Benefit evaluation of cogeneration based on avoided costs of power generation and transmission

Based on avoided generation costs, This work presents an assessment function to calculate a reasonable selling price for electricity generated by a cogeneration system connected to the electric grid. Unlike the profit functions appearing in the literature, the proposed evaluation scheme is developed from the point of view of a power system, including line losses and power flows on the transmission lines according to seven time-segments in summer and nonsummer seasons. Examples of real primary substation system and extra high voltage system of Taiwan Power Company are given to show the correctness and practicality of the proposed assessment scheme.