Economic feasibility of heat storage systems under price uncertainty : a system dynamic approach
Roumpas, Asterios (2025)
Pro gradu -tutkielma
2025
School of Business and Management, Kauppatieteet
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe20251217121125
https://urn.fi/URN:NBN:fi-fe20251217121125
Tiivistelmä
This study examines the economic feasibility of heat storages in a district heating system, in the context of modern electricity markets. An illustrative System Dynamic (SD) model is built to represent the interdependencies between generation, storage, heat demand and cost, using real hourly data on electricity prices, temperature and demand. In addition, stochastic electricity price scenarios are generated using the AR(1)-GARCH(1,1) model, to capture the uncertainty and volatility of the market.
The thesis begins with a systematic literature review of the international literature on the integration of thermal and electrical storage in district heating systems, as well as the modelling and analysis methodologies that have been applied under conditions of variable electricity prices. It is shown that there is only limited use of dynamic simulation approaches that explicitly take into account price uncertainty.
In the empirical part, the constructed SD model is applied to three operating scenarios: (a) use of a thermal tank only, (b) combination of a tank and an electric battery and (c) a tank with two batteries.
The results indicate that thermal storage could significantly reduce the operating costs, while the addition of electric batteries further reduces the uncertainty and soothes the effect of price peaks. This study's findings concur with previous studies which illustrated that thermal storage adoption boosts the economic efficiency and flexibility of district heating systems in particular the case of frequently fluctuating electricity prices.
The thesis begins with a systematic literature review of the international literature on the integration of thermal and electrical storage in district heating systems, as well as the modelling and analysis methodologies that have been applied under conditions of variable electricity prices. It is shown that there is only limited use of dynamic simulation approaches that explicitly take into account price uncertainty.
In the empirical part, the constructed SD model is applied to three operating scenarios: (a) use of a thermal tank only, (b) combination of a tank and an electric battery and (c) a tank with two batteries.
The results indicate that thermal storage could significantly reduce the operating costs, while the addition of electric batteries further reduces the uncertainty and soothes the effect of price peaks. This study's findings concur with previous studies which illustrated that thermal storage adoption boosts the economic efficiency and flexibility of district heating systems in particular the case of frequently fluctuating electricity prices.