Turning to supply-side management: Estimating industrial cogeneration potential

Abstract

Increased recognition by electric utilities of the economic opportunities for load displacement or purchase of customer cogenerated electricity has initiated a change in utility supply-side planning that has parallels with demand-side management activities. Analytical tools and detailed research are required to forecast the technical, economic and industry-offered cogeneration potential from various sources. In this study, an end-use technology simulation model (ISTUM-I) is used to estimate the future incremental cogeneration potential from pulp and paper mills in British Columbia under different scenarios of industry evolution. The estimated technical potential of 5000 GWh (815 MW) results from determining the total process steam requirements and highest feasible boiler pressures. The economic potential of about 3500 GWh (570 MW) depends upon the social discount rate, the utility's long run avoided costs, boiler cost estimates and the value of burning wood waste that must otherwise be disposed of. The industry-offered potential of 1200 GWh (200 MW) results from behavioural parameters in the model that mirror past investment decisions. As with demand-side management, various strategies are available to the utility to bridge the gap between industry-offered and economic potential.