A thesis submitted in partial fulfillment of the requirements for the degree of Master in Engineering, School of Environment, Resources and Development

Thesis (M.Eng.) - Asian Institute of Technology, 1988

An assessment of the future potential of cogeneration in Taiwan is important both for electricity planning purposes and for the formulation of appropriate national policies on cogeneration and conservation. Based on current cogeneration technology, a large range of cogeneration capacity is technically possible for a fixed amount of steam consumption in an industrial plant. This paper describes a financial approach based on internal rate of return to determine the preferred cogeneration capacity for an individual industrial user of steam and electricity. An assumed hurdle rate is applied to calculate the expected level of project implementation. Based on energy data for 112 heavy energy users in Taiwan, the method is then used to estimate the economic potential of cogeneration. The results provide a description of aggregate potential for the firms for base line conditions and for a range of scenarios for parameters such as fuel and electricity prices, buy- back rate, and cogeneration technology.