An energy cogeneration system allows the optimisation of the use of en
ergy sources through a maximal exploitation of energy products. The in
vestment is higher than for conventional energy systems but the pay-ba
ck time is shorter and the benefit is even higher beyond this time. Mo
reover, in addition to these economic advantages, energy cogeneration
systems allow the preservation of the environment due to a rational us
e of energy sources. The assessment of a thermoeconomic balance, on on
e hand for a cogeneration system producing heat and electrical power,
and on the other hand for a conventional energy system producing the s
ame amount of heat using the same type of energy resource, leads to an
expression for the minimum cost of the produced electrical power whic
h depends on the cogeneration system's electricity production efficien
cy and on the global efficiencies of the cogeneration system and of th
e conventional system due to the introduction of the unit cost of heat
production. These cogeneration systems have to present well-designed
thermal energy recuperation and electrical energy production devices i
n order for the unit cost of the produced electrical power to be highe
r than that of a conventional system. A thermoeconomic analysis of thr
ee existing cogeneration systems was conducted and led to the conclusi
on that these cogeneration systems were not profitable enough due to a
lack of a strong energy management strategy which is constrained by t
he tariffing of local utilities. The main analysis was focused on the
cogeneration system of a hospital. This later is based on a thermal en
gine using natural gas as a primary resource and producing 2.8 MW of e
lectricity and 2.7 MW of heat coupled with the heat production of natu
ral-gas-fired boilers ranging about a maximum of 31 MW. Based on the p
articular tariffing of the local utilities, the investment Cost of thi
s cogeneration system should not exceed 64% of the cost of a conventio
nal electrical production system in order to present a shorter pay-bac
k time. We have shown how this cogeneration system will not be competi
tive with a conventional system if it was operated at some tariffing m
ode and that the lifetime of the equipment has an impact on the profit
ability of the system. (C) 1998 Elsevier Science Ltd. All rights reser
ved.