In what context is co-generation of heat and electricity justified?

From an energy efficiency point of view, cogeneration is justified whenever a fuel is burned with simultaneous needs for electricity and heat at low to medium temperatures. However, cogeneration units are often difficult to make cost-effective.

The simultaneous production of heat and electricity (cogeneration or heat-power coupling) is relevant in different situations: when heat and electricity are required simultaneously (for industrial processes or for domestic use in winter); when electricity from the grid is relatively expensive in comparison with fuel prices (which is not currently the case in Switzerland); or when a high-temperature heat reject exists anyway because a resource has to be burned, for example in domestic waste incineration plants. Cogeneration is particularly well-suited to remote heating networks.

Take the example of a household waste incineration plant. The furnaces can power a remote heating network, while at the same time providing enough energy to produce electricity.

Switzerland has an electricity production deficit in winter [→ Q11], precisely when there is a high demand for heating. This is a favourable context for cogeneration systems, which simultaneously supply heat and electricity.

The main problem with cogeneration units remains their profitability, particularly in the current low electricity price context. Small systems are too expensive compared to the expected income and large systems often cannot sell all their heat because demand is often not sufficient or not constant enough throughout the year. In both cases, profitability is very difficult to achieve.

Many managers of remote heating networks based on cogeneration from natural gas face this challenge and survive through implicit subsidies to municipalities and cantons, which are shareholders in the electricity companies that manage them.

However, cogeneration from renewable sources (biogas, wood, synthetic gas from wood, sewage sludge from sewage treatment plants, etc.) can nowadays benefit from the feed-in tariff remuneration system (RPC), which increases the chances of becoming profitable [→ Q79].