Micro Combined Heat and Power Units in the UK: Feasibility Assessment Using Real Time Pricing and Analysis of Related Policies

Abstract

This thesis considers the techno-economic feasibility of micro combine heat and power (micro-CHP) units within individual dwellings. A cost-minimisation unit-commitment control strategy is applied so that units are operated in their most advantageous fashion in various scenarios. A variety of dwelling types and energy needs were modelled (with data from the Carbon Trust field trial) and a set of sample days chosen to represent seasonal changes. Four different micro-CHP technologies were examined and thermal storage and auxiliary heating considered. The objective was to establish whether a possible introduction of Real Time Pricing (RTP) of energy would affect the viability of micro-CHP and to establish which, if any, support mechanisms might be appropriate. The results show that fuel cell micro-CHPs out-performed the engine-based micro- CHP in most aspects. Low heat to electricity ratio is a desired characteristic given that the electricity price is typically significantly higher than that of gas and a higher production of on-site electricity is favourable. The results show that significant reduction in energy bills (electricity and gas) are possible under RTP compared to fixed tariffs but, in most cases, are not sufficient to cover the capital costs of the micro-CHP. Adoption of micro-CHP becomes tenable when financial incentives such as capital grants and operational cost support (such as Feed in Tariffs, FiT) exist. The results show FiT to be effective from both the consumers’ and a government’s points of view. However, operational cost support alone might not be sufficient to encourage uptake of micro-CHPs and therefore a loan scheme, which supports the initial cost, should be implemented in parallel. A study of CO2 emissions showed that the extent emissions reduction contributed by micro-CHPs is strongly dependent on the type of micro-CHP used and somewhat less influenced by the price of energy.