Design of Biomass Combined Heat and Power (CHP) Systems based on Economic Risk using Minimax Regret Criterion

Abstract

It is a great challenge to identify optimum technologies for CHP systems that utilise biomass and convert it into heat and power. In this respect, industry decision makers are lacking in confidence to invest in biomass CHP due to economic risk from varying energy demand. This research work presents a linear programming systematic framework to design biomass CHP system based on potential loss of profit due to varying energy demand. Minimax Regret Criterion (MRC) approach was used to assess maximum regret between selections of the given biomass CHP design based on energy demand. Based on this, the model determined an optimal biomass CHP design with minimum regret in economic opportunity. As Feed-in Tariff (FiT) rates affects the revenue of the CHP plant, sensitivity analysis was then performed on FiT rates on the selection of biomass CHP design. Besides, design analysis on the trend of the optimum design selected by model was conducted. To demonstrate the proposed framework in this research, a case study was solved using the proposed approach. The case study focused on designing a biomass CHP system for a palm oil mill (POM) due to large energy potential of oil palm biomass in Malaysia.

Current status and future forecasting of biofuels technology development

“…Figure illustrates the bio‐CHP system. Commonly, the biofuel CHP systems consist of three main parts, which include pretreatment unit, product conversion unit, and power generation unit …”

“…Commonly, the biofuel CHP systems consist of three main parts, which include pretreatment unit, product conversion unit, and power generation unit. 23 Biomass can be used as a feedstock for the bio-CHP power plant while some other biofuels such as biogas and bio-methane were used. The biomass is converted to biogas in the gasifier.…”