Energy 44 (2012) 96e104

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Energy
journal homepage: www.elsevier.com/locate/energy

A mathematical programming approach for optimal design of distributed energy

systems at the neighbourhood level
Eugenia D. Mehleri a, b, Haralambos Sarimveis a, **, Nikolaos C. Markatos a, Lazaros G. Papageorgiou b, *
a
School of Chemical Engineering, National Technical University of Athens, GR-157 80 Athens, Greece
b
Centre for Process Systems Engineering, Department of Chemical Engineering, University College London, London WC1E 7JE, UK

a r t i c l e i n f o a b s t r a c t

Article history: This paper presents a mixed-integer linear programming (MILP) super-structure model for the optimal
Received 23 September 2011 design of distributed energy generation systems that satisfy the heating and power demand at the level
Received in revised form of a small neighborhood. The objective is the optimal selection of the system components among several
30 January 2012
candidate technologies (micro combined heat and power units, photovoltaic arrays, boilers, central
Accepted 2 February 2012
Available online 8 March 2012
power grid), including the optimal design of a heating pipeline network, that allows heat exchange
among the different nodes. The objective function to be minimised contains the annualised overall
investment cost and the annual operating cost of the system. We show that besides the usual energy
Keywords:
Distributed generation
balance and unit operations constraints, additional equations must be included in the model to guar-
Optimal design antee correctness of the produced heating pipeline designs. A special instance of the problem where
Energy systems a single centralised combined heat and power unit is installed in the neighborhood is also considered.
Mixed integer linear programming The efficiency of the proposed model is evaluated through illustrating examples.
Heating pipeline network Ó 2012 Elsevier Ltd. All rights reserved.
Optimisation

1. Introduction
Conventionally, power is generated in large central plants such
as fossil fuel (coal, gas powered), nuclear, solar power plants or
hydropower plants. While such systems offer centralisation, large
amounts of primary energy are wasted as heat losses in the power
production sites or through transmission line losses until they reach
the end-user [1]. Finally, they have negative environmental impact
as well, due to high production of greenhouse gas emissions.
Distributed generation, also called on-site generation, generates
electricity and heat from many small energy sources [2]. This
approach reduces the percentage of wasted primary energy, mainly
because Distributed Energy Resource (DER) systems are installed
close to or even inside the end-users facilities, resulting in very low
energy transmission losses and the utilisation of produced heat to
cover local heating demands.
Among other DER technologies, micro Combined Heat and
Power (mCHP), also known as cogeneration plants, have the
advantage of producing heat and electricity simultaneously in
* Corresponding author.
** Corresponding author.
E-mail addresses: hsarimv@central.ntua.gr (H. Sarimveis), l.papageorgiou@
ucl.ac.uk (L.G. Papageorgiou).
a single integrated system. For many years, large-scale CHP plants
were mainly used in the industry due to the economy of scale.
Recently, mCHP technology has become cost effective, due to rising
energy costs and technological advances.
Although, DER technologies are growing fast, there are many
open questions regarding the optimal design, scheduling and
control of such systems. This is mainly due to the complexity
imposed by the availability of many different technologies and the
special requirements of each specific installation, such as the loca-
tion of the DER system around the globe, heat and power demand
profiles, electricity pricing policies etc. In particular, the design of
a DER system that is optimised to address both power and heating
requirements is a very challenging problem. The complexity is
further increased when the DER systems are designed for covering
the demands of multiple end-users in the neighborhood level,
which often involves the design of a heating pipeline network,
Hawkes and Leach [3].
The majority of the literature on district heating systems focuses
on the optimisation of the energy conversion technologies and their
operational strategies [4e6]. The simultaneous consideration of
heating and power demand has not been studied to the same extent.
Pengfei et al. [7], focused on the design of the district heating
system (DHS) based on its hydraulic characteristics with detailed
equations of the flow inside the pipeline, using graph theory for the
establishment of the spacial network. Dala Rosa et al. [8], presented

0360-5442/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved.
doi:10.1016/j.energy.2012.02.009
 E.D. Mehleri et al. / Energy 44 (2012) 96e104
an innovative low-energy district heating (DH) concept based on
low-temperature operation. After demonstrating the value of the
low-energy DH concept, they evaluated various possible designs
with the aim of finding the optimal solution with regard to
economic and energy efficiency issues.
In the paper of Soderman and Pettersson [9], electricity loads
can be satisfied through local suppliers, from the main power grid
or from own production, while thermal loads are satisfied by direct
heat transfer from suppliers, indirect heat transfer from heat
storage, via district heating network or from own production. Their
algorithm selects both the main district heating network and the
connection of the buildings to this line. Different types of DER
technologies are considered in the model without taking into
account the operational details.
Obara [10] determined the equipment arrangement of each
building in the DER system and designed the hot-water piping
network for supplying the exhaust heat of fuel cells and
reformers to each building based on the minimisation of the total
equipment, installation and operational costs, using Genetic
Algorithms (GA).
Weber et al. [11] developed a hierarchical solution scheme
that combines the design of the network together with the
design of technologies that are best suited to meet the energy
requirements of the district, considering the temperature levels
at which the energy services are requested. Recently, Weber and
Shah [12] proposed a single-level optimisation approach for a UK
district energy system allowing a mix of different energy
services.
This paper addresses the neighborhood level and presents an
integrated approach for designing DER systems, which optimises
the microgrid configuration in combination with the design of
a heating pipeline network. Detailed equations are implemented to
describe the operational characteristics of the different DER tech-
nologies (PV, CHP), while additional constraints and equations have
been used for the design of the heating pipeline network. The
objective is the optimal selection of DER technologies and equip-
ment (capacity and allocation) and heat exchange connections
among buildings in the neighbourhood level, which minimises the
investment and operational cost of the overall distributed energy
system.
2. Problem definition
In this paper, a super-structure Mixed Integer Linear Program-
ming (MILP) model is presented for the optimal design and oper-
ation of a DER system at the neighbourhood level. The model
focuses on the design of the heating pipeline network, but also
considers back-up boilers, photovoltaic (PV) arrays, and mCHP units
of different sizes and technologies as additional candidate
components of the system. Among the several candidate CHP units,
at most one can be installed in every node. Photovoltaic units can
be placed in all buildings, but upper bounds are posed on their
sizes, due to the limited available area in each building and the
particular energy regulations of individual countries. The capacities
of the back-up boilers are also bounded, taking into account the
available technologies in the market.
The proposed model does not assume a pre-existing base
heating network line and all possible connections between
different nodes are available for selection. Heat losses increase
proportionally with the distance travelled by the heat transfer
medium. Heat flow is allowed only in one direction in each
connection, which is optimally selected by the proposed model.
Modelling two-direction heat flows would require detailed
modelling of the temperature dynamics of the heat transfer
medium (hot-water), which renders the optimisation problem
97
intractable. Heat circulation is prohibited, to avoid situations where
heat produced by a node, is consumed by the same node after it has
been circulated through the system. Without prohibiting heat
circulation, CHP units may work at higher than needed thermal
loads, just to increase the produced power.
The basic model formulation is extended by adding some
optional specific requirements regarding the design of the
produced heating network. In particular, the modeller may ask for
designs, where the network consists of tree-like sub-structures (i.e.
each node can receive heat by at most one different node of the
network), or designs where one centralized CHP (and perhaps some
back-up boilers) are responsible for satisfying all heating demands
of the neighbourhood. The objective function to be minimised
contains the annualised overall investment cost of the system and
the annual operating cost.
The optimal design takes advantage of the various load profiles
of the buildings, compensates the fluctuations and achieves
a smooth operation. The full calendar year has been divided into 18
different time periods: 6 periods per day (h7eh9, h9eh12,
h12eh13, h13eh18, h18eh22, h22eh7), for 3 seasons: summer
(JuneeSeptember), mid-season (MarcheMay, October), winter
(NovembereDecember, JanuaryeFebruary)) [13].
3. Mathematical model
The overall problem is formulated as a superstructure optimi-
sation model, where in each node (building) we have the option of
installing a PV array, a mCHP plant which is selected among several
sizes and technologies and a back-up boiler. Additionally, there is
the option of connecting nodes with a heating pipeline, so that the
system can be integrated in terms of heat transfer among the
different nodes.
3.1. Objective function
The objective in the model is to minimise the total annualised
cost of the microgrid. Thus, the objective function contains both the
annualised investment cost and the annual operational cost:
GRID GRID
CTOTAL ¼ CINV þ COP þ CPUR þ CCARBTAX  CSAL (1)
In Eq. (1), CINV is the total investment for all the components of
GRID is the annual
the system. COP is the total annual operating cost, CPUR
cost of purchasing electricity from the grid, CCARBTAX is the annual
cost of carbon emissions and CSAL GRID is the income from selling
electricity to the grid.
The total investment cost includes the costs of the PV units,
the conventional boilers, the mCHP units and the pipeline
connections between the nodes, which is annualised by multi-
plying with the Capital Recovery Factor (CRF) of each equipment,
r$ð1 þ rÞn =ð1 þ rÞn  1 where r is the interest rate and n is the
lifetime of each component in years.
X X
CINV ¼ CRF PV $ CCPV $APV B
i $Cprat þ CRF $ CCB $Hi;MAX
B
i i
XX
þ gk $CkCHP $CRFkCHP $Wi;k
i k
XX
PIPE
þ CRF $ CCPIPE $li;j $YPi;j (2Þ
i j
where the key decision design variables referring to the compo-
nents that will be installed in each node i are: The size of the
photovoltaic array in terms of the total surface of the panels APV
i ,
98 E.D. Mehleri et al. / Energy 44 (2012) 96e104

the boiler size expressed as the maximum heat output Hi;MAX B , the X
CHP
EMAX;i ¼ gk $Wi;k ci (8)
type of the mCHP units among several choices Wi,k, and the pipeline k
connections among the nodes YPi,j. X
The annual operating is actually the fuel cost for operating back- Wi;k  1 ci (9)
up boilers and the mCHP units, calculated by multiplying the k
cumulative fuel consumption for each period with the fuel price:
   3.2.3. PV units
XXX
CHP
COP ¼ B
ds;p $ Hi;s;p $ PGAS;s;p =nBth The total surface of PV panels installed in each node cannot
i s p exceed an upper bound, which is indicated by the dimensions and
XXXX   other characteristics of the building or by energy regulations:
CHP CHP
þ ds;p $ Ei;s;p;k;SELF þ Ei;s;p;k;SAL $ (3)
i s p k
  APV PV
i  Aup ci (10)
PGAS;s;p =nCHP
ek
3.2.4. Pipeline network
The total cost for purchasing electricity is calculated by the
For each pair of nodes only one heat flow direction is allowed:
cumulative amount of purchased electricity multiplied by the
utility electricity rate: YPi;j þ YPj;i  1 ci; j_i (11)
XXX Additionally, according to the specific needs of each design,
GRID GRID
CPUR ¼ PELEC;s;p $ds;p $Ei;s;p (4)
particular connections can be forced or excluded from the design by
i s p
assigning proper values to the corresponding binary variables YPi,j.
The boilers and the mCHP units consume fuel and thus are
responsible for carbon emissions. Additionally, the electrical utility 3.3. Operational constraints
provides the information of the amount of carbon emissions
released per unit of purchased electricity. The annual cost for 3.3.1. Electricity balance
carbon emissions is computed by multiplying the annual carbon Electricity demand is satisfied by electricity produced by the PV
emissions which are due to the operation of the system with arrays and the CHP units as well as by purchasing electricity from
a carbon tax rate: the grid:

8P P P !9
>
>
PPP B
Hi;s;p >
>
>
>
>
GRID
CIELEC $ds;p $Ei;s;p þ ds;p $CIGAS $ >
>
>
> n B >
>
< i s p i s p th =
0  1
¼ CT$
CCARBTAX
>
>
>
PPPP CHP CHP
B Ei;s;p;k;SELF þ Ei;s;p;k;SAL C
>
>
>
(5)
>
> þ ds;p $CIGAS $@ A >
>
>
: nCHP >
>
i s p k ek ;

The income from selling electricity back to the grid is calculated

based on the cumulative amount of electricity delivered back to the X
CLoadELEC GRID PV
i;s;p ¼ Ei;s;p þ Ei;s;p;SELF þ
CHP
Ei;s;p;k;SELF ci; s; p (12)
grid. The model gives the option of using different buy-back prices
k
for electricity produced by CHP and PV units:

XXX 3.3.2. Heat balance

GRID PV PV
CSAL ¼ PSAL $ds;p $Ei;s;p;SAL Heat loads can be satisfied by the conventional boilers, the CHP
i s p
units and by transferring heat among nodes through the Heating
XXXX
þ CHP
PSAL CHP
$ds;p $Ei;s;p;k;SAL (6Þ Pipeline Network:
i s p k
X 
CLoadHEAT
i;s;p  bj;i $QHj;i;s;p  QHi;j;s;p
j
3.2. Design constraints X 
B CHP CHP
¼ Hi;s;p þ Ei;s;p;k;SELF þ Ei;s;p;k;SAL $HERk ci; s; p (13)
3.2.1. Boilers k
The boiler capacities are bounded within upper and lower
bounds, so that if a boiler is selected, its size will be consistent with Notice that through the parameter bi,j the model takes into
the boiler sizes available in the market: account heat losses when heat in transferred from node j to node i.
Heat losses are assumed proportional to the distance between
B
Blb $YBi  Hi;MAX  Bub $YBi ci (7) nodes j to node i [10] : bi,j¼(14  105$li,j)

The above inequalities introduce an additional binary design

variable for each node YBi indicating if the node will be equipped 3.3.3. Grid interaction constraints
with a boiler or not. The following constraint does not allow a node to purchase and
sell electricity from/to the grid during the same period. This
3.2.2. CHP units constraint is necessary in cases of high prices of selling electricity to
In each node at most one CHP unit can be installed. the grid, due to promoting renewable energy strategies.
 E.D. Mehleri et al. / Energy 44 (2012) 96e104 99

X
CHP
Ei;s;p;k;SAL PV
þ Ei;s;p;SAL  M$Xi;s;p ci; s; p (14) linearity of the model formulation. The option of more detailed
k piecewise-linear efficiency approximation introduces additional
sets of binary variables and renders the problem intractable for
GRID
  large scale case studies.
Ei;s;p  CLoadELEC
i;s;p $ 1  Xi;s;p ci; s; p (15)

where M is an appropriate upper bound. 3.4. Additional optional logical constraints for the heating pipeline
network
3.3.4. Operation of the PV units
PV is assumed to produce electricity in proportion to the capacity Extending the basic model formulation, some additional logical
of the installed system and the amount of solar irradiation [11]: constraints are presented in this subsection, which can be used to
  meet some special requirements in the design of the heating
PV PV
Ei;s;p;SELF þ Ei;s;p;SAL  APV PV
i $min Cprat ; Its;p $ne ci; s; p (16) pipeline network. These constraints further restrict the search
space and in general their inclusion in the model increases the
optimal value of the objective function.
3.3.5. Operation of the back-up boilers
The heat production rate of each boiler cannot exceed its 3.4.1. Only one heat source is allowed for each node
capacity: Eq. (21) states that the indegree of each vertex should be less
than 1, i.e. the directed graph takes the form of a forest (collection of
B B
Hi;s;p  Hi;MAX ci; s; p (17) trees), where each vertex can have only one father. In other words,
each node can receive heat only from one other node. This
constraint simplifies the design and excludes the occurrence of any
3.3.6. Operation of CHP units
cycles in the produced network.
The performance characteristics of the CHP plant are described
X
by Eq. (18), which indicates that the CHP unit cannot generate more YPi;j  1 cj (21)
than its installed capacity. i

CHP
Ei;s;p;k;SELF CHP
þ Ei;s;p;k;SAL  gk $Wi;k ci; s; p; k (18) Notice that no constraints are posed on the outdegrees of
vertices.

3.3.7. Operation of pipeline network
Transfer of heat from a node to another is only possible if the
corresponding pipeline connection has been installed:
QHi;j;s;p  N$YPi;j ci; j; s; p ; isj
where N is an appropriate upper bound.
3.3.8. Heat circulation is not allowed
This equation is used to avoid the creation of loops in the
produced directed graph (heating pipeline network), which may
lead to erroneous results, such as heat production and circulation
during periods where the heat demand is zero or CHP operation at
a higher rate compared to the actual demand in order to produce
more electricity and increase profit by selling the extra electricity to
the grid.
The constraint formulation was motivated by the Travelling
Salesman Problem (TSP) (see for example [14e16]).
 
Oj  Oi þ 1  jij$ 1  YPi;j ci; jsi
3.4.2. Centralised CHP with tree network structure
One typical configuration [10,11] is to install only one CHP unit
and transfer heat to other nodes using a tree-like pipeline network,
where the node that contains the CHP is the root and the rest of the
(19) nodes are either internal vertices or leaves. This design is achieved
by adding (21) and the following equation to the model:
X
Wi;k  1 (22)
i;k
According to Eq. (22), at most one CHP unit can be installed in
the microgrid.
4. Computational results
4.1. Application of the model for 10 buildings
The mathematical model was implemented in a neighbourhood
consisting of 10 buildings. The locations of the 10 nodes in a map
(20)

where Oi is a positive variable which indicates the visiting order of

each node. The binary variable YPi,j indicates whether two nodes
are connected or not, while jij is the total number of nodes. Eq. (20)
allows multiple subnetworks, but guarantees that no loops are
present in any feasible optimal solution, because for each subnet-
work of interconnected nodes, strictly increasing sequences of Oi
values must be produced. It should be noted that through Eq. (20)
only directed cycles are excluded, i.e. cycles with all the edges being
oriented in the same direction. If we remove the arrows and
consider the undirected version of the same graph, cycles can still
occur (see for example Fig. 1).
Remark: The model assumes constant efficiencies for DER units,
although efficiencies actually depend on the rating and part loads.
The error introduced by this assumption is acceptable for this type
of high-level design models. The fixed-efficiency assumption is
used systematically in the scientific literature [3,12] to maintain Fig. 1. Example of a cycle that is not excluded using Eq. (20).
100 E.D. Mehleri et al. / Energy 44 (2012) 96e104

Table 2
Capacities, costs and technical characteristics of mCHP units [24].

Technology Electrical power Electrical efficiency HER Capital

(kWe) (nCHP
e ) (%) cost (V)
Stirling Engine 1 12 6.7 9000
Fuel Cell 4 25 2.2 140,000
Gas Engine 4.7 25 2.6 11,750
Gas Engine 5.5 27 2.3 13,750
Stirling Engine 9.5 24 3 25,000

Fig. 2. Heating pipeline network for the “10 Buildings” case.
are shown in Fig. 2. Distances between each pair of nodes are easily
derived. The neighbourhood is assumed to be located in central
Greece so data from the Greek energy market are used.
The heat and electricity loads [17e21] for the three seasons and
6 periods and for the ten buildings, are given as input data (see
Appendix). It must be noted that the heat load refers to space
heating load, and during the summer period is zero for all
buildings.
The basic characteristics and capital costs of PV units and boilers
are given in Table 1. For the mCHP units, three different technologies
are considered: Stirling engines, fuel cells and gas engines, with
different capacities. In total, five different choices were assumed.
The corresponding capital costs, efficiencies and heat to electricity
ratios (HER) are shown in Table 2.
The scientific literature on the design of distributed generation
systems does not use a standard lifetime for each DER technology.
Instead, the reported lifetime figures on DER equipment typically
vary between 15 and 25 years [3,12,22,23]. The results reported in
this work assume an average of 20 years for all candidate DER
technologies with an interest rate of 7.5%. Thus, CRF is equal to 0.1
for all DER technologies. It should be noted, however, that the
model gives the option to the designer to use different lifetime
periods for different technologies.
The unit piping cost is taken as CCPIPE ¼ 40 V/m [10].
Electricity and fuel tariff rates are taken from the Greek energy
market. The utility rate is PELEC,s,p ¼ 0.11 V/kWh for all time periods
[25]. The price of selling excess electricity to the grid is
CHP
PSAL;s;p ¼ 0.08785 V/kWh for CHP units and PSAL;s;pPV ¼ 0.55 V/kWh
for PV units for all time periods [26]. This price refers to the elec-
tricity buy-back price based on Greek governmental policies for PV
systems up to 10 kWp and for CHP systems. Natural gas is assumed
as the fuel consumed in both CHP unit and boilers;
PGAS,m,p ¼ 0.054 V/kWh for all time periods [27].
The carbon tax of CO2 is CT ¼ 0.017 V/kgCO2 [28]. The emission
of CO2 for every kWh produced is CIELEC ¼ 0.781 kg/kWh [29]. The
emission of CO2 for every kWh natural gas is CIGAS ¼ 0.184 kg/kWh
[29]. The electricity factor corresponds to the Greek electricity
power mix, while the natural gas factor is based on lower heating
value (LHV) and refers to kWh of input fuel.
The upper and lower bounds on the capacities of the boilers
were set to 5 kWth and 35 kWth, based on data available in the
market [23]. The upper bound on the surface of PV arrays in each
building was set at APV 2
up ¼ 67 m . This is equivalent to 10 kWp for
the particular area where the PV units will be installed, which
according to Greek energy regulations is the upper limit on PV
installations in residential buildings [30].
The resulting MILP model was solved to optimality using the
GAMS CPLEX solver [31].
After a CPU time of 101 s an optimality gap of 5% has been
achieved and the obtained optimal solution gives a total annualised
cost of V 4,742.7.
In the optimal design, four mCHP units of capacity of 4.7 kWe are
installed in buildings i2, i3, i6, i10, while no back-up boilers are
used. PV arrays are installed in all buildings to the maximum
possible capacity, taking advantage of the high electricity buy-back
price in the residential sector.
The optimal heating pipeline network comprised of 2 sub
networks is depicted in Fig. 2.
Fig. 3, shows how much electricity is taken from the grid, or
produced by the mCHP units and the PV units in order to satisfy the
electricity loads for the 6 periods in each of the 3 seasons under
study. The electricity loads are mainly satisfied by the PV units,
especially during the summer period when solar irradiance is high
and the mCHP units are not in operation due to the zero heat
demands. The grid contributes mostly during periods p1 (early in
the morning) and p6 (night), when the PV units do not provide
much electricity due to low irradiance levels.
Fig. 4 presents the excess electricity produced and sold back to
the grid from the mCHP and PV units for the 10-buildings case.

Table 1
Basic technical characteristics and costs of candidate technologies.

Item Characteristics Values

PV unit [22] Capital cost (CCPV )(V/kWp) 4305
nPV
e 0.12
Cprat (kWp/m2) 0.15
Boiler [23] Capital cost (CCB )(V/kW) 100
nBth 0.80
Fig. 3. Sources of electrical energy.
 E.D. Mehleri et al. / Energy 44 (2012) 96e104
Fig. 4. Electricity exported to the grid.
From Figs. (3) and (4), it is observed that during some time
periods (i.e winter: p1, p5, p6, mid-season: p6), electricity is at the
same time sold and imported from the grid, which seems contra-
dictory to the grid interaction constraints (14)e(15). However this
is not the case, since Figs. (3)e(4) present the cumulative electricity
balances for all 10 buildings, while constraints (14)e(15) are
satisfied for each building separately.
Regarding heat balances, since no back-up boilers are installed
and no other heat source is available, the mCHP units cover all the
heating demands of the neighbourhood.
4.2. Centralised CHP scenario with 10 buildings
The 10-buildings problem was solved again by adding
constraints (21) and (22), in order to produce a network where at
most one centralised CHP will be installed. After a CPU time of
2067 s and an optimality gap of 5%, the optimal solution gives
a total annualised cost of V5965.2. The optimal design installs one
centralised mCHP unit of capacity 9.5 kWe in building i3 and 3
back-up boilers of capacity 5 kWth in buildings i2 and i8 and
9.3 kWth in building i10. PV units of 10 kWp are located in all
buildings.
The optimal heating network structure is illustrated in Fig. 5.
As illustrated in Fig. 6, the electricity loads for the 3 seasons are
mainly satisfied by the PV units. Electricity is purchased from the
Fig. 5. Heating pipeline network for the “10 Buildings” case - centralised CHP.
101
Fig. 6. Sources of electrical energy - centralised CHP.
grid during periods p1, p5 and p6 when PV electricity production is
very small or zero. The centralised mCHP unit covers most of the
electricity demands of building i3 where it is installed. The rest of
electricity produced by the mCHP unit (shown in Fig. 7) is sold to
the grid.
As illustrated in Fig. 8, heat loads are mainly satisfied by the
centralised mCHP unit and the heat produced is distributed through
the heating pipeline network to cover heating demands of the
rest of the nodes. When heat demand exceeds the CHP capacity,
the back-up boilers are used to cover the additional heating
requirements.
4.3. Scenario with 10 buildings where no heat exchange among
buildings is allowed
It is interesting to investigate on the benefits offered by the
proposed design methodology which involves the option of using
a heating pipeline network to allow heat exchange among the
different nodes. If we exclude the heating network from being an
option in the super-structure problem, the optimal design
installs five CHP units of capacity 4.7 kWe in nodes i3, i4, i6, i9,
i10, five back-up boilers of capacity 5 kWth in nodes i1, i2, i5, i7,
i8 and PV units of 10 kWp in all buildings, resulting in an
objective function value of 7198.4 V/y, 52% higher compared to
our best design.
Fig. 7. Electricity exported to the grid - centralised CHP.
102 E.D. Mehleri et al. / Energy 44 (2012) 96e104

Fig. 8. Sources of heat e centralised CHP.

4.4. Conventional scenario with 10 buildings Fig. 9. Heating pipeline network for the “20-Building” case.

The 10-buildings problem was solved for a scenario where no 5. Conclusions

DER technology or heating pipeline network is considered. This
scenario refers to the conventional design of the energy supply In this paper an MILP model has been proposed for the optimal
system, where the electricity load is satisfied by the utility grid and design of distributed energy generation systems that satisfy the
the thermal load is satisfied by gas boilers. After a CPU of 0.093 s heating and power demand at the level of a small neighborhood.
and an optimality gap of 5%, the optimal solution gives a total Apart from the selection of the capacity and location of the various
annualised cost of V18,181.6. In the optimal design boilers are technologies, which include micro CHP units, back-up boilers and PV
installed in all buildings with capacities: 5 kWth for buildings i1, i2, units, specific interest has been given to the design of the heating
i7, i8, i9, 5.1 kWth for i3, i4, i5, i10 and 5.5 kWth for building i6, pipeline network that serves the transportation of heat between the
while the utility grid satisfies the electricity loads. Comparing it different nodes. It was shown that special constraints derived from
with the annualised cost of the optimal design (V4742.7), we graph theory were necessary to ensure that correct designs are
conclude that 74% reduction can be achieved. Therefore, significant produced or to add special configurations to the produced network,
savings can be realised by installing DER technologies (mCHP units, such as the use of a single centralised mCHP unit that is connected in
PV arrays) and by thermally integrating the nodes in the neigh- a tree-like structure to other nodes. Applications of the model to two
borhood through the design of heating networks. different in size problems and comparison with conventional designs
Table 3 summarises the results (objective function and CPU not involving heating pipeline networks illustrate the usefulness of
time) for the four scenarios concerning the case study with 10 the model for energy optimisation at the neighborhood level.
building:
Acknowledgements
4.5. Application of the main model formulation to a case study with
20 buildings The author E.D.M gratefully acknowledges the financial support
from the Greek National Strategic Reference Framework (NSRF).
To test the scalability of the proposed methodology, the main
model formulation was implemented in a larger case study of
a neighbourhood with 20 buildings. Appendix. Electricity and heat load profiles
After a CPU time of 1275 s an optimality gap of 5% has been
achieved and the obtained optimal solution with a total annualised Tables A1eA3, present the electricity and heat loads for the 10
cost of V 9238.5. buildings in the neighborhood. During the summer period
In the optimal design, seven mCHP units of capacity of 4.7 kWe (Table A2) no heat demands exist, assuming that heating loads
are installed in buildings i2, i3, i6, i10, i12, i13, i20 and five back-up account for space heating and not for hot water requirements
boilers of capacity 5 kWth in buildings i1, i14, i15, i16 and i18. PV Table A1
arrays are installed in all buildings to the maximum possible Electricity and Heat Loads for the 10 buildings, winter season, kW.
capacity, taking advantage of the high electricity buy-back price in
Electricity loads Heat loads
the residential sector.
The optimal heating pipeline network comprises 5 sub- p1 p2 p3 p4 p5 p6 p1 p2 p3 p4 p5 p6
networks as depicted in Fig. 9. i1 0.31 0.44 0.56 0.54 0.78 0.35 4.60 2.31 1.10 1.09 3.69 4.68
i2 0.31 0.53 0.45 0.59 0.62 0.42 4.60 2.54 1.10 0.98 2.95 4.68
Table 3 i3 0.31 0.53 0.45 0.49 0.93 0.39 3.68 2.08 1.21 1.20 3.32 5.15
Scenarios for the10 building case study. i4 0.37 0.44 0.51 0.43 0.93 0.42 5.06 2.31 1.32 1.20 2.95 5.15
i5 0.25 0.35 0.62 0.49 0.86 0.42 5.06 2.31 1.10 1.31 2.95 3.74
Scenario Total annualised cost (V) CPU(s) i6 0.25 0.44 0.67 0.65 0.86 0.39 5.53 2.31 0.88 1.09 3.69 4.68
Basic formulation 4742.7 101 i7 0.25 0.44 0.62 0.49 0.70 0.35 4.60 2.77 1.10 1.20 2.95 4.68
Centralised CHP 5965.2 2067 i8 0.28 0.44 0.51 0.65 0.78 0.35 4.60 2.08 1.10 1.20 3.69 3.74
No heat exchange 7198.4 2.1 i9 0.34 0.48 0.56 0.43 0.70 0.32 4.60 2.31 1.32 1.09 4.43 3.74
Conventional design 18,181.6 0.093 i10 0.25 0.44 0.45 0.65 0.86 0.35 4.60 2.77 0.99 0.87 4.43 5.15
 E.D. Mehleri et al. / Energy 44 (2012) 96e104 103

Table A2 Blb Boiler lower bound, kWth

Electricity Loads for the 10 buildings, summer season, kW. Bub Boiler upper bound, kWth
p1 p2 p3 p4 p5 p6 CCB Capital cost of boiler, V/kW
i1 0.32 0.46 0.59 0.59 0.74 0.36 CCPIPE Capital cost of hot-water piping, V/m
i2 0.32 0.37 0.59 0.65 0.67 0.29
i3 0.29 0.41 0.59 0.71 0.74 0.43 CCPV Capital cost of PV, V/kW
i4 0.35 0.55 0.64 0.71 0.89 0.40 CkCHP Capital cost of CHP capacity k, V/kWe
i5 0.32 0.55 0.70 0.53 0.82 0.36
CIELEC Carbon intensity of electricity, kg CO2/kWh electricity
i6 0.32 0.46 0.59 0.53 0.74 0.43
i7 0.35 0.37 0.53 0.65 0.74 0.32 CIGAS Carbon intensity of natural gas, kg CO2/kWh natural gas
i8 0.26 0.46 0.53 0.71 0.67 0.40 CLoadELEC
i;s;p Customer electricity load for every dwelling i at season s
i9 0.39 0.41 0.70 0.65 0.67 0.32 and period p, kW
i10 0.35 0.37 0.64 0.71 0.59 0.29 CLoadHEAT
i;s;p Customer heat load for every dwelling i at season s and
period p, kW
Table A3 Cprat Rated capacity, kWp/m2
Electricity and Heat Loads for the 10 buildings, mid-season, kW.
CRFB Capital Recovery factor of boiler
Electricity loads Heat loads CRFCHP Capital Recovery factor of CHP unit
p1 p2 p3 p4 p5 p6 p1 p2 p3 p4 p5 p6 CRFPV Capital Recovery factor of PV
CRFPIPE Capital Recovery factor of hot-water piping
i1 0.32 0.45 0.57 0.57 0.76 0.36 3.11 1.72 0.82 0.50 2.72 4.02
i2 0.28 0.45 0.69 0.62 0.91 0.32 2.49 1.89 0.82 0.50 3.26 3.61 CT Carbon tax of CO2, V/kg
i3 0.35 0.41 0.46 0.68 0.91 0.36 3.11 2.06 0.74 0.45 2.99 4.02 ds,p Duration of every period p in season s, hours
i4 0.28 0.54 0.63 0.68 0.84 0.39 3.73 1.55 0.74 0.60 2.72 4.42 gk Capacity of CHP in type k, kW
i5 0.35 0.41 0.69 0.51 0.76 0.28 2.49 2.06 0.90 0.45 2.72 3.61
HERk Heat to electricity ratio of CHP unit of type k
i6 0.32 0.50 0.52 0.45 0.84 0.39 2.49 1.72 0.98 0.60 2.72 4.02
i7 0.25 0.41 0.46 0.62 0.61 0.43 3.73 2.06 0.98 0.45 2.44 3.21
li,j Distance from dwelling i to j, m
i8 0.25 0.45 0.46 0.45 0.84 0.39 3.42 1.89 0.66 0.60 2.44 4.42 nBth Thermal efficiency of the boiler, %
i9 0.25 0.45 0.63 0.51 0.91 0.43 3.11 1.38 0.90 0.55 2.44 4.42
nCHP
ek Electrical efficiency of the CHP unit of type k, %
i10 0.35 0.50 0.63 0.45 0.91 0.39 3.73 1.89 0.66 0.50 2.99 4.42
nPV
e Electrical efficiency of the PV panel, %
Itm,p Irradiance at month m and period p, kW/m2
PELEC,s,p Grid electricity price at season s and period p, V/kWh
PGAS,s,p Natural gas price at season s and period p, V/kWh
Nomenclature
CHP
PSAL;s;p Price of selling excess electricity from CHP at season s and
Subscripts period p, V/kWh
PV
PSAL;s;p Price of selling excess electricity from PV at season s and
C Capital
CARBTAX Carbon tax period p, V/kWh
e Electrical
ELEC Grid electricity
Variables
FIX Fixed
CTOTAL Total cost, V/y
GAS Natural gas
i,j Dwelling
INV Investment Positive variables
k CHP capacity APV
i Surface of the PV panels in every dwelling i, m2
MAX Maximum CCARBTAX Total environmental cost, V/y
OP Operational cost GRID
CPUR Total cost for purchased electricity, V/y
p Period GRID
CSAL Income from selling electricity to the grid, V/y
PUR Purchase
CINV Total Investment Cost, V/y
rat Rated
COP Operating cost, V/y
s Season CHP
SAL Sales EMAX;i Maximum energy generated by the CHP unit, kW
GRID
Ei;s;p Purchased electricity from the grid for every dwelling i at
SELF Self use
th Thermal season s and period p, kW
TOTAL Total CHP
Ei;s;p;k;SAL Excess electricity sold from CHP unit of type k for every
VAR Variable dwelling i at season s and period p, kW
CHP
Ei;s;p;k;SELF Electricity generated for self use from CHP unit of type k
Superscripts for every dwelling i at season s and period p, kW
B Boiler PV
Ei;s;p;SAL Excess electricity sold from PV for every dwelling i at
CHP CHP unit season s and period p, kW
ELEC Electricity generated PV
Ei;s;p;SELF Electricity generated for self use from PV for every
GRID Utility grid dwelling i at season s and period p, kW
HEAT Heat generated B
Hi;s;p Generated heat by the boiler for every dwelling i at season
PIPE Pipeline s and period p, kW
PV Photovoltaic panel B
Hi;MAX Maximum heat generated by the boiler for every dwelling
i, kW
Parameters Oi Order in which every building i is connected to the
APV
up Maximum surface of the PV panels, m2 network
bi,j Heat transmission losses between any pair of dwellings QHi,j,s,p Heat transfer from i to j at season s and period p, kW
104 E.D. Mehleri et al. / Energy 44 (2012) 96e104
Binary variables
YPi,j 1 if there is a pipeline between i and j; 0 otherwise
Wi,k 1 if CHP unit of capacity k is selected for dwelling i;
0 otherwise
Xi,m,p 1 if dwelling i sells excess electricity to the grid at
month m and period p; 0 if it buys from the grid
YBi 1 if a boiler is installed in dwelling i; 0 otherwise
Abbreviations
CHP Combined heat power
CRF Capital recovery factor
IntRate Interest rate
LHV Lower heating value
MILP Mixed integer linear programming
PV Photovoltaic
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