Production planning of energy systems: Cost and risk assessment for district heating

This dissertation is a collection of research articles that assess economic and
operational risk in production planning of district heating. District heating
systems are typically coupled to the electricity system through cogeneration
and power-to-heat technologies, and production planners must account for
uncertainty stemming from changing weather, demands and prices. Years of
high-resolution data from the district heating system in Aarhus, Denmark have
been used throughout the project to model the system and estimate uncertainties.
Risk management tools have been developed to aid district heating operators
and investment decision makers in short-, medium- and long-term production
planning.
Short-term production planning involves commitment of production units
and trading on the electricity markets and relies on forecasts of the heat load.
Weather predictions are a significant source of uncertainty for heat load forecasts,
because the heat load is highly weather-dependent. I introduce the method of
ensemble weather predictions from meteorology to heat load forecasting and
create a probabilistic load forecast to estimate the weather-based uncertainty.
Better estimates of the weather-based uncertainty can be applied to optimize
supply temperature control and reduce heat losses without compromising security
of supply in heat distribution systems.
Consumer behavior is another substantial, but difficult to capture, source of
uncertainty in short-term heat load forecasts. I include local holiday data in
state-of-the-art load forecasts to improve accuracy and capture how load patterns
change depending on the behavior of the consumers. A small overall improvement
in forecast accuracy is observed. The improvement is more significant on holidays
and special occasions that are difficult to forecast accurately.
In medium-term production planning, there can be substantial economic
potential in performing summer shutdown of certain production units. The
shutdown decision carries significant risk, due to changing seasonal weather
patterns. Based on 38 years of weather data, the uncertainty on the timing of
the optimal decision is estimated. This information is used to develop practical
decision rules that are robust to rare weather events and capable of realizing
more than 90% of the potential savings from summer shutdown.
Long-term production planning decisions regarding investments in future
district heating production systems are affected by uncertainty from changing
electricity prices, fuel prices and investment cost for technology. The effects of
these uncertainties on a cost-optimal heat production system are explored, using
well-established production and storage technologies and extensive multivariate
sensitivity analysis. The optimal technology choices are highly stable and,
taxes aside, large heat pumps and heat storages dominate the cost-optimal heat
production systems. However, the uncertainty on the exact capacity allocation
is substantial. Excluding heat production based on fossil fuels increases the
uncertainty on the system cost, but drastically reduces the uncertainty on the
optimal capacity allocation.