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In this article we study the economics of the adoption and diffusion of cogeneration (CHP) systems. Based on microeconomic theoretical reasoning, we identify the main variables influencing the decision-making problem of firms that plan to adopt CHP technology, and how the adoption by other firms affects optimal adoption timing. We also consider CHP-related technical change, trends in the industries studied, field of application, and relevant framework conditions with a potential impact on CHP adoption and diffusion. In the descriptive analysis our focus is on industrial CHP systems in Switzerland (>1 MW e), with particular emphasis on both the pulp and paper and the chemical industries.

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0168.pdf Non-technical summary:This paper investigates the economic impacts of two policy proposals: "Strom ohne Atom" CHF under MOP (i.e. MOP-N).In our calculations we do not account for the external costs of nuclear power due to the large uncertainties in the valuation of nuclear risks. Therefore, the adjustment costs presented in our analysis can not be interpreted as simple excess costs of energy policy interference, but must be viewed as the price tag for the risk reduction from nuclear power operation given additional constraints (preferences) on back-up technologies and carbon neutrality.1 Economic Impacts of a Premature Nuclear Phase-Out in SwitzerlandAn applied general equilibrium analysis