Overview

The complexity, comprehensiveness, and cost of cogeneration system modeling will be a function of the design phase, with the final decision regarding the development of an on-site system dependent on an engineering study that is detailed enough to provide reasonably accurate estimates of the project's capital budget, including both hard and soft costs, and of the resulting operating costs. In general, this more detailed study is preceded by one or two less comprehensive analyses that provide information required for preliminary decision making. That preliminary process will vary depending on the disposition of the cogenerated power. An on-site generation project in which most or all of the cogenerated power is sold to an electric utility will require considerably more legal and regulatory work than will a project that uses power internally. The initial developmental process for a "wholesale power" project may become extremely complex and costly in those cases where the cogenerator must compete in a competitive bidding procedure for the right to sell capacity to a utility. Conversely, an "internal use" project will require more attention to site electrical and thermal loads and the coincidence of such loads than will the wholesale power project. This chapter reviews the cogeneration system design process as it evolves from simple conceptual analyses to detailed design. It first reviews various design criteria and the basis for both capital and operating costs.

One categorization of project development activities is as a function of risk. The overall developmental strategy described here is one of minimizing...