At present, the total installed electricity generating capacity of Thailand is 7500 MW. According to an official forecast, the average annual growth of electricity demand will be 725 MW during 1992-1996 and 800 MW during 1997-2001. To satisfy this demand, it would be necessary to invest approximately $7 billion during the next 10 years. Because this level of investment will take an unacceptably large part of total foreign borrowing, the government plans to encourage participation of the private sector in electricity generation. Among the various technology options for power production, cogeneration appears to be the most promising technology due to its very high effectiveness of fuel utilization. Therefore, in the first phase of private power generation, the Thai government is encouraging cogeneration systems