PRICINGSTRATEGIESFORNEUTRAL-TEMPERATUREDISTRICTHEATINGANDCOOLINGNETWORKSBASEDONHEATPUMPS

MarcoCozzini,MatteoD’Antoni,SimoneBuffa,RobertoFedrizziEURACResearch,Bolzano,Italy

HPC2017,Rotterdam,15-18May2017

OUTLINE

- FLEXYNETSproject:neutraltemperatureDHCnetworksbasedonHPs

- Boundsonheatpricesgivenbythecombineduseofelectricity(top-downanalysis)

- Examplesforproducersandconsumers(includingprosumers)

TheFLEXYNETSapproach

ElaborationofsubstationsforconnectiontoDHCnetworkthroughreversibleheatpumps

From the water-loop concept to adecentralised low-temperature DHCnetwork (15-25°C)

AssessmentofDHCnetworktopologies

FLEXYNETSingredients- Neutraltemperaturenetwork,15-25°C- Reversibleheatpumps atsubstationsà prosumers

Advantages- Strongreductionofthermallosses- Integrationoflow-temperaturewasteheat- Reversiblenetwork

Disadvantages- Electricitycosts- Highersubstationcosts

Substationdefinition

Energysources- Hightemperature(boilers,CHP,incinerators,industrialwasteheat)- Lowtemperaturewasteheat (supermarkets,datacentres,…)Energysinksorlongterm(possiblyseasonal)storage

Prosumerssubstations

Producerssubstations

EnergyTRADINGstrategies(focusonheating)- Whatenergysourcesareworthtobeintegratedfromthe

economicperspective?

- Whatpriceshallbegiventoeachenergysource?

- Whatbusinessmodelsarereasonablefromtheenergyutilityandthecustomerperspectives?

- Howcandecisionmakerspromotelow-temperaturedistrictheatingandcoolingnetworks?

Approachonpricecomponents- Top-down approachbasedonreferenceheatingcostsofa

potentialcustomer,𝑐",$%&- FLEXYNETSshouldnotincreasecosts

- Aheatpump isneededtoprovidetherighttemperaturelevelsforspaceheatinganddomestichotwater:- Thecustomerpaysbothnetworkthermalenergy (atacertain

unitarycost𝑐",'"()and electricity (ataunitarycost𝑐%))- HighCOP thankstoFLEXYNETSnetworktemperature

- Sensitivityanalysis for𝑐",$%&,𝑐%),COP

Pricecomponents

HP

𝑐%)

𝑐",'"(𝐸+,%

𝐸%) = 𝐸+,%1COP

𝐸",'"( =

= 𝐸+,% 1 −1COP

𝐸+,% 1COP𝑐%) + 𝐸+,% 1 −

1COP 𝑐",'"( = 𝐸+,%𝑐",$%&

𝑐",'"( =𝑐",$%& − 𝑐%) COP⁄1 − 1 COP⁄

Simplelinearrelationformaximumadmissibleprice

(PossiblyuseSCOPinstead…)

ExamplesReferenceheatingcosts,𝑐",$%&:100-150€/MWhPossiblesplit:100€/MWhofgascost(residential)+40€/MWhofboilerplantcost(annualized)

à 𝑐",$%& =140€/MWh

𝑐%) =150€/MWh

COP=3.5 COP=6

Heatingmode𝑇7%89,:7 [°C] 𝑇);<=,;+8 [°C] COP

10 35 4.815 35 5.320 35 5.8

DHCutilitymargin

COP=5

𝑐%) =150€/MWh

Assessmentofincomesfortheutilitycompany,basedon

runningcosts

Assessmentofmaximumheatpricetothecustomer,basedonelectricityprice

EnergytradingstrategiesAnumberofbusinesscasescanbeaddressed:

∞ EnergyProducer

∞ EnergyConsumer

∞ InvestmentonProducer

∞ InvestmentonUtility

∞ Th.energyispaidbyutility∞ Th.energyisprovidedforfree

∞ Th.energyispaidbyutility∞ Th.energyisprovidedforfree

∞ EnergyProsumer

∞ InvestmentonConsumer

∞ InvestmentonUtility

∞ Electricityispaidbyutility∞ Electricityispaidbycustomer

∞ Electricityispaidbyutility∞ Electricityispaidbycustomer

ExamplesofbusinesscasesBusinesscase1a:Producer– InvestmentonUtilityCompany- Wasteheatrecoveryfrommediumsizesupermarketdrycooler(150kW)- W/WHeatPumpincreaseswasteheattemperaturefrom25°Cto40°C

InvestmentperkW 1500 €/kWCapacity 150 kWMaintenance 1% -/yearInvestmentCost 225,000.00€ €MaintenanceCost 2,250.00€ €/year

interestrate 2% -InvestmentHorizon 20 yearsAnnualisedInvestment 320,205.23€ €Annuity 7.1% -

Operationhours1 3000 hours/yearOperationhours2 6000 hours/yearSCOP 6 -Costofelectricity 100 €/MWh

(incl.maint.)

𝑃8? =150kW𝐶:7A ∼ 320k€𝑁D =20yearsℎD%<$ =3000÷6000h/yearCOP=6𝑐%) =100€/MWh

Conservativeassumptionsoninvestmentcosts,all

included.

ExamplesofbusinesscasesBusinesscase1a:Producer– InvestmentonUtilityCompany- Wasteheatrecoveryfrommediumsizesupermarketdrycooler(150kW)- W/WHeatPumpincreaseswasteheattemperaturefrom25°Cto40°C

Costofheat1(Investment) 35.58€ €/MWhCostofheat2(Investment) 17.79€ €/MWh

Costofheat1(electricity) 16.67€ €/MWh

Costofheat1(prosumer) -€ €/MWhCostofheat2(prosumer) -€ €/MWh

Costofheat1(total) 52.25€ €/MWhCostofheat2(total) 34.46€ €/MWh

Costofheat(investment), (GHIJKL?MNOPQM

Costofelectricity,𝑐%)/COP

à Costofheat(producer)

ExamplesofbusinesscasesBusinesscase1b:Producer– InvestmentonUtilityCompany- Wasteheatrecoveryfrommediumsizesupermarketdrycooler(150kW)- Directwasteheatrecoverywithoutheatpumpfrom30°Cto15°C

𝑃8? =150kW𝐶:7A ∼ 110k€𝑁D =20yearsℎD%<$ =3000÷6000h/yearCOP=20𝑐%) =100€/MWh

InvestmentperkW 750 €/kWCapacity 150 kWMaintenance 1% -/yearInvestmentCost 112,500.00€ €MaintenanceCost 1,125.00€ €/year

interestrate 2% -InvestmentHorizon 20 yearsAnnualisedInvestment 160,102.62€ €Annuity 7.1% -

Operationhours1 3000 hours/yearOperationhours2 6000 hours/yearSCOP 20 -Costofelectricity 100 €/MWh

(incl.maint.)

ExamplesofbusinesscasesBusinesscase1a:Producer– InvestmentonUtilityCompany- Wasteheatrecoveryfrommediumsizesupermarketdrycooler(150kW)- Directwasteheatrecoverywithoutheatpumpfrom30°Cto15°C

Costofheat(investment), (GHIJKL?MNOPQM

Costofelectricity,𝑐%)/COP

àCostofheat(producer)

FLEXYNETStemperaturescansignificantlycutintegrationcosts!

Costofheat1(Investment) 17.79€ €/MWhCostofheat2(Investment) 8.89€ €/MWh

Costofheat1(electricity) 5.00€ €/MWh

Costofheat1(prosumer) -€ €/MWhCostofheat2(prosumer) -€ €/MWh

Costofheat1(total) 22.79€ €/MWhCostofheat2(total) 13.89€ €/MWh

Conclusions/Remarks- Gatheringlowtemperaturewasteheatcanbeeconomicallyviable

(incentivesdisregardedonpurposeinthesecalculations).- Dependingontemperaturelevelsofenergysourceandnetwork,

thecostofrecoveredenergycanvarylargely.- Differentbusinesscases canbeconsidered(e.g.,substations

ownedbyusersorbyutilitycompany).- Ananalysisofthistypecanbeusedforplanning,evenatpolicy

level.- FLEXYNETSnetworkscouldbenefitofdynamiccontrol strategies,

wherevariablepricescouldbeimplemented.

THANKYOU!

Contacts: www.eurac.edumarco.cozzini@eurac.edu

VisitFLEXYNETSwebsite: www.flexynets.eu

TheFLEXYNETSprojecthasreceivedfundingfromtheEuropeanUnion’sHorizon2020researchandinnovationprogramme under grantagreementNo.649820