White Papers

More Than Heat and Power

A Fresh Look at Cogeneration

by Michael A. Devine
Caterpillar, Electric Power Division
Gas Product Marketing Manager

Cogeneration with gaseous-fueled engine-generators has delivered substantial benefits for many years. In Europe and North America, it provides extremely cost-effective electricity and heating in numerous commercial and industrial settings. In Asia and elsewhere in the developing world, it provides a steady source of electricity where utility power reliability and quality are inconsistent – while also delivering heat for process industries that help drive economic growth.

Today, the future of cogeneration looks brighter than ever. Shale gas development made possible by hydraulic fracturing (fracking) has driven North American natural gas prices down to levels not seen since the 1990s. Average wholesale prices fell...in 2012, and ... [this] helps enable attractive payback on the front end of cogeneration projects. The longer-term outlook is favorable as well: Current forecasts call for natural gas prices to increase...through 2035.

Meanwhile, utility electricity prices continue to escalate, and advances in technology are pushing the efficiency boundaries of reciprocating engine-generators – adding to the appeal and financial return of engine systems. As a result, a widening variety of cogeneration applications have moved squarely into the mainstream. Cogeneration today goes well beyond the classical picture of simultaneously generating electricity and hot water or steam. Today’s usable engine outputs also can include:

  • Heated air
  • Chilled water produced by way of absorption chillers
  • Carbon dioxide from purified exhaust

In other words, a single engine-generator can produce two, three or four useful outputs at once. With today’s generating technologies, electrical efficiencies up to 45 percent and total resource efficiencies upwards of 90 percent are achievable. And cogeneration systems do not necessarily need to operate full-time at full load to be cost-effective – low-cost and low-intensity configurations can bring attractive returns in many settings.

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