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Cogeneration versus natural gas steam boiler: A techno-economic model

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  • Shnaiderman, Matan
  • Keren, Nir

Abstract

Energy usage can constitute a substantial operational expense for corporations. To reduce expenses, corporations may seek out decentralized solutions for generating electricity, based on sustainable energy or on conventional energy resources. The main goal of this research is to resolve an organization’s dilemma regarding whether to adopt a cogeneration system or to replace a conventional diesel steam boiler with a boiler fueled by natural gas. We analytically calculate the total expected initial setup and operational costs under the two models, and determine which model is preferable. We numerically show that implementation of a cogeneration system may yield rapid return-on-investment and may lead to cost savings of more than 25%, as compared with the conventional system. However, low electricity tariffs or high operation costs lead to slower return-on-investment and the conventional model becomes significantly better for short-term processes. Furthermore, low uncertainty of steam demands leads to profitability of the cogeneration model. On the other hand, if the total expected demand of one type of product (electricity or steam) is significantly greater than that of the other, then the conventional model becomes preferable.

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  • Shnaiderman, Matan & Keren, Nir, 2014. "Cogeneration versus natural gas steam boiler: A techno-economic model," Applied Energy, Elsevier, vol. 131(C), pages 128-138.
    • Handle: RePEc:eee:appene:v:131:y:2014:i:c:p:128-138
    DOI: 10.1016/j.apenergy.2014.06.020
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    2. Mokheimer, Esmail M.A. & Dabwan, Yousef N. & Habib, Mohamed A. & Said, Syed A.M. & Al-Sulaiman, Fahad A., 2015. "Development and assessment of integrating parabolic trough collectors with steam generation side of gas turbine cogeneration systems in Saudi Arabia," Applied Energy, Elsevier, vol. 141(C), pages 131-142.
    3. Pavel Atănăsoae, 2018. "The Operating Strategies of Small-Scale Combined Heat and Power Plants in Liberalized Power Markets," Energies, MDPI, vol. 11(11), pages 1-16, November.
    4. Isa, Normazlina Mat & Tan, Chee Wei & Yatim, A.H.M., 2018. "A comprehensive review of cogeneration system in a microgrid: A perspective from architecture and operating system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2236-2263.
    5. Comodi, Gabriele & Rossi, Mosè, 2016. "Energy versus economic effectiveness in CHP (combined heat and power) applications: Investigation on the critical role of commodities price, taxation and power grid mix efficiency," Energy, Elsevier, vol. 109(C), pages 124-136.
    6. Mokheimer, Esmail M.A. & Dabwan, Yousef N. & Habib, Mohamed A., 2017. "Optimal integration of solar energy with fossil fuel gas turbine cogeneration plants using three different CSP technologies in Saudi Arabia," Applied Energy, Elsevier, vol. 185(P2), pages 1268-1280.

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