Operational Optimization of Combined Heat and Power Units Participating in Electricity and Heat Markets

In the background of electricity market reform, combined heat and power (CHP) units must balance electricity market revenues with reliable heat supply. However, the flexibility of CHP units to confront various features of renewable outputs remains to be explored more thoroughly. In this study, day-ahead electricity price curves are classified into four typical categories adopting k-means clustering, featured by diverse temporal trends associated with the output of renewables. An integrated model—capturing the CHP, the battery energy storage system (BESS), and heating network dynamics—supports day-ahead operational optimization. The results suggest that distinct operational strategies are to be implemented under different price profiles. Moreover, incorporating a BESS and exploiting thermal inertia of the network expands arbitrage opportunities and profit from the electricity market. Lastly, an alternation in the operational goal of CHP units is proposed, namely, from thermal-economy-guided to comprehensive-economy-oriented. Comparative results underscore the benefits of the revised strategies.