IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v177y2016icp553-569.html
   My bibliography  Save this article

Valuation under uncertain energy prices and load demands of micro-CHP plants supplemented by optimally switched thermal energy storage

Author

Listed:
  • Díaz, Guzmán
  • Moreno, Blanca

Abstract

This paper aims at providing insight on the ability that thermal energy storage (TES) systems have to reduce the cost of operating CHP plants, when an optimal switching policy is adopted to regulate the storage level under uncertain market conditions and also uncertain load demands.

Suggested Citation

  • Díaz, Guzmán & Moreno, Blanca, 2016. "Valuation under uncertain energy prices and load demands of micro-CHP plants supplemented by optimally switched thermal energy storage," Applied Energy, Elsevier, vol. 177(C), pages 553-569.
    • Handle: RePEc:eee:appene:v:177:y:2016:i:c:p:553-569
    DOI: 10.1016/j.apenergy.2016.05.075
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261916306730
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2016.05.075?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Longstaff, Francis A & Schwartz, Eduardo S, 2001. "Valuing American Options by Simulation: A Simple Least-Squares Approach," The Review of Financial Studies, Society for Financial Studies, vol. 14(1), pages 113-147.
    2. Milan, Christian & Stadler, Michael & Cardoso, Gonçalo & Mashayekh, Salman, 2015. "Modeling of non-linear CHP efficiency curves in distributed energy systems," Applied Energy, Elsevier, vol. 148(C), pages 334-347.
    3. Aydin, Devrim & Casey, Sean P. & Riffat, Saffa, 2015. "The latest advancements on thermochemical heat storage systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 356-367.
    4. Arteconi, A. & Hewitt, N.J. & Polonara, F., 2012. "State of the art of thermal storage for demand-side management," Applied Energy, Elsevier, vol. 93(C), pages 371-389.
    5. Ghadimi, P. & Kara, S. & Kornfeld, B., 2014. "The optimal selection of on-site CHP systems through integrated sizing and operational strategy," Applied Energy, Elsevier, vol. 126(C), pages 38-46.
    6. Merkel, Erik & McKenna, Russell & Fichtner, Wolf, 2015. "Optimisation of the capacity and the dispatch of decentralised micro-CHP systems: A case study for the UK," Applied Energy, Elsevier, vol. 140(C), pages 120-134.
    7. Kitapbayev, Yerkin & Moriarty, John & Mancarella, Pierluigi, 2015. "Stochastic control and real options valuation of thermal storage-enabled demand response from flexible district energy systems," Applied Energy, Elsevier, vol. 137(C), pages 823-831.
    8. Regin, A. Felix & Solanki, S.C. & Saini, J.S., 2008. "Heat transfer characteristics of thermal energy storage system using PCM capsules: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(9), pages 2438-2458, December.
    9. Pandiyarajan, V. & Chinna Pandian, M. & Malan, E. & Velraj, R. & Seeniraj, R.V., 2011. "Experimental investigation on heat recovery from diesel engine exhaust using finned shell and tube heat exchanger and thermal storage system," Applied Energy, Elsevier, vol. 88(1), pages 77-87, January.
    10. Mongibello, Luigi & Bianco, Nicola & Caliano, Martina & Graditi, Giorgio, 2015. "Influence of heat dumping on the operation of residential micro-CHP systems," Applied Energy, Elsevier, vol. 160(C), pages 206-220.
    11. Mancarella, Pierluigi & Chicco, Gianfranco, 2009. "Global and local emission impact assessment of distributed cogeneration systems with partial-load models," Applied Energy, Elsevier, vol. 86(10), pages 2096-2106, October.
    12. Fragaki, Aikaterini & Andersen, Anders N., 2011. "Conditions for aggregation of CHP plants in the UK electricity market and exploration of plant size," Applied Energy, Elsevier, vol. 88(11), pages 3930-3940.
    13. Bianchi, M. & De Pascale, A. & Melino, F., 2013. "Performance analysis of an integrated CHP system with thermal and Electric Energy Storage for residential application," Applied Energy, Elsevier, vol. 112(C), pages 928-938.
    14. Motevasel, Mehdi & Seifi, Ali Reza & Niknam, Taher, 2013. "Multi-objective energy management of CHP (combined heat and power)-based micro-grid," Energy, Elsevier, vol. 51(C), pages 123-136.
    15. van Goor, Harm & Scholtens, Bert, 2014. "Modeling natural gas price volatility: The case of the UK gas market," Energy, Elsevier, vol. 72(C), pages 126-134.
    16. Verbruggen, Aviel, 2008. "The merit of cogeneration: Measuring and rewarding performance," Energy Policy, Elsevier, vol. 36(8), pages 3059-3066, August.
    17. Díaz, Guzmán & Moreno, Blanca & Coto, José & Gómez-Aleixandre, Javier, 2015. "Valuation of wind power distributed generation by using Longstaff–Schwartz option pricing method," Applied Energy, Elsevier, vol. 145(C), pages 223-233.
    18. Weron, Rafał, 2014. "Electricity price forecasting: A review of the state-of-the-art with a look into the future," International Journal of Forecasting, Elsevier, vol. 30(4), pages 1030-1081.
    19. Ommen, Torben & Markussen, Wiebke Brix & Elmegaard, Brian, 2014. "Comparison of linear, mixed integer and non-linear programming methods in energy system dispatch modelling," Energy, Elsevier, vol. 74(C), pages 109-118.
    20. Siti Nuryanah & Sardar M. N. Islam, 2015. "The Context of the Case Study," Palgrave Macmillan Books, in: Corporate Governance and Financial Management, chapter 5, pages 145-156, Palgrave Macmillan.
    21. Fubara, Tekena Craig & Cecelja, Franjo & Yang, Aidong, 2014. "Modelling and selection of micro-CHP systems for domestic energy supply: The dimension of network-wide primary energy consumption," Applied Energy, Elsevier, vol. 114(C), pages 327-334.
    22. Díaz, Guzmán & Planas, Estefanía & Andreu, Jon & Kortabarria, Iñigo, 2015. "Joint cost of energy under an optimal economic policy of hybrid power systems subject to uncertainty," Energy, Elsevier, vol. 88(C), pages 837-848.
    23. Longstaff, Francis A & Schwartz, Eduardo S, 2001. "Valuing American Options by Simulation: A Simple Least-Squares Approach," University of California at Los Angeles, Anderson Graduate School of Management qt43n1k4jb, Anderson Graduate School of Management, UCLA.
    24. Zhang, Di & Evangelisti, Sara & Lettieri, Paola & Papageorgiou, Lazaros G., 2015. "Optimal design of CHP-based microgrids: Multiobjective optimisation and life cycle assessment," Energy, Elsevier, vol. 85(C), pages 181-193.
    25. Streckiene, Giedre & Martinaitis, Vytautas & Andersen, Anders N. & Katz, Jonas, 2009. "Feasibility of CHP-plants with thermal stores in the German spot market," Applied Energy, Elsevier, vol. 86(11), pages 2308-2316, November.
    26. Bradbury, Kyle & Pratson, Lincoln & Patiño-Echeverri, Dalia, 2014. "Economic viability of energy storage systems based on price arbitrage potential in real-time U.S. electricity markets," Applied Energy, Elsevier, vol. 114(C), pages 512-519.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Teng, Jiaying & Wang, Wan & Mu, Xiaofei, 2020. "A novel economic analyzing method for CCHP systems based on energy cascade utilization," Energy, Elsevier, vol. 207(C).
    2. Fuentes-Cortés, Luis Fabián & Ma, Yan & Ponce-Ortega, Jose María & Ruiz-Mercado, Gerardo & Zavala, Victor M., 2018. "Valuation of water and emissions in energy systems," Applied Energy, Elsevier, vol. 210(C), pages 518-528.
    3. Franco Cotana & Gianluca Cavalaglio & Valentina Coccia & Alessandro Petrozzi, 2016. "Energy Opportunities from Lignocellulosic Biomass for a Biorefinery Case Study," Energies, MDPI, vol. 9(9), pages 1-10, September.
    4. Ji, Ling & Zhang, Bei-Bei & Huang, Guo-He & Xie, Yu-Lei & Niu, Dong-Xiao, 2018. "GHG-mitigation oriented and coal-consumption constrained inexact robust model for regional energy structure adjustment – A case study for Jiangsu Province, China," Renewable Energy, Elsevier, vol. 123(C), pages 549-562.
    5. Jin, Ming & Feng, Wei & Marnay, Chris & Spanos, Costas, 2018. "Microgrid to enable optimal distributed energy retail and end-user demand response," Applied Energy, Elsevier, vol. 210(C), pages 1321-1335.
    6. Jin, Ming & Feng, Wei & Liu, Ping & Marnay, Chris & Spanos, Costas, 2017. "MOD-DR: Microgrid optimal dispatch with demand response," Applied Energy, Elsevier, vol. 187(C), pages 758-776.
    7. Zauner, Christoph & Hengstberger, Florian & Mörzinger, Benjamin & Hofmann, Rene & Walter, Heimo, 2017. "Experimental characterization and simulation of a hybrid sensible-latent heat storage," Applied Energy, Elsevier, vol. 189(C), pages 506-519.
    8. Mongibello, Luigi & Bianco, Nicola & Caliano, Martina & Graditi, Giorgio, 2016. "Comparison between two different operation strategies for a heat-driven residential natural gas-fired CHP system: Heat dumping vs. load partialization," Applied Energy, Elsevier, vol. 184(C), pages 55-67.
    9. Chen, X.P. & Hewitt, N. & Li, Z.T. & Wu, Q.M. & Yuan, Xufeng & Roskilly, Tony, 2017. "Dynamic programming for optimal operation of a biofuel micro CHP-HES system," Applied Energy, Elsevier, vol. 208(C), pages 132-141.
    10. Gbemi Oluleye & John Allison & Nicolas Kelly & Adam D. Hawkes, 2018. "An Optimisation Study on Integrating and Incentivising Thermal Energy Storage (TES) in a Dwelling Energy System," Energies, MDPI, vol. 11(5), pages 1-17, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mongibello, Luigi & Bianco, Nicola & Caliano, Martina & Graditi, Giorgio, 2016. "Comparison between two different operation strategies for a heat-driven residential natural gas-fired CHP system: Heat dumping vs. load partialization," Applied Energy, Elsevier, vol. 184(C), pages 55-67.
    2. Work, James & Hauer, Grant & Luckert, M.K. (Marty), 2018. "What ethanol prices would induce growers to switch from agriculture to poplar in Alberta? A multiple options approach," Journal of Forest Economics, Elsevier, vol. 33(C), pages 51-62.
    3. Maeda, Mansaku & Watts, David, 2019. "The unnoticed impact of long-term cost information on wind farms’ economic value in the USA. – A real option analysis," Applied Energy, Elsevier, vol. 241(C), pages 540-547.
    4. Àlex Alonso-Travesset & Diederik Coppitters & Helena Martín & Jordi de la Hoz, 2023. "Economic and Regulatory Uncertainty in Renewable Energy System Design: A Review," Energies, MDPI, vol. 16(2), pages 1-30, January.
    5. Jin, Ming & Feng, Wei & Liu, Ping & Marnay, Chris & Spanos, Costas, 2017. "MOD-DR: Microgrid optimal dispatch with demand response," Applied Energy, Elsevier, vol. 187(C), pages 758-776.
    6. Adam, Alexandros & Fraga, Eric S. & Brett, Dan J.L., 2015. "Options for residential building services design using fuel cell based micro-CHP and the potential for heat integration," Applied Energy, Elsevier, vol. 138(C), pages 685-694.
    7. Didier Nibbering & Coos van Buuren & Wei Wei, 2021. "Real Options Valuation of Wind Energy Based on the Empirical Production Uncertainty," Monash Econometrics and Business Statistics Working Papers 19/21, Monash University, Department of Econometrics and Business Statistics.
    8. Alessio Trivella & Danial Mohseni-Taheri & Selvaprabu Nadarajah, 2023. "Meeting Corporate Renewable Power Targets," Management Science, INFORMS, vol. 69(1), pages 491-512, January.
    9. Díaz, Guzmán & Coto, José & Gómez-Aleixandre, Javier, 2019. "Levelized income loss as a metric of the adaptation of wind and energy storage to variable prices," Applied Energy, Elsevier, vol. 238(C), pages 1179-1191.
    10. Murugan, S. & Horák, Bohumil, 2016. "A review of micro combined heat and power systems for residential applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 144-162.
    11. Boonstra, Boris C. & Oosterlee, Cornelis W., 2021. "Valuation of electricity storage contracts using the COS method," Applied Mathematics and Computation, Elsevier, vol. 410(C).
    12. Mongibello, Luigi & Bianco, Nicola & Caliano, Martina & Graditi, Giorgio, 2015. "Influence of heat dumping on the operation of residential micro-CHP systems," Applied Energy, Elsevier, vol. 160(C), pages 206-220.
    13. Merkel, Erik & McKenna, Russell & Fichtner, Wolf, 2015. "Optimisation of the capacity and the dispatch of decentralised micro-CHP systems: A case study for the UK," Applied Energy, Elsevier, vol. 140(C), pages 120-134.
    14. Nicholas Davey & Nicolas Langrené & Wen Chen & Jonathan R. Rhodes & Simon Dunstall & Saman Halgamuge, 2023. "Designing higher value roads to preserve species at risk by optimally controlling traffic flow," Annals of Operations Research, Springer, vol. 320(2), pages 663-693, January.
    15. Gimelli, A. & Mottola, F. & Muccillo, M. & Proto, D. & Amoresano, A. & Andreotti, A. & Langella, G., 2019. "Optimal configuration of modular cogeneration plants integrated by a battery energy storage system providing peak shaving service," Applied Energy, Elsevier, vol. 242(C), pages 974-993.
    16. Ida Bakke & Stein-Erik Fleten & Lars Ivar Hagfors & Verena Hagspiel & Beate Norheim & Sonja Wogrin, 2016. "Investment in electric energy storage under uncertainty: a real options approach," Computational Management Science, Springer, vol. 13(3), pages 483-500, July.
    17. Kitapbayev, Yerkin & Moriarty, John & Mancarella, Pierluigi, 2015. "Stochastic control and real options valuation of thermal storage-enabled demand response from flexible district energy systems," Applied Energy, Elsevier, vol. 137(C), pages 823-831.
    18. Gbemi Oluleye & John Allison & Nicolas Kelly & Adam D. Hawkes, 2018. "An Optimisation Study on Integrating and Incentivising Thermal Energy Storage (TES) in a Dwelling Energy System," Energies, MDPI, vol. 11(5), pages 1-17, April.
    19. Zhang, Hanyu & Assereto, Martina & Byrne, Julie, 2023. "Deferring real options with solar renewable energy certificates," Global Finance Journal, Elsevier, vol. 55(C).
    20. Weihan Li & Jin E. Zhang & Xinfeng Ruan & Pakorn Aschakulporn, 2024. "An empirical study on the early exercise premium of American options: Evidence from OEX and XEO options," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 44(7), pages 1117-1153, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:177:y:2016:i:c:p:553-569. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.