Market Integration of Excess Heat

TL;DR

This paper explores scheduling and pricing strategies for excess heat in district heating, comparing self-scheduling and market participation, and finds that high excess heat penetration requires advanced coordination methods.

Contribution

It introduces and analyzes two novel methods for integrating excess heat into district heating systems, highlighting the need for sophisticated approaches at high penetration levels.

Findings

Simple price signals are insufficient at high excess heat penetration.

Market participation can improve excess heat utilization.

Advanced coordination becomes necessary for high penetration scenarios.

Abstract

Excess heat will be an important heat source in future carbon-neutral district heating systems. A barrier to excess heat integration is the lack of appropriate scheduling and pricing systems for these producers, which generally have small capacity and limited flexibility. In this work, we formulate and analyze two methods for scheduling and pricing excess heat producers: self-scheduling and market participation. In the former, a price signal is sent to excess heat producers, based on which they determine their optimal schedule. The latter approach allows excess heat producers to participate in a market clearing. In a realistic case study of the Copenhagen district heating system, we investigate market outcomes for the two excess heat integration paradigms under increasing excess heat penetration. An important conclusion is that in systems of high excess heat penetration, simple price signal methods will not suffice, and more sophisticated price signals or coordinated dispatch become a necessity.