Impact of wind penetration in electricity markets on optimal power-to-heat capacities in a local district heating system

Abstract While the share of intermittent renewable energy sources in a power sector is constantly increasing, demand response technologies are becoming a crucial part of interconnected energy systems. The district heating sector has a great potential of offering such services if power-to-heat and thermal storage technologies are implemented. This is a well-known method of utilizing low-price electricity from the power market. However, power-to-heat optimal supply capacities are rarely studied with respect to different market conditions, especially from the point of view of multi-objective optimization. This paper shows an analysis of the impact of a wind production increase in a power market on optimal power-to-heat capacities in a local district heating system. To obtain these results, a district heating optimization model was developed by using linear programming, while the power market prices reduction is analysed by using historical bidding market data and shifting of the supply curve. The district heating model was created in the open-source and free programming language called Julia. The model was tested on a case study of the Nord Pool electricity market and a numerical example of a district heating system. The main outcome of this research is to show how district heating supply technologies operate in different market conditions and how they affect optimal power-to-heat and thermal storage capacities. Heat pump capacities linearly follow wind production increase in power markets.

[1]  Sanna Syri,et al.  Influence of different technologies on dynamic pricing in district heating systems: Comparative case studies , 2018, Energy.

[2]  Sanna Syri,et al.  Future views on waste heat utilization - case of data centers in Northern Europe , 2016 .

[3]  E. Lazarczyk,et al.  Wind power volatility and its impact on production failures in the Nordic electricity market , 2017 .

[4]  Wen Liu,et al.  The marginal-cost pricing for a competitive wholesale district heating market: A case study in the Netherlands , 2019, Energy.

[5]  Simon Moser,et al.  Designing the Heat Merit Order to determine the value of industrial waste heat for district heating systems , 2020, Energy.

[6]  Annica M. Nilsson,et al.  Do ground source heat pumps challenge the dominant position of district heating in the Swedish heating market? , 2020 .

[7]  Sven Werner.  District Heating and Cooling , 2013 .

[8]  Neven Duić,et al.  Future district heating systems and technologies: On the role of smart energy systems and 4th generation district heating , 2018, Energy.

[9]  Neven Duić,et al.  Economical, environmental and exergetic multi-objective optimization of district heating systems on hourly level for a whole year , 2019, Applied Energy.

[10]  David Watts,et al.  Impacts of wind and solar spatial diversification on its market value: A case study of the Chilean electricity market , 2019, Renewable and Sustainable Energy Reviews.

[11]  David Connolly,et al.  The effect of feed-in-tariff supporting schemes on the viability of a district heating and cooling production system , 2017 .

[12]  Wolfgang Gawlik,et al.  A method for technical assessment of power-to-heat use cases to couple local district heating and electrical distribution grids , 2019, Energy.

[13]  Faidra Filippidou,et al.  Coupling the heating and power sectors: The role of centralised combined heat and power plants and district heat in a European decarbonised power system , 2020 .

[14]  J. Danielewicz,et al.  Trends of European research and development in district heating technologies , 2017 .

[15]  Janusz Skorek,et al.  Energy and economic optimization of the repowering of coal-fired municipal district heating source by a gas turbine , 2017 .

[16]  Björn Felten,et al.  An integrated model of coupled heat and power sectors for large-scale energy system analyses , 2020 .

[17]  Poul Alberg Østergaard,et al.  Reviewing EnergyPLAN simulations and performance indicator applications in EnergyPLAN simulations , 2015 .

[18]  Jianing Zhao,et al.  Effects of the operation regulation modes of district heating system on an integrated heat and power dispatch system for wind power integration , 2018, Applied Energy.

[19]  Brian Vad Mathiesen,et al.  4th Generation District Heating (4GDH) Integrating smart thermal grids into future sustainable energy systems , 2014 .

[20]  Seppo Junnila,et al.  Introducing modern heat pumps to existing district heating systems – Global lessons from viable decarbonizing of district heating in Finland , 2019, Energy.

[21]  Anders N. Andersen,et al.  Economic feasibility of booster heat pumps in heat pump-based district heating systems , 2018, Energy.

[22]  Erik Dotzauer,et al.  Potential for district heating to lower peak electricity demand in a medium-size municipality in Sweden , 2018, Journal of Cleaner Production.

[23]  Kenneth Van den Bergh,et al.  Cycling of conventional power plants: technical limits and actual costs , 2015 .

[24]  Meysam Doostizadeh,et al.  Multi-area market clearing in wind-integrated interconnected power systems: A fast parallel decentralized method , 2016 .

[25]  Chresten Træholt,et al.  Investigation of real-time flexibility of combined heat and power plants in district heating applications , 2019, Applied Energy.

[26]  N. Duić,et al.  Multi-objective optimization of district heating and cooling systems for a one-year time horizon , 2019, Energy.

[27]  Peter Sorknæs,et al.  Quantifying the influence of wind power and photovoltaic on future electricity market prices , 2019, Energy Conversion and Management.

[28]  Abhijit R. Abhyankar,et al.  Optimum day-ahead clearing of energy and reserve markets with wind power generation using anticipated real-time adjustment costs , 2015 .

[29]  Brian Vad Mathiesen,et al.  The role of district heating in future renewable energy systems , 2010 .

[30]  Steven Beyerlein,et al.  Review of district heating and cooling systems for a sustainable future , 2017 .

[31]  Roberto Fedrizzi,et al.  5th generation district heating and cooling systems: A review of existing cases in Europe , 2019, Renewable and Sustainable Energy Reviews.

[32]  J. Z. Thellufsen,et al.  The electricity market in a renewable energy system , 2018, Energy.

[33]  J. Karl,et al.  The impact of renewables on electricity prices in Germany – An estimation based on historic spot prices in the years 2011–2013 , 2016 .

[34]  F. Haghighat,et al.  Integration of storage and renewable energy into district heating systems: A review of modelling and optimization , 2016 .

[35]  Y. Hayashi,et al.  Electricity adjustment for capacity market auction by a district heating and cooling system , 2017 .

[36]  Ahmad Arabkoohsar,et al.  Thermodynamic analysis of ultralow-temperature district heating system with shared power heat pumps and triple-pipes , 2020 .

[37]  Krzysztof Klobut,et al.  Future Services for District Heating Solutions in Residential Districts , 2014 .

[38]  Neven Duić,et al.  Hourly optimization and sizing of district heating systems considering building refurbishment – Case study for the city of Zagreb , 2017 .

[39]  Gong Li,et al.  Agent-based modeling for trading wind power with uncertainty in the day-ahead wholesale electricity markets of single-sided auctions , 2012 .

[40]  Jianzhong Wu,et al.  Energy consumption and economic analyses of a district heating network , 2013 .

[41]  Fabian Levihn,et al.  CHP and heat pumps to balance renewable power production: Lessons from the district heating network in Stockholm , 2017 .

[42]  A. Niromandfam,et al.  Modeling demand response based on utility function considering wind profit maximization in the day-ahead market , 2020 .

[43]  Fredrik Wallin,et al.  Towards smart thermal grids: Techno-economic feasibility of commercial heat-to-power technologies for district heating , 2018, Applied Energy.

[44]  Iva Ridjan Skov,et al.  Smart Energy Markets - Future electricity, gas and heating markets , 2020 .

[45]  Neven Duić,et al.  Performance Analysis of a Hybrid District Heating System: A Case Study of a Small Town in Croatia , 2015 .

[46]  Erik Trømborg,et al.  Energy system impacts of grid tariff structures for flexible power-to-district heat , 2019, Energy.

[47]  Anders N. Andersen,et al.  Booster heat pumps and central heat pumps in district heating , 2016 .

[48]  Goran Krajačić,et al.  Long-term energy planning of Croatian power system using multi-objective optimization with focus on renewable energy and integration of electric vehicles , 2016 .

[49]  Jan Jantzen,et al.  Business and socioeconomic assessment of introducing heat pumps with heat storage in small-scale district heating systems , 2019, Renewable Energy.

[50]  Christian Blume,et al.  Pareto Optimization or Cascaded Weighted Sum: A Comparison of Concepts , 2014, Algorithms.

[51]  Lakshmi Chinmoy,et al.  Modeling wind power investments, policies and social benefits for deregulated electricity market – A review , 2019, Applied Energy.

[52]  Thomas Bruckner,et al.  Control power provision with power-to-heat plants in systems with high shares of renewable energy sources – An illustrative analysis for Germany based on the use of electric boilers in district heating grids , 2015 .

[53]  Daniele Basciotti,et al.  Electricity market options for heat pumps in rural district heating networks in Austria , 2020, Energy.

[54]  Chen Lei,et al.  Power and energy flexibility of district heating system and its application in wide-area power and heat dispatch , 2020 .

[55]  Shuli Liu,et al.  A state of art review on the district heating systems , 2018, Renewable and Sustainable Energy Reviews.

[56]  Jinfu Zheng,et al.  Optimizing for clean-heating improvements in a district energy system with high penetration of wind power , 2019, Energy.

[57]  Dan Wang,et al.  Integrated demand response in district electricity-heating network considering double auction retail energy market based on demand-side energy stations , 2019, Applied Energy.

[58]  Mei Gong,et al.  Large heat pumps in Swedish district heating systems , 2017 .

[59]  Morteza Nazari-Heris,et al.  Evaluating the impact of multi-carrier energy storage systems in optimal operation of integrated electricity, gas and district heating networks , 2020, Applied Thermal Engineering.

[60]  Felipe Isaza Cuervo,et al.  Wind power reliability valuation in a Hydro-Dominated power market: The Colombian case , 2016 .

[61]  S. Mosquera-López,et al.  Drivers of electricity price dynamics: Comparative analysis of spot and futures markets , 2019, Energy Policy.

[62]  Chenghui Zhang,et al.  Multi-objective optimal operation and energy coupling analysis of combined cooling and heating system , 2016 .

[63]  Armin Schnettler,et al.  Multi-objective optimization and simulation model for the design of distributed energy systems , 2016 .

[64]  Dagnija Blumberga,et al.  Solar power in district heating. P2H flexibility concept , 2019, Energy.

[65]  Jon Olauson,et al.  Can electricity market prices control power-to-heat production for peak shaving of renewable power generation? The case of Sweden , 2019, Energy.

[66]  Peter Sorknæs,et al.  Balancing Europe: Can district heating affect the flexibility potential of Norwegian hydropower resources? , 2019, Renewable Energy.

[67]  R. Bavière,et al.  Storage influence in a combined biomass and power-to-heat district heating production plant , 2019, Energy.

[68]  Gottfried Weinberger,et al.  Increased cogeneration of renewable electricity through energy cooperation in a Swedish district heating system - A case study , 2018 .