Profitability of participation in control reserve market for biomass-fueled combined heat and power plants

Thomas Muche, Christin Höge, Oliver Renner and Ralf Pohl

Renewable Energy, 2016, vol. 90, issue C, 62-76

Abstract: Increasing utilization of renewable energy results in a rising need for the allocation of control reserve, associated with the possibility to gain large remunerations in addition to spot market prices, in particular, for biomass-fueled combined heat and power (CHP) plants. Ancillary services in control reserve, however, require enlargement of storage volume due to needed decoupling of cogenerated power and heat. In order to evaluate participation profitability, two optimization models for daily unit commitment based on mixed-integer linear programming (MILP) are developed and applied, whereat the first solely focuses on spot market and only the second includes additional control reserve. Net present value (NPV) of the differences in result subsequently lays the basis for evaluation. Because Organic Rankine Cycle (ORC) technology has advantageous properties setting the scene for control reserve market, application is based on it as an example. To complete the study, other appropriated technologies are also considered. As a result, additional investment costs for storage enlargement are not covered by rising cash flow under current conditions of the ORC technology. Nevertheless, participation should not be dismissed for CHP plants in its entirety, since NPV shows a positive trend and profitability is already reached with little increase of electrical efficiency.

Keywords: Biomass-fueled CHP plants; Thermal storage; Control reserve market; District heating; Short-term price forecasting; Unit commitment (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:90:y:2016:i:c:p:62-76

DOI: 10.1016/j.renene.2015.12.051

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