Cogeneration, also known as combined heat and power (CHP), has long been regarded as one of the most efficient ways to produce energy. But when exactly does it become economically viable?
What is cogeneration?
In conventional power plants, the heat generated during electricity production is often wasted. By contrast, cogeneration enables the simultaneous production of electricity and useful heat, thereby increasing overall energy efficiency.
The key to cogeneration profitability is the ability to make full use of the recovered heat. In winter, this heat can be used to heat buildings, production halls or other spaces. The financial benefits become particularly significant when the heat can also be used efficiently during the summer months.
In summer, recovered heat can be converted into cooling using absorption chillers, which supply cooling to buildings or industrial processes. Another option is to generate steam for industrial use, where it is required by many processes.
When is cogeneration profitable?
This is why cogeneration is most likely to be economically viable for companies with a steady year-round demand for heat or cooling. By using recovered heat not only in winter but also in summer, these companies can significantly reduce their energy bills.
The environmental aspect should not be overlooked either. Owing to cogeneration’s higher energy efficiency, emissions of harmful greenhouse gases are significantly lower than with conventional methods of energy production. This means that an investment in cogeneration can deliver financial benefits while also helping to protect the environment.
In summary, cogeneration becomes economically viable when recovered heat can be used to the greatest possible extent throughout the year. For companies with continuous demand for heat and cooling, the technology can deliver significant financial and environmental benefits.