Combined heat and power production planning under liberalized market conditions

Abstract This paper presents a methodology for optimization of technological operations in a CHP plant and for simultaneous planning of electricity trading with profit maximization being the objective. A general modelling framework is developed, which is aimed at rapid CHP plant models prototyping using an object-oriented modelling language. The framework consists of two main parts – first-principle models of technological components and a model of trading with standardized power products on power markets. The complexity of models is chosen considering their further implementation within a mixed-integer linear optimization problem. The choice of linear and piece-wise linear problem formulation results from the need of its applicability for practical problem instances, while non-linear descriptions usually involve unacceptable computational times. Using the proposed methodology and general-purpose solver Gurobi, optimal solution for short-term problems (24–48 h) are found within few minutes. In the case of medium- and long-term problems (weeks to months), near optimal solutions (with an error usually under 0.5% and 1.0% respectively) are found within 2 h.