Optimal planning of cogeneration systems under time‐of‐use rates

Abstract

AbstractFor commercial customers with a cogeneration system (CGS), a mixed integer programming model is used to examine effects of time‐of‐use (TOU) rate structure on the optimal operation of the system as well as its optimal capacity. Three case studies are performed for a hotel, a hospital, and an office building (20,000 m2 in total floor space, respectively). The optimal capacity of the generator under the flat rate is 50 to 70 percent of peak power demand. Effects of the on‐peak/off‐peak energy charge ratio are saturated at a ratio of 5. It is not until an energy charge ratio of between 2 and 5 that the purchase of off‐peak power increases in summer when price reduction is applied to city gas. As the energy charge ratio is raised, cheaper off‐peak power is substituted for city gas and the sum of electricity energy charge and gas energy charge decreases. The simulation results indicate that properly designed TOU rates may provide commercial customers an incentive to operate a cogeneration system with an appropriate mix of the self‐generation and commercial power.