This paper describes development of co-generation system model in individual building and district co-generation, and the effect analysis by the diffusion of co-generation system in Japanese business area. 1. Developed model in this paper calculated co-generation system operation at 5-minute interval. And it contain heat supply piping length, transport power, piping heat loss in district heating and cooling calculation. 2. The estimating of co-generation system spread effect confirmed the energy saving effect of reverse power flow permission and the demand aggregation by district co-generation in Japanese business area.
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