With the escalating concerns on climatic changes, the European energy market is striving to meet the ambitious Kyoto Protocol-based environmental targets. Meanwhile, the European Commission has planned to implement the cogeneration policy aggressively.

These efforts, along with the region’s need to reduce energy imports, has created a pressing need for sustainable development through a well balanced energy portfolio, inclusive of energy-efficient technologies. Although combined heat and power (CHP) still contributes to only a small percentage of the total power generation market, robust government backing in the form of favourable legislation and complementary financial incentives is expected to see the market through.

The ever-increasing energy demand, combined with the challenges in material supply, has necessitated a strong focus on resource consideration. "It is vital to have highly efficient plants and utilise the dual energy offering of heat and power generated through cogeneration," says the analyst of this research service. "This need also highlights the importance of employing trigeneration, in which a single fuel source is converted into three useful energy products such as power, steam for heat and chilled water, capturing up to 90.0 per cent of energy from a unit of fuel."

Cogeneration to Help Contain Rising Energy Costs at Facilities

With energy prices spiralling out of control, it augurs well for facilities to rely on CHP to rein in costs and thus adhering to a tight energy budget. It is mainly the energy savings benefit of cogeneration that makes it score over traditional power generation methods. Furthermore, reacting to this need for greater cost savings, equipment manufacturers are looking forward to an alternate fuel by replacing expensive natural gas, which accounts for more than 75 per cent of the fuel type used in cogeneration equipment, with the more economical biomass, bio liquids and other alternate biofuels.

The market is expected to witness a surge in demand from manufacturing and process industries, which demand reliable and quality power. The major end users in the industrial segment are chemicals, petrochemicals, refineries, pharmaceuticals, paper and pulp, steel, ceramics and food and beverage. "The chemical-based industries (chemicals, petrochemicals, refineries, pharmaceuticals) contribute to more than 60.0 per cent of the total cogeneration equipment market revenues," notes the analyst. "Thus, the future of cogeneration is not going to be in building a few large plants but in building many smaller plants across various industries."