A case study on cogeneration

Princeton University is considering the installation of a new central energy supply system. The existing system burns natural gas or residual oil to produce low temperature steam at 232 °C and 1.62 MPa. This steam powers compression chillers, supplies process heat, and drives a small backpressure turbine, the exhaust of which is used for hot water and space heat on campus. The steam demand varies from approximately 7 to 70 MWt, and the electric demand from 3 to 8 MWe. Energy prices have escalated sharply during the past decade, and recent changes in utility regulations have created favorable conditions for cogeneration. Therefore, a study was undertaken to evaluate reasonable alternatives for reducing energy costs. We study the most promising candidate systems: a gas turbine cogeneration system and a coal-fired fluidized bed boiler with a new, high temperature steam cogeneration system. A diesel cogeneration system is also investigated, but it turns out to be less attractive in this particular application because much of the cogenerated heat has too low a temperature. The savings are critically dependent on the economic scenario, in particular the escalation rates for energy prices. A wide price range for the various energy forms has been considered and the results for life-cycle savings and for rate of return are presented in compact graphical format. Under the most likely economic scenarios both the coal/steam system and the gas turbine offer rates of return in the range of 10–20% above inflation.