Energy companies face several crucial investment dilemmas in the liberalized energy market. These are: the availability of energy sources, feed-in tariffs, market positioning and consumer satisfaction. Research analyzes profitability of the Cogeneration (Combined Heat and Power, CHP) project in the city of Rijeka. The CHP is designed to provide district heating for the University campus, the Hospital and active private consumers of district heating, and bring about further sales of electricity. Revitalization of the CHP project comprises necessary adaptive actions in the distribution power system but also real time monitoring, which enables the CHP island operation, with uninterrupted electric and thermal energy supply of critical consumers (e.g. hospital) in case of a serious disturbance. Results indicate the project profitability under several conditions: non-government regulation for heating price, feed-in tariffs and guaranteed sale of electricity together with added value from automatic control system (ACS)–island operation.
