IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v93y2012icp614-623.html
   My bibliography  Save this article

Allocation of fuel costs and CO2-emissions to heat and power in an industrial CHP plant: Case integrated pulp and paper mill

Author

Listed:
  • Holmberg, Henrik
  • Tuomaala, Mari
  • Haikonen, Turo
  • Ahtila, Pekka

Abstract

This paper studies allocation of fuel costs and CO2-emissions to heat and power in a CHP plant producing heat to an integrated pulp and paper mill and electricity to the liberalized electricity markets (or to the mill by the market price). The CHP plant and the mill are considered to be two separate economical units and both the mill and the CHP plant perspectives are discussed. Fuel costs and CO2-emissions are allocated using the energy, exergy and market based methods. The CHP plant purchases black liquor and bark from the mill. It also purchases oil from the markets to cover the whole fuel demand of the plant. The results indicate that the marked based method can be recommended as a “neutral” cost allocation method, because with that, the energy producer is not collecting extra margins from selling steam. This means that heat pricing is cost based. The results also indicate that depending on the emission factor and efficiency of alternative energy production form, the marked based method or the exergy method allocate the lowest CO2-emissions to heat. Therefore, the use of market based method for allocating costs and CO2 emissions can be recommended in order to use one single approach in both.

Suggested Citation

  • Holmberg, Henrik & Tuomaala, Mari & Haikonen, Turo & Ahtila, Pekka, 2012. "Allocation of fuel costs and CO2-emissions to heat and power in an industrial CHP plant: Case integrated pulp and paper mill," Applied Energy, Elsevier, vol. 93(C), pages 614-623.
    • Handle: RePEc:eee:appene:v:93:y:2012:i:c:p:614-623
    DOI: 10.1016/j.apenergy.2011.11.040
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261911007379
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2011.11.040?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. Sjödin, Jörgen & Henning, Dag, 2004. "Calculating the marginal costs of a district-heating utility," Applied Energy, Elsevier, vol. 78(1), pages 1-18, May.
    2. Graus, Wina & Worrell, Ernst, 2011. "Methods for calculating CO2 intensity of power generation and consumption: A global perspective," Energy Policy, Elsevier, vol. 39(2), pages 613-627, February.
    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. da Silva, Julio Augusto Mendes & Santos, José Joaquim Conceição Soares & Carvalho, Monica & de Oliveira, Silvio, 2017. "On the thermoeconomic and LCA methods for waste and fuel allocation in multiproduct systems," Energy, Elsevier, vol. 127(C), pages 775-785.
    2. Gao, Jintong & Zhang, Qi & Wang, Xiaozhuang & Song, Dayong & Liu, Weiqi & Liu, Wenchao, 2018. "Exergy and exergoeconomic analyses with modeling for CO2 allocation of coal-fired CHP plants," Energy, Elsevier, vol. 152(C), pages 562-575.
    3. Noussan, Michel, 2018. "Performance based approach for electricity generation in smart grids," Applied Energy, Elsevier, vol. 220(C), pages 231-241.
    4. Fehrenbach, Daniel & Merkel, Erik & McKenna, Russell & Karl, Ute & Fichtner, Wolf, 2014. "On the economic potential for electric load management in the German residential heating sector – An optimising energy system model approach," Energy, Elsevier, vol. 71(C), pages 263-276.
    5. Murphy, Fionnuala & Sosa, Amanda & McDonnell, Kevin & Devlin, Ger, 2016. "Life cycle assessment of biomass-to-energy systems in Ireland modelled with biomass supply chain optimisation based on greenhouse gas emission reduction," Energy, Elsevier, vol. 109(C), pages 1040-1055.
    6. Choi, Sangmi & Kim, Soyeon & Jung, Minkyu & Lee, Jinwook & Lim, Jihun & Kim, Minsung, 2022. "Comparative analysis of exergy- and enthalpy-based allocation methods for cogeneration businesses in the industrial complex of South Korea," Energy, Elsevier, vol. 240(C).
    7. Pavel Atănăsoae, 2022. "Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration," Energies, MDPI, vol. 16(1), pages 1-20, December.
    8. Koroneos, Christopher J. & Fokaides, Paris A. & Christoforou, Elias A., 2014. "Exergy analysis of a 300 MW lignite thermoelectric power plant," Energy, Elsevier, vol. 75(C), pages 304-311.
    9. Walek, Tomasz T., 2023. "New model of cost allocation for micro-cogeneration systems applied in multi-family buildings — with standard and new-type multi-source energy meters," Energy, Elsevier, vol. 262(PB).
    10. Chuanjia Han & Bo Yang & Tao Bao & Tao Yu & Xiaoshun Zhang, 2017. "Bacteria Foraging Reinforcement Learning for Risk-Based Economic Dispatch via Knowledge Transfer," Energies, MDPI, vol. 10(5), pages 1-24, May.
    11. Pina, Eduardo A. & Lozano, Miguel A. & Serra, Luis M., 2018. "Thermoeconomic cost allocation in simple trigeneration systems including thermal energy storage," Energy, Elsevier, vol. 153(C), pages 170-184.
    12. Lyrio de Oliveira, Lucas & García Kerdan, Iván & de Oliveira Ribeiro, Celma & Oller do Nascimento, Claudio Augusto & Rego, Erik Eduardo & Giarola, Sara & Hawkes, Adam, 2020. "Modelling the technical potential of bioelectricity production under land use constraints: A multi-region Brazil case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    13. dos Santos, Rodrigo G. & de Faria, Pedro R. & Santos, José J.C.S. & da Silva, Julio A.M. & Flórez-Orrego, Daniel, 2016. "Thermoeconomic modeling for CO2 allocation in steam and gas turbine cogeneration systems," Energy, Elsevier, vol. 117(P2), pages 590-603.
    14. Mesfun, Sennai & Toffolo, Andrea, 2013. "Optimization of process integration in a Kraft pulp and paper mill – Evaporation train and CHP system," Applied Energy, Elsevier, vol. 107(C), pages 98-110.

    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. Trygg, Louise & Gebremedhin, Alemayehu & Karlsson, Björn G., 2006. "Resource-effective systems achieved through changes in energy supply and industrial use: The Volvo-Skövde case," Applied Energy, Elsevier, vol. 83(8), pages 801-818, August.
    2. Bonev, Petyo & Glachant, Matthieu & Söderberg, Magnus, 2022. "Implicit yardstick competition between heating monopolies in urban areas: Theory and evidence from Sweden," Energy Economics, Elsevier, vol. 109(C).
    3. Amiri, Shahnaz & Trygg, Louise & Moshfegh, Bahram, 2009. "Assessment of the natural gas potential for heat and power generation in the County of Östergötland in Sweden," Energy Policy, Elsevier, vol. 37(2), pages 496-506, February.
    4. Harmsen, Robert & Crijns-Graus, Wina, 2021. "Unhiding the role of CHP in power & heat sector decomposition analyses," Energy Policy, Elsevier, vol. 152(C).
    5. Soimakallio, Sampo & Kiviluoma, Juha & Saikku, Laura, 2011. "The complexity and challenges of determining GHG (greenhouse gas) emissions from grid electricity consumption and conservation in LCA (life cycle assessment) – A methodological review," Energy, Elsevier, vol. 36(12), pages 6705-6713.
    6. Bonev, Petyo & Glachant, Matthieu & Söderberg, Magnus, 2018. "A Mechanism for Institutionalised Threat of Regulation: Evidence from the Swedish District Heating Market," Economics Working Paper Series 1805, University of St. Gallen, School of Economics and Political Science.
    7. Dardan Klimenta & Marija Mihajlović & Ivan Ristić & Darius Andriukaitis, 2022. "Possible Scenarios for Reduction of Carbon Dioxide Emissions in Serbia by Generating Electricity from Natural Gas," Energies, MDPI, vol. 15(13), pages 1-33, June.
    8. Lin, Boqiang & Moubarak, Mohamed, 2014. "Mitigation potential of carbon dioxide emissions in the Chinese textile industry," Applied Energy, Elsevier, vol. 113(C), pages 781-787.
    9. Park, Sun-Young & Lee, Kyoung-Sil & Yoo, Seung-Hoon, 2016. "Economies of scale in the Korean district heating system: A variable cost function approach," Energy Policy, Elsevier, vol. 88(C), pages 197-203.
    10. Bonev, Petyo & Matthieu Glachant & Magnus Söderberg, 2020. "Implicit Yardstick Competition," Economics Working Paper Series 2009, University of St. Gallen, School of Economics and Political Science.
    11. Gonzalez-Salazar, Miguel & Klossek, Julia & Dubucq, Pascal & Punde, Thomas, 2023. "Portfolio optimization in district heating: Merit order or mixed integer linear programming?," Energy, Elsevier, vol. 265(C).
    12. Harmsen, Robert & Graus, Wina, 2013. "How much CO2 emissions do we reduce by saving electricity? A focus on methods," Energy Policy, Elsevier, vol. 60(C), pages 803-812.
    13. Arvesen, Anders & Hauan, Ingrid Bjerke & Bolsøy, Bernhard Mikal & Hertwich, Edgar G., 2015. "Life cycle assessment of transport of electricity via different voltage levels: A case study for Nord-Trøndelag county in Norway," Applied Energy, Elsevier, vol. 157(C), pages 144-151.
    14. Pérez-Uresti, Salvador I. & Martín, Mariano & Jiménez-Gutiérrez, Arturo, 2019. "Estimation of renewable-based steam costs," Applied Energy, Elsevier, vol. 250(C), pages 1120-1131.
    15. Björkqvist, Olof & Idefeldt, Jim & Larsson, Aron, 2010. "Risk assessment of new pricing strategies in the district heating market: A case study at Sundsvall Energi AB," Energy Policy, Elsevier, vol. 38(5), pages 2171-2178, May.
    16. Liu, Wen & Klip, Diederik & Zappa, William & Jelles, Sytse & Kramer, Gert Jan & van den Broek, Machteld, 2019. "The marginal-cost pricing for a competitive wholesale district heating market: A case study in the Netherlands," Energy, Elsevier, vol. 189(C).
    17. Li, Haoran & Hou, Juan & Hong, Tianzhen & Ding, Yuemin & Nord, Natasa, 2021. "Energy, economic, and environmental analysis of integration of thermal energy storage into district heating systems using waste heat from data centres," Energy, Elsevier, vol. 219(C).
    18. Soimakallio, Sampo & Saikku, Laura, 2012. "CO2 emissions attributed to annual average electricity consumption in OECD (the Organisation for Economic Co-operation and Development) countries," Energy, Elsevier, vol. 38(1), pages 13-20.
    19. Vlatko Milić & Shahnaz Amiri & Bahram Moshfegh, 2020. "A Systematic Approach to Predict the Economic and Environmental Effects of the Cost-Optimal Energy Renovation of a Historic Building District on the District Heating System," Energies, MDPI, vol. 13(1), pages 1-25, January.
    20. Mezősi, András & Beöthy, Ákos & Kácsor, Enikő & Törőcsik, Ágnes, 2016. "A magyarországi távhő-szabályozás modellezése. A megújuló energiára alapozott hőtermelés [Modelling policy options in the district heating sector, with a focus on renewable consumption]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1149-1176.

    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:93:y:2012:i:c:p:614-623. 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.