HOW TO GUIDE
Making automatic calculation of the
operation strategy in energyPRO
Software for techno-economic analyses of energy projects
Preface
energyPRO is a Windows-based modeling software package for combined techno-economic analysis and optimisation of complex energy projects with a combined supply of electricity and thermal energy from multiple different energy producing units.
The unique programming in energyPRO optimises the operations of the plant including energy storage (heat, fuel,
cold and electrical storages) against technical and financial parameters to provide a detailed specification for the
provision of the defined energy demands, including heating, cooling and electricity use.
energyPRO also provides the user with a detailed financial plan in a standard format accepted by international
banks and funding institutions. The software enables the user to calculate and produce a report for the emissions
by the proposed project.
energyPRO is very user-friendly and is the most advanced and flexible software package for making a combined
technical and economic analysis of multi-dimensional energy projects.
For further information concerning the applications of energyPRO please visit www.emd.dk.
Terms of application
EMD has made every attempt to ensure the accuracy and reliability of the information provided in this Guide.
However, the information is provided "as is" without warranty of any kind. EMD does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained in this
Guide.
No warranties, promises and/or representations of any kind, expressed or implied, are given as to the nature,
standard, accuracy or otherwise of the information provided in this Guide nor to the suitability or otherwise of
the information to your particular circumstances. In no event shall EMD be liable for any loss or damage of whatever nature (direct, indirect, consequential, or other) whether arising in contract, tort or otherwise, which may
arise as a result of your use of (or inability to use) this Guide, or from your use of (or failure to use) the information in this Guide.
EMD International A/S, November 2013
Content
1. Introduction ............................................................................. 1
2. The operation strategy window .......................................... 1
2.1 The operation strategy - fixed tariffs ........................................................... 2
2.2 The operation strategy - spot prices ........................................................... 2
3. How the operation strategy is calculated ........................ 3
3.1 A present electricity demand in the model ................................................... 5
3.2 Limitations of the automatic calculation of operation strategy ........................ 6
4. “Operation Strategy Calculation”-report .......................... 6
4.1 Example of how the operation strategy is calculated ..................................... 8
Annex 1: Interpretation of economy functions in
calculation of the operation strategy .............................. 12
1. Introduction
In energyPRO one has the option of choosing between an user defined operation strategy and an automatic
calculated operation strategy called “Minimizing Net Production Cost”. This ‘How to Guide’ details how to
set up the operation strategy, how it is calculated and lastly how to see the results of the calculation. More
information can be found in the energyPRO User’s Guide at www.emd.dk/energyPRO/Downloads
A typical way of making an operation strategy for an energy plant, is to put the energy conversion units in
operation only if they create profit for the plant - or expressed in another way, only to put an energy conversion unit in operation if the value of its outputs is bigger than its production costs including the costs of
the fuel inputs.
This however, is not the basic idea behind the operation strategy “Minimizing Net Production Cost”. The
basic idea behind this operation strategy is that many local energy plants have an obligation to cover local
energy demands – e.g. demands for heat, process heat or cooling. The goal of the operation strategy “Minimizing Net Production Cost” is to minimize the costs of covering these local demands.
With this goal in mind, the operation strategy could as well have been called Minimizing Production Cost
but as the energy conversion units may produce other outputs than the outputs covering the local demands – e.g. electricity, the energy plant does not have an obligation to cover demands for these other
outputs, since they may be covered by other plants. But producing these other outputs (e.g. electricity)
represents a value for the plant and will reduce the net production costs of covering the local energy demands. Therefore the goal of the operation strategy “Minimizing Net Production Cost” is to minimize the
costs of covering the local demands reduced with the value of the other outputs (e.g. electricity).
Keep in mind that optimizing a local energy plant is often a complex task for energyPRO because it optimizes the use of energy storages (heat, fuel or electricity storages), that is to say that the outputs is not necessarily produced at the cheapest price in the hour where they are covering demands, but may be produced
earlier and stored in between in the energy storages.
2. The operation strategy window
To setup the Operation strategy there are two options. The first one is to double-click on the “Operation
Strategy”-folder and the second option is to click the “Operation Strategy” in the editing window. Either
way will open a window as the one shown on Figure 1.
Figure 1. Select operation strategy
1
Here the user can choose between automatic calculation of operation strategy “Minimizing Net Production
Cost” or user defined “User defined Operation Strategy”. The last option is primarily directed at projects
where the user might want to investigate the technical possibilities rather than optimising the economic
profit or the user simply want to test own control strategies independent of the modelled economy .
2.1 The operation strategy - fixed tariffs
Figure 2 shows an example of an operation strategy with auto calculated Net Heat Production Costs in a
matrix consisting of the tariff names and the production units. These values cannot be edited while “Minimizing Net Production Cost” is selected. Choosing “User defined operation strategy” instead will keep the
calculated values and make the table editable.
Figure 2. Operation strategy table - minimizing the net heat production cost for fixed tariffs
The functionality of “Minimizing Net Production Cost” is described in section 3.
2.2 The operation strategy - spot prices
If “Minimizing Net Production Cost” is selected the operation strategy table is substituted by a graphic representation of the Net Heat Production Cost for the energy producing units as a function of the electricity
spot prices, as seen on Figure 3.
Figure 3. The operation strategy window with Net Heat Production Cost shown as function of electricity spot prices
2
If a cooling demand is present in the model an extra tab called ”Net Cooling Production Cost” is added,
where the operation strategy for the Net Cooling Production is shown. A graphic representation of the Net
Cooling Production Cost for energy producing units as function of the electricity spot prices can be seen on
Figure 4.
Figure 4. The operation strategy window with Net Cooling Production Cost shown as function of electricity spot prices
3. How the operation strategy is calculated
The basic idea behind the automatic operation strategy calculations in energyPRO is that the “Net Heat
Production Costs”, and “Net Cooling Production Costs” (if a cooling demand is added), are calculated for
each production unit in all tariff periods. For instance, if there are six tariff periods, six prices for the “Net
Heat Production Costs” and “Net Cooling Production Costs” are calculated as one for each of the production units forming a decision table. When calculating the energy conversion, energyPRO first places as
much production as possible on the production unit/tariff period combination represented by the smallest
value in the decision table. Hereafter the production unit/tariff period represented by the second smallest
net heat production cost will get as much production as possible, etc. This is done until all demands are met
or the production opportunities are exhausted.
The calculation of the operation strategy is entirely based upon the “Revenues” and the “Operation expenditures” set up by the user to describe the Operation income1. Therefore it is of crucial importance that
these payments are set up properly prior to the energy conversion calculation. The energy and economy
calculation are tied together and will affect each other. The calculation strategy is calculated for each
month in the planning period.
1
See the energyPRO User’s Guide for how to set up economy
3
The methodology for calculating the operation strategy is an incremental approach where each of the heatproducing units is calculated as stand-alone units producing one MWh-heat, and each of the cooling producing units as producing one MWh-cooling. In this calculation, all the payments in “Revenues” and “Operation expenditures” are evaluated and calculated. The calculation is repeated for each production unit in
each electricity tariff period.
This is the case for production units with heat production. On Figure 5 is shown the heat-producing units in
energyPRO. This is CHP, Boiler, Electrical heat pump and User defined. Note that a “User defined” production unit needs a heat production typed into the power curve.
Figure 5. Net heat production costs are only calculated for heat producing units.
Photovoltaic and Wind farms are always set to a priority higher than all heat-producing units. Next the heat
producing units are calculated, then the cooling producing units. Of the cooling producing units the absorption chillers are calculated first and finally the electric chillers.
The priority of the absorption chiller is defined as the maximum allowed heat production cost. This means
that if the absorption chiller is to produce cheaper than the electric chiller in the same tariff period, then
the heat producing unit must have a heat production cost lower than the maximum allowed heat production cost.
If a payment is the same for all production units in all tariff periods the payment is ignored. By other words,
fixed payments are not related to the operation of production units and are therefore eliminated.
4
In annex 1 the formulas that may occur when describing the payments are presented and interpreted upon
in relation to calculation of the operation strategy.
Each month new operation strategies are calculated. By selecting a month in the project period, the corresponding operation strategy is calculated and shown as on Error! Reference source not found..
Figure 6. The operation strategy for an arbitrary month of the planning period
3.1 A present electricity demand in the model
If one or more electricity demands are present in a project the calculation of the operation strategy changes. First, an additional set of net heat production costs is calculated based on covering the electricity demand. This means that “ExportedElectricity” and “ImportedElectricity” is interpreted as follows:
Function
ExportedElectricity
ImportedElectricity
Return value
0
EC - EP
Based on the two sets of net heat production costs (the “electricity export” and the “covering own electricity demand”) is calculated a weighted average, dependent on the electricity production capacity of the unit
and the electricity consumption in each time step.
Priority number when electricity demand is 0% of electricity production capacity:
100%*”electricity export” + 0%*”covering own electricity demand”
Priority number when electricity demand is 50% of electricity production capacity:
50%*”electricity export” + 50%*”covering own electricity demand”
Priority number when electricity demand is 100% or more of electricity production capacity:
0%*”electricity export” + 100%*”covering own electricity demand”
5
3.2 Limitations of the automatic calculation of operation strategy
If the “Delivery of both heat and process heat”-option is enabled in the “Project identification”-folder as
shown on Figure 7. The Operation Strategy will change to User Defined. This is also the case if there are fuel
producing energy units in the project. In these cases the automatic calculation for the operation strategy is
not supported.
Figure 7. Automatic calculations are not possible if delivery of heat is enabled
4. “Operation Strategy Calculation”-report
The report “Operation Strategy Calculation” shows the calculation of the operation strategy in details. The
report is invoked by clicking the “Operation Strategy Calculation”-folder in the Reports tree view shown on
Figure 8.
6
Figure 8. “Operation Strategy Calculation”-report
Hereafter a report will appear similar to the example shown on Figure 9.
The report starts with a main table containing the calculated operation strategy. The value in this table is
identical to the values found in the “Operation Strategy”-window.
Hereafter follows tables with detailed calculation results for each production unit. Each table contains the
calculation of the net heat production costs in all tariff periods.
Note that payments that are identical for all production units in all tariff periods are removed. This could
for instance be a fixed payment not related to the energy conversion.
7
Figure 9. An example of an operation strategy calculation
The shown month can be changed by clicking the button “Operation Strategy Report Setup” in the menu in
the top.
4.1 Example of how the operation strategy is calculated
In the following is described how the heat production costs for gas engine 1 in the Day is calculated (2.73
GBP/MWh-heat as shown on Figure 10).
Gas engine 1 has the following power curve:
8
Figure 10. Power curve, Gas engine 1.
When producing 1 MWh-heat the use of fuel will amount to
1MWhheat *
5267kWh fuel
2114kWhheat
 2.5MWh fuel
The corresponding electricity production will be
1MWhheat *
2000kWhelec
 0.95MWhelectricity
2114kWhheat
With these figures in place we can move on to the economy.
The production on 0.95 MWh-electricity will generate a revenue depending on the price per unit for export
of electricity as shown on Figure 11.
Figure 11. Screenshot, Sale of electricity revenue
The revenue will amount to:
0.95MWhelec * 50GBP / MWhelec  47,3GBP (the inaccuracy is due to rounding off)
The operation expenditures are divided into Fuel costs and Operation and Maintenance costs with these
payments shown on Figure 12, Figure 13 and Figure 14.
9
Figure 12. Fuel cost payment
We also need the definition of the fuel Natural gas:
Figure 13. Natural gas cost
The Natural gas payment becomes
2.5MWh fuel *
1000kWh / MWh
* 0.2GBP / Nm3  45.30GBP
11kWh / Nm3
The last payment regards the operation and maintenance costs.
Figure 14. Operation and Maintenance costs for gas engine 1
10
The operation and maintenance costs are related to the electricity production and becomes
0.95MWhelec * 5.00GBP / MWh  elec  4.73GBP
The total operation expenditures are
45.30 + 4.73 = 50.03 GBP
and subtracted the revenue, the heat production costs of 1 MWh-heat becomes
50.03 – 47.3 = 2.73 GBP
11
Annex 1: Interpretation of economy functions in calculation
of the operation strategy
Function
Demand functions
HD
ED
CD
PHD
PeakElecLoadAnnual
PeakElectricDemand
Net heat production
Net cooling production
0
0
0
0
0
0
0
0
0
0
0
0
1
ElProd/HeatProd
FuelCon/HeatProd
ElCon/HeatProd
CoolProd/HeatProd
1/HeatProd
0
0
0
0
0
0
Elcon/CoolProd
1
1
0
0
0
0
Other founctions
HeatValue
UnitOfDemand
Month
Index,
Indeksfaktor
TSMean,
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Functions at system level
ExportedElectricity *)
ImportedElectricity *)
ImportedFuel
AccExportedElectricity
AccImportedElectricity
AccImportedFuel
APeakExportedElectricity
APeakImportedElectricity
PeakExportedElectricity
EP
EC
FC
0
0
0
0
0
0
0
EC
0
0
0
0
0
0
0
Energy conversion unit functions
HP
EP
FC
EC
HC
CP, CoolingProduction
HoursOfOperation
ElectricCapacity
Turnons
AccEP
12
PeakImportedElectricity
PeakImportedFuel
0
0
0
0
Spot price functions
SpotPricesXExportedElectricity
SpotPricesXImportedElectricity
SPxDE
SPxRE
Elec-Spotprice * ExportedElectric- 0
ity
Elec-Spotprice * ImportedElec- Elec-Spotprice * ImportedElectricity
tricity
Elec-Spotprice * ExportedElectric- 0
ity
Elec-Spotprice * ImportedElec- Elec-Spotprice * ImportedElectricity
tricity
Table 1: Interpretation of payment functions in energyPRO when calculating operation strategy
*) if an electricity demand is present, then the operation strategy is planned to cover exactly this demand.
The consequence is a changed interpretation of “ExportedElectricity” and “ImportedElectricity”
Function
Return value
ExportedElectricity
ImportedElectricity
0
EC - EP
The operation strategy is calculated as with one market with a few exceptions. The exceptions are concerning the functions “ExportedElectricity” and “ImportedElectricity”. An overview of how those functions are
interpreted in a two-market situation is illustrated on Figure 15.
The interpretation of those functions depend on a) whether an electricity demand is present and b) which
market the energy conversion unit is attached to.
Where:
Heatprod
ElPprod
CoolProd
ElCon
FuelCon
= Heat production capacity
= Electricity production capacity
= Cooling Production capacity
= Electricity consumption capacity
= Fuel consumption capacity
All in [MWh] or [kWh]
13
Figure 15. Functions interpreted into a two-market situation
14
EMD International A/S
Niels Jernes Vej 10 • DK-9220 Aalborg Ø • Denmark
Tel.: +45 9635 4444 • Fax: +45 9635 4446 • E-mail: emdmd.dk • www.emd.dk