Integration of 50 % wind power in a CHP-based ... - Ea Energianalyse

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Integration of 50 % wind power in a CHP-based ... - Ea Energianalyse

Building the Mathematical Model 51Electricity marketCentral heat marketEl. priceEl. demandHeat priceHeat demandCHP (coal)(a)CHP (coal)(b)CHP (gas)CHP (gas)Q [MW]Q [MW]Figure 5.2, As seen through the model, electricity and heat prices are formed by eachsatisfying separately inelastic demands. Problem is, when the price-setting marginalCHP plant is cheaper on the electricity side (left) than the case for the local heatmarket (right), lost incomes on forced electricity (a) will be balanced by raising themarginal heat generation costs (b).The results of CHP plants producing forced electricity, is that these constrained units nolonger will influence the marginal quantities (Bregnbæk), as they no longer plays thepart of cheapest marginal capacity. Moreover, the constrained power now contributes toa further suppressing of the CHP plants. Consequently, heat prices reflect how muchextra fuel it will take for the heat system to produce one extra unit of heat. Under theseconditions, the corresponding electricity can be considered as a waste- or bi-product ofheat - and not the other way around as originally intended 18 . Whether this relation is aproblem for the system economy as a whole is interesting to look further into, but fact is,that whenever cheaper marginal producers suppress locally heat-constrained CHP unitsfrom the Merit order (on the electricity-side), marginal heat-generation costs increases(in order to cover the “loss” on the el. market), ultimately resulting in high heat prices.As shown in section 4.2.2, electricity and heat demand tend to follow the same patternsthroughout a normal day which should decrease the problem caused by forced electricityproduction to some extent. But since wind penetration has increased dramatically overthe previous decade, forced electricity has increased too. Central CHP plants have theoption of varying the relative heat production – but only to the backpressure limit isreached, giving maximum 130 % heat for one unit electricity. Backpressure CHP plantsgive a fixed quantity of around 180 % per unit electricity which is a small advantagewhen heat is the scarce resource. Therefore, an improved ability to vary the production,and thus making the heat and electricity-interplay more flexible, may very well limit theprice increasment due to the loss of income on the “over-supplied” product – whether thisis electricity or heat.18The original concept of distributing co-generated heat was to exploit the heat waste generated atthermal power plants, and use as a substitute for regular house heating and by this – increase the totalefficiency.

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