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The Simple Economics of Industrial Cogeneration


  • Paul L. Joskow
  • Donald R. Jones


Rising energy prices and dependence on insecure supplies of foreign petroleum have led energy consumers and energy policymakers to seek methods to use energy more efficiently. Industrial cogeneration has frequently been seen as such a method. By generating electricity in conjunction with the production of steam for industrial processes, less energy is used than when process steam and electricity are produced separately. Most recent U.S. energy policy studies have spoken favorably about the potential for cogeneration.' Some specific studies have indicated opportunities to replace central station electric power generation with industrial cogeneration capacity, and, in the process, to reduce domestic energy consumption substantially.

Suggested Citation

  • Paul L. Joskow & Donald R. Jones, 1983. "The Simple Economics of Industrial Cogeneration," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 1-22.
  • Handle: RePEc:aen:journl:1983v04-01-a01

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    Cited by:

    1. Soares, J. B. & Szklo, A. S. & Tolmasquim, M. T., 2001. "Incentive policies for natural gas-fired cogeneration in Brazil's industrial sector -- case studies: chemical plant and pulp mill," Energy Policy, Elsevier, vol. 29(3), pages 205-215, February.
    2. Salem Szklo, Alexandre & Borghetti Soares, Jeferson & Tiomno Tolmasquim, Maurício, 2000. "Economic potential of natural gas-fired cogeneration in Brazil: two case studies," Applied Energy, Elsevier, vol. 67(3), pages 245-263, November.
    3. Westner, Günther & Madlener, Reinhard, 2011. "Development of cogeneration in Germany: A mean-variance portfolio analysis of individual technology’s prospects in view of the new regulatory framework," Energy, Elsevier, vol. 36(8), pages 5301-5313.
    4. Dismukes, David E. & Kleit, Andrew N., 1999. "Cogeneration and electric power industry restructuring," Resource and Energy Economics, Elsevier, vol. 21(2), pages 153-166, May.
    5. Mark E Doms, 1993. "Inter Fuel Substitution And Energy Technology Heterogeneity In U.S. Manufacturing," Working Papers 93-5, Center for Economic Studies, U.S. Census Bureau.
    6. Wickart, Marcel & Madlener, Reinhard, 2007. "Optimal technology choice and investment timing: A stochastic model of industrial cogeneration vs. heat-only production," Energy Economics, Elsevier, vol. 29(4), pages 934-952, July.
    7. Arshad, Muhammad & Ahmed, Sibtain, 2016. "Cogeneration through bagasse: A renewable strategy to meet the future energy needs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 732-737.
    8. Shaaban, M. & Azit, A.H. & Nor, K.M., 2011. "Grid integration policies of gas-fired cogeneration in Peninsular Malaysia: Fallacies and counterexamples," Energy Policy, Elsevier, vol. 39(9), pages 5063-5075, September.
    9. Zarnikau, Jay & Reilley, Bob, 1996. "The evolution of the cogeneration market in Texas," Energy Policy, Elsevier, vol. 24(1), pages 67-79, January.
    10. Ghosh, Ranjan & Kathuria, Vinish, 2014. "The transaction costs driving captive power generation: Evidence from India," Energy Policy, Elsevier, vol. 75(C), pages 179-188.

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    JEL classification:

    • F0 - International Economics - - General


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