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With the liberation of utility regulation by government,
cogeneration system has played a more important role than
before. Instead of studying on the electrical operation, the
purchase price is taken into account in this paper. According
to regulation, a justified pricing system should consider both
capacity avoided cost and energy avoided cost in the same time.
These two subjects are elaborated so that price of electricity
can be helpful for cogeneration enterprises. The capacity
avoided cost is calculated by using the thermal power plant
construction data of Taiwan Power Company and cogeneration
plant. And energy avoided cost is estimated by calculating the
incremental cost of Taiwan Power Company based on the economic
dispatching. Finally, a comparison of the result and the
existing purchase price has found that the existing purchase
price appears higher. This pricing system should be improved in
the future so as to meet the requirement of fair market
competition.
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