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LUND UNIVERSITY LIBRARIES

Evaluation of new units to fulfil an intermediate district heating load demand

Pilstrand, Daniel LU (2024) MVKM01 20241
Department of Energy Sciences
Abstract
In this master thesis, the most economically viable option for investing in a new unit in an
existing district heating system to fulfil an intermediate load demand of district heating
was studied. The investment feasibility of retrofitting a new CHP plan with carbon
capture and storage and carbon capture utilization was also investigated. A simulation
environment was built in the software Energy Optima 3 where both technical and
economic data were entered for potential units such as boilers, a CHP plants with/without
CCUS, solar collectors, heat accumulators, heat pumps, wind turbines, and electric
boilers. The simulations were run with time steps of 1h during the year of 2023, with
corresponding electricity price and district... (More)
In this master thesis, the most economically viable option for investing in a new unit in an
existing district heating system to fulfil an intermediate load demand of district heating
was studied. The investment feasibility of retrofitting a new CHP plan with carbon
capture and storage and carbon capture utilization was also investigated. A simulation
environment was built in the software Energy Optima 3 where both technical and
economic data were entered for potential units such as boilers, a CHP plants with/without
CCUS, solar collectors, heat accumulators, heat pumps, wind turbines, and electric
boilers. The simulations were run with time steps of 1h during the year of 2023, with
corresponding electricity price and district heating load data. First, a baseline scenario
was simulated without any new unit. The rest of the simulations (with the different new
units) were then compared to this base-case where the difference in total running costs
meant a financial gain for each scenario. By comparing this profit with the purchase
cost and maintenance costs of respective new unit, investment calculations could be
performed where a conclusion could be drawn on which units are best suited as a new
medium duty unit based on the shortest payback time and maximum profit over a lifetime
of 20 years. The most profitable choice was shown to be a heat only wood chips boiler in
combination with an electric boiler and onshore wind turbines. Investment in CCUS was
only profitable for cases where the prices for CO2 emission rights and natural gas were
substantially higher than the prices of year 2023. (Less)
Popular Abstract
When investing in a new district heating load unit for an energy system, the choices are
many. While technical parameters such as efficiencies are important, it is also important,
from an investment point of view, to address investment cost parameters of such a unit.
On top of that, it is also of great interest to investigate the effects this hypothetical new
district heating load unit has on the entire energy system in which it is to be integrated
with. For such calculations, a software tool can be of great use to help simulate the energy
system, with these new hypothetical units in mind.
In this thesis, a software tool called Energy Optima 3 was used to investigate the effect
different new district heating load units would have... (More)
When investing in a new district heating load unit for an energy system, the choices are
many. While technical parameters such as efficiencies are important, it is also important,
from an investment point of view, to address investment cost parameters of such a unit.
On top of that, it is also of great interest to investigate the effects this hypothetical new
district heating load unit has on the entire energy system in which it is to be integrated
with. For such calculations, a software tool can be of great use to help simulate the energy
system, with these new hypothetical units in mind.
In this thesis, a software tool called Energy Optima 3 was used to investigate the effect
different new district heating load units would have on the energy system of E.on Malmo. ยจ
The objective was to investigate what new intermediate load district heating unit would be
the most profitable to invest in. By comparing the costs from running the energy system
without a new unit (referred to as the Base case), with that of running the system with
the new unit, a profit was achieved. This profit was subtracted with the investment costs
of the unit to obtain a final yearly profit. The yearly profits were then accumulated over a
timespan of 20 years.
The new unit input parameters such as efficiencies, start/stop costs, variable maintenance
costs, fuel costs and load intervals were all applied to the modelling of the unit in the Energy
Optima 3 software. These parameters where taken from different sources reflecting units
used in other energy systems, or units available on the market.
Different scenarios of different district heating load units were investigated and compared
to one another in terms of total accumulated profits.
The top case scenario reflecting the strongest investment choice, from an economical
standpoint, were shown to be a wood chips hot water boiler in conjunction with an
electrical boiler together with installed wind turbines. The change of electricity prices by
15 % showed to not have a strong affect on the total costs and profits of this top case of
scenario. However, changing the price of wood chips by 15% had a significant affect on
the costs and profits. This suggests that additional boilers not using wood chips (or fuels
of the same type) could be of interest to look further into.
1
Further in this thesis, investment feasibility was also conducted on carbon capture storage
(CCS) and utilization retrofitted to a hypothetical intermediate district heating load CHPplant that would burn wood chips. The CCS-facility was modelled to require steam and
electricity. The captured biogenic CO2, which would lead to negative emissions, was
modelled to be able to be sold off at the price of emission rights reflecting year 2023.
Profits were achieved by the difference of the total costs of the CCS-case compared to that
of the case involving only the CHP-plant. These profits were subtracted by the investment
costs of the plant as well as transport and storage costs, which yielded a value for final
yearly profits.
The investment of the CCS-plant proved to be infeasible initially. However, by increasing
the price of CO2 emission rights as well as removing the costs for transport and storage,
the investment could prove to be feasible.
The investment of carbon capture and utilization (CCU), where a methanation plant
in conjunction with an electrolyser system was used to create synthetic methane from
hydrogen and the captured CO2, proved to be infeasible as well. By increasing the price
of natural gas (which the synthesized methane was modelled to be able to be sold off at)
as well as the price CO2 emission rights, the investment could prove to be feasible.
For investment feasibility of CCS/CCU, the connected CHP-plant, which provides steam
and electricity for the CCS-process, would need to be active during far more hours than
initially planned, rendering its status as a intermediate load unit to be more of that of a
base load unit. (Less)
Please use this url to cite or link to this publication:
author
Pilstrand, Daniel LU
supervisor
organization
course
MVKM01 20241
year
type
H2 - Master's Degree (Two Years)
subject
keywords
CCS, CCU, intermediate district heating load unit
report number
ISRN LUTMDN/TMHP-24/5608-SE
ISSN
0282-1990
language
English
id
9179025
date added to LUP
2024-12-20 14:46:04
date last changed
2024-12-20 14:46:04
@misc{9179025,
  abstract     = {{In this master thesis, the most economically viable option for investing in a new unit in an
existing district heating system to fulfil an intermediate load demand of district heating
was studied. The investment feasibility of retrofitting a new CHP plan with carbon
capture and storage and carbon capture utilization was also investigated. A simulation
environment was built in the software Energy Optima 3 where both technical and
economic data were entered for potential units such as boilers, a CHP plants with/without
CCUS, solar collectors, heat accumulators, heat pumps, wind turbines, and electric
boilers. The simulations were run with time steps of 1h during the year of 2023, with
corresponding electricity price and district heating load data. First, a baseline scenario
was simulated without any new unit. The rest of the simulations (with the different new
units) were then compared to this base-case where the difference in total running costs
meant a financial gain for each scenario. By comparing this profit with the purchase
cost and maintenance costs of respective new unit, investment calculations could be
performed where a conclusion could be drawn on which units are best suited as a new
medium duty unit based on the shortest payback time and maximum profit over a lifetime
of 20 years. The most profitable choice was shown to be a heat only wood chips boiler in
combination with an electric boiler and onshore wind turbines. Investment in CCUS was
only profitable for cases where the prices for CO2 emission rights and natural gas were
substantially higher than the prices of year 2023.}},
  author       = {{Pilstrand, Daniel}},
  issn         = {{0282-1990}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Evaluation of new units to fulfil an intermediate district heating load demand}},
  year         = {{2024}},
}