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Li, H., Song, J., Sun, Q., Wallin, F. & Zhang, Q. (2019). A dynamic price model based on levelized cost for district heating. Energy, Ecology and Environment, 4(1), 15-25
Open this publication in new window or tab >>A dynamic price model based on levelized cost for district heating
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2019 (English)In: Energy, Ecology and Environment, ISSN 2363-7692, Vol. 4, no 1, p. 15-25Article in journal (Refereed) Published
Abstract [en]

District Heating (DH) is facing a tough competition in the market. In order to improve its competence, an effective way is to reform price models for DH. This work proposed a new dynamic price model based on the levelized cost of heat (LCOH) and the predicted hourly heat demand. A DH system in Sweden was used as a case study. Three methods were adopted to allocate the fuel cost to the variable costs of heat production, including (1) in proportion to the amount of heat and electricity generation; (2) in proportion to the exergy of generated heat and electricity; and (3) deducting the market price of electricity from the total cost. Results indicated that the LCOH-based pricie model can clearly reflect the production cost of heat. Through the comparison with other market-implemented price models, it was found that even though the market-implemented price models can, to certain extent, reflect the variations in heat demand, they cannot reflect the changes in production cost when different methods of heat production are involved. In addition, price model reforming can lead to a significant change in the expense of consumers and consequently, affect the selection of heating solution.

Place, publisher, year, edition, pages
Joint Center on Global Change and Earth System Science of the University of Maryland and Beijing Normal University, 2019
Keywords
District heating, Dynamic heat price, Heat demand, Levelized cost of heat, Price model
National Category
Energy Engineering Energy Systems
Identifiers
urn:nbn:se:mdh:diva-42917 (URN)10.1007/s40974-019-00109-6 (DOI)2-s2.0-85062437670 (Scopus ID)
Available from: 2019-03-19 Created: 2019-03-19 Last updated: 2019-08-13Bibliographically approved
Du, Y., Wang, C., Li, H., Song, J. & Li, B. (2019). Clustering heat users based on consumption data. In: Energy Procedia: . Paper presented at 10th International Conference on Applied Energy, ICAE 2018, 22 August 2018 through 25 August 2018 (pp. 3196-3201). Elsevier Ltd, 158
Open this publication in new window or tab >>Clustering heat users based on consumption data
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2019 (English)In: Energy Procedia, Elsevier Ltd , 2019, Vol. 158, p. 3196-3201Conference paper, Published paper (Refereed)
Abstract [en]

In today's district heating (DH) energy market, it is common to use user functional categories in price models to determine the heat price. However, users in the same category do not necessarily have the same energy consumption patterns, which potentially leads to unfair prices and many other practical issues. Taking into account heat usage characteristics, this work proposes two data-driven methods to cluster DH users to identify similar usage patterns, using practical energy consumption data. Efforts are focused on extracting representative features of users from their daily usage profiles and duration curves, respectively. Employing clustering based on these features, the resulting typical usage patterns and user category distributions are discussed. Our results can serve as potential inputs for future energy price models, demand-side management, and load reshaping strategies.

Place, publisher, year, edition, pages
Elsevier Ltd, 2019
Keywords
Consumption profile, District heating, Duration curve, User clustering, Electric utilities, Data-driven methods, Energy markets, Future energies, Practical energies, Practical issues, Energy utilization
National Category
Energy Engineering
Identifiers
urn:nbn:se:mdh:diva-43194 (URN)10.1016/j.egypro.2019.01.1010 (DOI)000471031703087 ()2-s2.0-85063916560 (Scopus ID)
Conference
10th International Conference on Applied Energy, ICAE 2018, 22 August 2018 through 25 August 2018
Available from: 2019-04-25 Created: 2019-04-25 Last updated: 2019-08-13Bibliographically approved
Song, J., Wallin, F. & Li, H. (2019). Effectiveness of introducing heat storage to repress cost increase. In: : . Paper presented at 10th International Conference on Applied Energy (ICAE2018), 22-25 August 2018, Hong Kong, China (pp. 4344-4349). , 158
Open this publication in new window or tab >>Effectiveness of introducing heat storage to repress cost increase
2019 (English)Conference paper, Published paper (Refereed)
Abstract [en]

District heating companies have been adapting their price models to reflect the changes in production cost caused by penetration of renewable fuels, and promote the applications of energy conservation measures that benefit the system efficiency. One of the approaches is to introduce a peak demand component in the price model, which has been proved to be effective to benefit users with lower peak demand. Whereas, this approach also significantly increase the cost for users with high peak demand. One of the measures that could help with high peak demand is installing energy storage on the demand side. In order to understand how the energy storage could change the users’ cost and help DH users to make informed decision, this study analyses the economic benefits of demand-side heat storage, namely if installing low-investment, low-tech, short-term hot-water storage on demand side could effectively repress the cost increase caused by new price models. Five types of building are considered here: multifamily house, commercial building, hospital and social services, industrial building, and office and school. One user of each type, whose costs increased the most during the price model transition process have been included. The result shows that heat storage could efficiently repress the cost increase, and all the investments will be paid back within 3 years, which means introducing heat storage is an efficient measure for cost saving under the circumstances.

Series
Energy Procedia, ISSN 1876-6102
Keywords
District heating; price model trannsition; energy storage; peak shifting; optimization
National Category
Energy Systems
Research subject
Energy- and Environmental Engineering
Identifiers
urn:nbn:se:mdh:diva-42248 (URN)10.1016/j.egypro.2019.01.786 (DOI)000471031704108 ()2-s2.0-85063890121 (Scopus ID)
Conference
10th International Conference on Applied Energy (ICAE2018), 22-25 August 2018, Hong Kong, China
Available from: 2018-12-31 Created: 2018-12-31 Last updated: 2019-07-11Bibliographically approved
Song, J., Li, H. & Wallin, F. (2017). Cost comparison between district heating and alternatives during the price model restructuring process. Paper presented at The 8th International Conference on Applied Energy, Beijing, October 8-11 2016. Energy Procedia, 105, 3922-3927
Open this publication in new window or tab >>Cost comparison between district heating and alternatives during the price model restructuring process
2017 (English)In: Energy Procedia, ISSN 1876-6102, E-ISSN 1876-6102, Vol. 105, p. 3922-3927Article in journal (Refereed) Published
Abstract [en]

District heating (DH) has been considered as a resource- and cost-efficient way of supplying heat and a promising method to mitigate climate change, yet it also facing growing competition from alternative technical solutions, such as heat pumps. Many DH companies are under price model restructuring process to enhance their competitiveness. This study investigated the competitiveness of DH among users which would encounter significant cost increase during the price model restructuring process through comparing the cost of different DH price models with three alternative technical solutions. The result shows that for the invested DH user, instead of DH, the most economic preferable choice is to install ground source heat pump combining with direct electrical heating.

Keywords
alternative cost, District heating, heat pump, price model
National Category
Energy Systems
Identifiers
urn:nbn:se:mdh:diva-33950 (URN)10.1016/j.egypro.2017.03.813 (DOI)000404967904005 ()2-s2.0-85020703991 (Scopus ID)
Conference
The 8th International Conference on Applied Energy, Beijing, October 8-11 2016
Funder
Knowledge Foundation
Available from: 2016-11-24 Created: 2016-11-24 Last updated: 2018-07-25Bibliographically approved
Song, J., Wallin, F. & Li, H. (2017). District heating cost fluctuation caused by price model shift. Applied Energy, 194, 715-724
Open this publication in new window or tab >>District heating cost fluctuation caused by price model shift
2017 (English)In: Applied Energy, ISSN 0306-2619, E-ISSN 1872-9118, Vol. 194, p. 715-724Article in journal (Refereed) Published
Abstract [en]

District heating companies are facing multiple challenges nowadays, including increased investment and maintenance cost and critique from customers regarding opaque price model. Hence there is an urgent need to develop new price models. In this paper, a survey was carried out and identified four basic components in the price model. Three price models that represent the current situation and future trend have been extracted from the survey as well. Based on those price models, investigation was performed to study the impacts of different components in price models on customers’ cost. The result shows that customers with flatter consumption profiles can benefit from the price model that has a higher share of load demand component and use consumers’ real-time consumption data for charging. On the contrary, when a price model that has a higher share of energy component is adopted, customers with flatter consumption profiles may experience an increase in the cost.  

Keywords
District heating, Price model, Cost flucturation, Restructured model
National Category
Energy Systems
Research subject
Energy- and Environmental Engineering
Identifiers
urn:nbn:se:mdh:diva-33958 (URN)10.1016/j.apenergy.2016.09.073 (DOI)000399623600066 ()
Funder
Knowledge Foundation
Available from: 2016-11-24 Created: 2016-11-24 Last updated: 2017-05-19Bibliographically approved
Song, J. (2017). Restructured district heating price models and their impact on district heating users. (Licentiate dissertation). Västerås: Malardalen University
Open this publication in new window or tab >>Restructured district heating price models and their impact on district heating users
2017 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

District heating (DH) is considered to be an efficient, environmentally friendly and cost-effective method for providing heat to buildings, since electricity is usually co-generated in biomass fuelled combined heat and power (CHP) plants. This gives it an important role in the mitigation of climate change. Swedish district heating companies are currently facing multiple challenges, and are in urgent need of new price models to increase transparency and maintain their competitiveness.

This thesis describes a survey carried out to understand the structure of the present price models and subsequently proposes and compares two restructured price models with the most commonly used price model. This work also investigates the impact of restructured price models on users who would encounter a significant cost increase if the restructured price models were to be introduced. The district heating costs of different price models are compared with three alternative technical solutions.

The results show that price models based on the consumption pattern of users can reflect district heating companies’ cost structure. Meanwhile, adopting a pricing strategy based on users’ consumption patterns increased the incentives to reduce the peak load.

Consequently, users with high load factor (flat consecutive load curve) were able to reduce costs whereas users with low load factor (steep consecutive load curve) faced possible cost increases, when the load demand cost was changed to daily or hourly peak demand based methods. Further, the most economically preferable option for the invested district heating user was to combine district heating with direct electrical heating or with a ground source heat pump.

Abstract [sv]

Fjärrvärme anses som ett effektivt, miljövänligt och kostnadseffektivt sätt för att leverera värme eftersom kraftvärme blir vanligare i fjärrvärmesystem, där elektricitet produceras tillsammans med värme. Den spelar en viktig roll i att begränsa klimatförändringen. Svenska fjärrvärme företag står inför flera utmaningar nu för tiden, och är i akut behov av nya prismodeller för att öka öppenheten och behålla konkurrenskraften.

I denna avhandling, genomfördes en undersökning för att ta reda på strukturen av de nuvarande prismodellerna. Därefter föreslogs två omstrukturerade prismodeller, vars påverkan på kostnaden av fjärrvärme konsument analyserades jämför med den nuvarande modellen.

Detta arbete undersökte också effekten av omstrukturerade prismodeller på konsument som skulle drabbas på signifikant kostnadsökning i samband med införande prismodeller. Kostnaden av fjärrvärme under olika prismodeller har också jämförts med tre olika tekniska lösningar.

Resultatet visade att prismodeller som baserar sig på konsuments förbrukningsprofil kunde återspegla fjärrvärme företagens kostnadsstruktur; Samtidigt medförde prissättningsstrategi baserad på användarens förbrukningsprofil högre incitament för att minska spetseffekt.

Följaktligen kommer att konsumenter med stabila konsumtionsprofiler att spara kostnader, medan konsumenter med spetsiga konsumtionsprofiler kommer att drabbas av kostnadsökning. Och för den investerade fjärrvärme konsument, den ekonomiska bättre val var att kombinera fjärrvärme med elpanna eller bergvärmepump.

Place, publisher, year, edition, pages
Västerås: Malardalen University, 2017
Series
Mälardalen University Press Licentiate Theses, ISSN 1651-9256 ; 251
Keywords
district heating, restructured price model, price model survey, pricing strategy, consumption profile, consumption pattern, alternative cost
National Category
Energy Systems
Research subject
Energy- and Environmental Engineering
Identifiers
urn:nbn:se:mdh:diva-34779 (URN)978-91-7485-311-7 (ISBN)
Presentation
2017-03-16, Case, Mälardalens högskola, Västerås, 13:00 (English)
Opponent
Supervisors
Funder
Knowledge Foundation
Available from: 2017-02-07 Created: 2017-02-03 Last updated: 2017-03-08Bibliographically approved
Song, J., Wallin, F., Li, H. & Karlsson, B. (2016). Price models of district heating in Sweden. Paper presented at Applied Energy Symposium and Summit on Low-Carbon Cities and Urban Energy Systems, CUE 2015; Fuzhou; China; 15 November 2015 through 17 November 2015. Energy Procedia, 88, 100-105
Open this publication in new window or tab >>Price models of district heating in Sweden
2016 (English)In: Energy Procedia, ISSN 1876-6102, E-ISSN 1876-6102, Vol. 88, p. 100-105Article in journal (Refereed) Published
Abstract [en]

Traditional pricing scheme of district heating is based on previous experience of system operation. This strategy does not work well under the circumstances of decreasing demand and shifting consumption pattern. Therefore new pricing strategies are needed. To have a comprehensive view on existing price models in Sweden, a price model survey was carried out among all members of the district heating quality system REKO. Four basic price components and multiple variants of them are detected in the survey. The result also shows that most of the district heating companies still use traditional methods and do not consider their customers’ consumption pattern while charging them.

Keywords
District heating, price model, model survey, price component
National Category
Energy Systems
Research subject
Energy- and Environmental Engineering
Identifiers
urn:nbn:se:mdh:diva-29824 (URN)10.1016/j.egypro.2016.06.031 (DOI)000387975200016 ()2-s2.0-85007574096 (Scopus ID)
Conference
Applied Energy Symposium and Summit on Low-Carbon Cities and Urban Energy Systems, CUE 2015; Fuzhou; China; 15 November 2015 through 17 November 2015
Available from: 2015-11-30 Created: 2015-11-30 Last updated: 2019-08-13Bibliographically approved
Organisations
Identifiers
ORCID iD: ORCID iD iconorcid.org/0000-0002-4720-548X

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