Coproduction of district heat and electricity or biomotor fuels

The operation of a district heating system depends on the heat load demand, which varies throughout the year. In this paper, we analyze the coproduction of district heat and electricity or biomotor fuels. We demonstrate how three different taxation scenarios and two crude oil price levels influence the selection of production units to minimize the district heat production cost and calculate the resulting primary energy use. Our analysis is based on the annual measured heat load of a district heating system. The minimum-cost district heat production system comprises different production units that meet the district heat demand and simultaneously minimize the district heat production cost. First, we optimize the cost of a district heat production system based on the cogeneration of electricity and heat with and without biomass integrated gasification combined-cycle technology. We considered cogenerated electricity as a byproduct with the value of that produced by a condensing power plant. Next, we integrate and optimize different biomotor fuel production units into the district heat production system by considering biomotor fuels as byproducts that can substitute for fossil motor fuels. We demonstrate that in district heating systems, the strengthening of environmental taxation reduces the dependence on fossil fuels. However, increases in environmental taxation and the crude oil price do not necessarily influence the production cost of district heat as long as biomass price is not driven by policy measures. Biomotor fuel production in a district heating system is typically not cost-efficient. The biomotor fuels produced from the district heating system have to compete with those from standalone biomotor fuel plants and also with its fossil-based counterparts. This is also true for high oil prices. A carbon tax on fossil CO₂ emissions based on social cost damage will increase the competitiveness of biomass-based combined heat and power plants, especially for BIGCC technology with its high electricity-to-heat ratio.     

Stockholm CHP potential—An opportunity for CO2 reductions?

The potential for combined heat and power (CHP) generation in Stockholm is large and a total heat demand of about 10 TWh/year can be met in a renewed large district heating system. This model of the Stockholm district heating system shows that CHP generation can increase from 8% in 2004 to 15.5% of the total electricity generation in Sweden. Increased electricity costs in recent years have awakened an interest to invest in new electricity generation. Since renewable alternatives are favoured by green certificates, bio-fuelled CHP is most profitable at low electricity prices. Since heat demand in the district heating network sets the limit for possible electricity generation, a CHP alternative with a high electricity to heat ratio will be more profitable at when electricity prices are high. The efficient energy use in CHP has the potential to contribute to reductions in carbon dioxide emissions in Europe, when they are required and the European electricity market is working perfectly. The potential in Stockholm exceeds Sweden's undertakings under the Kyoto protocol and national reduction goals.     

Optimal operation of coproduction with storage

We discuss the optimal operation of a combined heat and power (CHP) plant with heat storage. The dynamics of the district heating (DH) network are also considered. The decision variables include production of heat and power, supply temperature and operation of heat storage. Heat demand for the DH system and shadow prices for the electrical power system are inputs to the production system. The optimization criterion is minimization of total costs over the planning period. A non-linear optimization model based on real data is formulated and representative case studies are performed.     

Cost minimization for a local utility through CHP,heat storage and load management

The energy-system optimization model MODEST is described, especially heat storage and electricity load management. Linear programming is used for minimization of capital and operation costs. MODEST may be used to find the optimal investments and when to make them. The period under study can be divided into several linked subperiods which may consist of an arbitrary number of years. MODEST is here applied to a municipal electricity and district-heating system during three five-year periods. Each year is divided into three seasons. Demand peaks, as well as weekly and diurnal variations of, for example, costs are considered. The electricity demand is divided into the three sectors households, industries, and service. The electricity demand may be reduced by energy conservation, replacement of electric heating and load management. The profitability of load management, as well as cogeneration with and without heat storage at different prices of purchased power is calculated. At traditional Swedish electricity prices, the local utility should build a woodchips-fired steam-cycle CHP (combined heat and power) plant. Consumers would find it beneficial to reduce their electricity use by conservation and switching from electric heating to oil and biofuel. If just marginal power production costs are paid, the utility should introduce biomass-fired heat-only boilers instead. Electricity conservation is smaller at these lower prices. Load management is mainly profitable at the first price scheme which includes output-power-related charges. The heat storage should be used threefold: to cover demand peaks, as well as to enable increased CHP output when it is limited by the heat demand or to run heat pumps at cheap night electricity instead of in the daytime. © 1998 John Wiley & Sons, Ltd.     

On cost‐effective technical measures to avoid environmental damages of regional energy systems

The production of heat and electricity can cause large environmental impacts and, hence, large costs for society. Those are costs that are seldom taken into consideration. An important question is how the future technical energy systems should be formed if environmental costs were considered as any other good or service, such as raw material, capital and labour. This study comprises cost‐effective technical measures when monetary values of external effects are included in an energy system analysis. It is an analysis of how the present energy system can for society be cost‐effectively reconstructed to be more sustainable. A regional energy system model has been developed to perform the study and it concentrates upon production of heat in single‐family houses, multi‐dwelling buildings, non‐residential premises and district heating systems. The analysis adopts a business economic perspective, using present prices of energy carriers, and a more socio‐economic perspective, in which external costs are included. The result of the analysis is the optimal mix of energy carriers as well as new and existing heating plants that minimizes the costs of satisfying a demand for heat. The results show that it is profitable to invest in new heating plants fuelled with woody biomass. Furthermore, the external costs arising with satisfying the demand for heat can decrease substantially, 60%, by carrying through with the investments that are cost‐effective according to the institutional rules valid today. When monetary values of external costs are taken into consideration, this number is additional 5‐percentage points lower. It is shown that if environmental costs are included it is more expensive to continue with business as usual than it is to reconstruct and run a more sustainable energy system. Copyright © 2002 John Wiley & Sons, Ltd.     

A comprehensive thermodynamic analysis of load‐flexible CHP plants using district heating network

Because of the rapid expansion of intermittent renewable energy, conventional coal‐fired power plants, including combined heat and power (CHP) plants, are required to improve the quick‐response ability to respond the changing demand of the grid. However, the flexibility of CHP plants is not easy to be improved because of the restriction of traditional load variation mechanism. This work presents a comprehensive thermodynamic analysis on the flexibility‐improving scheme using the thermal energy storage (TES) capacity of district heating (DH) network. A typical CHP plant and related DH network were selected as a case study. The flexibility demand under the context of renewables accommodation in the short timescale (counted by minutes) and the operational characteristics of CHP plants were analyzed on the basis of experimental data and thermodynamics. Besides, the influence of heat supply adjustment on heat users' indoor temperature was quantified with a dynamic model, and the thermal inertia of the DH network is discussed. Moreover, a thermodynamic model for the load variation processes simplified with operational characteristics was established to analyze the response ability improvement of CHP plants. Results of the case study show, the scheme can shorten approximately 34% of the response time while almost have no influence on the indoor temperature of heat users.     

Comparative analyses of seven technologies to facilitate the integration of fluctuating renewable energy sources

An analysis of seven different technologies is presented. The technologies integrate fluctuating renewable energy sources (RES) such as wind power production into the electricity supply, and the Danish energy system is used as a case. Comprehensive hour-by-hour energy system analyses are conducted of a complete system meeting electricity, heat and transport demands, and including RES, power plants, and combined heat and power production (CHP) for district heating and transport technologies. In conclusion, the most fuel-efficient and least-cost technologies are identified through energy system and feasibility analyses. Large-scale heat pumps prove to be especially promising as they efficiently reduce the production of excess electricity. Flexible electricity demand and electric boilers are low-cost solutions, but their improvement of fuel efficiency is rather limited. Battery electric vehicles constitute the most promising transport integration technology compared with hydrogen fuel cell vehicles (HFCVs). The costs of integrating RES with electrolysers for HFCVs, CHP and micro fuel cell CHP are reduced significantly with more than 50% of RES.     

Testing activity‐based costing to large‐scale combined heat and power plant using bioenergy

This paper deals with the energy production and economics of a large‐scale biomass‐based combined heat and power (CHP) plant. An activity‐based costing model was developed for estimating the production costs of the heat and power of the bio‐CHP. A 100 MW plant (58 MW heat, 29 MW electricity) was used as reference. The production process was divided into four stages: fuel handling, fluidized bed boiler, turbine plant, and flue gas cleaning. The boiler accounted for close to 50% of the production costs. The interest rates and the utilization rate of the CHP had a significant effect on the profitability. We found that below 4000–4500 h per year utilization, the electricity production turned unprofitable. However, the heat production remained profitable with high interest rate (10%) and a low utilization rate (4000 h). The profitability also depended on the type of biomass used. We found that, e.g. with moderate interest rates and high utilization rate of the plant, the bio‐CHP plant could afford wood and Reed canary grass as fuel sources. Copyright © 2013 John Wiley & Sons, Ltd.     

Optimal location of lignocellulosic ethanol refineries with polygeneration in Sweden

The integration of ethanol production with combined heat and power plants is considered in this paper. An energy balance process model has been used to generate data for the production of ethanol, electricity, heat and biogas. The geographical position of such plants becomes of importance when using local biomass and delivering transportation fuel and heat. An optimization model has thus been used to determine the optimal locations for such plants in Sweden. The entire energy supply and demand chain from biomass outtake to gas stations filling is included in the optimization. Input parameters have been studied for their influence on both the final ethanol cost and the optimal locations of the plants. The results show that the biomass cost, biomass availability and district heating price are crucial for the positioning of the plant and the ethanol to be competitive against imported ethanol. The optimal location to set up polygeneration plants is demonstrated to be in areas where the biomass cost is competitive and in the vicinity of small to medium size cities. Carbon tax does not influence the ethanol cost, but solicits the production of ethanol in Sweden, and changes thus the geography of the plant locations.     

Excess heat from kraft pulp mills: Trade-offs between internal and external use in the case of Sweden—Part 1: Methodology

Excess heat from a kraft pulp mill can be used either internally to increase the level of efficiency in the mill, or externally for example as district heating. This paper presents an approach to investigate the competition between external and internal use through modelling the pulp mill and an energy company (ECO) within the same system boundary. Three different sizes of ECOs with different district heating demands are studied. To investigate the competitiveness of using industrial excess heat as district heating compared with other heat production techniques, the option of investing in excess heat use is introduced, along with the possibility for the ECO to invest in biomass combined heat and power (CHP), waste CHP and natural gas combined cycle (NGCC). To evaluate the robustness of the model, alternative solutions are identified and will be used as a comparison to the optimal solutions. The model has been verified by comparing the results with previous studies concerning kraft pulp mills and with related studies regarding district heating and real ECOs. Finally, the approach presented in this part of the study will be used in the second part in order to investigate the trade-off between internal and external use of excess heat under different future energy market scenarios.     

Cost-effective CO2 emission reduction through heat,power and biofuel production from woody biomass: A spatially explicit comparison of conversion technologies

Bioenergy is regarded as cost-effective option to reduce CO₂ emissions from fossil fuel combustion. Among newly developed biomass conversion technologies are biomass integrated gas combined cycle plants (BIGCC) as well as ethanol and methanol production based on woody biomass feedstock. Furthermore, bioenergy systems with carbon capture and storage (BECS) may allow negative CO₂ emissions in the future. It is still not clear which woody biomass conversion technology reduces fossil CO₂ emissions at least costs. This article presents a spatial explicit optimization model that assesses new biomass conversion technologies for fuel, heat and power production and compares them with woody pellets for heat production in Austria. The spatial distributions of biomass supply and energy demand have significant impact on the total supply costs of alternative bioenergy systems and are therefore included in the modeling process. Many model parameters that describe new bioenergy technologies are uncertain, because some of the technologies are not commercially developed yet. Monte-Carlo simulations are used to analyze model parameter uncertainty. Model results show that heat production with pellets is to be preferred over BIGCC at low carbon prices while BECS is cost-effective to reduce CO₂ emissions at higher carbon prices. Fuel production – methanol as well as ethanol – reduces less CO₂ emissions and is therefore less cost-effective in reducing CO₂ emissions.     

MINLP optimisation model for increased power production in small-scale CHP plants

In this work we present a mixed integer nonlinear programming (MINLP) model for increasing the power production in small-scale (1–20 MW_e) CHP plants based on a steam Rankine process and using biomass fuels. Changes that could increase the power production in these plants are, for instance, a steam reheater, a feed water preheater, a two-stage district heat exchanger, and a fuel dryer. In the model we also consider the integration of a gas turbine and a gas engine into the CHP process by using the oxygen remains of the turbine or engine exhaust gases as preheated combustion air in the biomass boiler. The developed MINLP model was tested with four existing small-scale CHP plants. The results showed that there are profitable possibilities to increase the electrical efficiencies and power-to-heat ratios of these plants with the addition of a two-stage district heating exchanger, a feed water preheater, a steam reheater, and a fuel dryer. Furthermore, the integration of a gas engine increased the efficiencies significantly. Overall, the MINLP model gave good results for the example cases, but the model could be still improved by developing its mathematical formulation to a more convex model and by adding the operational changes in the district heating network to the model with multiperiod modeling. The current model gives new possibilities to the design planning and optimisation of the small-scale CHP plants, and it also provides a good basis for the future design modeling of the CHP plants and their optimal integration to the district heating network.     

Biomass gasification in district heating systems – The effect of economic energy policies

Biomass gasification is considered a key technology in reaching targets for renewable energy and CO₂ emissions reduction. This study evaluates policy instruments affecting the profitability of biomass gasification applications integrated in a Swedish district heating (DH) system for the medium-term future (around year 2025). Two polygeneration applications based on gasification technology are considered in this paper: (1) a biorefinery plant co-producing synthetic natural gas (SNG) and district heat; (2) a combined heat and power (CHP) plant using integrated gasification combined cycle technology. Using an optimisation model we identify the levels of policy support, here assumed to be in the form of tradable certificates, required to make biofuel production competitive to biomass based electricity generation under various energy market conditions. Similarly, the tradable green electricity certificate levels necessary to make gasification based electricity generation competitive to conventional steam cycle technology, are identified. The results show that in order for investment in the SNG biorefinery to be competitive to investment in electricity production in the DH system, biofuel certificates in the range of 24–42 EUR/MWh are needed. Electricity certificates are not a prerequisite for investment in gasification based CHP to be competitive to investment in conventional steam cycle CHP, given sufficiently high electricity prices. While the required biofuel policy support is relatively insensitive to variations in capital cost, the required electricity certificates show high sensitivity to variations in investment costs. It is concluded that the large capital commitment and strong dependency on policy instruments makes it necessary that DH suppliers believe in the long-sightedness of future support policies, in order for investments in large-scale biomass gasification in DH systems to be realised.     

Exergetic comparison of efficiency indicators for combined heat and power (CHP)

Legislative regulations in favor of combined heat and power (CHP) production have been implemented in many countries. Although these regulations put different emphasis on power production vs. process heat production, they are based on energy quantities and not on exergy. In order to analyze and compare the exergetic consequences of the various legislations, a relative avoided irreversibility (RAI) is defined. This can be regarded as the exergy loss that is avoided when reference plants with separate production are replaced by an actual CHP plant. Some series of industrial and district heating CHP plants, under varying operational conditions, are used as test cases. It is seen that some, but not all, CHP cases are exergetically beneficial to separate generation. Comparison with the RAI allows a quantitative assessment of the various performance indicators. It is seen that exergetic improvements were only captured to a limited degree by the various energy-based efficiency indicators. Some legislatively defined indicators even appear to discourage thermodynamic improvements.     

On the potential trade-offs between energy supply and end-use technologies for residential heating

In Sweden, where district heating accounts for a significant share of residential heating, it has been argued that improvements in end-use energy efficiency may be counter-productive since such measures reduce the potential of energy efficient combined heat and power production. In this paper we model how the potential trade-offs between energy supply and end-use technologies depend on climate policy and energy prices. The model optimizes a combination of energy efficiency measures, technologies and fuels for heat supply and district heating extensions over a 50 year period. We ask under what circumstances improved end-use efficiency may be cost-effective in buildings connected to district heating? The answer hinges on the available technologies for electricity production. In a scenario with no alternatives to basic condensing electricity production, high CO₂ prices result in very high electricity prices, high profitability of combined heat and power production, and little incentive to reduce heat demand in buildings with district heating. In contrast, in a scenario where electricity production alternatives with low CO₂ emissions are available, the electricity price will level out at high CO₂ prices. This gives heat prices that increase with the CO₂ price and make end-use efficiency cost-effective also in buildings with district heating.     

Conversion of straw and similar agricultural wastes

Mainly the economic aspects prevent a far more extensive use of biomass, including straw as a fuel in energy supply.

During the latest years several straw fired plants have been put in operation, especially in Denmark, and they have demonstrated that both district heating and combined heat and power (CHP) production based on straw are technically possible.

However, experience has shown that a very precise research and development effort is necessary before the straw fired plants are competitive to traditional plants fired with fossil fuels, as to operational safety and economy.

The R & D activities ought first and foremost to aim at: 1) Reduction of costs connected to all processes from harvest to energy production, 2) wider know-how of the firing and combustion technical characteristics of straw, and 3) environmental conditions, including emissions and ash depositing problems.     

Possibilities and consequences of deregulation of the European electricity market for connection of heat sparse areas to district heating systems

The objective of the study is to analyse the conditions for connection of residential buildings in heat sparse areas to district heating systems in order to increase electricity production in municipal combined heat and power plants. The European electricity market has been assumed to be fully deregulated. The relation between connection of heat sparse areas, increased electricity and heat production as well as electricity prices, fuel prices and emissions rights is investigated. The results of the study show that there is potential to expand the district heating market to areas with lower heat concentrations in the cities of Gävle, Sandviken and Borlänge in Sweden, with both economic and environmental benefits. The expansion provides a substantial heat demand of approximately 181 GWh/year, which results in an electricity power production of approximately 43 GWh/year. Since the detached and stand-alone houses in the studied heat sparse areas have been heated either by oil boiler or by direct electricity, connection to district heating also provides a substantial reduction in emissions of CO₂. The largest reductions in CO₂ emissions are found to be 211 ktonnes/year assuming coal-fired condensing power as marginal electricity production. Connection of heat sparse areas to district heating decrease the system costs and provide a profitability by approximately 22 million EURO/year for the studied municipalities if the price of electricity is at a European level, i.e. 110 EURO/MWh. Sensitivity analysis shows, among other things, that a strong relation exists between the price of electricity and the profitability of connecting heat sparse areas to district heating systems.     

Exploration of economical sizing of gas engine and thermal store for combined heat and power plants in the UK

There has been discussion about the extent to which combined heat and power (CHP) plants with thermal stores are suitable for sustainable energy production. At the moment, in the UK the development of this type of plant is limited. This paper analyses the economics and optimum size of CHP operating with gas engines and thermal stores in British market conditions. This is achieved using energyPRO software. It is shown that, due to the big differences in electricity prices between day and night, the use of thermal stores could be profitable in the UK. The economical size of CHP plant for a district or community heating load of 20,000 MWh per year is found to be a 3 MWe gas engine with a 7.8 MWh thermal store. In this case the analysis reveals that the use of a thermal store more than doubles the return on investments (as measured in net present value) compared with the same size of a plant without a thermal store. It is concluded that thermal stores can improve the overall economics of CHP plants in present British circumstances.