Industrial Cogeneration--What It Is, How It Works, Its Potential

EMD-80-7: Published: Apr 29, 1980. Publicly Released: Apr 29, 1980.

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The role that cogeneration can play in the nation's efforts to conserve valuable energy resources was reviewed. The cogeneration of power and heat can be employed by both industry and utilities. Since these two sectors account for about half of the fuel consumed in the United States, their acceptance of this technology can assist in accomplishing the national goals of using fuels more efficiently and decreasing the use of imported fuels. To determine the possible effects of various levels of cogeneration on the nation's energy system, GAO analyzed three scenarios for the paper and pulp, chemical, and petroleum refining industries.

Cogeneration systems and components must be selected for compatibility with the industrial processes which they complement, necessitating selection on a site-by-site basis. A coherent federal policy consistent with State and regional interests should be developed to encourage coal and other alternate fuel use for cogeneration with a controlled shift away from oil and natural gas. However, a policy that permits oil and natural gas cogeneration in smaller facilities is particularly relevant for the short term. The policy should: (1) seek to balance oil and natural gas savings with overall energy savings; (2) recognize regional differences regarding fuel use and fuel availability and ensure regional equity in benefits and costs; (3) be based upon reasonable expectations of cogeneration development; (4) balance federal expenditures for financial incentives in support of cogeneration and expected national benefits from cogeneration; and (5) be based upon the need to get all interested parties, including utilities, industry, and federal and state agencies, actively involved in the development of cogeneration. It would be reasonable to expect that, for the three industries evaluated, the equivalent of 228,000 to 354,000 barrels of crude oil per day would be saved in 1985. The maximum expectation of energy savings in the year 2000 would approximate 945,000 barrels of crude oil per day.

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