Economic appraisal of small biofuel fired CHP plants

A study is presented in which an optimisation model is built to determine the economic viability of three small biofuel fired CHP plants. The model formulated to describe heat and electricity production with CHP plants is based on simulation data for three existing plants. The modeled system extends from the production facilities to the distrcit heating substations of the consumers, thus combining operational and design planning. We find that, compared to the long term average situation in the Nordic countries, higher electricity prices or lower investment costs are needed to make CHP plants attractive in small district heating networks. The results are relatively sensitive to the original economic parameters, and this uncertainity over future cashflows may further reduce investments in small CHP plants.