A Study on Urban Energy System Planning Based on Long-term Dynamic Model

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1 1. INTRODUCTION Global warming is one of the most serious problems for human being. Reduction of energy consumption is one of essential measures in order to resolve the problem because greenhouse gases, especially CO 2 emission, are generated by combustion of a fossil fuel. As the price of crude oil has been rising in these days, it has been more important to reduce the energy consumption. The amount of energy consumption largely depends on energy systems they selected. Although the new energy conservative energy systems, for example a heat-pomp or fuel cells etc, are very effective to reduce energy consumption, many consumers hesitate to select them due to the expensive initial costs of the equipment. In other words, it is necessary for most customers, particularly business and commercial customers, to recover the initial cost of the equipment within shorter period than life time of the equipment. That is one of reasons that energy conservative but more expensive equipments have not been widespread currently. Then, in this paper, the authors focus on initial cost payment, and analyze that the lease system of energy-conservative equipment helps to introduce the new energy-systems. And, under the assumption that customers desire to recover the initial cost of the equipments within five years, they compare and analyze the lease system and the normal payment system economically and environmentally, in the long time over 30 years dynamically in consideration of technological progress of the equipments. The merit of the lease payment system is not only cheaper initial costs than the normal payment, but also the flexible selection of energysystems. If there are the initial cost reduction and the improved efficiency by technological progress, it is easy to introduce the energy-conservative in the lease scenario 2.1 Framework of Model A Study on Urban Energy System Planning Based on Long-term Dynamic Model Satoshi Yamaoka *, Hideharu Sugihara and Kiichiro Tsuji Division of Electrical, Electronic and Information Engineering, Osaka University, Osaka, Japan Abstract: In Japan, in order to reduce CO2 emission, it is important to introduce energy-conservative urban energy system to business and residential customer, e.g. fuel cell cogeneration, photovoltaic generation and so on. The authors have already developed the simulation model that each building selects the most economic system. But in this model, the dynamical concept, in other words chronological concept, has not considered. Also, in this paper, it is evaluated that the lease system helps to introduce the new energy-conservative energy-systems. And this paper compared and analyzed the lease system and the normal payment system economically and environmentally, in the long time over 30 years dynamically. The merit of the lease payment system is not only cheaper initial costs, but also the flexible selection of energy-systems. If there are the initial cost reduction and the improved efficiency by technology advance, old systems is changed easily in the lease scenario. As the result, in 6 periods, the lease payment system was better than the normal system both of economically and environmental points of view. From 1st period to 4th period, gasengine co-generation systems and conventional electric hot water supply systems are dominant system, but from 5th period, both of them are changed into fuel cells co-generation systems. Then the CO2 emission and the primary energy consumption reduced over 2%. As a conclusion, the lease payment system is effective about reduction of costs, CO2 emission and primal energy consumption. Keywords: Dynamic Model, Urban Energy System, Payment System, Lease, CO2 Emission 2. DYNAMICAL MODEL FOR SELECTING ENERGY SYSTEMS CONSIDERING THE LEASE PAYMENT Ele-Power City Gas Fuel Consumer Energy Systems Final Demand Ele Demand Cool Demand Heat Demand Cooking Demand 1Normal 2Lease Change System 1 System 2 Sys1 Sys2 Sys3 Sys4 Sys5 Sys6 Change Change Change Change Change Valuation Index = Initial Cost + Running Costs 1st 2nd 3rd 4th 5th 6th Fig. 1 concept of the analysis model Fig. 2 Chronological concept of the analysis model Fig. 1 illustrates a dynamical model in order to determine energy systems at customer s buildings from a viewpoint of customer s ow n cost. Using the installed energy system, a customer purchases electricity, city gas and fuel, and supplies the end-use demand which Corresponding author: iam3104@polux.pwr.eng.osaka-u.ac.jp 1

2 consists of electricity-specified, cooling, heating, and cooking demands. As shown in Fig2, in numerical simulation, the proposed mo del assumes that one period equals to five years, as the results, total six periods mean thirty years. And all buildings select the cheapest system among energy system alternatives as shown in Table 1, based on minimization of the tot al cost (the initial cost + the running cost at each period). Table 1 is explained at next section in detail. Table1 Energy system alternatives for business and residential customers Symbol Components (Business) Symbol Components (Residential) ARH Absorption refrigerator and heating unit + Boiler CNV Air Conditioner + Stove + Gas Boiler ER Electric turbo refrigerator + Boiler SLR1 CNV + Solar-type hot water supply system + Solar generation system GE1, GE2 Boiler + Gas Engine(GE) + Absorption refrigerator + Electric turbo refrigerator SLR2 CNV + Solar-type hot water supply system FC1, FC2 Boiler + Fuel Cells(FC) + Absorption refrigerator + Electric turbo refrigerator ELE1 Air Conditioner + Electric hot water supply system + Electric cooking apparatus HP Heat pump system with heat storage equipment FC Air Conditioner + Boiler + FC + Heat storage equipment MAC Multi Air-Conditioner HPB Air Conditioner + Stove + Heat Pomp GHP Gas Heat Pomp Air-Conditioner LHB Air Conditioner + Stove + Latent Heat Boiler EI Heat Pomp with Ice Tank GE Air Conditioner + Boiler + GE + Heat storage equipment 2.2 Energy system alternatives The energy system alternatives in residential houses and, business and commercial buildings are shown in table1 and table2, respect ively. In the residential energy system alternatives, energy system CNV is considered to be popular in recent Japanese residential h ouses. The SLR1 and SLR2 are solar utilization systems. The SLR1 includes both solar power generation and solar water heate r. The SLR2 includes only the solar water heater and, therefore the SLR1 has higher cost and lower CO2 emission than SLR2. Also, ELE1 and ELE2 depends only on electric energy supply. ELE1 is used a conventional electric water heater, on the other h and, ELE2 includes a heat-pomp water heater. The FC or GE is small-size fuel cell or gas engine co-generation system for residential house, and its CO2 emissions is lower and its energy consumptions is less than CNV system because the waste heat fro m the fuel cell or gas engine is used for heated water supply. HPB means heat-pomp water heater, and LHB is an advanced (laten t heat recovery-type) boiler. In the business energy system group, ARH and ER mean gas absorption refrigerating and heater, and electric turbo refrigerator, respectively. These are widely used in current Japanese business and commercial buildings. Because HP system is equipped with h eat accumulation for space heating and cooling demand, the HP system is effective for load leveling of electric power utility. Also, characteristics of FC system are lower CO2 emission and higher equipment cost than GE system. HP and EI are heat pomp syste m with water and ice tank. GHP is gas heat pomp. And MAC means most popular Air-Conditioner. 2.3 Evaluation indices Economic index is evaluated by total cost of initial cost and running cost per one period (5 years) because this paper assumes that the recovery period of initial cost of a customer is assumed as 5 years. Therefore, in normal scenario, initial cost payment is assumed to be completed for first 5 years. On the other hand, in the lease scenario, initial cost is total lease cost for 5 years. ELE2 Air Conditioner + Heat pump system + Electric cooking apparatus YNormal = SSystem + ( SRunning 5years) YLease = ( SLease + SRunning ) 5years S Lease = SSystem ( 1/ TLife + RAddon + RFix ) (1) (2) (3) As shown in the equation (3), the lease cost per year includes extra add-on rate and fix rate. Ordinarily when something is leased, extra advantage rate is added. But in this case, the rate is set 0% for simplification of the 2

3 calculation. And the fix rate is set 0.6% without exception. 2.4 Merit and Demerit of Lease Payment System One of the largest characteristics of lease payment system is small initial cost. The authors calculated the economic cost of each e nergy system alternative using the equation (1) and (2). Fig3 shows the simulation results for Office customer in normal scenario a nd in lease scenario, respectively. However, it should be noted that both results of simulations in the normal scenario and the lease sc enario, can not be compared with each other because, in the lease case, only one third of initial cost is recovered. Consequently, in the lease scenario, more expensive energy systems are able to reduce more the initial cost, and the difference of initial cost of each energ y system is smaller. Then the authors considered that the energy system alternatives with smaller running cost, this means saving-ener gy alternatives, are trend to be installed. Fig. 3 The total cost of each energy system alternative in the normal scenario and the lease scenario 2.5 Chronological change of technical and economic parameters In the long term chronological simulation, it is possible that many parameters of various energy equipments change. For example, the initial cost of energy-conservative equipments become cheaper, and their lifetime become longer. In this study, the future initial cost of energy equipments are calculated as anticipated values with the discount rate per year (shown in Fig. 4). Although lifetimes of mos t equipments is set 15 years, in case of only fuel-cell, the lifetime is set to increase from 5 years in present day to 15 years as well as other equipments as shown in Fig. 5. As a result, the total cost of F C in lease scenario for one period (five years), decrease more rap idly than any other energy systems, in both of residential and business sector (Fig. 6). Therefore, the longer lifetime an energy system has, the smaller the initial cost is in the lease scenario. In the normal case, annual value of initial cost is not changed by the longer lif etime because it is assumed in this paper that a customer wants to recover the initial cost for a fixed period (5 years). Consequently, it is easy for more customers to install the FC-type systems. Fig4: Assumed change of initial cost of Gas Engine and Fuel Cells 3

4 Lifetim e o f F C / Y e a r Passed Year Fig. 5 Change of the lifetime of FC Business Residential Fig. 6 Change of the total cost of the energy system alternatives (Considered the change of the lifetime of Fuel Cells) 3. Simulation Results In this study, for the business and residential customers, the authors optimize the energy system based on their economic cost in each scenario. The simulation results show in Table 3 and Table 4, respectively. Table3 shows the changes of energy systems in business sector in 2 scenarios. In the Normal scenario, GE1 is installed in all period. On the other hand, in the Lease Scenario, GE1 is installed until 4 th period and FC is installed from 5 th to 6 th period. Because, as shown in Fig5, the improvement in lifetime of fuel cell reduces the initial cost in lease scenario. Table3 Changes of introduced energy systems in business sector 1st 2nd 3rd 4th 5th 6th Normal GE1 GE1 Lease GE1 GE1 GE1 GE1 FC 1 FC1 Table4: Changes of introduced energy systems in residential sector 1st 2nd 3rd 4th 5th 6th Normal ELE1 ELE1 Lease ELE1 ELE1 ELE1 ELE1 FC FC 4

5 (a) Business sector (b) Residential sector Fig. 7 Environmental and economical comparison of 2 scenarios in 6 periods As shown in Table 4, ELE1 is installed in all periods in residential sector of normal scenario. But in the lease scenario, ELE1 is installed until 4 th period and FC is installed from 5 th period in the lease scenario. Through this study analyzes all 6 periods, the authors compared normal, lease and standard scenario in economical and environmental point of view. The standard scenario means that the conventional system which is widely used in Japan, is installed in all 6 periods. In Fig7, four evaluation indices, cost, CO2(average of All power plants), CO2(average of only Thermal power plants), and Primal Energy, in the lease scenario are smaller than the normal scenario. This shows that the lease payment system is effective in saving the environment. Some indices in the lease case are worse than the standard case, because the simulation is not optimizing CO2 reduction, but minimizing only the total cost. Especially, in residential section, ELE1 is a very cheap system including conventional electric water heater, consequently the ELE1 consume amount of electric power more than CNV. This result means the frequent change of energy systems and the lease payment system are effective in saving energy and saving cost. In the lease scenario, initial cost is less, and the gap of initial costs of each energy system is smaller than the normal scenario. However, it should be noted that this study assumes, an energy system which is already used for one period can be used in other customers in the lease system. What system should be installed largely depends on the size of running cost. The systems with the cheaper running cost use the less energy consumption, and the less CO2 emission. As the result, the authors considered that the share of the environmentally effective energy system alternatives is increased and CO2 emission is reduced. 4. CONCLUSIONS This paper proposed the new payment system for initial cost of energy system alternatives, the lease system, and analyzed the advantage of the payment system in the economic and environmental point of view. The payment system has less initial cost than the normal payment system, and it is easy for customers to install the energy system alternative, even if it is expensive. As the result, this paper concludes that the share of the environmentally effective energy system alternatives is increased and CO2 emission is reduced. Especially, it is possible that fuel cells cogeneration system is the most remarkable alternative. 5. REFERENCES [1] Manual of natural gas cogeneration system [2] H.Tomioka, H.Sugihara, and K.Tsuji: An evaluation of cooperation among customers in urban energy system (in Japanese) [3] K.Ikeda, H.Sugihara, and K.Tsuji: A dynamic optimization model for urban energy systems in a specific area (in Japanese) 5