Economic Feasibility and Implementation Guidelines for Combined Heat and Power Projects

Many parameters influence the economic feasibility of CHP projects. This paper identifies digester gas production and electricity prices as key parameters and presents the results from an economic analysis of CHP at various plant scales and electricity prices. For a 20 mgd facility, the economic feasibility threshold is found to be between $0.08 and $0.10/kWh, while for a 40 mgd facility, CHP is found to be viable at electricity prices as low as $0.06/kWh. The economic model does not include incentives, which may further improve the economic feasibility of CHP.Another key parameter considered is sizing philosophy. To illustrate its impact, two real-world case studies are presented, each based on a fundamentally different CHP sizing philosophies. The City of Orlando aimed to maximize digester gas utilization, while the City of St. Petersburg desired to meet their total power demand through on-site CHP with natural gas fed engines.