Cogeneration can improve the efficiency of energy utilisation, improve energy savings and reduce carbon emission. However, China currently suffers unreasonable cogeneration pricing and cost sharing, which has seriously hampered the development of cogeneration power plants. Based on the production process of cogeneration, this paper analyses the principles of thermoelectric cogeneration and energy savings. We research a variety of cost-sharing methods including two attributed to power and another three focused on heat. We then propose a new cost-sharing method to take into account both heating and generation. A real thermal power plant of 600 MW is selected as a case study. Our results show that the reduced condensation losses of heat extraction could have saved 87,088.43 tons of standard coal in 2010, which is equivalent to CO
emission reductions of 226,430 tons, if the proposed cost-sharing method had been used. Finally, policy suggestions are made to ensure the sustainable development of cogeneration and promote energy savings and emission reduction in China.
Keywords: cogeneration, cost-sharing mechanism, energy saving, emission reduction, global warming, China