Equilibrium Modeling of Combined Heat and Power Deployment
Publication: Journal of Energy Engineering
Volume 142, Issue 3
Abstract
Combined heat and power (CHP) generates electricity and heat from the same fuel source and can provide these services at higher equivalent conversion efficiency relative to grid-purchased electricity and stand-alone steam production. Previous work has focused on the economic factors and optimal operation strategy that influence the decision to install a single CHP unit. The approach discussed in this paper is to assess the economic potential for CHP in an electricity-market equilibrium framework, accounting for the impact that CHP adoption at scale will have on electricity prices—incremental installations of CHP reduce the demand for grid-provided electricity in some locations, thus reducing wholesale prices in that location. A statistical model of electricity supply and pricing is utilized to estimate locational electricity supply curves that reflect the impact of transmission congestion on locational price formation and location-specific elasticities of supply. The zonal electricity pricing model is coupled with the model of CHP adoption and utilization in commercial buildings for two locations in the PJM power grid. Under a range of operational assumptions and fuel prices, returns to incremental CHP deployment decrease rapidly in both locations for the first 100 MW of building-integrated CHP deployed, although CHP becomes an uneconomical decision only at much higher deployment levels. Although the elasticity of supply is an important determinant of economic potential for CHP, the authors find that in most cases, operating CHP units to follow building thermal demand (versus electrical demand, which would offset peak electricity-demand periods) yields higher returns over a broader range of CHP deployment levels.
Get full access to this article
View all available purchase options and get full access to this article.
References
AEP (American Electric Power). (2015). “AEP Ohio tariff.” 〈https://www.aepohio.com/account/bills/rates/AEPOhioRatesTariffsOH.aspx〉 (May 13, 2015).
Econsult. (2011). “The market for commercial property energy retrofits in the Philadelphia region.” 〈http://www.econsult.com/GPIC_report.pdf〉 (Sep. 12, 2011).
Hendriks, C., and Blok, K. (1996). “Regulation for combined heat and power in the European Union.” Energy Convers. Manage., 37(6–8), 729–734.
Huang, J., Akbari, H., Rainer, L., and Ritschard, R. (1991). “481 prototypical commercial buildings for 20 urban market areas.”, Lawrence Berkeley National Laboratory (LBNL), 〈https://publications.lbl.gov/islandora/object/ir%3A94368/.../citation.pdf〉 (Sep. 21, 2011).
IEA (International Energy Agency). (2008). “Combined Heat and power: Evaluating the benefits of greater global investment.” 〈http://www.iea.org/media/files/chp/chp_report.pdf〉 (Aug. 17, 2012).
Kelly, S., and Pollitt, M. (2010). “An assessment of the present and future opportunities for combined heat and power with district heating (CHP-DH) in the United Kingdom.” Energy Effic., 38(11), 6936–6945.
King, D. E., and Morgan, M. G. (2007). “Customer-focused assessment of electric power micro grids.” J. Energy Eng., 150–164.
MACEAC (Mid-Atlantic Clean Energy Application Center). (2011). “Pennsylvania combined heat and power baseline assessment.” 〈http://www.research.psu.edu/events/expired-events/naturalgas/documents/dpg-white-paper.pdf〉 (May 12, 2012).
Mago, P. J., et al. (2009). “Performance analysis of CCHP and CHP systems operating following the thermal and electric load.” Int. J. Energy Res., 33(9), 852–864.
Mago, P. J., and Smith, A. D. (2012). “Evaluation of the potential emissions reductions from the use of CHP systems in different commercial buildings.” Build. Environ., 53, 74–82.
Maidment, G. G., Zhao, X., and Riffat, S. B., (2001). “Combined cooling and heating using a gas engine in a supermarket.” Appl. Energy, 68(4), 321–335.
Newcomer, A., et al. (2008). “Short run effects of a price on carbon dioxide emissions from U.S. electric generators.” Environ. Sci. Technol., 42(9), 3139–3144.
Newcomer, A., and Apt, J. (2009). “Near-term implications of a ban on new coal-fired power plants in the United States.” Environ. Sci. Technol., 43(11), 3995–4001.
NREL (National Renewable Energy Laboratory). (2011). “U.S. Department of Energy commercial reference building models of the national building stock.” 〈http://www.nrel.gov/docs/fy11osti/46861.pdf〉 (Apr., 2012).
ORNL (Oak Ridge National Lab). (2005). “BCHP screening tool, version 2.0.1.” 〈http://www.coolingheatingpower.org/about/bchp-screening-tool.php.〉 (Nov. 12, 2011).
ORNL (Oak Ridge National Lab). (2008). “Combined heat and power: Effective energy solutions for a sustainable future.” 〈http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_report_12-08.pdf〉 (Aug. 18, 2012).
PECO (Philadelphia Electric Company). (2015). “PECO tariff.” 〈https://www.peco.com/CustomerService/RatesandPricing/RateInformation/Pages/CurrentElectric.aspx〉 (May 14, 2015).
PJM Interconnection. (2012). “Historical metered load data.” 〈http://www.pjm.com/markets-and-operations/ops-analysis/historical-load-data.aspx〉 (Feb. 21, 2012).
Sahraei-Ardakani, M., Blumsack, S., and Kleit, A. (2012). “Distributional impacts of state-level energy efficiency policies in regional electricity markets.” Energy Policy, 49, 365–372.
Sahraei-Ardakani, M., Blumsack, S., and Kleit, A. (2015). “Estimating zonal electricity supply curves in transmission-constrained electricity markets.” Energy, 80, 10–19.
Siler-Evans, K., Morgan, M. G., and Azevedo, I. L. (2012). “Distributed cogeneration for commercial buildings: Can we make the economics work?” Energy Policy, 42, 580–590.
Strachan, N., and Farrell, A. (2006). “Emissions from distributed vs. centralized generation: The importance of system performance.” Energy Policy, 34(17), 2677–2689.
Unterwurzacher, E. (1992). “CHP development: Impacts of energy markets and government policies.” Energy Policy, 20(9), 893–900.
U.S. DOE-EIA (U.S. Department of Energy, Energy Information Administration). (2006). “Commercial buildings energy consumption survey (2003 data).” 〈http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/detailed_tables_2003.html#enduse03〉 (Jun. 7, 2012).
U.S. DOE (U.S. Department of Energy). (2011). “Buildings energy data book.” 〈http://buildingsdatabook.eren.doe.gov/ChapterIntro3.aspx〉 (Jun. 7, 2012).
U.S. DOE (U.S. Department of Energy). (2012). “Combined heat and power: A clean energy solution.” 〈http://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/chp_clean_energy_solution.pdf〉 (Apr. 11, 2012).
U.S. EPA. (2007). “Emissions and generation resource integrated database (eGRID) Version 1.1 (2007 data).” 〈http://www.epa.gov/cleanenergy/energy-resources/egrid/〉 (Jul. 10, 2012).
U.S. EPA. (2008a). “Combined heat and power partnership: Economic benefits.” 〈http://www.epa.gov/chp/basic/efficiency.html〉 (Apr. 6, 2012).
U.S. EPA. (2008b). “Combined heat and power partnership: Efficiency benefits.” 〈http://www.epa.gov/chp/basic/efficiency.html〉 (Apr. 6, 2012).
U.S. EPA. (2010). “Sources of greenhouse gas emissions.” 〈http://www.epa.gov/climatechange/ghgemissions/sources.html〉 (Feb. 22, 2013).
Zerriffi, H., et al. (2007). “Incorporating stress in electric power systems reliability models.” Energy Policy, 35(1), 61–75.
Ziher, D., and Poredos, A. (2006). “Economics of a trigeneration system in a hospital.” Appl. Therm. Eng., 26(7), 680–687.
Information & Authors
Information
Published In
Journal of Energy Engineering
Volume 142 • Issue 3 • September 2016
Copyright
© 2015 American Society of Civil Engineers.
History
Received: Oct 15, 2014
Accepted: Jul 7, 2015
Published online: Oct 13, 2015
Discussion open until: Mar 13, 2016
Published in print: Sep 1, 2016
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.