Competitive strategies in the cogeneration marketplace

The electric utility's role in the cogeneration marketplace is especially unique because it can exercise the bargaining power of both the buyer and the seller. The disposition of a given utility toward cogenerated power is often dependent upon its capacity excesses or limitations. Despite the advantages that unregulated cogenerators enjoy, the regulated utility can question whether cogeneration plants provide a reliable and cost-effective source of power. The authors present the market opportunities which exist for a variety of businesses involved in the development and construction of a cogeneration project. They then review competitive barriers and threats, which include capital needs, the general economics of domestic industries, and the threat of substitution through conservation. 1 figure.