Cost allocation between heat and power during combined production

The ratio of specific costs in combined production of useful heat and power (cogeneration) is discussed from the energy as well as exergy points of view. On one hand, the specific costs of cogeneration are compared to the costs of separate production of power in a power plant and heat in a boiler. On the other hand, the total costs are divided into the costs of power and of heat production on the basis of the thermodynamic parameter. As a result, an equation is proposed for cogeneration costs allocation; these depend on plant efficiency, quantity of heat and the turbine's steam extraction temperature. The equation is critically analysed and evaluated numerically on an example. It enables a good estimation of the ratio of specific costs, but calculation of the absolute values of these costs is not possible.