part 1: overview of cogeneration and its status in asia - Fire

112 Part3: Summary of country studies – Bangladesh and Viet Nam
(c) Insurance cost
Insurance cost reduces as the book value of equipment decreases. Here, it is taken as 5 per
cent of the book value of the equipment.
(d) Depreciation
Straight-line depreciation method is adopted. The depreciation cost is calculated as:
CD
= (C - S)/N
Where, S = salvage value of equipment, Peso
N = equipment life, years
(e) Standby charges
If the electricity demand of the facility cannot be met by the cogeneration system, certain
amount of electricity must be imported from the grid. In this case, tariff structure requires the
electricity consumers to pay a standby charge depending upon the demand. The standby
charge is computed as follows:
CSC = SR x SC
Where, SR = standby rate, Peso/kW
2.3.2 Revenues
SC = standby capacity, kW
In this case study, revenue from a cogeneration system comes from four possible sources,
namely, savings from displaced electricity, sale of excess electricity, boiler fuel cost savings,
and boiler operating and maintenance cost savings.
(a) Savings from displaced electricity
RDE = P’ x CE
Where, P’ = power generated by the cogeneration system, kWh
CE
= electricity purchase price, Peso/kWh
(b) Revenue from sale of excess electricity
RX
= PX’ x (BR/100) x CE
Where, PX’ = excess electricity, kWh
BR
= buy-back rate, per cent
(c) Boiler fuel cost savings
RF
Where, KF
= KF
LHV
x S x10 6
= fuel purchase price, Peso/kg
LHV = fuel lower heating value, MJ/kg
S = amount of process steam utilized, TJ