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

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  • Muche, Thomas
  • Höge, Christin
  • Renner, Oliver
  • Pohl, Ralf

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.

Suggested Citation

  • Muche, Thomas & Höge, Christin & Renner, Oliver & Pohl, Ralf, 2016. "Profitability of participation in control reserve market for biomass-fueled combined heat and power plants," Renewable Energy, Elsevier, vol. 90(C), pages 62-76.
    • Handle: RePEc:eee:renene:v:90:y:2016:i:c:p:62-76
    DOI: 10.1016/j.renene.2015.12.051
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    References listed on IDEAS

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    Cited by:

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    2. Kalina, Jacek & Świerzewski, Mateusz, 2019. "Identification of ORC unit operation in biomass-fired cogeneration system," Renewable Energy, Elsevier, vol. 142(C), pages 400-414.
    3. 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).
    4. Markus Fleschutz & Markus Bohlayer & Marco Braun & Michael D. Murphy, 2023. "From prosumer to flexumer: Case study on the value of flexibility in decarbonizing the multi-energy system of a manufacturing company," Papers 2301.07997, arXiv.org.
    5. Hendrik Butemann & Katja Schimmelpfeng, 2020. "Long-term electricity production planning of a flexible biogas plant considering wear and tear," Journal of Business Economics, Springer, vol. 90(9), pages 1289-1313, November.
    6. Banshwar, Anuj & Sharma, Naveen Kumar & Sood, Yog Raj & Shrivastava, Rajnish, 2017. "Market based procurement of energy and ancillary services from Renewable Energy Sources in deregulated environment," Renewable Energy, Elsevier, vol. 101(C), pages 1390-1400.
    7. Sebastiano Patti, 2017. "Circular economy and sharing consumption: Attitudes towards low-carbon tourism," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2017(1-2), pages 219-234.

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