Extraction–condensing steam turbines mix cold-condensing and cogeneration activities making the respective power and fuel flows not directly observable. A flawed assessment of the flows is causing confusion and bias. A steam expansion path on a Mollier diagram reveals the design characteristics of a thermal power plant and of its embedded combined heat and power (CHP) activities. State variable data on a unit mass of steam, entering the turboset as life steam and leaving it at one of the heat extraction exhausts, provide the roster of the power-heat production possibility set of the plant. The actual production possibilities are drawn from the roster by applying capacity data and constraints on the heat extraction points. Design power-to-heat ratios of CHP activities are univocally identified, allowing accurate assessments of cogenerated power. This information is needed for proper incentive regulation of CHP activities, pursuing maximization of CHP quality and quantity. Quality is gauged by the power-to-heat ratio, principally a design (investment) decision. Quantity is gauged by the operational amounts of recovered heat exhausts. Optimal regulatory specificity is attained through setting generic frameworks by technology, accommodating investment and operational decisions by plant owners. Our novel method is explained and applied with numerical data, also revealing the flaws in present regulations.

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