Successful cogeneration system design requires a combination of engineering, investigation, and forecasting skills. Operating schedules for the facility must be considered in the design of the cogeneration system to optimize overall plant utilization and economics. This results in tradeoffs between electrical power production and thermal heat recovery for many applications of the technology. Optimizing these two parameters requires a thorough understanding of how and when the facility uses power and heat and the owner’s objectives of the investment in the cogeneration system. Customer-sited cogeneration systems have been accepted as one option to mitigate electrical supply shortages. On the utility side, this requires that cogeneration systems operate at a relatively high capacity factor, especially during peak periods. On the customer side, the cogeneration system must be capable of meeting onsite energy needs to reduce energy costs. In California, the Self-Generation Incentive Program (SGIP) provides incentives for the installation of distributed generation systems. Incentives are paid on an installed capacity basis ($/kW) that varies by installed technology. Eligible technologies include photovoltaic, wind, fuel cells, internal combustion engines, and microturbines. Alternative Energy Systems Consulting, Inc. (AESC) provides technical support services to the SGIP, the sponsoring utilities and SGIP’s Working Group. The services that AESC provides varies with utility, but primarily includes program design support, regulatory review, technology evaluation, application review, generator performance metering, participant training and equipment field verification. Itron evaluates the SGIP to quantify performance of the systems and estimate overall impacts of the program. This paper will present best practice recommendations for cogeneration system design to meet the efficiency criteria of the SGIP. Recommendations are based on findings from numerous AESC performance reviews and on-site inspections, as well as results of Itron’s in-depth performance evaluation of the effectiveness of useful thermal energy recovery of on-site cogeneration systems receiving incentives from the SGIP. Information is presented through Program Year 2005. Results of several past studies have suggested that cogeneration systems were not operating as they were designed and, more importantly, were not achieving the efficiencies claimed at the design stage. This paper will also explore some of the key drivers behind the unexpectedly low thermal energy recovery and overall plant performance sampled from the fleet of SGIP cogenerators. Results from recent Itron studies will be combined with AESC’s expertise in actual operations to develop a list of best practices to be followed when designing and commissioning a cogeneration system.

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