"When faced with steamrolling technology, you either become part of the technology or part of the road"

- Lowell Bryan

Future Considerations

This information leads one to the conclusion that the outlook for both small and large scale cogeneration is on the increase throughout the world. The axiom that a rising tide raises all boats becomes very applicable in this case and the advantage that this brings to North America is that we will benefit from the technology development that has occurred elsewhere for small scale technology. Now it is time to reap those benefits. New and proven technology, rising energy costs, and lower fuel prices make this a perfect storm for the move toward micro-cogeneration deployment in North America.

It’s time to talk about size. What is large and what is small? The easy answer to this is the large part. Again, reverting to conventional wisdom, large scale cogen is usually greater than 200kW (electric) and going larger into the megawatt range. Some of these systems can get very large, which is why they were developed first and were more prevalent in the early stages of CHP deployment. Bottom line - more money could be made generating megawatts than kilowatts.


Now that we’ve established the fact that anything larger than 200kW is large scale cogen and anything less is small scale, right? Not really. Again, converting to conventional wisdom (which satisfies convention, but not really wisdom), the high end of small scale or microCHP is usually either 20kW or 50kW (and sometimes it’s defined as 5kW.) So what is it? In reality it is all of the above, depending upon who is making the rules and “enforcing” them. There is no clear cut guideline - it depends upon which society, country, or utility makes the policy. An important thing to remember is that in the US, the upper limit for mCHP technology is 50kW.   

​A Consultancy to Small Scale
​Cogeneration Markets

Background, Current and Future Developments

As stated above, the big systems produce the largest amount of power and therefore developed faster. Applications for these systems are for hospitals, large office buildings, and university complexes. Small cogen systems didn’t start arriving in the marketplace until the late eighties or early nineties of the last century. The reasons are obvious. Power was cheap and therefore why would there be a need for residential or small commercial cogen units, which was the main application for such a product - regardless of the size definition (i.e. 5kW, 20kW, or 50kW.) Why would there be a need for such a product? Again, the simple answer is the price of power and the cost of fuel. Electricity is on the increase and natural gas is getting cheaper. The ratio between the two is called the “Spark Spread” and is considered the main metric for defining whether energy pricing is viable for a cogeneration application. (It’s something like the Richter Scale for earthquakes-- you know it’s a big one when it’s above eight or nine.) In the case of the Spark Spread, (the ratio between the electric price to gas price) anything over three is considered good. The calculation for Spark Spread is not considered here but further research will show that it is not a difficult number to calculate.


In order to satisfy the interest in this new technology over thirty companies throughout the world are developing and/or testing products to approach this market. The majority of these companies are in Europe and Japan - the leaders in microcogen development and deployment. Why is it that these two areas of the world are leading the charge to develop small scale cogeneration? Again, the answer is the cost of energy. Both regions are among the highest in the world for the cost of power generation — especially now with the policy of minimizing and/or eliminating nuclear plants.

Cogeneration is defined as the production of two forms of energy from one source of fuel. Conventional wisdom in this regard is that the fuel is usually natural gas or propane, and the energy output is electricity and heat. How that is done is explained further on, but the general descriptor of a cogen device is that it is comprised of three fundamental elements:  A source of power, a heat recovery system, and an electrical generator.


It was noted on the Home Page that microcogeneration is a new and exciting technology. That statement is true, but the origins of cogeneration are not new and go back to 1882 and Thomas Edison’s Pearl Street generating station in New York City. That facility was a cogen plant because the steam from boilers was used to run a “dynamo” (electrical generator) and also used to heat the surrounding buildings in Manhattan. So it can be said that large scale cogeneration is well over 100 years old, however, that cannot be said about its small scale cousin. Why is that? The short answer is that the power sources for small scale cogen have not been developed in the same timeline as the large systems.