Abstract
Although co-generation is regarded as one of the most effective energy conservation measures to cope with the global warming problem, it is necessary to balance electricity demand with heat demand. If the supply of extra electricity to outside consumers is allowed, then co-generation plants can work at high efficiencies. In that sense, wheeling, which enables co-generators to send extra electricity through the transmission lines of utilities, is expected to contribute to the improvement of energy efficiency.
In this study, the behavior of co-generators with and without wheeling is modeled from the view point of maximizing the welfare of the co-generator. Solution optimization is determined by Kuhn-Tucker's condition. The optimal solutions for given electric price conditions show that the behavior and marginal values of electricity and heat strongly depend on the heat-to-electricity ratio of the co-generation. These solutions also clarify the conditions under which wheeling becomes active or inactive, and under which co-generation is operated or electricity is purchased. Furthermore, the effect of wheeling on increasing energy efficiency is presented in a numerical example.
