Innovation on decentralised power production : the sustainability of micro-cogeneration for the portuguese market

Abstract

Achieving sustainable development in the energy supply chain represents nowadays a technological challenge. This challenge requires innovation in many different aspects: development of new technologies, new laws to regulate the energy sector and new pathways to achieve more efficiency and meet the energy needs. In the building sector, an emerging pathway is the decentralized power production via small thermal units. Therefore, micro-cogeneration offers a valuable opportunity for studying the potential of Combined Heat and Power (CHP) production for a specific niche market, the residential sector. The introduction of micro-cogeneration combines the perspectives of engineering, economics and political regulations. The micro-cogeneration success is influenced by a set of social and technological developments that may support or constrain it. For instance, the development of advanced grid-access technologies, subsidized tariffs for selling electricity to the grid and the possibility of using renewable energy sources as a fuel would simplify the micro-cogeneration installation process and enhance the possibility of attaining a return on capital investment. In fact, micro-cogeneration technologies are very efficient energy conversion devices, combining a cost effective energy generation with reduced CO2 emissions. According to a study from COGEN Europe, based on information from its Portuguese branch, for cogeneration units with an electric power below 150 kW, there is an estimated technical potential of 500 MWe. If this technical potential were totally used by micro-CHP systems, reductions of CO2 emissions of around 287 000 tonnes per year could be achieved. In addition, this technology has received a great recognition for its potential in Europe and policies are introduced for its promotion. The purpose of this research is to contribute for the identification of the potential of micro-cogeneration in the residential sector in Portugal, given the current energy scenario, the legal constraints and regulations for micro-scale CHP. Given the current technical performance, the economic constraints, the analysis of the growth drivers and market diffusion barriers of micro-CHP technologies, the economic viability of such systems in Portugal deeply depends on the investment purchase costs of these power plants. In fact, the acquisition of these systems represents a great investment for any consumer at private sector. The consideration of the socio-environmental aspects on the cost/benefit analysis for economic viability evaluation should be included. Thus, it would be useful to include a wider policy assessment in terms of environmental impact and develop a strategy where the renewable energy carriers, energy efficiency, and energy savings are taken into account.