Gas turbine based combined heat and power generation (cogeneration) has developed strongly in the Netherlands in the past twenty years and has the potential to do so also in the future. In this paper the effect of government incentives, both in the past and in the future, is explored. In the years 1968 through 1988 1200 MW of industrial cogeneration capacity was installed, based primarily on gas turbines technology. This brought total cogeneration capacity to 1800 MW. The amount of electricity generated by private companies tripled in the period 1968 through 1988. In 1988 industrial power generation supplied 37 MJe, which is equal to nearly 15% of the total amount of electricity consumed in the Netherlands. In the period up to 1978 there was hardly any governmental policy directed towards stimulation of industrial cogeneration. From 1978 onwards a number of stimulating measures have been brought into operation. From an analysis of implementation and effects of government incentives we conclude that the investment grants provided by the government had a considerable effect on the profitability of cogeneration investments. To a lesser extent this was also valid for relatively cheap standby power contracts that were provided by the utilities. However, stimulation of cogeneration only occurred as far as it concerned electricity production for owner consumption. The production of electricity which had to be sold to the utility grid has never been profitable enough from the industrial viewpoint, notwithstanding the provided incentives, like improved buy-back tariffs. The future potential of industrial cogeneration has been calculated using a computer model in which a simulation and economic optimization is carried out individually for each of the 300 largest industrial plants in the Netherlands. Using this computer model it can be calculated that in principle the cogeneration capacity in the Netherlands can still be doubled. The cogeneration capacity that can be expected to be realized without any government incentive is estimated to be less than 400 MW. The application of investment grants up to 40% can at best double this figure. Carbon taxes of up to $150 per tonne C are somewhat more effective. In order to realize a large part of the ultimate potential stronger policy measures are necessary, which could be regulation which forbids the use of large-scale steam raising in conventional boilers. Without the application of such physical regulation not much may be expected of private industrial investments in cogeneration. However, utility initiatives presented recently hold the promise of realizing a large part of the potential of industrial cogeneration in the Netherlands.
|Title of host publication||Heat Transfer; Electric Power; Industrial and Cogeneration|
|Publisher||American Society of Mechanical Engineers|
|Publication status||Published - 1 Jan 1992|
|Event||ASME 1992 International Gas Turbine and Aeroengine Congress and Exposition, GT 1992 - Cologne, Germany|
Duration: 1 Jun 1992 → 4 Jun 1992
|Conference||ASME 1992 International Gas Turbine and Aeroengine Congress and Exposition, GT 1992|
|Period||1/06/92 → 4/06/92|