Cogen Back on the Market

Cogeneration plants?a few thousand megawatts of them?could disappear as current qualifying facility (QF) contracts expire and more efficient power supplies are brought on line. But one group, Cogen Works, is beginning to lobby for the plants to compete with renewables and large, central-station power plants such as Otay Mesa and hopes to sign new contracts with utilities. Because cogeneration units are often in transmission-constrained areas, keeping the plants in business ?can take stress off the grid,? said Bill George, Cogen Works spokesperson. Cogeneration was one of the chief forms of third-party power supplied to utilities beginning in the 1980s, under ?standard offer? contracts resulting from federal legislation. Twenty years later, those contracts are expiring. While cogen efficiencies pale compared to new technologies, promoters hope that new contracts with utilities will pay for environmental and efficiency upgrades. ?If we get contract renewals, then we can make investment decisions? in efficiency, said George. He admitted that cogen is not as clean as other distributed generation but said it delivers more power overall. For instance, QF contracts account for 25 percent of Pacific Gas & Electric?s estimated supply next year, according to Tom Bottorff, PG&E senior vice president, customer service and revenues. That figure, however, does not distinguish between cogen and other sources. Cogen, however, is no bargain, said John Fielder, Southern California Edison senior vice president. He said it appears cheaper because the steam from the plants is used as a heat source, but the electricity itself is at market prices. George does not believe cogen will replace distributed generation as a direct supply of electricity and is counting on new contracts with utilities under their current procurement plans to keep the plants running.

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Cogen Back on the Market

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