Energy interchanges between cogenerators and utilities

Competition between industry and utilities for steam and electricity supply investments, risk differences between utility and industry markets,and the need to conserve capital are explored by the author for an explanation of differing rate of return requirements for energy conservation and electrical-generation investments. In the absence of production investments there is no opportunity for additional investments to improve energy efficiency, he finds, and says that there is an erroneous concept that cogeneration does not occur merely because industry requires a higher return on such investments than on production investments: in some instances it requires a lower rate of return. His article, which was adapted from a paper prepared for the Engineering Foundation conference on Waste Heat Utilization held in Henniker, New Hampshire, in August 1978, concludes with a set of public policy recommendations to facilitate realization of the benefits of cogeneration projects.