Tetra Tech, Inc.

10306 Eaton Place, Suite 340

Fairfax, VA 22030

phone 703-385-6000

fax 703-385-6007

DATE: January 14, 2009

TO: Paul Shriner and Jan Matuszko, EPA

FROM: Kelly Meadows, Tetra Tech

SUBJECT: Cogeneration

Cogeneration is “[t]he production of electrical energy and another form of useful energy (such as 

heat or steam) through the sequential use of energy

industrial sites or manufacturers.

rejected as waste increases the efficiency of the expended fuel

viability of cogeneration as a potential 

possibly reducing the volume of

Background

The process of electricity generation is inherently inefficient. 

electric power throws away much of the heat generated in production, and conventional thermal 

energy generation often misses an easy opportunity to generate power” 

Schaper (2008) stated that “[r]ecent EPA and D

heat to generate an estimated 200,000 megawatts of power 

nation uses. That's enough electricity to replace up to 400 coal

Cogeneration provides a way to recapture this waste heat and turn it into electricity. 

website provides a very thorough description of the 

configuration for cogeneration facilities:

“A typical cogeneration system consists of an engine, steam turbine, or 

combustion turbine that drives an electrical generator. 

recovers waste heat from the engine and/or exhaust gas to produce hot water or 

steam. 

There are two main types of cogeneration techniques: 

MEMORANDUM

Paul Shriner and Jan Matuszko, EPA

Kelly Meadows, Tetra Tech

[t]he production of electrical energy and another form of useful energy (such as 

heat or steam) through the sequential use of energy” (DOE 2009) and is most commonly found at 

. The creation of a secondary product from heat that is normally

increases the efficiency of the expended fuel. EPA directed Tt to explore the 

potential component of increasing the efficiency (and thereby 

intake water) of Phase II facilities.

The process of electricity generation is inherently inefficient. “[C]onventional generation of 

electric power throws away much of the heat generated in production, and conventional thermal 

energy generation often misses an easy opportunity to generate power” (USCHPA 2008). 

ecent EPA and DOE studies suggest U.S. industries waste enough 

heat to generate an estimated 200,000 megawatts of power — nearly 20 percent of what this 

nation uses. That's enough electricity to replace up to 400 coal-fired power plants.

recapture this waste heat and turn it into electricity. 

website provides a very thorough description of the technologies used in cogeneration and the 

configuration for cogeneration facilities:

A typical cogeneration system consists of an engine, steam turbine, or 

combustion turbine that drives an electrical generator. A waste heat exchanger 

recovers waste heat from the engine and/or exhaust gas to produce hot water or 

n types of cogeneration techniques: “topping cycle” plants, and 

1

[t]he production of electrical energy and another form of useful energy (such as 

and is most commonly found at 

from heat that is normally

EPA directed Tt to explore the 

(and thereby 

“[C]onventional generation of 

electric power throws away much of the heat generated in production, and conventional thermal 

(USCHPA 2008). 

OE studies suggest U.S. industries waste enough 

nearly 20 percent of what this 

fired power plants.”

recapture this waste heat and turn it into electricity. A vendor’s 

technologies used in cogeneration and the 

A waste heat exchanger 

recovers waste heat from the engine and/or exhaust gas to produce hot water or 

plants, and 
2

“bottoming cycle” plants. A topping cycle plant generates electricity or 

mechanical power first (usually for its own use) and can then sell any excess 

power to a utility. There are four types of topping cycle cogeneration systems, 

with each using a slightly different generating process, fuel, or technology. 

Bottoming cycle plants are much less common than topping cycle plants and 

usually exist in heavy industries such as glass or metals manufacturing where very

high temperature furnaces are used. A waste heat recovery boiler recaptures waste 

heat from a manufacturing heating process, using it to produce steam that drives a 

steam turbine to produce electricity. Since fuel is burned first in the production 

process, no extra fuel is required to produce electricity” (Cogeneration 

Technologies 2009).

Cogeneration accounts for approximately 8-10% of the electricity generation in the US. 

Secondary uses (i.e., the byproducts of power generation—heat or steam) might include process 

steam, hot water heating, space heating, and other thermal needs.

The fuel efficiency of cogeneration facilities is approximately double that of a standard fossil 

fuel electric generator. A modern cogeneration facility typically has a fuel efficiency of 55-60%, 

but can exceed 60% under commonly attainable conditions and even reach efficiencies of 80-

90% under optimal conditions (USCHPA 2008). Similarly, cogeneration produces a given 

amount of electric power and process heat with 10% to 30% less fuel than it would take to 

produce the electricity and process heat separately (Cogeneration Technologies 2009). 

Cogeneration is more widely used in some European nations (especially those in northern 

climates), where the percent of electricity produced by cogeneration can exceed 50%. As a 

whole, however, the European Union averages about 11%, which is comparable to U.S. 

production.1 European governments also appear to be moving towards enacting policies to 

encourage increased use of cogeneration.

History of Cogeneration

Historically, many industrial sites produced their own electricity, largely due to the lack of 

widespread electric generating facilities and transmission systems. As electric utilities grew and 

the cost of power fell, industrial facilities more frequently purchased all their electricity from a 

utility instead of using on-site generation. Industrial sites that still needed the heat or steam for 

other processes would simply use fuel oil or natural gas to produce heat as a separate process

(i.e., not through cogeneration). However, as the cost of energy rose in the 20th century, the 

economies of scale provided by centralized electricity production decreased and cogeneration 

became more popular. Various statutory and regulatory programs continue to affect the 

feasibility and cost-effectiveness of cogeneration (Cogeneration Technologies 2009).

 

1

Eurostat. 2005. Combined Heat and Power (CHP) in the EU and Turkey - 2005 data. 

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-08-002/EN/KS-QA-08-002-EN.PDF
3

Typical Uses of Cogeneration

Cogeneration systems can be designed for many facilities, but have typically focused on 

manufacturing and industrial sites, as well as large commercial buildings.2 In fact, 90% of all 

cogeneration systems are owned by manufacturers. Preferably, cogeneration systems are built at 

or near the site of the end user of the steam, negating the need for extensive piping and making 

the delivery much simpler (Cogeneration Technologies 2009).

Cogeneration Technologies (2009) provides two characteristics where installing cogeneration is 

most likely to be economically viable:

 Coincident demand for electricity and thermal energy (i.e., steam, heating, or cooling) 

during most of the year.

 Access to fuels, including natural gas, biomass,3and/or by-product fuels).

Limitations

While cogeneration offers some logical (and potentially significant) increases in efficiency, the 

applicability to Phase II facilities may be limited for several reasons:

 Most power plants looking to capture waste heat would instead install a combined cycle 

system.

 Lack of a “customer” for the secondary product—if a power plant were able to capture 

waste heat or steam, a partner industrial site would need to be located nearby. While 

possible for some Phase II facilities, many are not located near potential partner 

industries.

 Depending on the configuration of the system, removing steam may be detrimental to the 

electricity generation process, as additional energy must be expended to operate the 

boiler and steam loop at the appropriate temperature.

 Difficulty to integrate into 316(b)—as with repowering, cogeneration is associated with 

the generation process and not the cooling water intake structure. It may be difficult to 

incorporate rule provisions to address cogeneration.

 Market structure—the current regulatory structure often limits the ability of power plants 

to sell excess electricity (Schaper 2008).

 New Source Review—under the Clean Air Act, installing cogeneration equipment would 

likely be considered a major modification and trigger stricter emissions requirements 

(Schaper 2008).

Ultimately, there may be opportunities for Phase II facilities to improve fuel efficiency through 

cogeneration, but is unlikely to be common. The Phase II rule could encourage facilities to 

 

2 Hospitals, office buildings, universities and even large residential buildings may install cogeneration systems. 

Municipal steam systems are also common—Consolidated Edison has seven steam plants in New York City, 

forming the largest steam district in the world.

3

Some sites may have by-products from their industrial process that are well-suited for cogeneration. For example, 

a paper plant may have scrap wood that can be burned as biomass fuel, making it a logical candidate for onsite 

electricity generation.
4

employ cogeneration by developing flow credits or amending the scoping criteria for Phase II 

facilities (e.g., by classifying water associated with cogeneration as process water instead of 

cooling water). Cogeneration may, however, be a much more integral part of the Phase III 

regulation.

References

Cogeneration Technologies. 2002. http://www.cogeneration.net/Cogeneration.htm.

Eurostat. 2005. Combined Heat and Power (CHP) in the EU and Turkey - 2005 data. 

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-08-002/EN/KS-QA-08-002-

EN.PDF

Schaper, D. 2008. 'Recycling' Energy Seen Saving Companies Money. For National Public 

Radio, May 22, 2008. http://www.npr.org/templates/story/story.php?storyId=90714692.

USCHPA. 2008. CHP Basics. http://www.uschpa.org/files/public/CHP%20Basics.pdf. 

US Department of Energy (DOE), Energy Information Administration (EIA). 2009. Glossary. 

http://www.eia.doe.gov/glossary/glossary_c.htm.