Reading misc. articles on the internet, one might get the idea that cogeneration is commonly used at relatively small facilities (not utilities) to reduce the money they spend on electricity.
To quote from several internet sources:
By 1978, Congress recognized that efficiency at central power plants had stagnated and sought to encourage improved efficiency with the Public Utility Regulatory Policies Act (PURPA), which encouraged utilities to buy power from other energy producers. Cogeneration plants proliferated, soon producing about 8 percent of all energy in the U.S.[13] However, the bill left implementation and enforcement up to individual states, resulting in little or nothing being done in many parts of the country.
Although cogeneration has been in use for nearly a century, in the mid-1980s relatively low natural gas prices made it a widely attractive alternative for new power generation. In fact, gas-fired cogeneration is largely responsible for the decline in conventional power plant construction that occurred in North America during the 1980s. Cogeneration accounted for a large proportion of all new power plant capacity built in North America during much of the period in the late 1980s and early 1990s.
“The average efficiency of fossil-fueled power plants in the U.S. is 33% and has remained virtually unchanged for 40 years. This means that two-thirds of the energy in the fuel is lost–vented as heat–at most power plants in the United States. CHP systems achieve effective electrical efficiencies of 50% to 70%. This improvement in efficiency is an excellent pollution prevention strategy that reduces emissions of air pollutants and carbon dioxide, the leading greenhouse gas associated with climate change.”
Combined heat and power (CHP) offers many benefits over separate heat and power for a wide variety of applications and users, such as: Industrial manufacturers
Institutions Commercial buildings Municipalities residential structures
Some sectors are well-suited to expand their use of CHP because: (1) CHP technology is a strong technical fit for these facilities' needs; and (2) CHP systems can potentially generate significant bottom-line cost savings for these industries and organizations.
Is My Facility a Good Candidate for CHP?
If you answer "yes" to 3 or more of these of these questions, your facility may be good candidate for CHP.
Do you pay more than $0.06/kilowatt hour (kWh) on average for electricity (including generation, transmission, and distribution)? Are you concerned about the impact of current or future energy costs? Is your facility located in a deregulated electricity market? Are you concerned about power reliability? Does your facility operate more than 5,000 hours per year? Do you have thermal loads throughout the year (including steam, hot water, chilled water, process heat, etc.)?