Save Money with Cogeneration

Posted by Jack Barry on Mon, Jun 18, 2012

Cogeneration, or Combined Heat and Power (CHP) produces two kinds of energy from one fuel—usually heat and electricity.  Cummins Power Generation states systems can be powered either with diesel or natural gas. Systems are made of an engine generator and a heat recovery system that collects the heat from the cooling and exhaust.  The excess heat is then captured and reused to save half the energy.  Cogeneration provides the same quality and quantity of power, just with half the energy costs.  Companies using cogeneration can save 35% on overall energy costs.

Cogeneration has many benefits and reasons why you should make the switch.  Some benefits include ease with on-site location of the generator as well as fuel efficiency.  In old systems without cogeneration, only 27% of the energy generated is usable, with the rest as exhaust and loss.  Cogeneration systems can take 90% of the energy generated and actually use it. Not only does cogeneration have fuel efficiency but a small carbon footprint as well.  When fuel is used in an on-site cogeneration system, it produces 80% less carbon emissions per unit of energy consumed compared to the regular coal burning power plant.  Additionally, an on-site generator set that produces electricity and reuses exhaust and heat can reduce 11.03 tons of nitrogen oxide emissions, 31.46 tons of sulfur dioxide, and 3,355 tons of carbon dioxide emissions each year. Cogeneration systems also burn natural gas and therefore particulate emissions are lessened. 

With the environment saved, you can save too.  Cogeneration’s efficiency can save your business a lot of money.  How much saved depends on your application of the system and the type of system you use. You can also take advantage of government incentives and “carbon credits” that lower the cost.  Cummins says there are three main factors that determine a great return on investment (ROI), cost savings, and reliability:

  1. A favorable ratio between the local cost of natural gas and the cost of electricity.
  2. A simultaneous base-load need with at least 300 kw of electricity and about 1 gigajoule/hour (293 kWh) of thermal energy.
  3. Eligibility for government incentives and rebates.

    Economic viability for businesses can be positively affected by cogeneration.  “Spark spread”, or the gas to electricity cost ratio is equal to the local cost for electricity minus the cost of natural gas.  In other words, spark spread is when one energy source is more economical than the other. You can lower electricity costs by using cogeneration with natural gas.  In this scenario, electricity costs too much but natural gas does not.

    To increase economic viability, you also have to have the need for electric and thermal energy.  You can store the thermal energy or use it in other systems like a water tank.

    Lastly, incentives for cogeneration are available and are increasing.  Incentives can be cash rebates or carbon credits used in the market.

    Lots of industry facilities can benefit from cogeneration.  For example: animal feed processing, manufacturing, chemical processing, paper mills, petroleum and coal products, and pharmaceuticals. 

    But there can be even more possibilities to add cogeneration systems to commercial bakeries, health clubs and spas, hospitals and nursing homes, refrigerated warehouses and more.  Cogeneration systems can also be found in airports, government locations, prisons, landfills, and water treatment plants.

    You can find Cummins equipment at Depco.  Cummins power generators can reduce a facility’s power and operating costs, gain a competition edge over your competition, improve your power sources, reduce your business’ carbon footprint, and provide standby power generation in case of emergency.  

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    Tags: Power Generation, Cogeneration, Cummins

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