The findings in [10] particularly challenges the findings of studies that suggests for the introduction of large-scale heat pumps in district heating to be a “no-regret” option, represent-ing certain economic and environmental benefits.
The concept of integrating efficient large ground-source heat pumps in district heating production for the purpose of sup-porting large-scale penetration of wind power and cogenera-tion was analyzed as part of the research project at Aalborg University “Local Energy Markets” published in January 2004 [29]. Here it was assumed that the required levelized invest-ment costs including fixed O&M costs for integrating large-scale heat pumps in distributed generation would correspond roughly to an investment of €0,5 mill. per MWe, and it was found that investments in heat pumps was cost-effective even at current levels of wind power penetration. The thesis finds that investment costs for relevant concepts are likely to be at least 5 times higher than assumed in this study.
In ”Energy Plan 2030”, prepared by the Danish Association of Engineers [21], investment costs and fixed O&M costs reflect the findings also applied for some of the options in this thesis upon consultation [22], corresponding to investment costs of
€2,7 mill. per MWe. Applying EnergyPLAN, the study finds that the integration of 450 MWe large-scale heat pumps would reduce the economic costs of energy production in 2030 by
€263 mill. before depreciation of investment costs and fixed O&M costs, amounting roughly to a levelized cost of €82 mill.
per year at a discount rate of 3 % per year, suggesting for the net benefits to amount to €181 mill. per year. However, these benefits are not arrived at by the partial inclusion of heat pumps in the reference scenario, but by removing heat pumps from the alternative scenario, i.e. they represent the benefit of
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heat pumps in a visionary scenario in multiple ways different from the reference scenario, particular with respect to wind penetration levels, which is at 60 % of total supply. Noticea-bly, in the visionary scenario, heat pumps are replacing almost 75 % of boiler operation and 20 % of cogeneration, and are basically operated as base load heat producers with 7100 full-load hours. In this thesis, [10] simulates the introduction of heat pumps quite differently finding that for concepts like CHP-HP-CS or CHP-HP-GS only the installation of an unconstrained HP-GS unit with a heat production capacity similar to that of the CHP unit is able to replace 100 % of boiler operation and 19 % of CHP unit operation, while for more cost-effective options, boiler operation is reduced by 25 % - 40 %, while CHP unit operation is reduced by 2 % - 14 %. Simply extrapo-lating the results in [10] with respect to costs, it is found that introducing 450 MWe heat pumps as CS or CHP-HP-GS would result in net annualized economic costs of between
€30 mill. and €55 mill.
In ”The Future Danish Energy System”, prepared by The Danish Technology Council [30], the so-called “combi-scenario 2025” includes the consequences of allowing 264 MWe large-scale heat pumps to supply almost 17 % of the total district heating production in 2025. At €3,5 mill. per MWe, investment costs, and also fixed O&M costs, are higher than for the integrated options suggested by the thesis. The heat pump option is not subject to any partial evaluation, but the combi-scenario is found to increase the economic costs of energy system operation by €214 mill. per year compared to the assumed 2025 reference scenario. While the study evaluates the heat pumps as integrated in heat-only production, it may be argued that simply assuming 4500 full-load hours for all heat pumps without considering reducing the number of full-load hours for distributed generators, fails to consider the constraints given by actual plant operation as explored with this thesis. The thesis hypothesizes that the introduction of large-scale heat pumps primarily will take place in distributed generation which would allow for advanced relocation con-cepts, but would then also reduce the load factor of cogenera-tors.
However, the methodology of these studies differs from the approach applied in [10]. Both studies analyses the inclusion of heat pumps for a single year in an energy system very
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different from the current system. In [21], the wind power penetration level in 2030 for which the analyses are prepared is assumed to have reached 60 %. In [30], wind power penetration levels in 2025 are assumed to be at 50 %. In [10], the Danish Energy Agency’s annual reference develop-ment scenario as modelled by RAMSES is applied in modelling relocation concepts over a period of 20 years from 2006-2025 during which the wind power penetration level will increase to 29 %.
With respect to electricity spot market prices and fossil fuel prices, the thesis applies Danish Energy Agency projections for 2006-2025 as of February 2007 [25], which includes projected prices for 2030; USD55 per barrel for oil, and USD60 per ton for coal. In [21], an oil price of USD68 and a coal price of USD63 is assumed for 2030, while [30] assumes an oil price of USD50 and a coal price of USD55 for 2025.
But most importantly, both studies are assuming for heat pumps to substitute boiler operation rather than cogeneration, allowing for high load factors of the heat pumps. In this respect, both studies are not limited to considering the inte-gration of heat pumps with cogenerators for which boiler operation is often limited to peak and reserve loads, often supplying a relatively small share of total heat production. Nor does the studies consider for the operation of heat pumps to be constrained by the availability of low-temperature heat sources.
In conclusion, the combined findings of these studies and the findings offered by the thesis, it is suggested that the technical and operational concepts, by which heat pumps are integrated into the energy system, is critical to the cost-effectiveness of this option. The two studies are suggesting that concepts allowing for the heat pump to substitute boiler operation, making the heat pump enter as a base-load heat producer, are likely to be cost-effective. The thesis is suggesting that concepts for integrating heat pumps with cogenerators comes with significant variations in resulting substituted boiler operation and cogeneration, which may in some cases (Option C) even increase boiler operation, reducing only cogeneration.
For the concepts in [10], the heat pump enters as an interme-diate-load heat production unit with full-load hours between 1350 and 4250 according to concept, all resulting in
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ized costs of heat production that are 2 % to 8 % higher for Options A-D, and 59 % higher for Option E.
Finally, in another recent study, Energinet.dk’s 2007 system plan [7] considers the integration of 125 MWe large-scale heat pumps into strategic district heating areas by 2025 in an energy system where 44% of total wind production would come from wind power. In this study, heat pumps are found to reduce critical excess by 60 GWh out of a total critical excess of 700 GWh. The thesis finds that 125 MWe CHP-HP-CS or CHP-HP-GS concepts would likely consume around 160 GWh per year, while reducing cogenerator electricity output by about 600 GWh per year. However, the thesis has not at-tempted to quantify the problem in terms of excess electricity production.