How is the heating price determined in CHP projects?

Provisional heat price = Fixed cost + Variable cost (Gas consumption × Heat-to-electricity ratio × Gas price). Fixed cost: it is the cost of the quantity of gas sold to you, which is the quantity of gas multiplied by the unit price per unit of gas. (Excluding fuel costs) Variable cost: For gas boilers, the cost of natural gas is variable. It is calculated as total gas volume (the total amount used for combined heat and power generation) * heat and power ratio (the proportion of gas used for heating) * gas price (the price of gas, which is variable). The amount of heat supplied remains constant. How to sign a contract for heat supply? Who knows how much steam you will use? The electricity and water prices remain unchanged; that’s basically how the calculations are done.

1. I disagree with what you call fixed costs. In my understanding, fixed costs refer to expenses such as water bills, water treatment costs, electricity bills, and maintenance fees； 2. A unit-price contract is in place; steam is supplied as needed, with settlement based primarily on the meter readings ； 3. Regarding the heat-electricity ratio, the definition given in the \"Regulations on the Development of Cogeneration\" is heat-electricity ratio = heat supply amount / (electricity supply amount × 3600 KJ/KW·h) × 100%; it is not the proportion of gas used for heat supply as you mentioned. Shouldn’t the proportion of gas used for heat supply be gas consumption × gas price × heat supply amount / (heat supply amount + electricity supply amount × 3600 KJ/KW·h)?

This post was last edited by xyc114 on 2016-1-14 at 14:36: (gas consumption × heat-to-electricity ratio × gas price). Here, the heat-to-electricity ratio should not be the ratio of heat energy produced to electrical energy generated; otherwise it makes no sense at all. Here, it clearly means that the proportion of natural gas used for heating is determined based on the ratio of electricity generated to heat supplied. “Just change “thermoelectric ratio” to “proportion of natural gas used for heating”.

This post was last edited by gjn1970 on 2016-1-15 at 15:24. Your question is quite complex and requires a series of complicated calculations; it would be best for the original poster to carry out these calculations themselves, or else they should spend money to hire someone skilled at doing so. Let me briefly outline the steps for you: 1. First, calculate the total heat consumption of the entire plant, Q, based on the calorific value of natural gas as a fuel. Then, using the total amount of steam supplied by the thermal power plant, the return rate of water from the heating network, the efficiency of the boilers, and the efficiency of the pipelines, calculate the total heat output of the thermal power plant, Qh. This allows us to determine the heat consumption for power generation within the plant, Qe, thereby obtaining the thermoelectric ratio X = Qh/Qe. 2. Next is the calculation of the allocation costs for heat supply and power generation. The costs associated with heat supply and power generation – including fuel, plant electricity consumption, employee salaries, equipment maintenance, water fees, etc. – are allocated based on the ratio of heat to electricity produced. The total allocated cost for heat supply is then divided by the amount of heat supplied (in T/H) to determine the cost per ton, expressed in RMB per ton; similarly, the total allocated cost for power generation is divided by the total amount of electricity generated (in kilowatt-hours) to determine the cost per kilowatt-hour, expressed in RMB per kilowatt-hour. The above calculations are for the case where natural gas is used solely as fuel for the boiler; in the case of a steam-gas combined cycle, an additional gas turbine is present. The heat engine consists of three main components: the boiler, the gas turbine, and the steam turbine, and the same allocation method applies to these as well. The poster should do the calculations themselves; the key issue is that they need to obtain information on all of the thermal systems in this natural gas-fired power plant, as well as details regarding various loads and consumption metrics. I think this will be quite difficult, so they can refer to the current market price for heat in the Northeast region, which is generally around 40–50 yuan per gigajoule.

Bro, you understand it the same way as I do, but it’s not a matter of whether I change it or not; the contract simply states it that way. Moreover, the definition of the heat-electric ratio is given in those \"Regulations on the Development of Cogeneration,\" and after checking online, the definition is the same~~~:'(

First of all, thank you very much for your detailed answer! 1. Actually, I don’t need to calculate the specific heat price myself; therefore, I don’t require detailed thermal parameters from the heat power plant. When signing a heating supply contract with others, I need to review the method used to calculate the heat price and be able to explain each component of the formula. Otherwise, the audit department will reject the contract during the approval process, so I must understand it first. 2. Secondly, I still can’t understand the thermoelectric ratio you mentioned. According to what you say, then why is the cost allocation based on the thermoelectric ratio rather than Qh/(Qh+Qe)? Shouldn’t it be the proportion of natural gas used for heating?

The consumption of natural gas fuel results in two main products: heat supply and electricity generation. If the heat-to-electricity ratio is X, then, taking the total cost of labor wages as an example, the proportion of wages allocated to heat supply is X/(1+X), while the proportion allocated to electricity generation is 1/(1+X). This is because thermal power plants have various positions such as those related to machinery, boilers, and electricity generation, as well as management staff, personnel responsible for chemical processes and water handling, and maintenance staff – all of whom are assigned to produce these two products. Costs such as electricity used within the plant, water expenses, and maintenance costs should also be allocated in this manner; otherwise, it would be impossible to carry out calculations. In fact, this method of allocation is reasonable. In this way, the heating costs and power generation costs can be calculated; of course, the equipment depreciation costs are allocated in the same manner.

The consumption of natural gas fuel results in two main products: heat supply and electricity generation. If the heat-to-electricity ratio is X, then, taking the total cost of labor wages as an example, the proportion of wages allocated to heat supply is X/(1+X), while the proportion allocated to electricity generation is 1/(1+X). This is because thermal power plants have various positions such as those related to machinery, boilers, and electricity generation, as well as management staff, personnel responsible for chemical processes and water handling, and maintenance staff – all of whom are assigned to produce these two products. Costs such as electricity used within the plant, water expenses, and maintenance costs should also be allocated in this manner; otherwise, it would be impossible to carry out calculations. In fact, this method of allocation is reasonable. In this way, the heating costs and power generation costs can be calculated; of course, the equipment depreciation costs are allocated in the same manner.

Senior, your method for calculating the cost ratio is the same as my understanding, but the key issue for me now is how exactly the thermoelectric ratio X should be defined In the \"Regulations on the Development of Cogeneration,\" the definition of the cogeneration ratio is given as: cogeneration ratio = heat supplied / (electricity generated × 3600 KJ/KW·h) × 100%. This differs from your definition of the cogeneration ratio, X = heat consumed for heating / heat consumed for electricity generation. I prefer the definition provided in the regulations, which calculates the cogeneration ratio using the heat and electricity produced as the final products; efficiency and losses do not need to be taken into account when calculating the cost of heat ； Secondly, I agree with the way in which the proportion of your heating costs is calculated as X/1+X, and the proportion of power generation costs as 1/1+X. Therefore, the variable cost included in the price of heat should equal gas consumption * gas price * X/1+X. It seems that the person who drafted the contract made a mistake; I really can’t understand how that happened! I am truly grateful to my seniors in the end! I gradually fell in love with Haichuan, where I found the joy of learning once again!

This post was last edited by gjn1970 on 2016-1-18 at 14:45. This “fuel” based on natural gas ultimately yields two products: heat energy and electricity. There is indeed a difference between the heat energy generated and the amount of heat energy used for power generation, as referred to in the concepts of heat consumption and the heat-to-electricity ratio. Taking heat consumption as an example, if 1 unit of natural gas is consumed in the thermal process, then y (%) of that natural gas is used for generating heat, while (1-y) (%) is used for power generation. The cost allocation ratio between heat and electricity is therefore y:1-y, which is undisputed. Since there are losses during the energy conversion process, the losses are the same in the boiler, but not so in the turbine (obviously, more losses occur in the power generation part). The correct concept for the heat-to-electricity ratio should be the ratio of heat energy generated to electricity generated (note that it refers to heat-energy-based electricity generation; the electricity generated in the condensing section is not included). In less precise calculations, the cost allocation ratio of heat to electricity can be used, with a ratio of X:1, and such an error is acceptable. Finally, let’s explain your thermoelectric ratio: it is calculated as Heat supplied / (Electricity generated × 3600 KJ/KW·h) × 100%. Note that it is the electricity generated that is used in this calculation, not the electricity supplied, as there is power consumption for plant operations. The factor of ×3600 KJ/KW·h is included to convert the unit of electricity generation from kilowatt-hours to kilojoules.