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Is District Heating Combined Heat and Power at Risk in the Nordic Area?—An Electricity Market Perspective

Author

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  • Kristo Helin

    (Department of Mechanical Engineering, School of Engineering, Aalto University, Otakaari 4, 02150 Espoo, Finland)

  • Behnam Zakeri

    (Department of Mechanical Engineering, School of Engineering, Aalto University, Otakaari 4, 02150 Espoo, Finland
    Sustainable Energy Planning, Department of Planning, Aalborg University, A. C. Meyers Vænge 15, 2450 Copenhagen, Denmark)

  • Sanna Syri

    (Department of Mechanical Engineering, School of Engineering, Aalto University, Otakaari 4, 02150 Espoo, Finland)

Abstract

The Nordic power market has exceptionally low carbon emissions. Energy efficient combined heat and power (CHP) plays an important role in the market, and also produces a large share of Nordic district heating (DH) energy. In future Nordic energy systems, DH CHP is often seen as vital for flexibility in electricity production. However, CHP electricity production may not be profitable in the future Nordic market. Even currently, the prevailing trend is for CHP plants to be replaced with heat-only boilers in DH production. In this work, we aim to describe the future utilisation of CHP in the Nordic area. We use an electricity market simulation model to examine the development of the Nordic electricity market until 2030. We examine one main projection of electricity production capacity changes, and based on it we assess scenarios with different electricity demands and CO 2 emission prices. Differences between scenarios are notable: For example, the stalling or increasing of electricity demand from the 2014 level can mean a difference of 15 €/MWh in the average market price of electricity in 2020. The results of this paper underline the importance of considering several alternative future paths of electricity production and consumption when designing new energy policies.

Suggested Citation

  • Kristo Helin & Behnam Zakeri & Sanna Syri, 2018. "Is District Heating Combined Heat and Power at Risk in the Nordic Area?—An Electricity Market Perspective," Energies, MDPI, vol. 11(5), pages 1-19, May.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:5:p:1256-:d:146307
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    Cited by:

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    2. Pylsy, Petri & Lylykangas, Kimmo & Kurnitski, Jarek, 2020. "Buildings’ energy efficiency measures effect on CO2 emissions in combined heating, cooling and electricity production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    3. Pavel Atănăsoae, 2018. "The Operating Strategies of Small-Scale Combined Heat and Power Plants in Liberalized Power Markets," Energies, MDPI, vol. 11(11), pages 1-16, November.
    4. Heng Chen & Zhen Qi & Qiao Chen & Yunyun Wu & Gang Xu & Yongping Yang, 2018. "Modified High Back-Pressure Heating System Integrated with Raw Coal Pre-Drying in Combined Heat and Power Unit," Energies, MDPI, vol. 11(9), pages 1-16, September.
    5. Miguel Gonzalez-Salazar & Thomas Langrock & Christoph Koch & Jana Spieß & Alexander Noack & Markus Witt & Michael Ritzau & Armin Michels, 2020. "Evaluation of Energy Transition Pathways to Phase out Coal for District Heating in Berlin," Energies, MDPI, vol. 13(23), pages 1-27, December.
    6. Stefan Blomqvist & Lina La Fleur & Shahnaz Amiri & Patrik Rohdin & Louise Ödlund (former Trygg), 2019. "The Impact on System Performance When Renovating a Multifamily Building Stock in a District Heated Region," Sustainability, MDPI, vol. 11(8), pages 1-18, April.
    7. Konsta Värri & Sanna Syri, 2019. "The Possible Role of Modular Nuclear Reactors in District Heating: Case Helsinki Region," Energies, MDPI, vol. 12(11), pages 1-24, June.
    8. Møller Sneum, Daniel, 2021. "Barriers to flexibility in the district energy-electricity system interface – A taxonomy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    9. Beiron, Johanna & Göransson, Lisa & Normann, Fredrik & Johnsson, Filip, 2022. "A multiple system level modeling approach to coupled energy markets: Incentives for combined heat and power generation at the plant, city and regional energy system levels," Energy, Elsevier, vol. 254(PB).
    10. Oh, Saesin & Kim, Sang-Kee, 2022. "Impact of heat price regulation on the optimal district heating production mix and its policy implications," Energy, Elsevier, vol. 239(PD).
    11. Yaokui Gao & Yong Hu & Deliang Zeng & Jizhen Liu & Feng Chen, 2018. "Modeling and Control of a Combined Heat and Power Unit with Two-Stage Bypass," Energies, MDPI, vol. 11(6), pages 1-20, May.
    12. Francesco Neirotti & Michel Noussan & Stefano Riverso & Giorgio Manganini, 2019. "Analysis of Different Strategies for Lowering the Operation Temperature in Existing District Heating Networks," Energies, MDPI, vol. 12(2), pages 1-17, January.
    13. Antti Teräsvirta & Sanna Syri & Pauli Hiltunen, 2020. "Small Nuclear Reactor—Nordic District Heating Case Study," Energies, MDPI, vol. 13(15), pages 1-16, July.
    14. Stefan Blomqvist & Shahnaz Amiri & Patrik Rohdin & Louise Ödlund, 2019. "Analyzing the Performance and Control of a Hydronic Pavement System in a District Heating Network," Energies, MDPI, vol. 12(11), pages 1-23, May.

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