Basic Cogeneration Concepts

By Oscar Aguilar

In the context of large industrial sites it is very common to employ the term cogeneration to make
reference to the equipment that satisfies the power and heating requirements of the plant. This
brief document explains the technical features of this type of systems along with their main
pros/cons in comparison with conventional energy-production schemes.

Broadly speaking, co-generate means to produce something at the same time or together with
something or someone else. In that sense, the word can be employed in many different
connotations. However, in technical terms, when referring to an energy conversion process,
cogeneration can be defined as:

The successive production of power and directly useful heat from a common energy source.

It is important to note that in this definition, “directly useful heat” refers to the thermal energy
required by a process, which doesn’t need further transformation before being employed (i.e. will
not be employed to produce additional power); two common examples are heating steam and hot
air (e.g. heating or drying a product). Also, although the power produced is not limited to the
rotational type, this is normally the case (e.g. steam or gas turbines, reciprocating engines), either
to directly drive equipment like pumps and compressors, or to run electric generators.

Regarding the last part of the definition, a “common energy source” means that, from an original
carrier of energy (e.g. fuel), power and heat are produced in succession (in series). In other words,
fuel is not split to separately generate both (in parallel).

It is worth stressing that the definition makes reference to a production mode from a particular fuel
stream, not to an equipment or unit. This is because it possible for the same system to run in
cogen and non-cogen modes at different times or even to operate just partially as a cogeneration
scheme (i.e. just a fraction of the fuel co-generating). Note that, conversely, basic textbooks
portray a “cogeneration plant” as a combined cycle with steam extraction to a process, which,
strictly speaking, is NOT the case, as explained below.

Fig 1: Basic cogeneration scheme in which the valve can regulate the fraction of steam (and fuel)
that would be actually co-generating (power and heat)

Fuel
BO

0 t/h

LD BTg
Cogen
Path

7 t/h

Cogeneration Examples

According to the definition, a relatively simple system such as a boiler plus a back-pressure turbine
delivering heating steam is, in fact, a cogeneration process (Fig. 1). In contrast, a gas turbine (GT)
discharging gases to a heat steam generator (HRSG) to raise steam and produce additional power
inside a condensing steam turbine (ST), would NOT be co-generating (Fig. 2), as the fuel is only
employed to produce power in a combined cycle (CC), and the remaining heat is being rejected to
the surroundings through the condenser and cooling system.

An intermediate case between the last two examples would be a GT that rejects half of its exhaust
gases straight to the atmosphere and the rest is employed to generate heating steam in a HRSG
(Fig. 3). Under this scheme, only a fraction of the energy in the fuel would be co-generating power
and useful heat. Actually, this is a similar situation as in the example cited from basic textbooks, as
only the extracted steam from the CC sent to the process can be considered part of a cogeneration
scheme (the rest is a conventional power plant).

Fig. 2: Non-cogen scheme in which the fuel is only employed to generate power (combined cycle)
and the remaining heat is rejected to the surroundings

Fuel

GTg
HRS
No Cogen
Path

7 t/h

CTg

Cond CWT

Since cogeneration is a production mode, it is possible to change the operational state of a given
system and increase the amount of fuel that is co-generating. For instance, in the first case (Fig.
1), if the valve is open, a fraction of the fuel would not be co-generating since some of the steam
would be delivered to the process without producing power inside the ST.

Cogeneration and CHP systems

Most of the plants installed in manufacturing sites are intermediate cases like the last two
examples mentioned previously, in which some of the fuel is co-generating, and some just
producing either heat OR power (e.g. Fig. 3). Those schemes are called “combined heat and
power plants” or simply “CHP systems”, and should not be confused with the term “cogeneration”,
even though they are often (and erroneously) used interchangeably. The main difference is that
CHP refers to the plant itself, while cogeneration denotes an operating mode. In that sense,
cogeneration should be considered a particular way of operating a CHP system or a section of it
(i.e. when only some units run in cogeneration mode).

Fig. 3: In this case only a fraction of the fuel is co-generation power and steam, as some of the
exhaust gases are being directly rejected to the atmosphere
 Fuel
Bypass

Non-Cogen
GTg

Cogen
HRS Path

7 t/h

Conventional heat and power generation systems

Under a conventional scheme, both the power and the heat required by a process are produced by
independent systems. A common example are the industrial sites in which boilers meet the steam
demands, while all the required power is imported as electricity from the grid (generated in a
central power station). As can be observed on Fig. 6a, the boiler features relatively high fuel
efficiency (around 90% LHV), while the power plant can only reach 30-50% LHV (typically)
depending on the specific configuration.

In fact, the efficiency of a thermoelectric plant, regardless of size and technology, is limited by the
Second Law of Thermodynamics, which dictates that the thermal energy in a system cannot be
fully transferred as (mechanical) power (i.e. heat cannot be completely converted into power). This
means that any system that employs thermal energy sources to produce (only) power, must reject
a significant amount of heat to the surroundings.

Fig. 4: Conventional power production scheme in a Rankine cycle configuration

Gases

Boiler Fuel

BO
Power
Pump Generation
STg
Condenser
Steam
Cond

Heat Reject

Fig. 5: Conventional power production scheme in a combined cycle configuration

 Gases

Fuel Gas Turbine

HRS
GTg
Pump Power
Generation

Condenser STg

Cond Steam

Heat Reject

For example, if a power plant is based on a Rankine cycle (Fig. 4.), it will feature boilers providing
steam to turbines that generate power before discharging to a condenser (at lower pressure and
temperature), where nearly half of the energy contained in the fuel must be rejected through the
cooling system (so that a pump can take the liquid condensate and continue the cycle again).
Under this type of configuration, the highest fuel efficiency that a power station has achieved is
around 47% LHV (net), although in most plants it is around 35-40%.

On the other hand, in a power plant based on a combined cycle (Fig. 5), gas turbines produce
power and hot gases that rise steam inside HRSG units to be used in a secondary Rankine cycle
(in this case the heat rejected is nearly one third of the energy supplied by the fuel). Under such
configuration the highest fuel efficiency that has been achieved is 60% LHV (net), but normally it is
around 45-55%.

Fig. 6: Comparison between a conventional system and a cogeneration scheme performance

a) Conventional System b) Cogeneration Scheme

Fuel: Fuel: Tot Fuel: Fuel: Savings:
111 MW 232 MW 343 MW 298 MW 45 MW

Eff: Eff: Eff:

89% Combined 50% Cogen 72%
Boile

Steam Electricity Steam Electricity

100 MW 116 MW 100 MW 116 MW
Loses Loses
11% 20% Loses
Conden 28%
30%

Net 89% Net 50% Net 72%

Eff CHP = (100+116)/365 = 63.0% Eff CHP = 216/298 = 72.5%

Cogeneration Schemes

The main difference of a cogeneration scheme with a conventional power plant is that the former
delivers the heat rejected by the power units to processes that directly need thermal energy to
operate (e.g. heating heat or hot gases to dry a product). Therefore, the otherwise wasted heat
from the power producing elements is mostly employed as a useful product, reaching fuel or
utilization efficiencies of 70-90% LHV (net).
To illustrate the differences, consider two systems (Fig. 6) delivering the same power and useful
heat, one employing a conventional method (steam from a boiler, power from a combined cycle),
and another one running in cogeneration mode (typical efficiency values have been used in both
cases). As can be noticed, the overall efficiency of the conventional system is 63% LHV (net), so
that in order to deliver 100 MW of heat (steam) and 116 MW of electricity it requires a total of 343
MW of natural gas.

In contrast, the cogeneration scheme is supplying the same amount of heat and power, but only
consumes 298 MW of fuel, reaching an overall efficiency of 72% (savings of 45 MW of natural gas,
around 13% of conventional consumption). Note that if the efficiency of the power plant were only
35% (like a typical Rankine cycle), and the utilization or fuel efficiency of the cogeneration scheme
was 90%, then the savings could reach 46% of conventional consumption. Therefore, cogeneration
schemes have an advantage over conventional systems to reduce energy consumption and CO2
emissions.

Fig. 7: Economic performance of different CHP systems

a) Conventional Tot Opex 74.3 MM$/yr b) Cogen 1 Tot Opex 58.9 MM$/yr c) Cogen 2 Tot Opex 7.5 MM$/yr
Schem e Schem e Schem e
Pow er Cost 48.2 MM$/yr Pow er Cost 26.0 MM$/yr Pow er Cost -62 MM$/yr
Fuel Cost 26.1 MM$/yr Fuel Cost 32.9 MM$/yr Fuel Cost 70.0 MM$/yr
Pow er Imprt 50.9 MW Pow er Imprt 27.4 MW Pow er Imprt -66.0 MW

111.2 MW 140.3 MW 298.1 MW

BO BO 158.8 ton/hr 98.4 MW

GTg
HP 55.0 bara 413.9 °C VHP 95.0 bara 488.6 °C VHP 95.0 bara 488.6 °C

131.7 ton/hr 158.8 ton/hr 158.8 ton/hr

23.7 MW 23.7 MW
LD
ST ST
LP 5.0 bara 376.0 °C LP 5.0 bara 155.0 °C LP 5.0 bara 155.0 °C

Dea Steam 100.0 MW Dea Steam 100.0 MW Dea Steam 100.0 MW

5.2 ton/hr 126.5 ton/hr 7.5 ton/hr 151.3 ton/hr 7.5 ton/hr 151.3 ton/hr

Economic Advantage of Cogeneration Schemes

Beyond the energy and CO2 reduction potential of operating in cogeneration mode, the following
example illustrates the economic benefits that these schemes can deliver in comparison to
conventional systems. On Fig. 7 it is possible to compare the operating costs for a process plant
that requires 100 MW of low-pressure steam and 50 MW of power, when a non-cogen and a cogen
option are implemented. For both cases a fuel price of 8.0 $US/MMBtu LHV and a average electric
tariff of 110.0 $US/MWh (import and export) have been assumed.

In the first case (Fig. 7a), under a conventional approach, only the steam is produced onsite in
high-efficiency boilers (90% LHV net) and all the power is imported, resulting in a total cost of 26.1
+ 48.2 = 74.3 MM$US/yr.

In the second case (Fig. 7b), boiler pressure is higher and a steam turbine has been installed to
co-generate power before delivering steam to other processes. Under this scheme it is possible to
reduce power import from 50.9 MW (including auxiliaries) to 27.4 MW. Even though fuel
consumption increased from 111.2 to 140.3 MW, the net total cost was decreased to 26.0 + 32.9 =
58.9 MM$US/yr, which is equivalent to 15.4 MM$/yr in savings (around 21% of original cost).

In the third case, (Fig. 7c), the boiler has been replaced by a GT with a HRSG, so that power is co-
generated by the two turbines before delivering steam to the processes. Since this cogeneration
scheme produces more power than required by the complex, some 66.0 MW of electricity are
exported (instead of importing 50.9 MW and 27.4 MW as in the two previous cases). Although fuel
consumption increased to 298.1 MW, the net total cost was reduced to -62.5 + 70.0 = 7.5
MM$US/yr, representing savings of 66.8 MM$/yr or a reduction of around 90%.
Limiting factors to cogeneration

Even though running a cogeneration scheme is more efficient than employing conventional
systems to satisfy the heat and power requirements of a process, not all sites have implemented
this approach due to factors that reduce or eliminate the economic advantages of cogeneration.
Some of the main limiting factors include:

1. Subsidized fuel for power stations.

This may allow the central plant to offer tariffs below the production costs of an independent
producer, even if it operates in cogeneration mode. In these cases there is no incentive for
users to generate their own power.

2. Contracts that restrict or penalize power export.

For many sites, a cogeneration scheme would lead to producing more power than what
they consume. If the contract with the utility company does not pay the exported power at a
reasonable price, then it may be more attractive to employ steam generators to directly
meet some or all of the heating demands.

3. Flexibility and operability of the CHP plant.

Running in cogeneration mode means that power and heat production are coupled, so it is
not possible to vary one without affecting the other. However, in many cases both demands
will significantly fluctuate independently and it becomes necessary to meet at least some of
the heat and/or power demands with non-cogen schemes (e.g. boilers directly supplying
steam or condensing turbines rejecting heat to the surroundings)

4. Plant reliability.
When a unit inside a cogeneration scheme fails or has to be taken out to receive
maintenance, it compromises both power and heat production. Therefore, it is often needed
to operate the plant in a non-cogen mode to ensure a certain reliability of the plant.

5. Capital costs.
Equipment units employed in cogeneration schemes (especially HRSGs and gas or steam
turbines) are significantly more expensive than a high-efficiency boiler. In many instances, if
some limiting factors are present, it is not possible to justify the additional investment
required to operate in cogeneration mode.

Conclusions

Running a CHP plant in a cogeneration mode offers a more efficient and environmentally friendly
to meet the energy demands of a process plant (i.e. less fuel and emissions compared to
conventional systems). Furthermore, manufacturing sites may significantly reduce their operating
costs by implementing cogeneration schemes. However, certain limiting factors such as electricity
contracts that do not reflect the cost of producing power for independent producers, may turn
cogeneration into a non-economic alternative. In this sense, it is necessary to negotiate a legal
framework that enables a fair competition and promotes more efficient energy generation schemes
in order to successfully exploit the benefits of cogeneration.