A Comparative Cost Assessment of Energy Production from Central Heating Plant or Combined Heat and Power Plant

The levelized cost of electricity (LCOE) is a common approach in evaluating the economic competitiveness of a power generation technology. The same approach can be applied for evaluating the levelized cost of heat (LCOH) production. There are a number of approaches in calculating the LCOE and or LCOH from a combined heat and power (CHP) plant. In this study, we explore three alternative methods in calculating the LCOE and LCOH of a CHP and compare the results with that those of a heating only plant. The results can be used as indicators for identifying a suitable pricing mechanisms for the heating market.