price that utilities (and thus their customers) have to pay for electricity in the short run. In the long run, however, it is also inhibiting growth of an electricity supply that is more efficient than the conventional supply.

• OSTI ID: 6301753
• Journal Information: Energy Studies; (United States), Journal Name: Energy Studies; (United States) Vol. 12:3; ISSN ESTUE
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290800* -- Energy Planning & Policy-- Heat Utilization-- (1980-)
CHEMICAL INDUSTRY
COGENERATION
DEUS
ECONOMICS
ELECTRIC UTILITIES
ENERGY
ENERGY SOURCES
ENERGY SYSTEMS
FEDERAL REGION VI
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
GOVERNMENT POLICIES
HEAT
INDUSTRY
NATURAL GAS
NORTH AMERICA
PAPER INDUSTRY
POWER GENERATION
PROCESS HEAT
PUBLIC UTILITIES
RECOMMENDATIONS
REGULATIONS
STEAM GENERATION
TEXAS
USA
WOOD PRODUCTS INDUSTRY