Calculating the marginal costs of a district-heating utility
2004 (English)In: Applied Energy, ISSN 0306-2619, Vol. 78, no 1Article in journal (Refereed) Published
District heating plays an important role in the Swedish heat-market. At the same time, the price of district heating varies considerably among different district-heating utilities. A case study is performed here in which a Swedish utility is analysed using three different methods for calculating the marginal costs of heat supply: a manual spreadsheet method, an optimising linear- programming model, and a least-cost dispatch simulation model. Calculated marginal-costs, obtained with the three methods, turn out to be similar. The calculated marginal-costs are also compared to the actual heat tariff in use by the utility. Using prices based on marginal costs should be able to bring about an efficient resource-allocation. It is found that the fixed rate the utility uses today should be replaced by a time-of-use rate, which would give a more accurate signal for customers to change their heat consumptions.
Place, publisher, year, edition, pages
2004. Vol. 78, no 1
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-22977DOI: 10.1016/S0306-2619(03)00120-XLocal ID: 2349OAI: oai:DiVA.org:liu-22977DiVA: diva2:243290