A cost-benefit analysis of the combined cooling and heating system from the economic perspective: A case study from Hefei, China

Abstract

With the increase of people's income, space heating in the south has become a hot topic in China. Based on the economic concept of total social welfare, which consists of producer surplus, consumer surplus and external benefits, this study presents a cost-benefit analysis of a combined cooling and heating (CCH) system with ground source heat pumps (GSHPs) in Hefei. The analysis focuses on the application of the system in the Anhui Innovation Museum with a central air-conditioning system as a benchmark. For the producer, the CCH system is losing 14,897 USD a year now due to the low load although it can be profitable when operating at full capacity. For the consumer, the system can save 6257 USD per year. In terms of external benefits, the system reduces greenhouse gas and pollutant emissions, which results in a benefit of 103,697 USD. On the other hand, it reduces the peak load of the power system and saves 11,568 USD of constructing new power plants. As a result, under the current operation load and full load, the CCH system increases the total social surplus by 106,625 USD and 247,683 USD respectively. Based on the above findings, policy suggestions are made to help promote the application of the CCH system using GSHPs.