Feasibility of domestic micro combined heat and power units with Real Time Pricing

Within the context of recent interest in `Smart Grids´, this paper considers the possibility that domestic consumers could participate in demand side management. Price is one of the main concerns for domestic consumers, and hence Real Time Pricing (RTP) can have an influence on consumers with dispatchable generation such as micro combine heat and power (micro-CHP). These systems can reduce the annual operating costs for consumers and simultaneously improve the load profile on the network. This paper employs a cost minimization unit-commitment approach to investigate the Pay Back Times for micro-CHP under RTP and results show that they are heavily dependent on capital costs of the systems. Therefore, such investment is presently only feasible when incentives such as capital grants exist. The total carbon dioxide emissions and load profile both see improvements when micro-CHPs are present. Furthermore, with the RTP scenario, on/off switching of many micro-CHP units causes the aggregate load profile to behave stochastically as the prices change and this is especially true during summer months. Therefore, the methodology for pricing units of energy needs to be thought through thoroughly before implementing RTP in the residential sector.