The economic feasibility of combined heat and power as a utility producer for the residential sector
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Combined heat and power (CHP) plants are a very promising prospect to reducing CO₂ emissions and increasing efficiency in the power generation sector, especially when combined with residential solar photovoltaic (PV) power generation. By utilizing natural gas, a cleaner fuel than coal, CHP plants can reduce CO₂ emissions, while exploiting the waste heat from electricity production to generate a useful thermal energy, increasing the overall efficiency of the plant. While incorporating residential solar PV power generation has important environmental benefits, it can - if not properly managed - lead to an over-generation situation with very high power plant ramp rates. Most current power plants are unlikely to be able to withstand such rapid changes in generation rates. If PV generation is incorporated into the design and operation of the CHP plant, both thermal and electrical energy storage systems can be included, opening the door to more strategies for controlling photovoltaic generation and increased PV power generation. The ability to combine thermal and electrical energy generation in an efficient manner, on a medium to large scale, suggests that CHP plants with rooftop PV panels and energy storage are an appealing choice as an integrated utility supplier for the neighborhood of the future. Yet, there are currently no CHP plants that serve exclusively residential neighborhoods in the United States. Thus, the objective of this research was to determine the most economical design and operation of a CHP plant with integrated residential solar PV power generation to meet all the energy demands of a residential neighborhood. After determining that a CHP plant could meet all the electricity, heating, and cooling demands of a residential neighborhood, a multi-scale economical optimization formulation to simultaneously determine the design and operation of a CHP plant with PV generation was constructed. The optimal CHP plant produced extra energy, so the optimization formulation was updated to include both thermal and electrical energy storage. Utilizing the results from these optimizations, the monetary values of PV generation and energy storage were evaluated, giving a guide for future economic targets for these technologies.