Technical, financial, and environmental feasibility study of reciprocating engine-driven CHP systems for residential applications in various climates of Iran

In this study a reciprocating engine- driven CHP system is assumed to meet part of the electricity and heating (space heating, domestic hot water) demands of a 3 flat building in various climates of Iran. First the optimum engine capacity and the auxiliary boiler capacity have been estimated by evaluating the electricity and heating loads of the building for each typical climate. Depending on the costs of the system, the financial viability of the project has been evaluated in the terms of financial indicators, such as payback time, IRR, NPV, and the cumulative cash flows for different cases plotted over the project life. In the main scenario it was assumed that the exported rate of electricity would be equal to the rate of delivered electricity by the utility and it was set according to the electricity consumption based on the Law of Targeted Subsidies Plan, also GHG reduction credit of 30 $ was assigned per equivalent ton of CO2. To make comparison possible, different rates for electricity and natural gas were considered; also different credits per ton of CO2 reduction were assigned. Calculations show the remarkable effect of exported rate of electricity on reducing payback time of the project. The results indicate that government financial support and promotion schemes are usually required, and regional policies clearly helps promote CHP system adoption.