THE ECONOMICS OF GAS TURBINE COGENERATION.

The technology of cogeneration is reviewed through an examination of the prime movers most commonly used for this purpose in industrial and commercial facilities. The systems characteristics which are of particular importance to the congeneration application are emphasized along with the advantages and limitations of each. A comparative examination of the methods selected for use in the evaluation of profitability in cogeneration systems is presented. The examination focuses on the interpretation of the projections made by each method and their implications for the decision to adopt cogeneration. A computer simulation model is utilized to perform a sensitivity study in order to identify the key variables determining economic viability of cogeneration. Employing a gas turbine system as a representative installation, the variables used in the sensitivity study are presented along with the justification for the assignment of the baseline and study range values. A simplified method for analyzing the profitability of cogeneration systems is developed. The technique is specifically tailored to gas turbine based cogeneration which is the technology most commonly proposed for moderate size facilities. The significance of the incremental energy consumption factor as a determinant of profitability is investigated. The application of the simplified method for comparative studies of different gas turbine systems is described and the results compared to projections made by the simulation model. Finally, the simplified method is utilized to examine the implications of regional fuel price differences and the implications of natural gas price deregulation on the profitability of gas turbine cogeneration