Governments around the world are taking unprecedented action on climate change, with some governments having legislated incentives to improve the uptake of cogeneration technology.
Cogeneration has long been popular in Europe, where district heating is more common, and among self-generating industrial customers around the world. In our own backyard, the Province of Ontario has incentives in place that cover up to 40% of the capital cost of an installation. Among other eligibility criteria, the cogeneration plant must produce a minimum of 100,000 kWh for on-site consumption annually while maintaining a minimum overall system efficiency of 65% (meaning 65% of the energy from the natural gas powering the cogeneration system is used as electricity or for heating).
Another factor seemingly driving interest in cogeneration is the difference between how much electricity costs from the grid and how much it costs companies to produce it themselves with natural gas. Companies are realizing that it can be cheaper to produce their own power behind the meter, although they still have to remain connected to the grid in Ontario to qualify for the government’s incentives.
In addition to increased efficiency, reduced greenhouse gas emissions, and significant cost savings for users, cogeneration also offers improved energy security. If there is a grid power outage, the cogeneration unit works as a backup source, securing the supply of energy so that there is no danger of electricity supply being interrupted.