During recent years interest in gas-based CHP systems has been growing in Europe due to environmental concerns and ageing of older heat generation systems. The new plants have to be developed under uncertain economic conditions and the situation is made even more difficult by the instability of regulatory frameworks in some EU countries. This is further complicated by anticipated increase of energy market volatility, already observed in some countries and attributable to increased amount of wind and solar capacity, whose output patterns do not follow fluctuations in electricity and heat demand.
At the same time considerable technical progress has been made and new solutions can be offered to the investors. This paper discusses relative merits of internal combustion engines (ICEs) and gas turbine combined cycles (GTCCs) in both traditional and future energy markets. Traditionally the ICE technology has only been seen as a valid solution for smaller and more agile plants, while the latter seems to be preferred for large-scale and baseload applications, yet the justified “borderline” size for a specific type of plant is not clear. Based on external market analyses, comparative feasibility studies and specific calculations the authors have attempted to find such a borderline by defining distinct technical and economic project conditions where both solutions offer comparable feasibility (expressed as internal rate of return for the project) for typical baseload CHP plants built in today’s conditions.
This analysis is followed by a study of additional benefits of using inherent flexibility of ICE technology on increasingly unstable energy markets in order to adapt to rapidly changing market environments. It is shown that use of heat accumulators enables making full use of ICE flexibility also in district heating applications. This way ICEs can run when the electricity price is high - typically when no renewable energy is available – providing heat to the network and loading the accumulators, which in turn cover the heat load when renewables are running again.
Ultimately it is demonstrated that in certain application fields ICE technology is competitive even in traditional and relatively large baseload DH applications. Furthermore, the dynamic combination of ICE and heat accumulators can bring further benefits to the environment, grid owners and utilities – as well as the electricity consumers – thus further extending its attractiveness.