The present study of the district heating (DH) system in the city of Kisa, Sweden, shows how, through energy cooperation with a nearby sawmill and paper mill, a local energy company contributes to energy-efficient DH and cost-effective utilization of a new biofuel combined heat and power (CHP) plant. Cases of stand-alone and integrated energy systems are optimized with the linear program MODEST. The European power market is assumed to be fully deregulated. The results show clear advantages for the energy company to cooperate with these industries to produce heat for DH and process steam for industry. The cooperating industries gain advantages from heat and/or biofuel by-product supply as well. The opening to use a biofuel CHP plant for combined heat supply results in cogenerated electricity of almost 29 GWh/a with an increased biofuel use of 13 GWh/a, zero fuel oil use and CO₂ emission reductions of 25,800 tons CO₂/a with coal-condensing power plant on the margin and biofuel as limited resource. The total system cost decreases by −2.18 MEUR/a through extended cooperation and renewable electricity sales. The sensitivity analysis shows that the profitability of investing in a biofuel CHP plant increases with higher electricity and electricity certificate prices.

This paper investigates the interaction of a wide range of electricity and fuel prices and technical factors of combined heat and power production in a district heating system. A linear programming-based optimization model with the objective to minimize system cost was used to study the energy systems in the cities of Gävle and Sandviken in Sweden. The comprehensive outcomes from optimization and parametric studies have been analyzed using a polynomial-based metamodel. System costs include variable costs for the production and revenues for sale of heat and electricity. The metamodel is used as an analytical and explanatory tool to interpret input-output relationships. Municipal district heating systems of Gävle and Sandviken in Sweden are studied as an interconnected regional system with improved and new combined heat and power plants. The results show that effects from electricity and fuel prices are important, but that variations in energy system cost may also be caused by many cross-factor interactions with technical factors. A comparative system performance analysis with defined cases and optimal factor setting shows a substantial increase in the electricity production, here by up to 650 GWh annually. The profitability of investing in a new plant depends highly on the considered investment risk and electricity and fuel market prices. CO₂ emission savings by up to 466 kton annually can be accomplished if marginal electricity production from coal-condensing power plants is avoided and biofuel is released at the same time.

Energy-related cooperation using industrial excess heat (IEH) in district heating (DH) networks shows economic and environmental benefits. A rarely investigated approach is the energy cooperation which incorporates a jointly operated CHP plant also producing process steam for nearby industry. The present study aims to evaluate economic and environmental effects on the Hofors DH system with jointly operated CHP plant when the nearby steel mill extends the supply of recovered IEH. Various IEH supply opportunities with different capacities of hot water and steam were designed and compared with existing IEH utilization, plant heat and electricity production and DH system performance. The energy system model MODEST is used for cost-optimization. A parametric study is used to analyze influences of increasing IEH cost and fluctuating electricity prices. The results show advantages for the DH system to utilize IEH for deliveries of DH and process steam and the cogeneration of electricity. Economic and environmental benefits are decreased total system cost (-1.67 MEUR/a), less use of fuels and electricity, and reduced CO₂ emissions with a maximal reachable amount of 28,200 ton/a when the use of biofuel is assumed as limited resource and the substituted marginal electricity production is based on coal condensing power plants. The results also show that industrial steam is a preferred heat supply source as long as the steam cost is below the alternative heat production cost, irrespective of the electricity price. While the cost-effective utilization of industrial hot water for DH is more sensitive and affected by a beneficial CHP production based on higher electricity price segments, it is also shown that utilization of continuously supplied industrial hot water is limited during seasons of low DH demand.