Valuing Investments in Multi-Energy Conversion, Storage, and Demand-Side Management Systems Under Uncertainty

Abstract

In this paper, a financial valuation method for energy hubs with conversion, storage, and demand-side management (DSM) capabilities is proposed. An energy hub is an integrated system of units, e.g., a combined heat and power plant and a heat storage, which allows the conversion and storage of multiple energy carriers. In this paper, an extended energy hub model is presented which additionally takes into account the possibility of performing DSM with the load(s) connected to the hub output. Taking into account the energy hub's flexibility to change its output power(s), its economic value is determined with a method based on Monte Carlo simulation. This method calculates an optimal dispatch of the hub for a large amount of possible price paths of the input and output energy carriers. By means of the proposed energy hub Monte Carlo valuation model, integrated systems of multi-energy conversion and storage devices can be valued together with load management schemes. In doing so, the energy hub's ability to flexibly adapt its output to uncertain and volatile market prices is explicitly considered.