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WP2 DH report

Introduction 1. The cost of producing heat from a gas boiler is horizontal because it is unrelated to the price of 4 electricity (horizontal line) 2. The cost of producing heat from a heat pump is increasing with the electricity price (increasing line). COP 2.6 means that the heat pump produces 2.6 MWh heat for each MWh electricity it consumes 3. The cost of producing heat from a CHP plant is decreasing with the electricity price (decreasing line). This is because electricity production can be sold in the spot market From an electricity price of 0-37 EUR/MWh, the heat pump has the lowest marginal heat production cost. From an electricity price of 37-44 EUR/MWh, the gas boiler has the lowest marginal heat production cost. The gas engine has the lowest marginal heat production cost from 44 EUR/MWh and up. It is evident that electricity prices and heat production costs are related.  120  100  80  60  40  20  ‐  ‐  7  13  20 Figure 3 Diagram of marginal heat production cost in a Danish DH plant with gas boiler (HO), heat pump (P2H) and gas engine (CHP). Based on  data from the energyPRO model (EMD International 2016).  As it appears from the above description, CHP produces electricity, while P2H consumes electricity. It is exactly these characteristics that qualify these technologies to be in the DH-electricity interface. Figure 4 explains their respective contribution to flexibility in the ideal market. 1. Low VRE production. High electricity prices incentivise the CHP to produce, where the heat is delivered to the consumers and to the heat storage. 2. High VRE production covers the electricity demand. Low electricity prices incentivise supply of heat from the storage.  27  34  40  47  54  60  67  74  81  87  94  101 Heat production cost  EUR/MWh heat Day ahead spot price EUR/MWh electricity Gas boiler Heat pump (COP 2.6) Gas engine


WP2 DH report
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