Studies have shown that separate actors can benefit from co-operation around heat supply. Such co-operation, for example, might be between an industry selling waste heat to a districtheating system or two district-heating systems interconnecting their respective systems. Cooperation could also be expected to reduce the environmental impacts of the energy systems by choosing the plants with the lowest emissions. It is widely accepted that the production of heat and electricity causes damage to the environment. This damage often imposes a cost on society, but not on company responsible. In general, using a broader system perspective when analysing local energy systems results in a lower total cost, more e.cient use of plants and a greater potential for producing electricity in combined heat-and-power (CHP) plants. Internalising the externality costs in the energy system model facilitates the study of what cooperation can mean for reducing emissions. This study shows that co-operation between the two systems is on the whole cost-effective, but the benefits are greater when external costs are not included in the calculation. Considering externality costs in combination with current electricity prices would lead to a higher system cost, but the quantity of emission gases will be lower. If, on the other hand, the calculation is made taking externality costs and corresponding adjusted electricity prices (the adjustment being necessary to compensate for the additional cost due to externality costs) into consideration, the quantities of emission gases will rise because more heat-and-power will be generated by one of the CHP plants. © 2002 Elsevier Science Ltd. All rights reserved.

Recent studies have shown that there is great potential benefit in utilities collaborating around heat supply. Analyses based on an extended system boundary clarify the advantage of mutual co-operation in the district heating markets. The purpose of this study is to show how far a local paper mill affects the degree of co-operation between two utilities. Current and future electricity prices and existing and potential plants are considered in the different scenarios in the study. The results in all the scenarios clearly show that the paper mill plays an active role in an integrated heat supply system. The scenario where co-operation, new plants and future electricity prices are considered, gives the lowest total system cost. A new back pressure turbine with a higher electricity-to-heat output ratio in combination with high trade prices promotes increased electricity and heat generation in the co-generation plant. The proportion of combined heat and power in district heating would increase if co-operation between the players were encouraged. ⌐ 2003 Elsevier Science Ltd. All rights reserved.

The capacity for waste incineration in Swedish municipalities is increasing due to regulations aimed at decreasing landfill with waste. This has a large impact on the municipal energy systems, since waste is an important fuel for district heating production. The object of this study is a municipality, Skövde, which is planning to build a waste incineration plant to produce electricity and heat. The municipality is also planning to extend the district heating grid to include a large industrial heat consumer. The economic effect on the energy system of these measures is analysed as well as environmental effects in terms of carbon dioxide emissions. The consequences of two different policy instruments, green electricity certificates and a tax on waste incineration, are also studied. Economic optimisations show that the advantage of co-operation with industry is twofold: lower heat production costs and a considerable reduction of carbon dioxide emissions. It is economically feasible to invest in a waste incineration plant for heat production. An important measure to lower carbon dioxide emissions is to introduce combined heat and power production on the assumption that locally produced electricity replaces electricity produced by coal condensing power.