Economic Benefits of Integrating Solar-Powered Heat Pumps Into a CHP System

As a promising distributed energy resource, solar-powered heat pumps (SPHPs) can achieve significant system benefits. On the one hand, the accommodation of solar generation can be highly improved on the demand side. On the other hand, SPHPs can efficiently provide heat energy for consumers, which reduces the operational costs of central heat supply from combined heat and power (CHP) units. In this paper, a planning framework is developed to evaluate the economic benefits of integrating SPHPs into a CHP system. The framework is formulated as a bilevel market equilibrium model. On the upper level, given the locational marginal prices (LMPs) and district heating prices (DHPs), the consumers at different buses will strategically invest in SPHPs. Thus, the net electric and heating loads vary with the investment in the SPHPs. On the lower level, LMPs are updated by direct current optimal power flow, and DHPs are updated by a cost-plus pricing method. Because of the nonlinearity of this market equilibrium problem, an algorithm is proposed to iteratively solve the bilevel model, and a criterion is designed to achieve a desired solution. Case studies based on the IEEE 14-bus and 118-bus systems demonstrate that by investing in SPHPs on the demand side, the operational costs of CHP systems can be effectively reduced in both the electric and heating sectors.