12th International Symposium on District Heating and Cooling

The <strong>12th</strong> <strong>International</strong> <strong>Symposium</strong> on District Heating and Cooling,September 5 th to September 7 th , 2010, Tallinn, EstoniaFig. 1 Distribution of Estonian cities and municipalities by the annual heat demandsPRINCIPLES FOR EVALUATION OF CHPTECHNOLOGIES COMPETITIVENESSThe revenues of a CHP company are generated fromthe heat and electricity sales. Theoretically they mustcover the operation and maintenance (hereafter calledas ―O&M‖) costs of the CHP plant completely andprovide an expected IRR. Main CHP plant related costsand incomes are shown in Fig. 2.Income from the heat sells depends on amount of soldheat (computable value) and heat price.Knowing investment costs (specified in section CHPtechnologies), and other above mentioned costs andincomes the power plant operation annual net cash flowscan be calculated and IRR defined.The principle for evaluation of CHP technologiescompetitiveness is based on finding such heat pricewhich will cause an expected (proposed) IRR, wherecalculation/estimation rules for the other cash flowscomponents are clearly defined.CHP TECHNOLOGIESThere are numerous CHP technologies that can betheoretically used for small scale CHP systems, but notall of them are economically and technically feasible.The list of main CHP technologies ordered by marketreadiness and common heat outputs are shown in Fig. 3.Fig. 2 CHP plant incomes and costsFuel costs, pollution charges and ash handling costs aremainly depend on used fuel properties and areestimated in section Fuel sources for energy production.CHP technology related fixed operation andmaintenance costs depend on selected CHP technologyand are defined in % from the investment costs annual.They are estimated in section CHP technologies.Electricity sells depends on amount of producedelectricity (computable value) and fuel prices. Fuel pricesare estimated by taken into account feed-in tariffsdescribed in Electricity Market Act [2].It is important to consider the market ready solutions firstof all, such as a steam turbine (hereafter called as ―ST‖),steam engine (hereafter called as ―SE‖), ORCtechnology (hereafter called as ―ORC‖) and gas engine(hereafter called as ―GE‖). Hereafter SE and ST areconsidered jointly, where capacities less than 1 MWelcorrespond to SE by default.For CHP plant economical calculations it is important toknow such CHP plant parameters as efficiencies, priceand O&M costs.Above mentioned parameters are obtained andsystemized on the basis of information regarding CHPplants collected from different information sources suchas [3, 4, 5, 6, 7, 8].268