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In the 21st century, energy conservation has globally been highlighted due to an expected sharp
increase in energy demands and the resultant increased pollution and global warming from
greenhouse gases. For industrial power applications, particularly in the oil and gas sector,
cogeneration or combined heat and power (CHP) provides an interesting technology for maximizing
energy utilization and minimizing emissions. Criticisms of environmental compliant power systems
usually focus on the cost of development, manufacturing and operation. However, few decisions on
whether a system meets acceptable specification can be made until the power system is fully
understood and optimized.
This paper reviews the role and applications of cogeneration and discusses the use of an exergy
approach to delineate the engineering understanding and economics of such systems.
Introduction
Cogeneration is a technology used by many industries since the beginning of this century as an
economic means of providing total plant energy requirements. Prior to 1960, most applications were
developed based on steam turbine generating systems. However, more recently, the economic
benefits resulting from high power-to-heat ratios, the wide range of system integration options, and
attractive cogeneration system performance levels have made gas turbines highly desirable prime
movers in applications where suitable fuels are economically available.
The commonly accepted definition, and therefore the one used in this paper, is that cogeneration is
the sequential production of necessary heat and power (electric or mechanical) or the recovery of low
level energy for power production. It should also be mentioned that other terms have historically been
applied to such systems, such as by-product generation, combined heat and power (CHP), in-plant
generation and total energy systems. At an industrial site requiring both electricity and high pressure
steam, a cogeneration facility would be able to supply both products from a single fuel stream.
Cogeneration typically improves the overall efficiency of energy use, leading to reduced fuel use and
pollutant emissions, and is an example of distributed generation. Using distributed generation roughly
halves greenhouse gas emissions. This will be a major incentive for cogeneration and distributed
power if and when greenhouse gas reduction credits begin trading.
General Principles
Different sources of energy have different quality based on the ease of transportation and use and
the range of applications for the energy form. Some example energy forms in order of decreasing
quality are:
electricity
chemical energy, such as natural gas
high pressure steam
low pressure steam
hot water.
Both chemical energy and electricity are high quality energy sources. A joule of electricity can be
used for many different things, such as lighting, electric motors etc. Although a joule of water at 90C
contains the same amount of energy as a joule of electricity, the energy is low quality and has limited
use. Due to the basic laws of thermodynamics, a process cannot convert a lower quality energy into a
higher quality energy at 100% efficiency; some of the energy will be converted into lower quality
energy. An example is the conventional natural gas fired steam cycle. Chemical energy is converted
to high pressure steam used to turn a steam turbine-generator set to produce electricity. About 35%
of the chemical energy in the natural gas is converted to electricity while the remaining 65% is
converted to low quality warm water.
Cogeneration attempts to improve the energy use efficiency by producing several useable energy
forms from a single fuel source. Although less of the fuel energy may be converted to electricity,
producing both electricity and useable thermal energy can lead to higher overall efficiencies. For
example, using natural gas to produce steam in a conventional boiler is a missed opportunity. Natural
gas is a high quality fuel that can be used to produce electricity while waste heat from this process
can be used to produce steam.
To understand cogeneration, it is necessary to know that most conventional power generation is
based on burning a fuel to produce steam. It is the pressure of the steam, which actually turns the
turbines and generates power, in an inherently inefficient process. Because of a basic principle of
physics no more than one third of the energy of the original fuel can be converted to the steam
pressure, which generates electricity. Cogeneration, in contrast, makes use of the excess heat,
usually in the form of relatively low-temperature steam exhausted from the power generation turbines.
Such steam is suitable for a wide range of heating applications, and effectively displaces the
combustion of carbon-based fuels, with all their environmental implications.
Conventional Central Power Plants
There are three major components in the cost of producing electricity; capital cost, operating cost and
fuel cost. Electric power generation in North America is dominated by large central power plants with
electricity distributed to customers over a transmission grid. Factors that have led to large central
power plants include:
a) Economies of scale
Large and small power plants require the same level of complexity and instrumentation in order to
operate reliably with good efficiency. This leads to a general trend of reducing capital and operating
cost per kilowatt hour (kWh) of electricity produced as the size of the plant increases.
b) Low cost of coal
Locally available coal is typically the lowest cost fuel, with mine site power plants producing the lowest
fuel costs. Coal-fired power plants located at the mine site benefit from low fuel costs and decreasing
cost per kWh with increasing size of the power plant.
c} Government control of electricity market
Often the electricity market is under government control with fixed rate of return to the electricity
producer. This guaranteed revenue lends itself to construction of large power plants with long
payback periods. The electricity market tends to be controlled by one or two power generators.
d) Existing Transmission Grids
Transmission grids for distributing electricity may already exist with their cost built into the regulated
electricity rates. Even though the electricity loss in the transmission grid may be 3 to 6%, the
existence of a grid reduces the capital cost of the user to obtain electricity. Rather than building his
own power plant, the user merely pays the cost of connecting to the existing grid.
Although central power plants can be reliable and cost effective, the efficiency of conversion of fuel
energy to energy used is poor. Examples of stand-alone power plants and their energy use efficiency
include:
30 to 35%
30%
50%
Stand-alone power plants convert only 30 to 50% of the fuel energy to electricity while the remaining
50 to 65% is rejected as waste heat to cooling ponds or cooling towers. Inefficient conversion to
useful energy also increases the amount of pollutants put into the atmosphere. Pollutants emitted by
coal-fired power plants include sulfur oxides, nitrogen oxides, ash particles and mercury. Fossil fuels
also produce carbon dioxide, a greenhouse gas that contributes to global warming.
Cogeneration Power Plants
Producing electricity with smaller devices located near the user can dramatically increase the overall
efficiency of energy use. Distributed generation is a term used for small power generators located
near the point of electricity use as apposed to central power plants using transmissions grids.
However as smaller scale power generation is usually less efficient at the production of electricity, the
full benefits of distributed generation are only achieved with cogeneration applications. The following
discusses some of the benefits of cogeneration.
a) Improved Efficiency of Fuel Energy Use
The production of both electricity and thermal energy from a cogeneration system leads to energy use
efficiencies of 80 to 85%. A typical cogeneration system can convert 30 to 35% of the energy in the
fuel to electricity with another 50 to 55% produced as steam and/or hot water. Using absorption
based refrigeration systems, the thermal energy could also be used for cooling and refrigeration. By
locating the cogeneration plant near the end user, electricity transmission losses are also reduced
further improving overall energy efficiency. Losses in the transmission systems can be as high as 3 to
6% of the electricity used.
b) Reduction of Load on Existing Transmission Systems
By locating energy production near the user, loads on existing transmission systems can be reduced
negating the need for expensive upgrades or new transmission lines. Reducing the load on existing
transmission systems also improves operating stability of the system. Cogeneration plants sized to
supply the thermal load to a facility may produce excess electricity that can be sold back to the grid.
c) Improved security of power
With the increase in use of computer equipment for plant operation, security and quality of power is
increasing in importance. The conventional transmission system represents a weak link for the
electricity user as the control and operation of the transmission system is with the utility.
Cogeneration systems are often installed and operated by the electricity user and can be maintained
to provide more dependable power. Existing transmission systems may also act as a backup to the
cogeneration system.
d) Reduced Emissions of Pollutants and Greenhouse Gases
Improving the overall efficiency of fuel energy use also leads to reduced emissions of pollutants and
greenhouses gases into the atmosphere. The cogeneration system supplies both electricity and
thermal energy, in place of purchasing electricity from the grid and firing natural gas in a separate
boiler to generate thermal energy for plant use. By eliminating the need for a separate steam boiler
fired with natural gas or other fuel, the emissions of nitrogen oxides, sulfur oxides, particulates are
also reduced. The improvement of fuel use efficiency of cogeneration over central power plants can
more than halve the emissions of carbon dioxide, a greenhouse gas.
e) Development of Competition within the Electricity Supply Industry
Cogeneration power plants are usually small plants sized to either the users electricity demand or
thermal demand. Often they are installed and operated by small independent power producers rather
than the utilities controlling the transmission grid. The availability of a number of cogeneration plants
operated by independent companies leads to increased competition in the production and sale of
electricity that may lead to improved quality and reduced cost to the user.
Cogeneration Technologies
Although natural gas is the most common fuel used in cogeneration systems other fuels can and have
been used. Installations in operation include units fired with wood, agricultural waste, peat moss, and
a wide variety of other fuels. Petrochemical facilities may also fire some of their waste materials such
as coke and vacuum bottoms.
Reciprocating Engines
Reciprocating engine based systems are the most developed and most common cogeneration
systems. Reciprocating engines fueled by natural gas or hydrocarbon liquid fuels are available in
sizes from several kW to 10 MW.
Figure 1 shows a typical installation of a natural gas fired reciprocating engine with thermal energy
recovery from the cooling water, engine oil and exhaust gas. The amount of fuel energy converted to
electricity generally increases with size, ranging from 30% for small units to 40% for large engines.
The amount of fuel converted to thermal energy is from 40 to 50% resulting in overall efficiencies of
80 to 85%. Of the small cogeneration systems available, reciprocating engines offer the highest
conversion of fuel energy to electricity.
800 kW generator with carbon dioxide recovery from the exhaust gas; operates continuously to
maintain 1000 ppm CO2 in the greenhouse
800 kW generator operates from 7 am - 11 pm; selling unused power to the transmission
system during high electricity prices
500 kW generator operating in base load for on-site electric power demand
The cogeneration facility at this greenhouse was sized based on electricity demand in the facility. The
thermal energy recovered from the cogeneration units supplies about 30% of the maximum thermal
demand for the greenhouse.
Gas Turbines
Conventional combustion turbines are a mature technology with several suppliers worldwide.
Turbines can be fueled with natural gas or oil. Units range in size from 500 kW to 250 MW. Efficiency
generally improves with increasing size of the turbine.
Single cycle turbines have efficiencies from 20 to 45% at full load. Combining a gas turbine with a
steam turbine cycle can improve efficiencies further to over 50% for large units. Gas turbines
generally have a higher capital cost than reciprocating engines with lower operating costs. For plants
above 10 MW, gas turbines are generally less expensive than reciprocating engines. Gas turbines
require a supply of high pressure natural gas and a natural gas compressor may be required. This
will increase the capital cost and reduce the efficiency of conversion to electricity.
Figure 2: Example Gas Turbine Steam Turbine Combined Cycle with Some Heat Recovery
Construction of cogeneration plants using gas turbines is well developed commercial technology.
Typical turbine exhaust temperature is about 500C. A Heat Recovery Steam Generator (HRSG) is
installed to recover energy from the turbine exhaust. The steam recovered is of sufficient quality to
operate a steam turbine to generate further electricity. In a cogeneration application the steam from
the HRSG would be used as process steam. Alternately the heat in the turbine exhaust can be used
to drive an absorption chiller for building cooling or refrigeration.
Microturbines
Microturbines are a recent development of the gas turbine industry. Generally ranging in size from 25
to 500 kW, microturbines were developed from turbocharger turbines used in the truck and aircraft
industry. Most microturbines are single-stage turbine with high rotating speeds (90,000 rpm) and
often directly coupled to a generator. Efficiencies of conversion to electricity range from 15 to 30%
depending on size, fuel supply pressure, and whether the design includes a recuperator. Microturbine
exhaust temperatures are relatively low (about 200 to 300C) and the waste heat can only be used to
generate low pressure steam and/or hot water.
Because of their simplicity (most designs have only one moving part), microturbines potentially have
very low operating costs, although they have not been in commercial use long enough to confirm this.
Due to their low efficiency of electricity production, microturbines are best applied in a cogeneration
application. The available sizes of 25 to 500 kW are ideally suited to hospitals, apartment buildings,
and small industries where a hot water supply is required.
Figure 3: Microturbine Installation with Heat Recovery from the Turbine Exhaust
Barriers to Increased Use of Cogeneration
Historically electricity production, distribution and sales have been controlled by large government
owned utilities. There are numerous real and perceived barriers to moving from central power to a
distributed network of relatively small cogeneration units, often operated by independent providers.
Some of the barriers to cogeneration include:
a) artificially low price for electricity
Large central power plants and the associated transmission grid may have been installed at
government cost or heavily subsidized by government funds. This usually leads to an artificially low
price that is difficult for new cogeneration facilities to compete with. Also the environmental cost
emissions of pollutants and greenhouse gas emissions are not accounted for in the price of electricity.
Until greenhouse gas credit trading is established, there is little financial reward for the improved fuel
efficiency of cogeneration systems.
b) market power of existing electricity supplier
Cogeneration systems that wish to tie into the existing transmission grid or sell power to the grid are
subject to rules and regulations that are geared towards large central power plants.
c) cost of cogeneration equipment
Although fuel use efficiency is higher, the economies of scale usually result in a high capital
equipment cost per kilowatt of electricity produced for small cogeneration plants. New technologies
such as microturbines and Stirling engines have the potential to reduce this capital cost but not until
production numbers increase.
d) complexity and cost of transmission grid connection
Safety aspects and power quality requirements both increase the cost of equipment required to
connect cogeneration systems to an existing transmission grid. The transmission grid operator
usually requires the ability to remotely turn off or disconnect from the grid the cogeneration unit for
safety reasons.
e) Undervaluing of System Reliability
Cogeneration improves the reliability of power supply to the user. Most electricity users do not put a
value on this improved reliability.
In conclusion, wide adoption of distributed generation will require the availability of small, economical
cogeneration units that require minimum maintenance. These units must have a high demonstrated
reliability and there must be a large number of sites with both a demand for electricity and a demand
for thermal energy. Both the technical and regulatory barriers to transmission grid connection will
need to be addressed to maximize any investment in cogeneration for the user.
Near Commercial Cogeneration Technologies
Greater market penetration of small scale cogeneration will require the development of systems with
high reliability, long lifetime, and lower capital and operating costs. There are several technologies
under development or near commercial application that promise some or all of these benefits. Table
1 lists some of these technologies and their predicted conversion efficiency and capital cost as
compared to conventional reciprocating engines. In a cogeneration application high efficiency of
conversion to electricity may not be the determining factor in a technology selection. If the
cogeneration system is sized to supply the thermal load, high reliability, fast response time and low
capital cost may be more important factors.
Table 1: Comparison of New Generation Technologies Suitable for Cogeneration
Stirling Engines
A Stirling engine is a closed system that converts thermal energy into mechanical energy by cyclic
compression and expansion of the working fluid. The work energy can subsequently be converted
into electricity using a generator. A Stirling engine can use several sources of heat, which makes it
theoretically ideal for electricity generation from waste heat sources. Test engines have been run on
solar heat, heat from gas, oil or biomass flames and waste heat from existing operations. As the
Stirling engine uses an external combustor and all moving parts are sealed from the combustion
products, unlike internal combustion engines and turbines there is no need for high quality fuel. By
design, Stirling engines are quiet and should require little maintenance, which makes them attractive
for remote sites or for domestic use.
Stirling engines are a technology within 1 to 5 years of commercial production, assuming they can be
demonstrated to have acceptable reliability and energy conversion efficiency for their target markets.
Stirling engines have several potential applications in cogeneration, conversion of waste heat to
electricity and remote power generation. Beta test units are available at sizes up to 25 kW. To be
effective, Stirling engines should be used in a cogeneration mode as efficiencies of conversion from
heat energy to electricity are only 15 to 25%. When used in a cogeneration system, overall energy
use will be 80 to 85%.
Photovoltaics
Photovoltaics can produce electricity with no emissions of pollutants or greenhouse gas and with zero
cost for fuel. However the capital cost of current photovoltaic systems is high making them cost
effective mainly in remote areas without existing fuel or electricity transmission lines.
Photovoltaics convert only a portion of the incident solar radiation to electricity. The remainder is
converted to heat or reflected from the solar panel. When combined with a solar hot water system, a
photovoltaics unit could produce both electricity and hot water for space heating or domestic use.
Fuel Cells
Fuel cells are devices that directly convert chemical energy to electricity at high efficiency. There are
several types of fuel cells with different operating conditions, fuel requirements and efficiencies. Fuel
cell technology is developing rapidly due to their potential for simplicity and high efficiency of
conversion to electricity. The leading fuel cell technologies are proton exchange membranes (PEM)
and solid oxide electrolytes.
PEM fuel cells operate at modest temperatures and may be applicable for cogeneration where the
waste heat can be used in the form of hot water, such as building heating. Solid oxide fuel cells
typically operate at temperatures over 800C enabling cogeneration applications where the waste
heat from the solid oxide fuel cell is used to generate high pressure steam. Solid oxide fuel cell are
also being developed in combined cycle systems with the waste heat used to power a gas turbine.
Generating electricity from both the fuel cell and the turbine results in the potential for converting 70%
of the fuel energy to electricity.
Integrated Gasification Combined Cycle (IGCC)
Integrated Gasification Combined Cycle (IGCC) technology uses a combination of gas-fired turbine
and steam turbine cycle to improve the efficiency of electricity generation. Coal or other hydrocarbon
fuels are converted to synthesis gas (mainly a mixture of methane, carbon monoxide and carbon
dioxide) in a gasification reactor followed by gas cleaning to remove particulate and sulphur
compounds (H2S and COS) followed by combustion in a gas turbine generator set. Waste heat from
the gasifier and from the exhaust of the gas turbine are used to generate steam, which generates
electricity in a steam turbine generator set. Typically 65% of the electricity is produced in the gas
turbine and 35% in the steam turbine (Rousaki and Couch, 2000). IGCC will have applications in very
large cogeneration opportunities.
IGCC has advantages over conventional fossil fueled steam cycle power plants including:
When constructed near a petrochemical facility, IGCC can be integrated with the facility to operate as
a cogeneration facility, producing electricity, chemical feedstocks or high pressure steam for process
heat. The fuel flexibility also enables waste destruction, such as heavy oils and coke, in the gasifier.
integrated design analysis can be applied. The goal of an integrated total energy system approach is
the synthesis of all the processes from early concept to online operation. The advantage of integration
of subsystems modules and separate databases is that other independently developed modules may
be added without having to modify extensively the new module to conform to the format of the existing
program. This provides flexibility to quickly incorporate new capabilities, and thus upgrade the existing
program.
Today, environmental considerations are an obvious factor in the development of power generation
systems. The importance of this dimension will increase further in the years ahead as a result of ever
more stringent environmental legislation and increasing public awareness of green issues. Hence,
there is an urgent need to advise utility generating companies, system manufacturers and
governments on how to optimise the application of power generating systems to improve operating
performance and to facilitate emission reduction or elimination. However, advice can only be offered
with a clear understanding of the principles of system operation, economic and effective emission
regulation techniques. It is envisaged that going research, development and demonstration will
provide robust and responsive methodologies for assessing the effectiveness and the economics of
cogeneration systems in their operation, the optimum design and the environment impact.
References
Potential for Cogeneration in Ontario, prepared for Ministry of Energy, Science and Technology,
August 2000. (available from the Ontario Ministry of Energy).
Distributed Generation Strategic Plan, California Energy
(http://www.energy.ca.gov/distgen/strategic/strategic_plan.html)
Commission,
May
2002.
Spiewak, S., Cogeneration and Small Power Production Manual, Third Edition.
Guidebook for Combined Heat and Power, California Energy Commission, report #P700-00-011,
October 2000.
Rousaki, K. and G. Couch, Advanced Clean Coal Technologies and Low Value Coals, IEA Coal
Research Report CCC/39, IEA, London, UK, November, 2000.
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Funding
This document has been exclusively prepared for the AIDIS-CANADA Environmental Project. The Project was funded by the Canadian
International Development Agency (CIDA), managed by the Alberta Research Council Inc. (ARC) and AIDIS as the Latin American
partner.
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