Techno-Economic Evaluation of Natural Gas-Fired Cogeneration System for a Large Hotel in India

A simple methodology for techno-economic evaluation of a natural gas-fired internal combustion (I.C.) engine based cogeneration system is proposed, and is applied for a large hotel in India as a case study. The capacity of the prospective cogeneration system is estimated on the basis of the electricity requirements of the hotel during the extreme summer/winter season, with and without running the absorption cycle based refrigeration system. The financial analysis reveals a low pay-back period of less than 2 years and a high rate of return of 68.5% that justify the investment in the system. The sensitivity analysis for the net present value (NPV) and the benefit-cost ratio (B/C) indicates that the NPV is sensitive to the values of discount rate and the useful life time while the B/C is sensitive to the capital cost of the system.