Risk Analysis of Expansion Planning of Combined Heat and Power Energy System under Emissions Trading Scheme

A. Rong and R. Lahdelma (Finland)


Energy and power systems, expansion planning, risk analysis, combined heat and power production, emissions trading scheme


Combined heat and power (CHP) production is an increasingly important technology for clean provision of energy because of its higher efficiency. With the effective of EU emissions trading scheme (ETS) in 2005, a large number of existing and potential future CHP plants are obligated to participate in ETS and target for emissions reduction. Expansion planning of a CHP system is complicated by uncertainties such as variable heat demand, volatile power market price, and emissions allowance price. CO2 becomes an essential economical factor for decision making in expansion planning under the climate protection policy. In this paper we represent the uncertainties as a set of scenarios on the hourly basis. We present the long-term CHP planning model to estimate the variable cash flow associated with the operation of the expanded system and apply stochastic simulation for analysing the risks involved in the different dimensioning alternatives of CHP plants in expansion planning.

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