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Page 1: A Hybrid Optimization Model of Biomass Trigeneration ...orbit.dtu.dk/files/125526085/A_hybrid_optimization_model_of... · 1 A hybrid optimization model of biomass trigeneration system

General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.

Users may download and print one copy of any publication from the public portal for the purpose of private study or research.

You may not further distribute the material or use it for any profit-making activity or commercial gain

You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.

Downloaded from orbit.dtu.dk on: Oct 24, 2020

A Hybrid Optimization Model of Biomass Trigeneration System Combined with PitThermal Energy Storage

Dominkovic, Dominik Franjo; Cosic, B.; Bacelic Medic, Z.; Duic, N.

Published in:Energy Conversion and Management

Link to article, DOI:10.1016/j.enconman.2015.03.056

Publication date:2015

Document VersionPeer reviewed version

Link back to DTU Orbit

Citation (APA):Dominkovic, D. F., Cosic, B., Bacelic Medic, Z., & Duic, N. (2015). A Hybrid Optimization Model of BiomassTrigeneration System Combined with Pit Thermal Energy Storage. Energy Conversion and Management, 104,90-99. https://doi.org/10.1016/j.enconman.2015.03.056

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1

A hybrid optimization model of biomass trigeneration system combined 1

with pit thermal energy storage 2

3

D. F. Dominković 4

Faculty of Mechanical Engineering and Naval Architecture 5

University of Zagreb, Zagreb, Croatia 6

e-mail: [email protected] 7

8

B. Ćosić* 9

Faculty of Mechanical Engineering and Naval Architecture 10

University of Zagreb, Zagreb, Croatia 11

e-mail: [email protected] 12

address: I. Lučića 5, 10 000 Zagreb, Croatia 13

phone number: +385 98 168 81 49 14

15

Z. Bačelić Medić 16

iC artprojekt ltd, Croatia 17

Varaždin, Zagreb, Croatia 18

e-mail: [email protected] 19

20

N. Duić 21

Faculty of Mechanical Engineering and Naval Architecture 22

University of Zagreb, Zagreb, Croatia 23

e-mail: [email protected] 24

25

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ABSTRACT 26

27

This paper provides a solution for managing excess heat production in trigeneration and thus, 28

increases the power plant yearly efficiency. An optimization model for combining biomass 29

trigeneration energy system and pit thermal energy storage has been developed. Furthermore, 30

double piping district heating and cooling network in the residential area without industry 31

consumers was assumed, thus allowing simultaneous flow of the heating and cooling energy. 32

As a consequence, the model is easy to adopt in different regions. Degree-hour method was 33

used for calculation of hourly heating and cooling energy demand. The system covers all the 34

yearly heating and cooling energy needs, while it is assumed that all the electricity can be 35

transferred to the grid due to its renewable origin. The system was modelled in Matlab© on 36

hourly basis and hybrid optimization model was used to maximize the net present value 37

(NPV), which was the objective function of the optimization. Economic figures become 38

favourable if the economy-of-scale of both power plant and pit thermal energy storage can be 39

utilized. The results show that the pit thermal energy storage was an excellent option for 40

storing energy and shaving peaks in energy demand. Finally, possible switch from feed-in 41

tariffs to feed-in premiums was assessed and possible subsidy savings have been calculated. 42

The savings are potentially large and can be used for supporting other renewable energy 43

projects. 44

45

Keywords: trigeneration, seasonal storage, optimization, biomass, feed-in tariff, feed-in 46

premium 47

48

49

50

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51

1. INTRODUCTION 52

53

Worldwide demand for energy is increasing; as a consequence fossil fuel resources are 54

becoming more and more expensive, in the same time making renewable energy resources 55

more competitive. The European Union has adopted 20-20-20 targets until 2020, which 56

means increased energy efficiency by 20%, reduced greenhouse gas emissions by 20% and 57

reaching a 20% share of renewable in total energy generation [1]. In the EU’s 2030 58

framework for climate and energy policies presented in January 2014, continuing progress 59

towards a low-carbon economy is expected [2]. The most important objective by 2030 is to 60

reduce the greenhouse gas emissions by 40% below the 1990 level, while increasing the 61

renewable energy share to at least 27%. In order to achieve this target, improvements in the 62

energy efficiency are needed. 63

64

One good example in improving energy efficiency throughout the year is combined 65

production of electricity, heating and cooling energy in trigeneration [3]. At the same time, 66

using biomass as a fuel for the trigeneration power plant increases the renewable energy share 67

in the overall production mix. Rentizelas et al. [4] provide an optimization model for energy 68

supply based on multi-biomass trigeneration, covering peak demand with a biomass boiler. 69

Puig-Arnavat et al. [5] assessed different trigeneration configurations based on biomass 70

gasification. A Borsukiewicz-Godzur et al. [6] calculated results for three variants of 71

combined heat and power (CHP) biomass plants. A techno-economic assessment of biomass 72

fuelled trigeneration system was made by Huang et al. [7]. Recently, Wang et al. [8] 73

published a paper dealing with multi-objective optimization of a combined cooling, heating 74

and power system driven by solar energy. Zhao et al. [9] analyzed the energy efficiency level 75

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for a station in China, which uses a trigeneration system. Although this is still a small-scale 76

trigeneration system, used for a single building, interesting economic figures have been 77

achieved, i.e. simple pay-back time of the additional investment was 5.47 years. There are 78

also papers dealing with micro-trigeneration system such as Angrisani et al. [10], where a 79

trigeneration system on a small-scale is assessed. Nevertheless, Kilkiş [11] developed a model 80

for the net-zero exergy district development for a city in Sweden, which among other units 81

includes a CHP plant with district heating and cooling system. 82

83

In the simultaneous generation of electricity, heating and cooling energy, the system should 84

be optimized to follow heating energy demand in order to achieve maximum efficiency of the 85

useful energy being utilized. Please note here that due to the renewable nature of the biomass 86

being considered, electricity generated has preference when supplying to the grid and thus, it 87

is considered that all the electricity can be transferred to the grid at anytime. On the other 88

hand, the feed-in-tariff for electricity is the most important income for investors in 89

trigeneration power plant. In order to be eligible to receive feed-in-tariff, minimum overall 90

yearly power plant efficiency has to be reached. One way of achieving high, relatively 91

constant heat demand is to use dryers for reducing the moisture content in biomass. Currently, 92

legislation in Croatia allows this, but it is questionable if it will be allowed in the future as it is 93

not the most efficient way of using the heat energy. According to Härkönen [12], after 94

reaching the equilibrium moisture, which will happen naturally, after a required period of time 95

when exposed to the outside air, heat of desorption increases linearly as the moisture content 96

is getting lower. The biomass in Croatia is delivered to the power plant with up to 30% of 97

moisture, after which the heat needed for drying biomass increases significantly by reducing 98

the moisture content in biomass. Moreover, the increased size of wood significantly increases 99

energy consumption in dryers and drying can become unprofitable as shown by 100

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Gebreegziabher et al. [13]. Thus, the drying will not be considered as an option to utilize heat 101

in this paper. As a consequence of not having a constant heat consumer, seasonal thermal 102

energy storage will be incorporated in the optimization model in order to deal with the peak 103

demand, as well as with large differences in heating and cooling energy demand throughout 104

the seasons. 105

106

Currently in Croatia, for the system being assessed, only feed-in tariffs for cogeneration 107

power plants or biomass electric power plants would be applicable, while the feed-in tariffs 108

for trigeneration systems do not exist. Both options are at the same level for the capacities 109

being considered in this paper. However, feed-in-tariff for the pit thermal energy storage 110

(PTES) would be of great significance for the economic feasibility of investment. Krajačić et 111

al. [14] provided an overview of potential feed-in-tariffs for different energy storage 112

technologies. For the system being assessed, the triple tariff, as discussed in Lund and 113

Andersen [15], would be significantly supportive towards the economic viability of the 114

chosen system. Furthermore, neither a feed-in-tariff for district heating and cooling network is 115

available in Croatia. As shown in Rezaie and Rosen [16], district heating in densely populated 116

regions would be a favourable investment compared to low-density residential areas. 117

However, in this case study, a neighbourhood consisting of family houses was considered. 118

119

Nevertheless, the importance of seasonal heat storage in a future sustainable energy system in 120

Croatia was assessed by Krajačić et al. [17]. Without seasonal heat storage, critical excess in 121

electricity production, as well as intermittency of wind power plants production, will be 122

difficult to deal with. 123

124

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Up to now, most papers have dealt with the solar thermal energy coupled with the seasonal 125

energy storage [18-22]. Raine et al. [23] optimized combined heat and power production for 126

buildings using a heat storage. However, storage volumes in two different scenarios had 127

volumes of only 600 m3 and 350 m

3. Thus, these were not large-scale seasonal storages. 128

Rezaie et al. [24] assessed exergy and energy efficiencies of a seasonal hot water storage 129

combined with solar collectors and boilers. When there is no instant need for heating energy, 130

it can be stored in the large-scale pit thermal energy storage and used later when there will be 131

need for the heating energy. In Mangold [25], it is shown that the economy-of-scale is 132

significant till water storage volumes of 50,000 m3. Moreover, according to Energo 133

Styrelsen’s publication [26], the economy-of-scale for the low capacity range is quite 134

considerable. 135

136

The novel approach in this paper is a combination of large scale seasonal pit thermal energy 137

storage and biomass trigeneration power plant. The model will be developed in order to make 138

the most of economy-of-scale. Moreover, in order to develop the model which can be easily 139

replicated, only residential buildings will be considered as heat consumers. From the demand 140

side point of view this is the worst case for covering the heating and cooling load throughout 141

the year as there is no constant need for heating or cooling energy. 142

143

Furthermore, the guidance for the design of renewables’ support schemes [27] has been issued 144

by the European Commission. Feed-in-premiums, variable or fixed, were given preference 145

over feed-in-tariffs. Under the feed-in tariff, power plants do not trade any electricity on the 146

market; they rather receive a fixed amount of subsidy per energy unit of generated electricity. 147

On the other hand, under both variable and fixed feed-in premiums, power plant trades the 148

electricity generated on the market, on top of which it receives a premium, which should 149

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fairly compensate the costs of generating the energy from the renewable energy sources. In 150

the case of fixed feed-in premium, there is a larger risk placed on an investor, as the amount 151

of subsidy on top of the market price is fixed. In the case of variable feed-in premium, a lower 152

risk is imposed on the investor as the total amount of income per unit of energy generated is 153

guaranteed to the investor and known in advance. Variable premium changes as the price on 154

the market changes, keeping the total income per unit of energy generated constant. In both 155

variable and fixed premiums, one part of the income for the investor is received from the 156

market, reducing the total subsidy needed to be paid off by the governmental body or agency. 157

158

As Croatia has implemented feed-in-tariffs as a renewables’ support scheme, this paper will 159

also estimate levels at which feed-in-premiums, both variable and fixed, should be set to in 160

order to replace the current mechanism. At the end of 2013, seven countries in the EU28 were 161

using feed-in premiums or combination of feed-in premiums and other supporting schemes 162

[28]. Other common supporting schemes are green certificates and tenders. So far, feed-in 163

systems proved to be more efficient than the green certificates [29]. Potential savings in 164

expenditure on subsidies by the government, by adopting feed-in premiums, were assessed, 165

too. 166

2. METHODOLOGY 167

2.1. Problem definition 168

169

An investor who decides to invest funds wants to maximize profit. In a trigeneration power 170

plant the crucial role for maximizing income is the generated electricity sold at a price set by a 171

feed-in-tariff. Consequently, the best way to maximize profit would be to produce as much 172

electricity as possible. On the other hand, technically, the system is driven by heat demand in 173

order to maximize efficiency. In order to satisfy both economic and technical targets, the 174

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feed-in-tariff eligibility is usually constrained by a minimum overall efficiency of the power 175

plant. In Croatia, the minimum average yearly efficiency needs to be above 50% [30] in order 176

to receive the maximum feed in tariff, while some other examples include Austria (60%), 177

Greece (65%) and Ireland (70%) [31]. Taking this into account, the model is possible to be 178

adopted and used in many European countries. In order to have a constant electricity 179

production, while still having an overall efficiency above the minimum allowed level, a 180

relatively constant heat demand is needed. However, as it is shown that the heat demand has a 181

strong seasonal pattern, especially in housing dwellings [32] and [33], there is a need to 182

develop a model which will offset high seasonality. Thus, the scope of this paper is to answer 183

the research question: “How should a district heating and cooling (DHC) system, including a 184

biomass fired CHP plant, absorption chillers and a PTES, be dimensioned in order to 185

maximize the NPV depending on system efficiency requirements for feed-in tariff 186

eligibility?”. 187

188

The system efficiency is defined by the ratio of usefully delivered energy and the total fuel 189

consumption (in this case biomass). Term usefully delivered energy covers all the electricity 190

delivered to the electrical grid, no matter what the demand for the electricity in the specific 191

area is, and heating and cooling energy consumed by the end-consumers (households). 192

Consequently, heat stored in the thermal energy storage and later used by the consumers is 193

considered as a usefully delivered energy. 194

2.2. Model description 195

196

The model optimizes the sizes of the seasonal thermal storage, the biomass power plant and 197

the absorption units which are subject to different constraints. The decision maker can set the 198

targeted overall efficiency of the power plant. The first target of the system is to fully cover 199

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the heating and cooling energy demand. As a consequence, seasonal energy storage, besides 200

storing energy in periods with lower demand, shaves peaks in heating energy demand for 201

periods with higher demand, which usually occur during the winter season. This means that a 202

peak boiler is not necessary in the system. It is assumed that all the electricity produced in the 203

power plant can be sold to the network for the price specified by the feed-in-tariff. The 204

produced heat can be used for district heating, district cooling by using absorbers, or stored in 205

the energy storage. The three main system components are the biomass power plant, absorbers 206

and the seasonal pit thermal energy storage (PTES). 207

208

209

Figure 1. The scheme of the modelled system 210

211

The interactions within the systems can be easily understood by studying the following logic 212

tree: 213

214

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215

Figure 2. A logic tree representation of the decisions made by the technological system 216

217

To sum up, the system presented will cover all the heating and cooling energy demand by the 218

consumers in the considered area, as well as produce a significant amount of electricity, 219

which will be transferred to the electrical grid, no matter what the generation amount equals 220

to. 221

2.3. Biomass power plant 222

223

The biomass power plant size is calculated, taking into account the heating and cooling 224

demand. As the model is heat driven, the electricity generating capacity follows the heat 225

consumption throughout the year. As an average biomass power plant has the availability of 226

approximately 90%, the model calculates the part of the year with the lowest energy demand 227

where the biomass power plant is shut down for maintenance. During this period the 228

heating/cooling demand is completely covered by the seasonal energy storage. 229

2.4. Heating and cooling demand 230

231

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Heating and cooling demand are calculated by using degree hours, based on hourly 232

temperatures valid for the considered location. Yearly heating and cooling energy 233

consumption per m2 has to be assumed by the decision maker for the specific location. The 234

district heating and cooling network consist of double piping each, thus, allowing 235

simultaneous cooling and heating energy flow. This is of great importance during the summer, 236

when the demand for cooling energy exists due to high temperatures, as well as for the 237

heating energy for the domestic hot water (DHW) preparation. Moreover, this also allows the 238

model to be adopted by industrial consumers, as it is possible to provide both heating and 239

cooling energy simultaneously. 240

241

Calculated total heating energy for space heating, DHW preparation, as well as the cooling 242

energy demand is shown in Figure 3. The DHW distribution has been adopted from the 243

ASHRAE standard [34]. 244

245

246 247

Figure 3. Heating and cooling energy demand for the city of Osijek 248

249

0

5000

10000

15000

20000

25000

30000

1

25

9

51

7

77

5

10

33

12

91

15

49

18

07

20

65

23

23

25

81

28

39

30

97

33

55

36

13

38

71

41

29

43

87

46

45

49

03

51

61

54

19

56

77

59

35

61

93

64

51

67

09

69

67

72

25

74

83

77

41

79

99

82

57

85

15

kW

hour DHW demand Heating energy demand Cooling energy demand

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2.5. Absorbers 250

251

Absorbers in the system are driven by the heat generated from the biomass power plant. They 252

can be driven directly by the produced heat in power plant or by the heat stored in the 253

seasonal energy storage. Absorbers were preferred, compared to adsorbers, because they have 254

a lower investment cost. As it is predicted that the water in the seasonal storage will be stored 255

with temperatures between 85oC and 90

oC, the predicted LiBr-H2O single effect absorbers are 256

able to work properly [35] and [36]. 257

2.6. Seasonal energy storage 258

259

Pit thermal energy storage (PTES) was chosen for the seasonal heat energy storage mostly 260

due to low investment cost. Water as a storage media is a well-developed solution and so far, 261

the only mature technology for large volume storages. According to [37], PTES are the largest 262

thermal energy storages being built. Typical efficiency of such storage is between 80% and 263

95%, depending on the temperature level in the storage [26]. As economy-of-scale after 264

volume of 50,000 m3 does not apply, it is possible to build a few PTES instead of one if the 265

storage volume in the model becomes very large. 266

267

The average yearly efficiency of the seasonal thermal energy storage in this model is set to 268

80% and is independent of the time that the heat is stored. This simplification is valid as the 269

seasonal storage is mostly used for the storage of the heat during the longer period of time, 270

which can be used as a reference for calculating the average efficiency of the storage. 271

Moreover, for such large capacities, as it is the case with this model, the surface-to-volume 272

ratio declines rapidly, which significantly reduces a heat exchange surface on the walls of the 273

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storage. Thus, picking a lower average efficiency from the efficiency span reported in the 274

literature [26] is a valid assumption. 275

3. OPTIMIZATION MODEL 276

3.1. Optimization variables 277

278

Three independent variables determined by the optimization model are: 279

elP - electricity generating capacity of the biomass trigeneration power plant in kWe. 280

The heat capacity ( elP ) is proportional to the electricity generating capacity, following 281

assumed fixed heat-to-power ratio. 282

VS - volume of the storage in m3 283

AP - capacity of the absorber unit(s) in kW 284

285

3.2. Objective function 286

287

Maximizing net present value for the project lifetime, during which feed-in-tariff is assumed 288

as guaranteed, was the objective in the optimization model. Although a biomass power plant 289

has a much longer lifetime, this assumption was introduced in order to reduce vagueness 290

about the future electricity price predictions. The optimization model also calculates the 291

internal rate of return (IRR) and the simple pay-back period in order to provide enough inputs 292

for the decision making process. The NPV function is: 293

294

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, , , ,

h c el OM Bf OM Bv OM DHCn OM S fB

B A DHCN S

NPV I I I E E E E E D

Inv Inv Inv Inv

( 1 ) 295

296

where all the future annual income and expenditure values are multiplied by a discount 297

coefficient D: 298

299

1

1t

Di

( 2 ) 300

301

where i is the discount rate and t is the project lifetime. 302

3.2.1. Income 303

304

There are three income items in the model; revenues from electricity, heating and cooling 305

energy sales. As the power plant needs to satisfy all the need for heating and cooling energy, 306

it can be assumed that all the heating and cooling energy need for the district considered is 307

sold from this power plant. Income from the heat sales during the one year Ih equals: 308

309

8760

1

h P j

j

I h h

( 3 ) 310

311

where hP is the price of kWh of heat, hj is the hourly value of heat demand (kWh) throughout 312

the year. 313

314

Ic is the income from the sales of cooling energy: 315

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316

8760

1

c P j

j

I C c

( 4 ) 317

318

where CP is the price of kWh of the cooling energy and cj is the hourly value of the cooling 319

demand (kWh) throughout the year. 320

321

Iel is the income from the sales of electricity: 322

323

8760

1

el P j pp

j

I E e e

( 5 ) 324

325

where EP is the price of kWh of electricity, ej is the hourly value of electricity production 326

(kWh) and epp is the power plant's own electricity consumption throughout the year. 327

3.2.2. Expenditure 328

329

There are five expenditure items; fixed and variable operating and maintenance cost of the 330

biomass power plant, operating costs of district heating and cooling network and thermal 331

energy storage and cost of fuel, which is biomass in this case. 332

333

,OM BvE is the expenditure on variable O&M: 334

335

8760

,

1

OM Bv j

j

E V e

( 6 ) 336

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337

where V is the variable cost of O&M (€/kWhe). 338

339

,OM BfE is the expenditure following fixed O&M cost: 340

341

,OM Bf elE F P ( 7 ) 342

343

where F is the fixed yearly O&M cost (€/kWe). 344

345

,OM DHCnE is the O&M cost of district heating and cooling network: 346

347

,OM DHCnE Z N ( 8 ) 348

349

where Z is the number of dwellings in a district considered and N is the cost of yearly network 350

maintenance (€/dwelling). 351

352

,OM SE is the O&M cost of storage: 353

354

,OM S VE U S ( 9 ) 355

356

where U is the O&M price of the yearly storage maintenance (€/m3). 357

358

fBE is the expenditure on fuel (biomass): 359

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360

8760

1

1 1fB j

jd el

E B eh

( 10 ) 361

362

where B is the price of biomass (€/ton), hd is the lower calorific value of biomass (kWh/ton) 363

and ηel is the electrical efficiency of the power plant. 364

3.2.3. Investment 365

366

The overall investment consists of four parts; investment in the biomass power plant, in 367

absorption chillers, in district heating and cooling networks and in the pit thermal energy 368

storage. Investment in the biomass power plant BInv is calculated as follows: 369

370

B inv elInv B P ( 11 ) 371

372

where invB is the price of investment per power plant capacity (€/kWel). 373

374

AInv is the price of investment in absorption chillers: 375

376

1A inv peakInv A C

COP ( 12 ) 377

378

where invA is the price of investment per absorption capacity (€/kW), peakC is the peak 379

demand for cooling energy (kW) and COP is the coefficient of performance of the absorption 380

units. As mentioned before, the model predicted that all the cooling energy needs to be 381

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satisfied from this power plant, thus the needed capacity of absorption units is equal to peak 382

cooling demand divided by the coefficient of performance, which was set in this model to 0.7. 383

384

Investment in the district heating and cooling network DHCNInv is calculated as follows: 385

386

DHCN invInv N Z ( 13 ) 387

388

where invN is the investment per dwelling (€/dwelling). In this model invN was used from Ref. 389

[38]. 390

391

Investment in the pit thermal energy storage SInv : 392

393

S inv VInv S S ( 14 ) 394

395

where invS is the price of storage investment (€/m3), which was implemented in this model 396

from Ref. [26]. 397

3.3. Constraints 398

399

The heat demand in every hour j throughout the year needs to be covered, either by biomass 400

power plant production, by heat stored in PTES, or by both sources of heat: 401

402

, ,VB j S j jh h h ( 15 ) 403

404

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where ,B jh is the hourly heat production in the biomass power plant and

,VS jh is the heat taken 405

from PTES on an hourly basis. 406

407

Heat used in the absorption units needs to cover the cooling demand in every hour j 408

throughout the year: 409

410

, ,

1VB j S j jh h c

COP ( 16 ) 411

412

The sum of the heat production capacity of the biomass power plant and the heat from the 413

storage that can be taken has to be larger or equal to peak heat demand: 414

415

1

3600el V w p S peakP HTP S c T h ( 17 ) 416

417

where HTP is the heat-to-power ratio, w is the density of water (kg/m3),

pc is the specific 418

heat capacity of water (kJ/(kgK)), T is the difference in temperature of stored water and the 419

design temperature of the dwellings’ heating systems (K), S is the efficiency of the PTES 420

and peakh is the peak heat demand (kW). 421

422

The cooling energy peak demand needs to be covered in the same manner as the heating 423

energy peak demand: 424

425

1

3600el V w p S peakP HTP COP S c T COP c ( 18 ) 426

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427

Storage volume size has to be able to store all the heating energy which needs to be taken at 428

certain time from the PTES: 429

430

,

1 1 1 13600

VS sum V

p S

h Sc T

( 19 ) 431

432

where ,VS sumh is the sum of heating energy which needs to be taken from the storage in the 433

longest period of time where average biomass heat production rate is lower than heat demand 434

(under the term “heat demand”, “cooling energy demand” is also assumed, which is the same 435

in this model except COP coefficient which needs to be taken into account). 436

437

18760el av X

el

e h P B

( 20 ) 438

439

where e and h present the produced electricity and heat demand during one year of power 440

plant operation, el is the electrical efficiency of the power plant, avB is the availability of the 441

biomass power plant and X is the minimum overall efficiency power plant needs to have to 442

be eligible to receive subsidy. 443

3.4. Optimization method 444

445

A hybrid optimization method was used to optimize this problem. As this is a non-linear 446

problem, a Genetic Algorithm and fmincon were used in Matlab©. The Genetic Algorithm 447

has been recently applied in several papers for the optimization of the energy systems, such as 448

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in optimization of low-temperature district heating network [39]. It is a useful optimization 449

method, which approaches to a global optimum very fast because it generates a population of 450

points at each iteration, instead of a single point at each iteration in a classical algorithm [40]. 451

However, it converges relatively slowly when it reaches a solution close to the global 452

optimum. Thus, after Genetic Algorithm, fmincon starts and finds a minimum of the 453

constrained nonlinear multivariable function [40]. However, fmincon needs to have a good 454

initial point in order to end up in the global optimum instead of a local optimum. Thus, hybrid 455

programming optimization method has proven to be very effective for this type of problem. 456

4. CASE STUDY: the City of Osijek 457

458

The model was applied to a district in the city of Osijek. Osijek is one of the four largest cities 459

in Croatia. 2000 dwellings with 200 m2, with an average spacing of 10 meters between each 460

of them were assumed. In Croatia, the yearly average heating energy consumption is rather 461

high and 160 kWh/m2 of heating energy per annum was assumed. In order to be eligible for 462

the feed-in support, in Croatia, overall yearly efficiency of the power plant has to be above 463

50% [30]. Biomass moisture is considered to be relatively constant at 30% as this is the usual 464

case in Croatia. Input data for the case study are presented in Table 1. 465

466

467

468

469

470

471

472

473

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Table 1. List of data used in case study 474

475

amount unit ref.

Power plant availability 0.9 [26]

Biomass price 38.5 €/ton [41]

Lower calorific value (30%

moisture)

3,500 kWh/ton [42]

η power plant total 0.89 [26]

ηel 0.3 [26]

HTP ratio 1.97 [26]

η storage 0.8 [26]

Storage temperature 90 oC [26]

invB 3,600 €/kWe [26]

invA 400 €/kW [43]

invN 8,150 €/dwelling [38]

invS 56 €/m3 [44]

Plant own electricity

consumption

6%

Discount rate 7%

Feed-in-tariff 0.156 €/kWhe [30]

COP 0.7 [43]

Design temperature for heating 21 oC

Design temperature for cooling 26 oC

F 29 €/kW per annum [26]

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V 0.0039 €/kWh [26]

N 75 €/dwelling per annum [38]

U 0.39 €/m3 per annum [26]

Ph 0.0198 €/kWh

PC 0.0198 €/kWh

Project lifetime 14 years

476

Three case studies were conducted, with minimum yearly average power plant efficiencies of 477

50%, 65% and 75%, respectively. The first number was chosen in order to represent a current 478

situation in Croatia, where the minimum yearly efficiency needed, in order to be eligible for 479

the maximum feed-in tariff is more than 50%. The 65% efficiency was chosen in order to 480

represent the situation where the efficiency level currently used in Greece would be adapted 481

to the Croatian system. The last efficiency, amounting to 75%, was chosen in order to 482

represent a possible future stringent measures adopted in order to reduce inefficient use of 483

energy even more. A sensitivity analyses were performed and the influence of the biomass 484

price on overall results was investigated. The second parameter that was checked in the 485

sensitivity analyses was the reduced heat and cooling demand due to increased thermal energy 486

savings which resulted after applying a better insulation. Many programs of improving 487

insulation properties are being carried out in Croatia, where the government supports the 488

investment up to 47% [45]. Thus, in this case a shift from energy class E to energy class C 489

was assumed. 490

5. RESULTS AND DISCUSSION 491

5.1. Case study 1 492

493

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In this case study, with the minimum yearly power plant efficiency of 50%, all economic 494

indicators are good and this investment would be profitable for the investor. The NPV equals 495

to 39,630,000 €, IRR is 15.0% and the simple pay-back time is 5.72 years. Optimal capacity 496

of the power plant is 14,675 kWe. The results would be even better if a higher heat price could 497

be achieved, but it was decided to use the cheaper than best alternative approach in order to be 498

certain that customers would shift to a new heat supply option. The storage size in this case 499

would be 30,350 m3. The heat from the storage in this case is only used during the time when 500

the biomass power plant is not producing heat due to regular yearly maintenance work. In 501

Figure 4 the use of storage for peak energy demand can be seen. 502

503

504

Figure 4. Operation of the system in the case study 1 505

506

One could argue here that the PTES is not a necessary component of the system, since it is 507

rarely used. A possible substitute could be a small back-up hot water boiler. However, this is 508

not the case as it can be seen from the calculation in the Table 2. It is important to keep in 509

mind that the heating energy stored in the PTES and later used by the consumers is considered 510

as usefully delivered energy by the cogeneration plant system. If the small back-up boiler 511

would be used instead of the seasonal storage, the amount of heat used from PTES now would 512

0

500

1.000

1.500

2.000

2.500

3.000

3.500

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

13

46

69

11

03

61

38

11

72

62

07

12

41

62

76

13

10

63

45

13

79

64

14

14

48

64

83

15

17

65

52

15

86

66

21

16

55

66

90

17

24

67

59

17

93

68

28

18

62

6

MW

h

kWh

hour

Electricity production [kWh] Heating energy production [kWh]

Absorption units production [kWh] Storage energy content [MWh]

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be released into the air. Thus, the total yearly efficiency, calculated as explained in the section 513

2.1., would drop below 50%. In order to tackle this issue, the cogeneration plant should be 514

resized and lower its capacity in order to stay above the efficiency requirements for the feed-515

in tariff eligibility. 516

517

Table 2. Comparison of the two technologies in the district heating system 518

Peak

biomass

boiler

PTES

Efficiency 0.97 0.8

Investment 100 €/kW 56 €/m3 €/kW

Maximum load 7,873 7,873 kW

Total heat needed 2,397,000 2,397,000 kWh

Calorific value of the wood 3,500 - kWh/t

Wood needed 706 - t

Price of fuel 39 - €/t

Total cost of fuel 27,182 - €/year

Total investment cost 787,330 1,699,600 €

Variable cost 27,557 11,836 €/year

Yearly amortization of investment 56,238 121,400

Yearly cost (including amortized

investment) 110,977 133236

€/year

Avoided income of feed in tariff 93,714 - €/year

Savings using the PTES instead of peak

boiler

71,455 €/year

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519

As it can be seen from the table, although running the biomass boiler instead of PTES, in the 520

case with the minimum yearly efficiency of 50%, is cheaper from the investment point of 521

view, the option with the PTES is a better choice in the system organized in this way, as it 522

enables the larger capacity of the cogeneration power plant to be installed in the first place, 523

which contributes to the better economic indicators in overall. Increasing the minimum yearly 524

efficiency to higher levels, this saving becomes larger and larger. 525

5.2. Case Study 2 526

527

Although the economic indicators in this case are slightly less favourable from the investor’s 528

point of view compared to the case study 1, it is nevertheless still economically feasible 529

investment. In this case, in which the minimum yearly efficiency is set to 65%, a current 530

efficiency level set by legislation in Greece, the NPV of the project amounts to 15,320,000 €, 531

IRR is 11.5% and the simple payback time equals 6.78 years. Optimal capacity of the 532

cogeneration plant is 8,270 kWe. 533

534

535

Figure 5. Operation of the system in the case study 2 536

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

1

29

3

58

5

87

7

11

69

14

61

17

53

20

45

23

37

26

29

29

21

32

13

35

05

37

97

40

89

43

81

46

73

49

65

52

57

55

49

58

41

61

33

64

25

67

17

70

09

73

01

75

93

78

85

81

77

84

69

MW

h

kWh

hour Electricity production [kWh] Heating energy production [kWh]

Absorption units production [kWh] Storage energy content [MWh]

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27

537

In Figure 5, it can be noted that, compared to the case study 1, PTES here is used extensively 538

during the high demand for heating energy during the winter time, as well as during the 539

maintenance time. 540

541

This case study shows that the PTES could be used for shaving peak energy demands instead 542

of the oversized cogeneration power plants that are now used in Croatia. Secondly, the 543

economic indicators show that a shift in legislation from minimum efficiency to be eligible 544

for the feed-in-tariff from 50 to 65% would not cause a risk to the economic performance of 545

the project. 546

5.3. Case study 3 547

548

In this case, with the minimum overall yearly power plant efficiency of 75%, the economic 549

indicators are vague for an investor. The NPV is 78,972 €, IRR is 7.0% and the simple 550

payback time is 8.73 years. Optimal capacity of the power plant is 6,590 kWe. 551

552

553

Figure 6. Operation of the system in the case study 3 554

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

13

14

62

79

40

12

53

15

66

18

79

21

92

25

05

28

18

31

31

34

44

37

57

40

70

43

83

46

96

50

09

53

22

56

35

59

48

62

61

65

74

68

87

72

00

75

13

78

26

81

39

84

52

MW

h

kWh

hour

Electricity production [kWh] Heating energy production [kWh]

Absorption units production [kWh] Storage energy content [MWh]

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28

555

The storage size in this case is much larger with a volume of 159,220 m3. It can be seen in 556

Figure 6 that the storage is used more often than in previous cases. In some parts during the 557

winter, the total amount of heat taken from the PTES is more than two and a half times larger 558

than the heat produced in the biomass power plant at the same time. Thus, in this case the 559

seasonal energy storage significantly contributes to the overall power plant efficiency, as it 560

significantly shaves a peak demand. During the regular yearly maintenance work, heat is 561

provided from the seasonal energy storage in the same manner as in the case study 1. 562

5.4. Comparison of the figures in the different case studies 563

564

In Table 3 all the important results are listed for easier comparison of the case studies’ 565

optimization results. 566

Table 3. Results of case studies 567

568

Case study 1 Case study 2 Case study 3

Power plant capacity 14,675 kWe 8,270 kWe 6,590 kWe

Storage size 30,350 m3 53,310 m

3 159,220 m

3

Absorption units size 7,910 kW 7,910 kW 7,910 kW

NPV 39,630,000 € 15,320,000 € 78,972 €

IRR 15.0% 11.5% 7.0%

Simple pay-back time 5.72 years 6.78 years 8.73 years

Total investment cost 73,990,000 € 52,211,000 € 52,094,000 €

Share of storage in

total investment

2.3% 5.7 % 17.1%

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29

Share of absorbers in

total investment

4.3% 6.1% 6.1%

Share of biomass

cogeneration plant in

total investment

71.4% 57.0% 45.5%

Share of DHC

network in total

investment

22% 31.2% 31.3%

569

As it can be seen from the results, the overall investment in the first case study is higher than 570

the overall investments in the second and third case studies. This occurs because of a higher 571

biomass power plant capacity in the first case; the biomass power plant in the first case has a 572

14.4% higher share in total investment than in the second case and 24.9% higher compared to 573

the third case. In the second and the third case, the total investment is roughly the same. 574

However, in the third case investment in the cogeneration plant is lower, while the investment 575

cost of the PTES is much higher compared to the second case. It is interesting to assess shares 576

of different constituents in the total investment. The district heating and cooling network has a 577

significant share in all the cases, although significantly larger in the second and third case 578

compared to the first one. This difference in the DHC network costs share occurs (although 579

costs are the same in absolute terms in all the cases) because the overall investment in the first 580

case is approximately 42% larger compared to the second and the third case. 581

5.5. Comparison of fixed and variable feed-in-premiums 582

583

When comparing the feed-in-tariff and electricity prices on Nordpool for the year 2013 584

(because Croatia does not have its own electricity spot market), it was calculated that the 585

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30

fixed feed-in-premium should be set at 0.113 €/kWh in order to remain the same yearly 586

subsidy level as it is the case now. In the case of the variable feed-in-premium (where the 587

total revenue per kWh of electricity would remain the same as with the feed-in-tariff), 76% of 588

the electricity income would come from the feed-in-premium and 24% would be earned on 589

the spot market. Thus, in the case of switching from feed-in tariffs to feed-in premiums, 590

yearly subsidy expenditures would decrease for 24%, as these funds would be obtained from 591

the electricity market itself. This is a significant amount of savings that could then be used for 592

further renewable energy subsidies. 593

594

Prices below zero, where the feed-in-premium could not be received, are very rare, while 595

prices on the spot market above the feed-in-tariff did not occur at all during 2013. Thus, hours 596

in which the power plant would not be eligible for the feed-in-premium do not play a 597

significant role. For the case study 1, these two feed-in-premium options are shown in Figures 598

7 and 8. 599

600

601

602

Figure 7. Hourly revenue with the variable feed-in-premium, case study 1 603

0

500

1000

1500

2000

2500

1

33

8

67

5

10

12

13

49

16

86

20

23

23

60

26

97

30

34

33

71

37

08

40

45

43

82

47

19

50

56

53

93

57

30

60

67

64

04

67

41

70

78

74

15

77

52

80

89

84

26

Tota

l rev

enu

e [€

]

hour

Variable feed-in premium Revenue from market sales

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31

As it can be seen, for electricity market prices in the year 2013 on Nordpool, the modelled 604

biomass power plant would be eligible to receive premium in all hours except those when 605

maintenance was in progress. 606

607

608

Figure 8. Hourly revenue with the fixed feed-in-premium, case study 1 609

610

Similar to the case with the variable feed-in-premium, the power plant would be eligible to 611

receive the premium in all hours except when maintenance work was in progress. Like in the 612

previous case, subsidy funds account for 76% of the income from selling the electricity, while 613

24% of income is earned on the electricity market. However, in the case with the fixed feed-614

in-premium, risk for an investor would be higher than in the case with the variable feed-in-615

premium because of the vagueness of the future electricity market price predictions. 616

5.6. Sensitivity analyses 617

618

In the sensitivity analyses, the impact of a significant increase in the biomass price was 619

checked, as well as the impact of improved thermal insulation. A different biomass price for 620

0

500

1000

1500

2000

2500

3000

3500

1

33

8

67

5

10

12

13

49

16

86

20

23

23

60

26

97

30

34

33

71

37

08

40

45

43

82

47

19

50

56

53

93

57

30

60

67

64

04

67

41

70

78

74

15

77

52

80

89

84

26

Tota

l rev

enu

e [€

]

hour

Revenue from fixed feed-in premium Revenue from market sales

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32

the case of Croatia, according to difference in transportation distances, was assessed by 621

B.Ćosić et al. [41]. 622

623

624

625

Figure 9. NPV change with biomass price increase 626

627

It can be seen in Figure 9 that the biomass price significantly affects the NPV value. 628

However, in the first two cases, the NPV value is beneficial for the investor even for a 629

significant increase in the biomass price. As expected, in the third case, the NPV becomes 630

even worse than in the original case study with an increase in the biomass price. It can be 631

further noticed that the slope of curves with lower efficiencies is larger than those with higher 632

efficiencies. Thus, the NPV value is more dependant to the biomass price if the average yearly 633

efficiency is lower. This occurs because of the larger power plant capacity in the case with the 634

lower average yearly efficiency achieved, in which the biomass contributes more to the 635

overall costs. 636

637

-20000000

-10000000

0

10000000

20000000

30000000

40000000

50000000

38,5 43,5 48,5 53,5 58,5 63,5 68,5

NP

V

€/ton

50% efficiency 65% efficiency 75% efficiency

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33

In the second sensitivity analysis case, the improved thermal insulation reduced the cooling 638

and heating energy demand from 160 kWh/m2 to 95 kWh/m

2 per annum (Table 4.). Pukšec et 639

al. [46] showed for the case of Croatia that significant energy savings could be expected if the 640

policy measures already implemented are properly modelled in the future energy demand. 641

642

Table 4. Results in case of reduced heating and cooling energy demand 643

644

Case study 1 Case study 2 Case study 3

Biomass power plant

capacity

8,620 kWe 4,863 kWe 3,875 kWe

Storage volume 21,230 m3 25,128 m

3 81,519 m

3

Absorption units

capacity

4,225 kW 4,225 kW 4,225 kW

NPV 16,282,290 € 2,873,014 € -5,651,591 €

645

It can be seen that the NPV is lower compared to the base case studies in all the cases. The 646

most significant decrease in NPV occurs in the first case. The NPV value in the first case 647

study decreased for significant 59% compared to the original case study. Thus, it is shown 648

that the careful planning should be carried out before deciding to invest in a power plant 649

similar to this one because the impact of reducing heating and cooling energy demand is high 650

comparing to economic indicators in two cases. If this change would be sudden, with the 651

power plant already being built, the economic indicators would be even worse, as the power 652

plant would be extremely oversized. 653

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34

654

6. CONCLUSIONS 655

656

This model was developed in order to try to find a solution for the problems of efficiency in 657

the existing cogeneration power plants. Moreover, the model showed that an increase in terms 658

of the overall power plant efficiency from 50% to 65% in legislation, in order to be eligible 659

for the maximal feed-in-tariff, would not present a problem for the economic side of a project. 660

Additionally, the following conclusions can be made: 661

Increase in the overall power plant efficiency reduces the economic benefits for the 662

investor. 663

PTES is an efficient and cheap solution in combination with a biomass power plant by 664

means of peak energy demand shaving and replacing the power plant supply during 665

downtime. 666

PTES can significantly improve the overall yearly power plant efficiency. 667

Reducing the heating and cooling energy demand represents a great risk for the 668

economic indicators of the whole project. Thus, a relatively secure energy demand 669

should be envisaged at the beginning of the project in order to maximally reduce the 670

risk for the investor. 671

Increase in the biomass price is negative to the economy of the investment. 672

Economy-of-scale of both thermal energy storages and biomass power plants should 673

be utilized in order to have an economically feasible project. 674

Switching from feed-in tariffs to feed-in premiums can obtain large savings in subsidy 675

fund expenditures. 676

For the larger overall power plant efficiencies a different approach is needed in order 677

to try to reach an economically feasible solution. 678

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35

References: 679

[1] European Commission. Memo on the Renewable Energy and Climate Change 680

Package. 23.01.2008, Brussels. 681

[2] European Commission. A policy framework for climate and energy in the period 682

from 2020 to 2030. 22.01.2014, Brussels . 683

[3] Conolly D, Lund H, Mathiesen BV, Werner S, Möller B, Persson U, Boermans T, 684

Trier D, Ostergaard PA, Nielsen S. Heat Roadmap Europe: Combining district 685

heating with heat savings to decarbonize the EU energy system. Energy Policy 686

2014;65:475-489. 687

[4] Rentizelas A.A., Tatsiopoulos I.P., Tolis A. An optimization model for multi-688

biomass tri-generation energy supply. Biomass and bioenergy 2009; 33:223-233. 689

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