Three key benefits of cogeneration

Power line from above

Cogeneration is an efficient way of producing electricity, heat and, in some cases, cooling. 

Traditional power generation systems waste a large portion of the energy that is released by the combustion of fuel. Energy losses typically occur via the exhaust gas combustion, through the steam condensing system, and out of the various cooling systems. 

Cogeneration systems recover heat from those energy loss pathways and put that heat to good use. This is typically by providing heat or hot water to a nearby property or properties.

Cogeneration has wide appeal because most buildings need what cogeneration systems can provide—electricity, heat, and cooling. 

Installing a cogeneration system can reduce a building’s carbon footprint, enhance the reliability of its electric supply, and, crucially, save money. More broadly, the wide adoption of cogeneration provides benefits to the broader community. These benefits are enhancing the community’s energy security and making its energy infrastructure more resilient.

Sustainability benefits of cogeneration

Environmental concerns motivate many cogeneration projects. 

Traditional fossil-fuel-burning power plants waste between 70% and 40% of the energy that they consume to produce electricity. By recovering much of that waste energy, cogeneration systems remove the need to burn additional fuel for heating purposes. This saves energy and reduces emissions of carbon dioxide (CO2) and other pollutants. 

For many organizations, investing in a cogeneration system is a smart and cost-effective step towards meeting environmental commitments. 

Various programs, such as the LEED rating system, are available to independently assess and certify progress made in that regard. Additionally, incentives exist at the local, regional, and national level. These incentives reward those who invest in a cogeneration system for their contribution to environmental sustainability. In the United States, for example, a 10% federal tax credit is available to the owners of qualifying systems. This incentivization often shifts the return on investment of a cogeneration system from good to great.

Cogeneration users who can produce their own fuel on site for use in the cogeneration equipment can save even more energy. 

Many industrial processes generate a combustible by-product. This by-product can be burned in a boiler or a power generator to produce electricity and heat. Wastewater treatment facilities, for example, can generate large quantities of methane-bearing gas from the fermentation of sewage sludge. Rather than flare that valuable gas, many facility owners have chosen to use it to fuel a cogeneration system. These facilities are thus able to power their electrical equipment and heat their fermentation pools very cheaply. 

Financial benefits and ROI of cogeneration

Regardless of environmental benefits, far fewer cogeneration systems would exist if cogeneration didn’t also save money. 

At the most basic level, cogeneration systems allow their owners to reduce electricity bills as well as heating and cooling bills. Well-considered cogeneration investments can typically break even within a few years. 

Here are some of the factors that can boost a cogeneration system’s return on investment:

Demand charges and other surcharges

The electric utility levies a demand charge or applies onerous time-of-use surcharges. It is common for utilities to charge large consumers a fee that increases with their peak instant electricity demand. This is in addition to charging for the amount of kilowatt-hours consumed. 

An on-site generator installed behind the meter can effectively shave off those peaks and reduce demand charges. Many property owners complement this peak-shaving capability with solar panels. 

This reduction in peak demand is a win-win for the consumer and for the utility. The consumer saves on fees. Meanwhile, if enough consumers limit their peak demand, the utility can reduce selected investments. These are investments in transmission and distribution upgrades or additional capacity for periods of high usage.

Net energy metering

The electric utility is required to purchase excess electricity generated by privately owned cogeneration systems. Such requirements, typically known as ‘net energy metering’, exist in multiple U.S. states. 

These requirements can significantly offset the cost of operating and maintaining a cogeneration system. These requirements also provide a great deal of flexibility in how such a system is used and designed.

Replacing an existing heating and cooling system

The price of natural gas is at an all-time low in many geographies. This creates an incentive to replace an old boiler running on heating oil, with a natural gas system. 

Where it is available, natural gas is a cleaner, cheaper fuel, which also does not need on site storage. If that old boiler is going to be replaced, why not a greater investment and enjoy the energy savings of a cogeneration system for many years? 

Conversely, some facilities need to generate electricity on-site in a continuous or semi-continuous manner. In these cases, why not add a heat recovery component and enjoy free heating and hot water? Many industrial sites located in countries and regions with an unreliable electric grid have made this choice. In either case, the economics of cogeneration can often beat the economics of the standalone heating or on-site generation investment. 

Moreover, weather related events cause an increasing number of disruptions to the electrical utility. In these cases, having reliable on-site power, such as from a cogeneration system, is critical for safety and business continuity. 

In all cases, achieving the best financial results requires carefully considering each site’s individual energy profile. This includes energy usage, fuel costs, and electricity rate structure. It may also be worthwhile to consider complementary measures. These include installation of LED lights or additional insulation to optimize the site’s energy profile. 

When it comes to sizing, the objective is to maximize usage of the cogeneration system. It is usually more economical to have a cogeneration plant meet half of the site’s energy needs 24/7. This is in comparison to an attempt to cater for all the site’s needs but only run the plant half of the time. 

In many applications across industry, commerce, and the public sector, cogeneration is a sensible economic choice. Whether the project pays for itself in two, three or five years depends on the specifics of each individual application.

Energy security and resiliency benefits of cogeneration

Many electric utilities are keen to promote the adoption of cogeneration by ratepayers. It may seem counterintuitive that for-profit corporations encourage their customers to purchase less, but it makes sense. 

Utilities are happy to sell more electricity overall; meanwhile, they are anxious to limit the peak electric load they support. Think of the height of summer when every house has an air conditioning unit running at full blast. The electricity infrastructure needs to accommodate that peak load, even if it occurs just a few days per year. Customers with on-site cogeneration can effectively shave off their peak demand, reducing their impact on the grid and increasing the overall resiliency of the electricity infrastructure.

Cogeneration plants provide electricity and heat far more efficiently than traditional power plants. As a result they provide significant cost savings as well as a reduced environmental footprint. Using typical numbers provided by the US DOE, it takes a cogeneration power plant 100 units of fuel to provide 35 units of useful of electricity and 50 units of usefuel heat. Providing the same useful amounts would require a total of 165 units of fuel shared between a central power plant and an on-site boiler (of furnace). Cogeneration thus requires 40% less energy to achieve the same results.
Cogeneration plants provide electricity and heat far more efficiently than traditional power plants. As a result they provide significant cost savings as well as a reduced environmental footprint. Using typical numbers provided by the US DOE, it takes a cogeneration power plant 100 units of fuel to provide 35 units of useful of electricity and 50 units of use fuel heat. Providing the same useful amounts would require a total of 165 units of fuel shared between a central power plant and an on-site boiler (of furnace). Cogeneration thus requires 40% less energy to achieve the same results.

Governments tend to encourage the deployment of cogeneration technology for a similar reason, particularly in countries with limited energy resources. In such places, beyond environmental benefits, reducing energy usage and energy imports can be a strategic objective. Cogeneration systems help reduce a nation’s energy requirement. Moreover, when run locally using by-product fuels, cogeneration systems help achieve a better utilization of domestic energy resources. 

Interested to learn more about cogeneration? You might also like: 

The advantages of cogeneration are clear across a wide range of applications and power output requirements. Moreover, there are three situations that maximize these advantages of cogeneration applications. As a tried and tested technology, there is low-risk and high-return for suitable projects. 

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Cummins Inc.

Cummins, a global power technology leader, is a corporation of complementary business segments that design, manufacture, distribute and service a broad portfolio of power solutions. The company’s products range from internal combustion, electric and hybrid integrated power solutions and components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, microgrid controls, batteries, electrolyzers and fuel cell products.

What markets and commercial vehicle applications are well-suited for propane ?

alt fuel

Medium duty vehicle fleets, from postal vans to school buses, are switching to alternative fuels. Among low-carbon emitting fuels, propane, also known as autogas, is one of the most readily available options.

As an alternative to gasoline and diesel, propane vehicles produce less greenhouse gases and harmful air pollutants. Thirty billion gallons of propane are produced domestically in the United States, with 20 billion gallons being exported each year. Its price is not subject to shocks connected to global supply and demand. This results in more stable prices over the long run, among other operational benefits. Therefore, propane vehicle operators can secure long-term fuel contracts at fixed costs.

Centralized, regional, and return-to-home base fleets are well suited for propane autogas vehicles. Propane-powered transit vehicles can help improve the air quality in densely populated areas. That’s because, compared to diesel, they have lower NOx emissions, particulate matter and other air pollutants.  Additional benefits for more suburban and rural fleets include easy, affordable, and scalable infrastructure as propane is available in every community across the country. Propane is also one of the most accessible alternative fuel sources not only nationwide, but worldwide. Most propane fleets own their fueling infrastructure due to low installation costs, but drivers can also access over 2,600 public refueling sites across the United States. 

Urban delivery trucks can lower emissions with propane autogas engines

In 2019, the U.S. Postal Service (USPS) committed to lowering its greenhouse gas emissions 30 percent by 2025. Today, USPS operates a fleet of over 30,000 alternative fuel vehicles and has implemented incentives for contractors to do the same. The Cummins B6.7 propane is an ideal engine for postal vehicles, like USPS and its contractors, seeking to achieve key sustainability goals. 

With 325 hp and 750lb-ft peak torque at 1800 RPM, the B6.7 propane can also be used in class 6 straight-box trucks for food and beverage delivery, tow trucks, and terminal tractors. Propane autogas offers fleets in these markets the lowest total cost-of-ownership compared with other fuels. In fact, many fleets have reduced their operating costs by 50 percent after making the switch from diesel.

Utility and service vehicles have been using propane for a long time

Propane is a good fuel source for everyday utility and service vehicles. Propane is widely used for forklifts and can be used for other utility vehicles such as golf carts, street sweepers, and snowplows. Propane is also well-suited for emergency service vehicle fleets such as ambulances and police cars. In 2021, the city of Petersburg, Virginia converted its public fleet of 49 vehicles to run on renewable propane. By switching to the propane fueled fleet, the city forecasted it would save $1,000 per vehicle per year.

School buses running on propane help improve air quality

As mentioned above, propane vehicles help improve air quality. Residents and passengers in city, suburban, and rural areas are less likely to be exposed to harmful exhaust fumes, as propane burns significantly cleaner than other fossil fuels.

School buses are one of the most visible markets for propane autogas. There are currently more than 22,000 propane autogas school buses transporting kids to school each day. Propane autogas engines are also quieter than gasoline/diesel engines and help decrease noise pollution. The Cummins B6.7 propane engine can provide large buses the power to run long, high-capacity routes.

Propane delivery trucks can lower fuel and maintenance cost

Propane delivery trucks, also known as bobtails, are specially designed bulk delivery vehicles that deliver propane to businesses and homes.

Bobtails that run on propane can benefit from lower fuel and maintenance costs while reducing carbon emissions. The new Cummins B6.7 propane engine is well-suited for use in bobtails.

Overall, propane offers many benefits and is well suited for delivery trucks, school buses, utility vehicles and bobtails. It’s a clean burning, low-cost alternative fuel source, available in abundant quantities across the United States and around the world. Are you interested in learning more about propane use in motor vehicles? Check out Cummins B6.7 propane engine for various medium duty applications.

Puneet Singh Jhawar

Puneet Singh Jhawar

Puneet Singh Jhawar is the General Manager of the global natural gas business for Cummins Inc. In this role, he is responsible for the product vision, financial management and overall performance of the natural gas business. Over his 14-year career at Cummins, Jhawar has cultivated successful relationships with a number of Cummins’ largest customers. Jhawar has extensive global experience, with roles based in the Middle East, India, Europe and the US.

Natural gas is well-positioned to fuel vehicles for today’s energy transition

truck on highway

Natural gas powers more than 175,000 vehicles in the United States and 23 million vehicles worldwide. It’s an ideal alternative to gasoline and diesel for heavy and medium-duty applications. These include freight-hauling trucks, buses, and garbage trucks. Natural gas engines provide horsepower, acceleration, and cruise speed comparable to conventional fossil fuel engines. This fuel can also replace gasoline in smaller applications, such as forklifts and commercial lawn equipment. 

Natural gas engines reduce emissions and environmental risks

Many companies are setting carbon reduction targets for tailpipe emissions. Fleets can meet these requirements by replacing older vehicles or generators that run on diesel to new ones that use natural gas. 

Switching to natural gas can reduce hydrocarbons, carbon dioxide (CO2), nitrous oxide and other greenhouse gas (GHG) emissions. The size of the reduction depends on vehicle type, duty cycle, and engine calibration. Vehicles that use compressed natural gas (CNG) can reduce their GHG emissions by 13-18%. That percentage is a lot higher when using renewable natural gas (RNG) or a blend between the two gases. 

Natural gas vehicles offer additional air quality and environmental justice benefits too. They emit almost no particulate matter, volatile organic compounds or carbon monoxide which lead to poor air quality.

There are also other environmental risks that can be eliminated. For example, natural gas can’t spill because it’s lighter than air. It doesn’t puddle or cause ground contamination like a diesel or gasoline spill would.

Renewable natural gas is a carbon neutral fuel alternative

RNG is manufactured from agricultural by-products and organic waste from food manufacturing, farming and groceries. The systems needed to fuel a vehicle with RNG or with fossil natural gas are identical. Both fuels are interchangeable and can be blended. National, state and local incentives for RNG projects are also available. RNG is considered a carbon neutral fuel and it can even be carbon negative when using waste from landfills -that’s at least a 100% GHG reduction! 

RNG provides more benefits than CNG. Methane (CH4) from a landfill or a wastewater treatment facility is typically vented into the atmosphere. Its global warming potential (GWP) is more than 25 times greater than CO2. That makes capturing and refining methane into a fuel for natural gas engines a better alternative. 

Enabling fleets to more affordable engine solutions with natural gas

Natural gas engines meet stringent environmental standards with less complicated emissions controls. As a result, they offer an affordable advantage over diesel engines.

Additional cost savings can be achieved by converting conventional vehicles to run on natural gas. Kits are available to retrofit existing fleets. And automotive original equipment manufacturers (OEMs) offer natural gas versions of their medium and heavy-duty vehicles.

Natural gas refueling stations also can be less expensive to construct than those for hydrogen (H2) or electric vehicles. Their proven equipment and systems are less complex.

National gas also allows fleets to better predict operational costs. The fuel itself costs less than gasoline and diesel. In some areas, natural gas can even be half of the price of diesel. These prices have remained relatively flat for 20 years. This helps fleet operators by being able to reliably forecast monthly and yearly natural gas costs.

Expanding the natural gas supply for national energy independence

The United States has an estimated 2,926 trillion cubic feet of natural gas — enough to last about 98 years. In 2021, 64% of all on-road fuel used in natural gas engines was renewable natural gas. That percentage increases in California, where it’s 98%. The growing use of RNG further diversifies domestic energy supplies. 

Natural gas is readily available through established distribution channels. Supplies are so abundant that natural gas is also compressed and exported. It moves across the United States through a pipeline network that links production areas and storage facilities with 77 million customers.

Compressor stations utilize natural gas engines to keep fuel flowing to distribution companies. They deliver natural gas to consumers through small-diameter, lower-pressure service lines.

Natural gas is available at nearly 900 compressed natural gas (CNG) stations. Another 60 liquefied natural gas (LNG) fueling stations are located in areas that service long-haul trucks. 

Refueling is done at:

  • Fast-fill stations, where natural gas vehicles can fill up in about the same time it takes to refuel gas and diesel vehicles
  • Long-fill stations, where natural gas vehicles slowly fill up overnight or during extended breaks between trips

In summary, natural gas engines can help fleets lower their total transportation emission and operating costs without major disruptions to their day-to-day operations. Natural gas, as a fuel, has a key role to play in our renewable future.  

Traci Kraus headshot

Traci Kraus

Traci Kraus is a Director of Government Relations where she leads US federal advocacy for Cummins. She focuses on energy, climate, hydrogen, transportation and budget legislative and regulatory issues. 

Prior to joining Cummins, Traci worked for former U.S. Senator Russ Feingold.  She has a Master’s in Public Administration from the George Washington University and B.A.s in Government and Politics and Communication from the University of Maryland in College Park. She is originally from Chicago, and now lives outside of Washington, D.C. with her husband, Aaron and two children Liam (8) and Sloane (5).

How is the United States investing in clean energy?

GR hero

Our planet is facing a dire crisis: carbon dioxide concentrations in the atmosphere continue to soar above record highs. If gone unaddressed, the collective stress of climate change will produce an irreparable impact. Our health, energy, water, and food ecosystems are at risk. 

As it stands, there are many long-term effects of climate change. In North America, climate change is forecasted to cause decreasing snowpack in the western mountains. It will also lead to a 5–20% increase in yields of rain-fed agriculture and great intensity of heat waves. In fact, over the last five years, the United States has incurred roughly $120 billion a year in damages as a result of natural disasters caused by extreme weather and climate events.

Beyond natural catastrophes, climatic risks to the United States will have a cascading effect on the country’s interconnected ecosystems. Reduced labor and overall economic productivity, and altered crop yields, will disproportionately harm lower-income and marginalized populations. These groups lack the resources to prepare or cope with extreme weather and climate events.

The world is investing in clean energy innovation

Combating the intensifying climate crisis requires a strategic combination of research and development (R&D), innovation, technology — and bold attempts.

Around the globe, countries are investing in clean energy to contribute to a livable planet now and for generations to come. In 2022, the US passed the Inflation Reduction Act, which includes a historic $370 billion investment to address the climate crisis. The Inflation Reduction Act provides tax credits and incentives to power homes, businesses, and communities with clean energy by 2030. The Act will increase investments in the fastest-growing power generation technologies, solar and wind. It will also advance cost-saving clean energy projects and protect two million acres of national forests. These initiatives are in addition to substantial tax credits and rebates offered to families and businesses in the United States.
Consequently, a stronger clean energy economy will contribute to overall economic growth and competition. As a result, there will be millions of new well-paying jobs for Americans to make clean energy.

It is possible to start decarbonizing now

Governmental policy strategies and investments in decarbonization technologies are part of the solution to produce increasingly cheap, dependable, and clean energy.

Strong communities and vibrant economies depend on a healthier planet. As a global power technology leader, Cummins is in a unique position to power customer success by leading during this energy transition. We intent to do so by providing customers with the right technology at the right time, understanding of their needs and applications.

We think of this journey to carbon neutrality in two distinct and complementary ways. First, by innovating zero-emission solutions and introducing them in markets and applications where the infrastructure, development and deployment are ready. Secondly, by advancing internal combustion engines through efficiency improvement and by running them on cleaner alternative fuels for a well-to-wheels solution.

Through Destination Zero, we are advancing low- and no-carbon platforms. This includes diesel and natural gas engines, hybrid, and electric platforms, as well as powertrain components, controls, and related technologies.

Join Cummins in powering a better tomorrow

Cummins environmental sustainability strategy includes goals timed for 2030. Progress toward the reduction of carbon emissions from company plants and facilities — in addition to our products — is in full swing. For more than one hundred years, we have brought technological solutions to market. As a power solutions leader, we will continue to power a more prosperous world for today and tomorrow. Are you ready to consider investing in new power solutions?

Traci Kraus headshot

Traci Kraus

Traci Kraus is a Director of Government Relations where she leads US federal advocacy for Cummins. She focuses on energy, climate, hydrogen, transportation and budget legislative and regulatory issues. 

Prior to joining Cummins, Traci worked for former U.S. Senator Russ Feingold.  She has a Master’s in Public Administration from the George Washington University and B.A.s in Government and Politics and Communication from the University of Maryland in College Park. She is originally from Chicago, and now lives outside of Washington, D.C. with her husband, Aaron and two children Liam (8) and Sloane (5).

Economic and Operational Benefits of Propane Engines

semi trucks driving on highway

Propane is a low carbon energy source commonly used in millions of homes across the country for cooking, home heating, hot water and many other applications. It can also be used as a clean vehicle fuel in medium duty applications including school buses, delivery and beverage fleets, paratransit vehicles and more.

Thousands of fleet owners choose propane autogas because it offers many environmental, economic and operational benefits. With new technology like the Cummins B6.7 propane engine, fleet owners can experience the power of diesel while producing less greenhouse gas emissions and air pollutants, ultimately saving on operations costs.

Propane is a clean fuel

In testing, the Cummins B6.7 propane engine delivered the lowest greenhouse gas emissions of any propane autogas-powered engine. It will also deliver some of the lowest GHG emissions in the medium-duty market. It is an ultra-low, .02 NOx engine that will meet or exceed EPA and CARB regulations in 2024 and beyond.

For fleets and other end users looking to meet environmental goals, renewable propane is available in the market. It has the same chemical structure and physical properties as conventional propane. It has an even lower carbon intensity than conventional propane because it’s produced from renewable, raw materials. This fuel can be used in any existing propane autogas engine or propane autogas infrastructure. Therefore, fleet owners will be able to easily implement this cleaner energy source in their own vehicles.

Propane is an abundant domestically produced fuel

Approximately 30 billion gallons of propane are produced annually in the United States and about 80% of U.S. propane is produced during the natural gas refining process. Because of that, its price is decoupled from the price of crude oil set by the global market.

Propane is an abundant and portable natural resource in North America. It can be distributed in liquid form using ships, rail cars, trucks and via pipelines. Best of all, propane is an environmentally friendly energy source. When compared with other options like diesel or gasoline, propane can significantly reduce harmful emissions.

Since propane is produced in the U.S., the domestic supply is shielded from global geopolitical and economic shocks. Unlike gasoline and diesel, it provides a reliable energy source for business owners.

Propane engines provide low total operating costs

Due to propane’s widespread and long-standing usage, propane autogas engines are a mature technology. The B6.7 propane engine will be built on Cummins’ fuel agnostic platform, meaning many parts are shared across an array of other engines. This will help reduce cost and complexity to the customer in terms of vehicle acquisition, integration of lower carbon fuel types, and vehicle maintenance.

As a vehicle fuel, propane autogas is affordable and typically costs as much as 50 percent less than diesel. The wholesale cost of propane autogas falls between the price of oil and natural gas, which are the fuel’s two sources. Because of this, propane autogas prices don’t fluctuate as sharply as other fuels, so fleet owners are able to easily manage fuel budgets.

Additionally, there is no need for an exhaust treatment system. That’s because propane is a clean energy source that produces 20 times less nitrogen oxides and particulate emissions than diesel. The B6.7 propane engine is instead fitted with a maintenance-free, three-way catalyst exhaust system.

Due to the cost-effectiveness of the fuel and reduced maintenance costs, propane autogas provides fleet owners with the lowest total cost of ownership. Propane autogas engines like the Cummins B6.7 propane will provide a strong return on investment and a low cost per mile.

Propane engines offer a simple refueling experience

A benefit of propane autogas that many fleet owners may not immediately think about is the ease and affordability of refueling. Fleets can choose from several refueling options. Each one offers distinct advantages that help a company identify and customize a solution that best fits its business and maximizes productivity.

Options range from private on-site stations that are fully scalable to meet the demands of a fleet, to temporary field stations to employ around a site in the field. Some fleets can even use any of the more than 2,800 public refueling stations around the country. Best of all, propane suppliers will often lease the refueling infrastructure to a fleet in exchange for a fuel contract that locks in a set price per gallon for a duration beneficial to both parties.

Fleet owners must consider what energy source will best meet their environmental, economic, and operational needs. With new propane autogas innovations, the Cummins B6.7 propane engine becomes an attractive solution.


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Puneet Singh Jhawar

Puneet Singh Jhawar

Puneet Singh Jhawar is the General Manager of the global natural gas business for Cummins Inc. In this role, he is responsible for the product vision, financial management and overall performance of the natural gas business. Over his 14-year career at Cummins, Jhawar has cultivated successful relationships with a number of Cummins’ largest customers. Jhawar has extensive global experience, with roles based in the Middle East, India, Europe and the US.

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