Cogeneration - key part of New Jersey's energy master plan

A sound state cogeneration policy must include both educational and financial elements. With regard to the lateer, the state must be careful to balance the impact of its incentives against the possible cost to others. The department believes that its policies will strengthen the state's economy in the long-term. Based upon the rate incentives contained in this master plan, nearly 2,000 mm of cogeneration (slightly less than the combined capacities of PSE and G's Salem 1 and 2 Nuclear Plants) could be added to the state's electric system with an impact on rates of less than five percent. The benefits of cogeneration can therefore be summarized as: reducing the need for new power plant construction; improving the state's business climate through lower energy costs; and generating and retaining jobs in a community on a longterm basis. The economics of cogeneration are, in general, most favorable and fuel savings are maximized when four conditions are met: 1) electrical output is determined by steam demand; 2) the ratio of steam to electrical output is relatively constant; 3) the plant operates with a high capacity factor; and 4) the plant is connected to the utility grid.