Impacts of time-of-use rates on the optimal sizing and operation of cogeneration systems

For customers with a cogeneration system (CGS), a mixed-integer programming and nonlinear programming model was used to examine effects of time-of-use (TOU) rates on the optimal operation of the constituent equipment as well as the optimal sizing. Three customers were selected for case studies: a hotel, a hospital, and an office building. Effects of an on-peak/off-peak energy charge ratio on purchased power share in the total electricity demand were saturated at the ratio of 5. As the energy charge ratio was raised, cheaper off-peak power substituted for city gas and the operating cost decreased. The responses of the hotel and the hospital were similar. The simulation results indicated that properly designed TOU rates can provide commercial customers an incentive to operate a CGS with an appropriate mix of self-generation and commercial power