As a starting point, most combined heat and power system features one or more large CHP units as well as heat-only boilers for peak-load periods or back-up supply. If operated efficiently, one will commit either the CHP unit or HOB to meet one’s supply obligation at a given time.
A CHP unit can generate 0.3 units of electricity and 0.6 units of heat p.u. fuel input, having a power generation efficiency of 30%, heat generation of 60% and a total efficiency of 90%. The back-up boiler is an older vintage with a heat efficiency of 85%. Which unit should generate needed heat in a situation where there is an abundance of wind power from and overall efficiency perspective?
Despite the CHP unit’s higher overall efficiency, the opportunity value of the power is now zero. Electricity not generated by the CHP is made up by reducing curtailment. The same quantity of heat and power can be delivered with about 0.5 less units of fuel p.u. of heat, leading to reduced fuel costs and emissions. The savings occur from the combined interest of the wind and district heating plant owners. Aligning these interests is the key institutional challenge.
Heat storages are commonly large insulated tanks to store hot water. In contrast with electricity, heat is an energy form, which can be storage quite cheaply for considerable time, without significant losses. Moreover, the technology is quite cheap. Heat storages can be used to decouple the time of heat generation on a CHP with the time of consumption. Therefore, when there is need for electricity, the CHP can generate and store heat in excess of simultaneous demand. When there is abundant wind power, the CHP is not ‘forced’ to be online, since heat can be supplied from the storage unit.
Electric boilers/heat pumps
Conventionally, converting electricity to heat 1-1 is a bad idea, since thermal electricity generation is less efficient than heat generation. However, when the opportunity cost of electricity is zero (wind is being curtailed); we can take free electricity and make free heat. Electric boilers have the advantage of being a relatively cheap technical measure, but if an electric boiler is running often, it is an indication of either a structural imbalance of misalignment of incentives in the system. Heat pumps are a more energy efficient technology. Heat pumps can move heat from a lower temperature ambient heat source to a higher temperature usable for district heating. Depending on the technology and temperatures, the coefficient of performance (COP) could be 3 meaning that 3 units of usable heat can be generated using 1 unit of electricity. The added efficiency comes at a higher cost, however.
Condensing power production
In balancing wind power, CHP extraction units can play another important role. Extraction steam turbine CHPs have considerable flexibility in the power-heat output combination. Unfortunately, wind power is not perfectly predictable and it can therefore be necessary to have reserves available for the unexpected drop-off in generation.
Moreover, it is possible to very quickly boost power output by discontinuing heat supply from the plant. This option can reduce the necessity of having other regulating units online. This is important since each thermal generator brought online in a power system, increases the combined minimum thermal power output and leaves less accommodation space for wind and other renewables.