CHP Plant Owners Say: Cogeneration Systems No More Viable

EghtesadOnline: Investing in combined heat and power (CHP) plants is no more economically feasible for the private sector, a board member of the CHP association said.

News ID: ۷۴۹۴۲۲

12 January 2020

“As per a new directive, the Energy Ministry buys power from such stations only for five years and that too only from June to September,” Mohammad Bayat was quoted as saying by Bargh News.

So long as the electricity cannot be sold all year round, the very existence of CHP plants does not make sense anymore, Financial Tribune quoted him as saying.

Increasing interest in distributed energy is shifting the manner power grids in the world operate and the way utilities provide service to customers, but what is happening in Iran has no justification.

Power plants, producing close to 1,000 megawatts, Bayat said, are closing gradually due to financial problems.

“Moreover, no investment has been made in such ventures in the past three years and this is while cogeneration plants have many advantages over thermal plants.”

Referring to the plus points, he said the average efficiency of fossil-fueled power plants is 33% because a part of the energy in the fuel is wasted in the form of heat discharged into the atmosphere. By recovering the wasted heat, CHP systems typically achieve 80% efficiency.

By producing electricity onsite, CHP avoids transmission and distribution loss that occurs when electricity travels over extended power lines. Losses can be higher when the grid is under strain and temperatures are high.

By avoiding T&D losses associated with conventional electricity supply, CHP reduces fuel use, helps avoid the need for extra T&D infrastructure and eases grid congestion when demand is high.

These economic and environmental benefits are expected to drive the global CHP market between 2020 and 2023. But Iran is in the opposite direction as investors are fast moving away from CHP stations.

Essence of Reliability

As the system is designed to operate independent (in ‘island’ mode) of the national grid, CHP systems provide crucial power reliability to a variety of users, especially hospitals, emergency medical centers desalination plants in coastal areas and the likes.

CHP is an on-site generation resource and can be designed to support continued operations in the event of disaster or grid disruption by continuing to provide reliable electricity.

Despite the fact that cogeneration stations can help the grid with stable power during peak hours, Bayat noted that negotiations with the ministry and Iran Power Generation, Distribution and Transmission Company (Tavanir) have not helped and it seems the company does not want to address the issue.