Cogeneration

Cogeneration is considered a preferred resource option over centralized power plants due to its high efficiency. The PDP 2010 calls for investments of 16,670 MW of centralized gas‐fired combined cycle generation while including only 7,024 MW of more efficient cogeneration. In contrast, the PDP 2012 gives priority to cogeneration over gas combined cycle gas turbines (CCGT) or coal‐fired power plants if and when new capacity is needed. Typically the size of each cogeneration capacity varies and depends on the steam requirement at the host factor. According to SPP regulations, no more than 90 MW of electricity export is accepted per plant. Here in the PDP 2012, we added 300 MW of cogeneration capacity per year in most years and 600 MW in the few years that more new capacity addition is required. Table 13 shows the comparison of cogeneration capacity in the PDP 2010 vs. the PDP 2012.

Table 13: Comparison of cogeneration capacity (MW) in the PDP 2010 vs the PDP 2012.

We expect that most of the cogeneration capacity will use natural gas as fuel while some may use coal. For the purpose of our analysis here, we assume that all cogeneration is gas‐based. This improves environmental performance of the PDP 2012 generation mix but exacerbates the country’s dependency on gas. However, we believe that if we must use fossil fuels, gas is preferred over coal and efficient utilization of gas in the form of useful cogeneration should be employed to the extent possible before considering inefficient centralized generation.