Factors affecting cogeneration of electricity in Indiana's iron and steel industry

This paper identifies the factors affecting cogeneration of electricity in the steel industry, a general economic/technical model of the industry which is developed. This model is then tested using the data from Indiana;s steel firms. Empirical results were consistent with the theory. The share of cogenerated electricity increases as the price of purchased electricity increases, and it decreases was the price of natural gas increases. Furthermore, the increases in continuous casting greatly increase the cogeneration share. Finally, in the period of this study the Public Utility Regulatory Policy Act of 1978 (PURPA) does not provide substantial incentive for Indiana's steel firms to cogenerate. The shift to continuous casting removes a use of by-product gases and thus more of this low-cost fuel is available for cogeneration