Revisiting the feasibility of biomass-fueled CHP in future energy systems – Case study of the Åland Islands

Abstract Biomass has been widely recognized as a sustainable fuel for balancing energy systems with high amounts of varying renewable energy production, mainly from wind or solar power. Combined heat and power (CHP) is an efficient technology for biomass utilization and energy system balancing. Currently, the increasing amount of renewable power production often reduces the price of electricity, which makes CHP plants uneconomical. However, this might not be the case in the future, when the subsidies for developing renewable energy sources are reduced or removed. This paper presents a feasibility analysis of the potential for operational flexibility in a bio-fueled CHP plant in a real-life environment using a spreadsheet model. Three different renewable power production schemes for the Aland Islands were analyzed: the present system, a balanced scenario and a high-wind scenario. The analysis was conducted for three different-sized CHP plants run in modes which followed either the heat or the power load. Moreover, in one case two more parameters affecting the magnitude and rate of the flexibility were thoroughly examined: the start-up time and the minimum plant load. The results showed that biomass does have a place in future energy systems, and the spreadsheet tool can effectively be used for a CHP feasibility assessment in different operational environments; both for existing CHP plants and for planning new investments. The results indicate that the availability of inexpensive fuel and sufficient income from heat sales have to be secured as the operational environment of the CHP plant changes. The examination of the operational mode revealed that in the power-following mode, where the CHP plant can offer flexibility services, the plant’s profitability depends on the rate of compensation for the excess heat or spinning hours.