Modelling and optimization of district heating and industrial energy system—an approach to a locally deregulated heat market

Regions with densely concentration of industries and district heating systems (DHS) could be interesting study object from the light of an integrated heat market on local basis. System analysis with a widened system boundary could be used as an approach to evaluate the benefit of an integrated heat supply system. In this study, an energy system model consisting of totally seven different participants is designed and the optimization results of the system analysis are presented. With applied data and assumptions, the study shows that a significant amount of the heat demand within two sub-systems can be covered by heat supply from the heat market (the entire heat comes from two industries). Shadow prices, which can be used for heat pricing, indicate the advantage of an integrated system. The system cost reduction through integration and the availability of several actors with diverse energy supply system, makes the region under study an interesting area to prove a locally deregulated heat market. Copyright © 2004 John Wiley & Sons, Ltd.