Combined energy plants operating on the Brayton-Rankine cycle have gained wide acceptance as the most efficient energy conversion system. The technology is well proven and numerous research activities are underway to develop it further past its present plateau of performance. In developed and emerging economies alike, the current situation in the global economic market has caused the liberalization of the energy industry in some countries, and in others it is causing a rethink of economic and energy policies. A result is that electric utility companies that have enjoyed a monopoly in power generation and distribution are seeing this privilege being eroded. This is opening up opportunities for independent power production and, consequently, for gas/steam turbine plants because of the technical merits of the technology and its ability to fill the vacuum being created in the energy industry. An economic model has been developed for carrying out life cycle costs analysis of energy investment proposals involving gas and steam turbines in combined power and combined heat and power. A computer program for the economic analysis of combined energy systems (PEACES) was developed with a capability to evaluate the economic merits of individual and competing energy investment proposals. This paper describes the economic model around which the computer code was structured.
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