The Economic Competitiveness of the Micro-CHP in Buildings in Nordic Climate

Abstract

Cogeneration systems (CHP) provide both useful thermal energy and electricity generated from a single source such as fuel oil or natural gas. From the technological viewpoint, potential for the application of micro-CHP in the residential sector seems promising. However, reliable information about the prices of the micro-CHP units is not yet widely available. Technical solutions are still in a developing stage. Prices are expected to decrease in the future, when technology develops further and will be followed by increase of production and demand.

The main objective of this research was to evaluate the competitiveness of micro-CHP plants, when compared with the current heating solutions used in residential sector. Technologies like fuel cells and Stirling engines seem promising for small-scale cogeneration for residential buildings in the future and have therefore been used in this research. The other heating forms used in the comparison were fuel oil heating, district heating, ground source heat pump heating and electric heating.

A new calculation tool was developed. Information regarding costs of different heating plants was collected and saved in the data base of the tool. The total costs of each heating method were calculated separately for each heating plant, but using the same approach. The total costs include: construction stage investment costs, annual energy costs, fixed annual basic fees and service and maintenance costs during a life time of 30 years. Different heating generation forms arranged according to the costs (from lowest to highest) were: district heating, electric heating, ground source heat pump heating, Stirling engine, fuel cell and oil heating.

A sensitivity analysis was performed to determine the effects of considerably higher electricity and gas prices and doubled maintenance costs. The investment price of devices for the fuel cell unit should be 7 500 and 7 000 for the Stirling engine for being competitive with electric heating. If the electricity prices increase with 2 cents the competitive price for investment of devices is 16 500 for both micro-CHP units. Even with the prices of today the micro-CHP unit is a serious alternative in Nordic climate, when all the investment costs of device are considered. However, with the increase of electricity prices there is a possibility that micro-CHP units will be more cost-effective than electric heating.