Opportunities for integration of biofuel gasifiers in natural-gas combined heat-and-power plants in district-heating systems

As political pressure to improve efficiency and reduce CO₂-emissions increases, natural gas combined cycle (NGCC) combined heat-and-power (CHP) technology is an increasingly attractive option for district-heating systems. However, as CO₂-emissions reduction targets become more ambitious, it is expected that there will be pressure to reduce CO₂-emissions from such units well before they reach the end of their useful lifetime. One way to achieve this goal is to integrate a biofuel gasification unit at the plant site. After clean-up, the produced syngas can be co-fired in the CHP unit. This paper discusses the economic performance of this type of retrofit, with specific emphasis on the impact of the following parameters: (i) the original NGCC CHP plant’s power-to-heat ratio; (ii) the size of the district-heating system’s annual heat-energy demand; (iii) the fuel mix in the district-heating system; and (iv) the availability of low-cost waste-heat that can be delivered to the district-heating system. The economic performance of the retrofitted CHP unit is measured as the overall cost of electricity production (COE). COE is analysed for four different energy-market parameter sets (referred to as Scenarios), including fuel prices, costs associated with energy and climate change policy instruments, and market electricity prices. The results indicate that even relatively high costs associated with CO₂ emissions are insufficient to motivate retrofitting an NGCC CHP unit with an integrated biofuel-gasification unit. To promote this type of retrofit, an additional premium value for electricity generated from renewable fuel sources is required (such as the Swedish REC renewable energy certificate system). An unexpected result of this study is that the required value of REC is essentially independent of the energy market scenario considered.     

Short-term impact of green certificates and CO2 emissions trading in the Swedish district heating sector

Swedish district-heating (DH) systems use a wide range of energy sources and technologies for heat-and-power generation. This provides the DH utilities with major flexibility in changing their fuel and technology mix when the economic conditions for generation change. Two recently introduced policy instruments have changed the DH utilities’ costs for generation considerably; the tradable green-certificate (TGC) scheme introduced in 2003 in Sweden, and the tradable greenhouse-gas emission permit (TEP) scheme introduced in the EU on January 1, 2005. The objective of this study is to analyse how these two trading schemes impact on the operation of the Swedish DH sector in terms of changes in CHP generation, CO₂ emissions, and operating costs. The analysis was carried out by comparing the most cost-effective operation for the DH utilities, with and without, the two trading schemes applied, using a model that handles the Swedish DH-sector system-by-system. It was found that the volume of renewable power generated in CHP plants only increased slightly owing to the TGC scheme. The TGC and the TEP schemes in force together, however, nearly doubled the renewable power-generation. CO₂ emissions from the DH sector may either increase or decrease depending on the combination of TGC and TEP prices. The overall CO₂ emissions from the European power-generation sector would, however, be reduced for all price combinations assuming that increased Swedish CHP generation replaces coal-condensing power (coal-fired plants with power generation only) in other European countries. The trading schemes also lower the operational costs of the DH sector since the cost increase owing to the use of more expensive fuels and the purchase of TEPs is outweighed by the increased revenues from sales of electricity and TGCs.     

MODEST-An energy-system optimisation model applicable to local utilities and countries

MODEST, an energy-system optimisation model is described. It has been applied to a typical local Swedish electricity and district-heating utility and to the national power system. Present and potential installations and energy flows should be considered and their best combination can be obtained through optimisation. MODEST uses linear programming to minimise the capital and operation costs of energy supply and demand-side management. Seasonal, weekly, and diurnal variations of, for example, demand, costs, and capacities are considered. MODEST may be used to decide which investments to make, the dimensioning of new installations, and the operation of all system components. The municipal utility under study should now expand its heat production using woodchips. Electricity export or nuclear phase-out will probably raise the Swedish electricity prices. In this case, cost minimisation is achieved by introducing combined heat and power (CHP) production in the municipality. Fossil fuels should be used in the cogeneration plant at current taxation levels but biofuels are favourable if higher environmental fees are imposed for CO₂ emissions. Biomass capacity expansion could decrease local CO₂ emissions by 80%. Efficiency improvements for electricity use have robust profitability at high electricity prices. The Swedish electricity demand may be satisfied without nuclear power and fossil fuels through massive biomass use, wind-power supply, and energy conservation.     

European perspective on absorption cooling in a combined heat and power system – A case study of energy utility and industries in Sweden

Mankind is facing an escalating threat of global warming and there is increasing evidence that this is due to human activity and increased emissions of carbon dioxide. Converting from vapour compression chillers to absorption chillers in a combined heat and power (CHP) system is a measure towards sustainability as electricity consumption is replaced with electricity generation. This electricity produced in Swedish CHP-system will substitute marginally produced electricity and as result lower global emissions of carbon dioxide. The use of absorption chillers is limited in Sweden but the conditions are in fact most favourable. Rising demand of cooling and increasing electricity prices in combination with a surplus of heat during the summer in CHP system makes heat driven cooling extremely interesting in Sweden. In this paper we analyse the most cost-effective technology for cooling by comparing vapour compression chillers with heat driven absorption cooling for a local energy utility with a district cooling network and for industries in a Swedish municipality with CHP. Whilst this case is necessarily local in scope, the results have global relevance showing that when considering higher European electricity prices, and when natural gas is introduced, absorption cooling is the most cost-effective solution for both industries and for the energy supplier. This will result in a resource effective energy system with a possibility to reduce global emissions of CO₂ with 80%, a 300% lower system cost, and a 170% reduction of the cost of producing cooling due to revenues from electricity production. The results also show that, with these prerequisites, a decrease in COP of the absorption chillers will not have a negative impact on the cost-effectiveness of the system, due to increased electricity production.     

Role of a district-heating network as a user of waste-heat supply from various sources – the case of Göteborg

District-heating (DH) networks can utilise heat that would otherwise be of limited use. This study analyses a municipal DH system, which uses waste heat from industries and waste incineration as base suppliers of heat and is currently investing in a natural-gas fired combined heat-and-power (CHP) plant. An important assumption in this study is of the establishment of an integrated European electricity-market, which means higher electricity prices than are traditional in Sweden. The study shows that there is space in the DH system for all three energy carriers; heat from industries, waste incineration and CHP plants. The new CHP plant replaces mainly other heat sources, i.e., hot water boilers and heat pumps. The new CHP plant’s operating time is strongly dependent on the electricity price.     

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.     

Implementation strategy for small CHP-plants in a competitive market: the case of Lithuania

Within five years from now, Lithuania is going to close down Ignalina, the only nuclear-power plant in the country. Since Ignalina generates more than 75% of the Lithuanian electricity production, new generation capacities are needed. Traditional steam-turbines, fuelled with fossil fuels, would mean further imports of fuel as well as a rise in CO₂ emissions. At the same time, several small district-heating companies one suffering from high heating-prices. Typically, the price in small towns is 20–50% higher than the price in large urban areas. Consequently, alternative strategies should be considered. This article analyses the conditions for one such strategy, namely the replacement of boilers in the existing district-heating supplies with combined heat-and-power production (CHP). Compared with new power stations, fuel can be saved and CO₂-emissions reduced. Also this strategy can be used to level the difference between low heating prices in the large urban areas and high prices in small towns and villages.     

A review on energy,economical, and environmental benefits of the use of CHP systems for small commercial buildings for the North American climate

The use of combined heating and power (CHP) systems to produce both electricity and heat is increasing rapidly due to their high potential of reducing primary energy consumption (PEC), cost, and emissions in domestic, commercial, and industrial applications. In addition to producing both electricity and heat, CHP systems can be coupled with vapor compression systems to provide cooling. This paper analyzes a natural gas engine CHP system together with a vapor compression system for different American climate zones. Performance is measured in terms of operational costs, PEC, and carbon dioxide emissions as a percent of a reference building. The objective of this paper is to compare the performance of a CHP system operating 24 h a day with a system that only operates during typical office hours. Furthermore, the system is optimized based on reducing PEC, minimizing costs, and reducing emissions. In addition, the benefits of CHP systems based on the Energy Star program and the Leadership in Energy and Environmental Design (LEED) program are presented. Results show that, in general, it is more beneficial to operate the CHP system during typical office hours than to operate the system 24 h a day. Also, the CHP system performance strongly depends on the location where it is installed. In addition to reductions in cost, primary energy, and emissions, CHP systems can help achieve the Energy Star label for commercial office buildings and help obtain LEED points that go toward achieving LEED certification status. Copyright © 2009 John Wiley & Sons, Ltd.     

Biomass and district-heating systems

New technologies for biomass gasification are being developed which increase the potential to cogenerate electricity and may reduce costs compared with steam turbine technology. Cogeneration is a more energy-efficient way to convert biomass into heat and electricity than separate electricity and heat production. The potential to cogenerate electricity in the Swedish district-heating systems is estimated to be 20% of current electricity production when using combined cycle technology. The electricity and heat costs from cogeneration with biomass are higher than the costs from fossil fuel plants at current fuel prices when external costs are excluded.     

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.     

Shadow prices for heat generation in time-dependent and dynamic energy systems

Shadow prices for heat generation are used to study the impact of changes in heat demand on the total system cost of an existing district-heating system in Sweden. The energy system may be considered to be both dynamic, because there is energy storage, and time-dependent since the electricity tariff is time-differentiated and the heat demand varies over the year and day. The energy system has been analysed with and without energy storage. The analysis shows that despite a reduction in system cost, the use of energy storage can result in higher shadow prices for heat generation in some time periods.     

Methodology to estimate the economic,emissions, and energy benefits from combined heat and power systems based on system component efficiencies

This paper presents a methodology to estimate the economic, emissions, and energy benefits that could be obtained from a base loaded CHP system using screening parameters and system component efficiencies. On the basis of the location of the system and the facility power to heat ratio, the power that must be supplied by a base loaded CHP system in order to potentially achieve cost, emissions, or primary energy savings can be estimated. A base loaded CHP system is analyzed in nine US cities in different climate zones, which differ in both the local electricity generation fuel mix and local electricity prices. Its potential to produce economic, emissions, and energy savings is quantified on the basis of the minimum fraction of the useful heat to the heat recovered by the CHP system (φ_min). The values for φ_min are determined for each location in terms of cost, emissions, and energy. Results indicate that in terms of cost, four of the nine evaluated cities (Houston, San Francisco, Boulder, and Duluth) do not need to use any of the heat recovered by the CHP system to potentially generate cost savings. On the other hand, in cities such as Seattle, around 86% of the recovered heat needs to be used to potentially provide cost savings. In terms of emissions, only Chicago, Boulder, and Duluth are able to reduce emissions without using any of the recovered heat. In terms of primary energy consumption, only Chicago and Duluth do not require the use of any of the recovered heat to yield primary energy savings. For the rest of the evaluated cities, some of the recovered heat must be used in order to reduce the primary energy consumption with respect to the reference case. In addition, the effect of the efficiency of the power generation unit and the facility power to heat ratio on the potential of the CHP system to reduce cost, emissions, and primary energy is investigated, and a graphical method is presented for examining the trade‐offs between power to heat ratio, base loading fraction, percentage of recovered heat used, and minimum ratios for cost, emissions, and primary energy. Copyright © 2014 John Wiley & Sons, Ltd.     

Examination of energy price policies in Iran for optimal configuration of CHP and CCHP systems based on particle swarm optimization algorithm

The current subsidized energy prices in Iran are proposed to be gradually eliminated over the next few years. The objective of this study is to examine the effects of current and future energy price policies on optimal configuration of combined heat and power (CHP) and combined cooling, heating, and power (CCHP) systems in Iran, under the conditions of selling and not-selling electricity to utility. The particle swarm optimization algorithm is used for minimizing the cost function for owning and operating various CHP and CCHP systems in an industrial dairy unit. The results show that with the estimated future unsubsidized utility prices, CHP and CCHP systems operating with reciprocating engine prime mover have total costs of 5.6 and $2.9×10⁶ over useful life of 20 years, respectively, while both systems have the same capital recovery periods of 1.3 years. However, for the same prime mover and with current subsidized prices, CHP and CCHP systems require 4.9 and 5.2 years for capital recovery, respectively. It is concluded that the current energy price policies hinder the promotion of installing CHP and CCHP systems and, the policy of selling electricity to utility as well as eliminating subsidies are prerequisites to successful widespread utilization of such systems.     

Long-term optimization of cogeneration systems in a competitive market environment

A tool for long-term optimization of cogeneration systems is developed that is based on mixed integer linear-programming and Lagrangian relaxation. We use a general approach without heuristics to solve the optimization problem of the unit commitment problem and load dispatch. The possibility to buy and sell electric power at a spot market is considered as well as the possibility to provide secondary reserve. The tool has been tested on a demonstration system based on an existing combined heat-and-power (CHP) system with extraction-condensing steam turbines, gas turbines, boilers for heat production and district-heating networks. The key feature of the model for obtaining solutions within reasonable times is a suitable division of the whole optimization period into overlapping sub-periods. Using Lagrangian relaxation, the tool can be applied to large CHP systems. For the demonstration model, almost optimal solutions were found.     

The role of a paper mill in a merged district heating system

Recent studies have shown that there is great potential benefit in utilities collaborating around heat supply. Analyses based on an extended system boundary clarify the advantage of mutual co-operation in the district heating markets. The purpose of this study is to show how far a local paper mill affects the degree of co-operation between two utilities. Current and future electricity prices and existing and potential plants are considered in the different scenarios in the study. The results in all the scenarios clearly show that the paper mill plays an active role in an integrated heat supply system. The scenario where co-operation, new plants and future electricity prices are considered, gives the lowest total system cost. A new back pressure turbine with a higher electricity-to-heat output ratio in combination with high trade prices promotes increased electricity and heat generation in the co-generation plant. The proportion of combined heat and power in district heating would increase if co-operation between the players were encouraged.     

Energy system analysis of the inclusion of monetary values of environmental damage

This is an analysis of the effect on the technical solution when monetary values of externalities are included in a model for optimising energy systems. The focus of the study is on heating in domestic houses, non-residential premises, multi-dwelling buildings and district heating systems. The included monetary values of damage to the environment and health are those resulting from atmospheric emissions of CO₂, NO_x, SO₂ and particulates. The estimates are taken from the literature. An optimising method based on linear programming is used and the result is an optimal mix of energy carriers as well as new and existing heating plants that minimise the costs of satisfying a demand for heat. Furthermore, a calculation is made of the externality cost resulting from the energy system. The analysis makes it possible to compare the technical and economic differences of an energy system based on business economics to a system with greater emphasis on socio-economics. Generally speaking, it is cost-effective to take externality costs into consideration at the planning stage instead of correcting the damage later. The results show that by considering externality costs the total discounted cost of the energy system would be approximately 30% lower than today. Furthermore, the use of pellets and wood chips should be substantially larger in all of the studied regions.     

Techno-economic evaluation of medium scale power to hydrogen to combined heat and power generation systems

The European Hydrogen Strategy and the new « Fit for 55 » package indicate the urgent need for the alignment of policy with the European Green Deal and European Union (EU) climate law for the decarbonization of the energy system and the use of hydrogen towards 2030 and 2050. The increasing carbon prices in EU Emission Trading System (ETS) as well as the lack of dispatchable thermal power generation as part of the Coal exit are expected to enhance the role of Combined Heat and Power (CHP) in the future energy system. In the present work, the use of renewable hydrogen for the decarbonization of CHP plants is investigated for various fossil fuel substitution ratios and the impact of the overall efficiency, the reduction of direct emissions and the carbon footprint of heat and power generation are reported. The analysis provides insights on efficient and decarbonized cogeneration linking the power with the heat sector via renewable hydrogen production and use. The levelized cost of hydrogen production as well as the levelized cost of electricity in the power to hydrogen to combined heat and power system are analyzed for various natural gas substitution scenarios as well as current and future projections of EU ETS carbon prices.     

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.     

Large-scale integration of wind power into different energy systems

The paper presents the ability of different energy systems and regulation strategies to integrate wind power. The ability is expressed by the following three factors: the degree of electricity excess production caused by fluctuations in wind and Combined Heat and Power (CHP) heat demands, the ability to utilise wind power to reduce CO₂ emission in the system, and the ability to benefit from exchange of electricity on the market. Energy systems and regulation strategies are analysed in the range of a wind power input from 0 to 100% of the electricity demand. Based on the Danish energy system, in which 50% of the electricity demand is produced in CHP, a number of future energy systems with CO₂ reduction potentials are analysed, i.e. systems with more CHP, systems using electricity for transportation (battery or hydrogen vehicles) and systems with fuel-cell technologies. For the present and such potential future energy systems different regulation strategies have been analysed, i.e. the inclusion of small CHP plants into the regulation task of electricity balancing and ancillary grid stability services and investments in electric heating, heat pumps and heat storage capacity. The results of the analyses make it possible to compare short-term and long-term potentials of different strategies of large-scale integration of wind power.