FE rapport,
University of Gothenburg, Department of Business Administration

Abstract: This study investigates the advantages of investing in plants for cogeneration, i.e. combined heat and power (CHP), when the heat is utilized for district heating. A focus is set on Swedish municipalities. The demand for heat is visualized in terms of load curves and duration diagrams. A standard diagram is chosen in order to analyze the dimensioning of a CHP plant. Two alternative sizes are studied: operating a plant with full capacity in eight or in six months of the year. For each alternative, a CHP plant is compared to a heat water plant (a “boiler”) and biological fuel is compared to natural gas. It is shown a) that a CHP plant based on biological fuel is profitable and outstanding, and that it is an economic advantage to expand the dimension of such a plant in order to operate with full capacity in six months of the year only. These theoretical findings are then illustrated by case studies from eight large Swedish municipalities – Göteborg, Helsingborg, Linköping, Lund, Malmö, Stockholm, Uppsala, and Västerås. From these studies it becomes evident that the use of cogeneration is often limited both by contracted deliveries of waste heat from industries and sewage destruction plants and by the slope of the duration diagram. The flatter the duration diagram is, the more efficient the use of cogeneration will become.

Keywords: Cogeneration; duration diagrams; taxation principles; cost-benefit analyses; case studies

32 pages, March 5, 2008

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