Management decisions for cogeneration: executive summary

This report summarizes two interdependent studies which explore the underlying factors in the decision by private, private non-profit, and public sector facility owners to invest in cogeneration technology. They employ factor analysis techniques to explain the decision to invest and discriminant analysis to group the survey respondents into non-cogenerators and potential cogenerators. Data for both studies come from a survey of commercial, industrial, and institutional electric energy consumers who used more than 750 kW demand in any one month of 1981 for a selected electric utility in the Boston area. There were 129 usable responses to the survey of 32.2% of the population. The studies reported here confirm that a number of factors other than purely economic considerations may prevent use of cogeneration technology at the present time. These factors include: uncertainty caused by regulatory action; desire for energy self sufficiency by the organization; financial flexibility; experience with electricity cogeneration or self generation; and capital budget planning methods. These studies provide a ranking of the factors involved in the cogeneration decision explaining most variance to least variance. However, the ranking of factors provides no measure of the importance of these factors in the decision to adopt or not adopt cogeneration technology. The results of these studies can be used to provide a rough estimate of capacity (kW) and energy (kWh) available from potential cogenerators in this electric utility service territory and the probability that a facility can be a cogenerator. These studies project a maximum potential of 106 MW and 559,000 MWH of cogenerated electrical energy in the utility service territory between 1982 and 2002.