Myths about Lack of Competitiveness of Combined Electricity and Heat Production by Combined Heat and Power Plant Steam Turbine Units in Comparison with the Best Available Technology of Their Separate Production

Factors causing degraded efficiency of existing combined heat and power plants (CHPPs) in the electricity and heat (capacity) markets, and ways of solving this problem are considered. The competitiveness of combined production at CHPPs is compared proceeding from a comprehensive analysis of economic, process, and environmental parameters for real electrical and thermal loading modes of equipment, the same amount of rendered services, and equal reliability and survivability levels of power systems, i.e., their ability to withstand emergency disturbances and prevent cascading progression of accidents with mass-scale loss of power supply to consumers. It is shown that the existing steam turbine CHPPs can compete with the best available technologies (BAT) for separate electricity and heat production. The analysis results are presented in convenient graphic form in applying a methodical approach to determining the competitiveness of combined electricity and heat production with the most up-to-date technologies for their separate production. It is proposed to introduce amendments into the existing rules of the wholesale and retail electricity and capacity markets that will make it possible to eliminate factors causing the artificial unprofitability of existing CHPPs, including termination of subsidizing the construction of new generating capacities within the framework of the CSA, RES CSA, HPP/NPP CSA, and Mod CSA programs at the expense of existing thermal generation sources. The operation of CHPP cogeneration equipment in the condensing mode should be considered as forced. The fuel consumption during CHPP operation in the condensing mode should be fully assigned to electricity production instead of allocating it to both electricity and heat. The CHPP price bids for the condensing tails should be applied proceeding from the actual fuel rates and shall not participate in the formation of marginal prices in the day-ahead market (DAM). In making strategic decisions on power system development, it is advisable to do away with using the ORGRES method (the separate production method) and the physical and thermal methods of allocating the fuel consumption between the electricity and heat supply because they yield incorrect information.