An investigation of the factors that determine the attractiveness of cogeneration

Abstract

The attractiveness of a cogeneration proposal is determined by a number of factors, some of which may be site specific. The cost of the electricity generated by the plant is a strong indication of the economic viability of the proposal and the level of this cost is set by the minimum attractive rate of return expected by the owner, although other factors, such as the utilisation factor of the plant and the effectiveness with which the by-product of the plant is used, cause slight variations in electricity cost. The paper concludes that with a proper sizing of a cogeneration plant and with a good electric/thermal load match it is possible for a project to be economically viable, even when the proposal demands a high rate of return on the investment. The analysis takes as an example a case study in Kenya.