Research

Biomass Supply Planning for Combined Heat and Power Plants using Stochastic Programming

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Abstract

During the last years, the consumption of biomass to produce power and heat has increased due to the new carbon neutral policies. Nowadays, many district heating systems operate their combined heat and power (CHP) plants using different types of biomass instead of fossil fuel, especially to produce heat. Since biomass is transported from the supplier to the consumption sites and the contracts with the suppliers are negotiated months in advance, the negotiation process involves many uncertainties from the energy producer’s side. The demand for biomass is uncertain at the time of negotiation, and heat demand and electricity prices vary drastically during the planning period. Furthermore, the optimal operation of combined heat and power plants has to consider the existing synergies between the power and heating systems while always fulfilling the heat demand of the system. We propose a solution method using stochastic optimization to support the biomass supply planning for combined heat and power plants. Our two-phase approach combines mid-term decisions about biomass supply contracts with the short-term decisions regarding the optimal market participation of the producer to ensure profitability and feasibility. The risk of major deficits in biomass supply is reduced by including appropriate risk measures to the models. We present numerical results and an economic analysis based on a realistic test case.