Economic evaluation of a CHP biomass plant using stochastic dual dynamic programming

Abstract

Cogeneration systems have gained prominence in recent years driven by the simultaneous systematic production of heat and electricity, which are involved in industrial and commercial processes. Sugar and alcohol industry has become a reference in the use of cogeneration through the burning of sugarcane bagasse, with an important role in the future policies for generation expansion in Brazil. However, in the economic evaluation of this type of project, some previously ignored variables had a gain of relevance, such as the possibility of selling surplus energy produced by the plant. This paper presents a multiobjective stochastic optimization model using stochastic dynamic dual programming techniques, which seeks to maximize net revenue of a cogeneration project, indicating also the installed power adequate to the fuel availability and the needs of the plant, considering different energy scenarios in the spot market. The results indicate the best configuration for a cogeneration plant, considering the possibility of energy revenue, allowing an easy cost comparison of different alternatives for decision making from the investor’s point of view.