Conditions for aggregation of CHP plants in the UK electricity market and exploration of plant size

Abstract

Combined heat and power (CHP) plants with thermal stores may be suitable for sustainable energy production and the accommodation of fluctuating renewable energy sources. At the moment, in the UK, only a few CHP plants have thermal stores. Previous research has shown that thermal stores can improve the economics of CHP plants in the UK under the current market conditions. However, currently, it is only beneficial for CHP plants to sell their electricity to a third party, a Licensed Electricity Supplier, rather than to sell it directly to the power exchange market at prices which are much higher. If CHP plants aggregate, direct access to the power exchange market can become economically viable hence there is the possibility that thermal stores could further improve the economics of CHP plants under an aggregated electricity dispatch. This work firstly explains the conditions under which such plants could aggregate and act as a large power plant in the UK market, and secondly explores the most economic-size of gas engine and thermal store, in the case of aggregation, using energyPRO software and Excel spreadsheets. The work suggests that direct access to the power exchange market can improve the economics of the CHP plants. The highest Net Present Value (NPV), without heat dissipation, for a CHP plant exporting its electricity to the grid for a community heating load of 20 GW h, is more than £5 m, and is obtained for a 6 MW engine with a 28.2 MW h (900 m 3) thermal store. The research suggests that such high electricity prices could make even larger plants more profitable than that; however, this can happen only if some of the produced heat is dissipated.