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Towards smart thermal grids: Techno-economic feasibility of commercial heat-to-power technologies for district heating

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  • Hennessy, Jay
  • Li, Hailong
  • Wallin, Fredrik
  • Thorin, Eva

Abstract

Recent improvements in low-temperature heat-to-power (LTHtP) technologies have led to an increase in efficiency at lower temperatures and lower cost. LTHtP has so far not been used in district heating. The aim of the study is to establish under what conditions the use of existing LTHtP technology is technically and economically feasible using a district heating system as the heat source. The organic Rankine cycle (ORC) is identified as the most interesting LTHtP technology, due to its high relative efficiency and the commercial availability of devices operating at temperatures in the district heating operating range. The levelised cost of electricity of several ORC devices is calculated for temperatures found in district heating, assuming a zero cost of heat. A case study from Sweden is used to calculate the levelised cost of electricity, the net present value and payback period, based on income from the electricity produced, excluding taxes. Hourly spot market electricity prices from 2017 are used, as well as forecast scenarios for 2020, 2030 and 2040. A sensitivity study tests the importance of electricity price, cost of heat and capital/installation cost. Based on the case study, the best levelised cost of electricity achieved was 26.5 EUR/MWh, with a payback period greater than 30 years. Under current Swedish market conditions, the ORC does not appear to be economically feasible for use in district heating, but the net present value and payback period may be significantly more attractive under other countries’ market conditions or with reduced capital costs. For a positive net present value in the Swedish market the capital cost should be reduced to 1.7 EUR/W installed, or the average electricity price should be at least 35.2 EUR/MWh, if the cost of heat is zero. The cost of heat is an important factor in these calculations and should be developed further in future work.

Suggested Citation

  • Hennessy, Jay & Li, Hailong & Wallin, Fredrik & Thorin, Eva, 2018. "Towards smart thermal grids: Techno-economic feasibility of commercial heat-to-power technologies for district heating," Applied Energy, Elsevier, vol. 228(C), pages 766-776.
    • Handle: RePEc:eee:appene:v:228:y:2018:i:c:p:766-776
    DOI: 10.1016/j.apenergy.2018.06.105
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    3. Dorotić, Hrvoje & Ban, Marko & Pukšec, Tomislav & Duić, Neven, 2020. "Impact of wind penetration in electricity markets on optimal power-to-heat capacities in a local district heating system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    4. Badr Eddine Lebrouhi & Éric Schall & Bilal Lamrani & Yassine Chaibi & Tarik Kousksou, 2022. "Energy Transition in France," Post-Print hal-03716839, HAL.

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