A novel bidding method for combined heat and power units in district heating systems
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A novel bidding method for combined heat and power units in district heating systems Ignacio Blanco1 · Anders N. Andersen2 · Daniela Guericke1 Henrik Madsen1
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Received: 10 August 2018 / Accepted: 6 August 2019 © Springer-Verlag GmbH Germany, part of Springer Nature 2019
Abstract We propose a bidding method for the participation of combined heat and power (CHP) units in the day-ahead electricity market. More specifically, we consider a district heating system where heat can be produced by CHP units or heat-only units, e.g., gas or wood chip boilers. We use a mixed-integer linear program to determine the optimal operation of the portfolio of production units and storages on a daily basis. Based on the optimal production of subsets of units, we can derive the bidding prices and amounts of electricity offered by the CHP units for the day-ahead market. The novelty about our approach is that the prices are derived by iteratively replacing the production of heat-only units through CHP production. This results in an algorithm with a robust bidding strategy that does not increase the system costs even if the bids are not won. We analyze our method on a small realistic test case to illustrate our method and compare it with other bidding strategies from literature, which consider CHP units individually. The analysis shows that considering a portfolio of units in a district heating system and determining bids based on replacement of heat production of other units leads to better results. Keywords Day-ahead electricity market · Combined heat and power units · District heating · Bidding method · Mixed-integer linear programming · Operational planning
1 Introduction The global target of reducing CO2 -emissions from fossil fuels has required several countries, especially in the European Union, to consider efficient district heating and
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Daniela Guericke [email protected]
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Department for Applied Mathematics and Computer Science, Technical University of Denmark, Richard Petersens Plads, 2800 Kgs., Lyngby, Denmark
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EMD International A/S, Niels Jernesvej 10, 9220 Aalborg, Denmark
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cooling systems as a key role in its CO2 -emissions reduction strategy [1]. Since it is assumed that fossil fuels will be mostly replaced by intermittent renewable energy sources, a higher share of district heating and cooling systems can facilitate the integration of these intermittent energy sources in the energy mix [2], contributing to balance the grid by the use of heat pumps, electric boilers, thermal storage or flexible CHP production. The efficiency of these systems has been demonstrated already in countries like Denmark and Sweden. In Denmark around 64% of the households are connected to district heating networks for space heating and domestic hot water [3]. Nowadays, the total heat consumption in all district heating networks in Denmark is close to 130 petajoule (PJ) from which more than 65% are produced by combined heat and power (CHP) plants [4]. The integration of renewable and intermittent energy sources (e.g. wi
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