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This paper shows that in support of its ability to improve the overall economic cost-effectiveness and flexibility of the Danish energy system, the financially feasible integration of large-scale heat pumps (HP) with existing combined heat and power (CHP) plants, is critically sensitive to the operational mode of the HP vis-à-vis the operational coefficient of performance, mainly given by the temperature level of the heat source. When using ground source for low-temperature heat source, heat production costs increases by about 10%, while partial use of condensed flue gasses for low-temperature heat source results in an 8% cost reduction. Furthermore, the analysis shows that when a large-scale HP is integrated with an existing CHP plant, the projected spot market situation in The Nordic Power Exchange (Nord Pool) towards 2025, which reflects a growing share of wind power and heat-supply constrained power generation electricity, further reduces the operational hours of the CHP unit over time, while increasing the operational hours of the HP unit. In result, an HP unit at half the heat production capacity as the CHP unit in combination with a heat-only boiler represents as a possibly financially feasible alternative to CHP operation, rather than a supplement to CHP unit operation. While such revised operational strategy would have impacts on policies to promote co-generation, these results indicate that the integration of large-scale HP may jeopardize efforts to promote co-generation. Policy instruments should be designed to promote the integration of HP with lower than half of the heating capacity of the CHP unit. Also it is found, that CHP-HP plant designs should allow for the utilization of heat recovered from the CHP unit’s flue gasses for both concurrent (CHP unit and HP unit) and independent operation (HP unit only). For independent operation, the recovered heat is required to be stored. .
PAPER REVISED: 2007-04-25
PAPER ACCEPTED: 2007-04-30
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