Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration
In the case of cogeneration, the allocation of operation costs has a particularity specific to the joint production of heat and electricity from the same primary energy source. The cost allocation is also influenced by the demand conditions faced by the joint products, and prices must be sufficient...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-12-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/16/1/134 |
| _version_ | 1797625881214058496 |
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| author | Pavel Atănăsoae |
| author_facet | Pavel Atănăsoae |
| author_sort | Pavel Atănăsoae |
| collection | DOAJ |
| description | In the case of cogeneration, the allocation of operation costs has a particularity specific to the joint production of heat and electricity from the same primary energy source. The cost allocation is also influenced by the demand conditions faced by the joint products, and prices must be sufficient for both products to remain profitable and competitive with other power generation alternatives in the respective markets. Therefore, the choice of cost allocation methodology is influenced by market conditions. The paper presents an algorithm for determining the prices of energy and heat produced in cogeneration according to demand and market conditions. The economic market method was extended with an algorithm based on duality theory for verifying allocation methods and establishing forecasting strategies. An example is provided for a cogeneration plant (1.287 MWe; 5.386 MWth) based on ORC (Organic Rankine Cycle) technology and biomass fuel. The fuel cost has a major influence on the total costs of the cogeneration plant, between 68% and 77% in the analyzed scenarios. The fuel cost variation is considered in the application of the cost allocation methods for setting the prices of heat and electricity. |
| first_indexed | 2024-03-11T10:02:44Z |
| format | Article |
| id | doaj.art-2f9144c3fac6491f9556cd9b3df52c0a |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-11T10:02:44Z |
| publishDate | 2022-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-2f9144c3fac6491f9556cd9b3df52c0a2023-11-16T15:14:59ZengMDPI AGEnergies1996-10732022-12-0116113410.3390/en16010134Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in CogenerationPavel Atănăsoae0Department of Electrical Engineering, Faculty of Electrical Engineering and Computer Science, Stefan cel Mare University of Suceava, 720229 Suceava, RomaniaIn the case of cogeneration, the allocation of operation costs has a particularity specific to the joint production of heat and electricity from the same primary energy source. The cost allocation is also influenced by the demand conditions faced by the joint products, and prices must be sufficient for both products to remain profitable and competitive with other power generation alternatives in the respective markets. Therefore, the choice of cost allocation methodology is influenced by market conditions. The paper presents an algorithm for determining the prices of energy and heat produced in cogeneration according to demand and market conditions. The economic market method was extended with an algorithm based on duality theory for verifying allocation methods and establishing forecasting strategies. An example is provided for a cogeneration plant (1.287 MWe; 5.386 MWth) based on ORC (Organic Rankine Cycle) technology and biomass fuel. The fuel cost has a major influence on the total costs of the cogeneration plant, between 68% and 77% in the analyzed scenarios. The fuel cost variation is considered in the application of the cost allocation methods for setting the prices of heat and electricity.https://www.mdpi.com/1996-1073/16/1/134combined heat and powerCHPcogeneration economicscost allocationenergy prices |
| spellingShingle | Pavel Atănăsoae Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration Energies combined heat and power CHP cogeneration economics cost allocation energy prices |
| title | Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration |
| title_full | Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration |
| title_fullStr | Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration |
| title_full_unstemmed | Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration |
| title_short | Allocation of Joint Costs and Price Setting for Electricity and Heat Generated in Cogeneration |
| title_sort | allocation of joint costs and price setting for electricity and heat generated in cogeneration |
| topic | combined heat and power CHP cogeneration economics cost allocation energy prices |
| url | https://www.mdpi.com/1996-1073/16/1/134 |
| work_keys_str_mv | AT pavelatanasoae allocationofjointcostsandpricesettingforelectricityandheatgeneratedincogeneration |