Promotion of distributed energy systems integrated with district cooling systems considering uncertainties in energy market and policy in China

Abstract

The distributed energy system has attracted increasing attentions due to its high efficiency and low pollution emissions. The Chinese government has planned to promote the application of distributed energy systems using natural gas to address the atmospheric pollution problem. However, considerable uncertainties exist in energy market and policy, which would significantly affect the economic performance of distributed energy systems and make the promotion challenging. Therefore, this study attempts to investigate the impacts of energy market and policy uncertainties by evaluating the economic performance of a distributed energy system integrated with a district cooling system serving a campus in the cooling dominated area of China. Uncertainties in the following factors are taken into account: the natural gas price, the electricity price, the feed-in tariff, the incentive from the government and the carbon tax. The payback period of the distributed energy system under various uncertainties is analysed. Results show that the economic performance of the distributed energy system is satisfactory when the ratio of natural gas price to the electricity price is less than 3. If the government plants to promote the DES, the incentive should be not less than 1300 CNY/kW or the carbon tax charged should be not less than 50 CNY/ton. (C) 2018 The Authors. Published by Elsevier Ltd.