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Cogeneration is a process where waste heat from electricity generation is used for other purposes like domestic and commercial heating and cooling, or for industrial processes such as fruit packaging. This means more energy is used constructively, increasing efficiency and reducing carbon emissions.

Cogeneration has been widely applied in cold parts of the world that require a lot of space heating or in businesses that can use the waste heat effectively.

Snapshot of the technology

There are a range of commercially available and established cogeneration technologies including diesel engines and gas turbines.

In cogeneration, a small scale electricity generator is located at a location where both the heat and electricity will be used.  Any fuel can be used, but often natural gas is used because it is easily supplied.  The waste heat is then diverted - in the form of hot water or steam - for nearby use. The heat can also be passed through ‘absorption chillers’ that produce cool air for air conditioning.

Fuel cells are also being developed that could expand the range of sites for which cogeneration is applicable.

Status of cogeneration in Victoria

Because Australia has a mild climate and our electricity costs are relatively low, cogeneration has had limited application.

In Victoria, there are more than 30 sites with installed and operating cogeneration facilities. Hospitals are one example where cogeneration offers additional benefits like improving the security of electricity supply.

The future for cogeneration

For a cogeneration facility to operate efficiently there needs to be a match between site demand for electricity and heat, or operators need to be able to export electricity to the grid.

Being able to sell excess electricity is often required to make these projects economic. But grid connection can be a difficult process for small distributed generators because of their impact on the electricity grid. Transparent rules that outline the process for connecting to the grid and a smarter and more flexible electricity grid will help to address this problem.