Techno-economic optimization of hybrid steam-electric energy systems with excess heat utilization and reserve market participation

TL;DR

This paper evaluates the economic and operational optimization of hybrid industrial energy systems integrating excess heat, energy storage, and market participation, highlighting cost-effective configurations and the impact of market dynamics.

Contribution

It introduces a comprehensive optimization framework for hybrid energy systems considering excess heat utilization and market participation, with detailed case studies for Norway and Germany.

Findings

Steam accumulators are currently more cost-effective than BESS.

Cost reductions in BESS can make batteries more competitive, especially in Germany.

Participation in reserve markets significantly reduces net energy costs.

Abstract

This study investigates the economic viability and optimal configuration of a hybrid industrial energy system combining an electrode boiler, steam accumulator, and battery energy storage system (BESS). This study optimizes system operation for a specific configuration to minimize net energy costs, defined as energy costs minus profits from price arbitrage and reserve markets. The optimization uses load shifting, peak shaving, and frequency containment reserve market participation with hourly 2024 data from Norway and Germany. Net present value (NPV) analysis was performed to determine the most cost-efficient energy storage configurations. The results show that current investment costs favor steam accumulators over BESS in both countries. However, a reduction in BESS cost will make batteries economically competitive, particularly in Germany, where high price volatility and power-based grid tariffs provide stronger incentives for load shifting and peak shaving. Participation in the FCR market accounted for a 17% and 7% reduction of the net energy costs in Norway and Germany, respectively. Utilization of excess heat, through inlet water preheating, further reduced the net energy costs. Sensitivity analyses confirm that investment costs, especially for BESS, strongly influence optimal system design. These findings offer guidance for industrial flexibility investments across diverse electricity markets.