Coupling of cleaner production with a day-ahead electricity market: A hypothetical case study

During the last 25 years day-ahead electricity markets are continuously expanding and the amount of energy being traded through them is increasing. Moreover, there is a possibility for production facilities to act directly on a day-ahead market as independent market players. The aim of this paper is to analyse the potential for reduction of variable costs of an arbitrary production facility consisting of high-efficient combined heat and power (CHP), grid connection and production unit, thermal and products storage and photovoltaic (PV) panels. Costs are reduced by offsetting the expensive electricity with the use of thermal and products storage and optimization of power flows. Variable costs are, together with the costs of a raw material, directly related to input costs of energy in the form of a fossil fuel derivatives and/or electricity. Two hypothetical cases will be analysed: (1) production facility with installed PV acting as a prosumer and (2) production facility without the installed PV acting only as a consumer from the market point of view. Mathematical model consists of two sub-models which are solved in a coupled manner: the optimization of cost-reduction by retaining the output product distribution and model for obtaining the day-ahead market clearing price of electricity. The results show that coupling of market modelling with optimization of running costs for an arbitrary production facility can be used for estimation of market clearing price and optimization of power flows within the production facility.