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ETI Macro Distributed Energy Project


DE Tool User Guide
11 July 2012






Megan Jobson and Gbemi Oluleye (The University of
Manchester)

Paul Woods (AECOM) Chief Technologist

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Table of contents
Executive summary ............................................................................................................................. 6
1 Introduction ................................................................................................................................ 7
1.1 Installing the software ........................................................................................................ 9
1.2 Summary ........................................................................................................................... 10
2 Tool Inputs ................................................................................................................................ 11
2.1 Demand profile ...................................................................................................................... 11
2.2 Other user inputs ................................................................................................................... 12
2.3 DE systems ............................................................................................................................. 14
2.4 Performing sensitivity analysis with the tool ......................................................................... 15
2.5 Heat distribution .................................................................................................................... 15
3 Tool Outputs ............................................................................................................................. 17
3.1 Operating schedule of DE solution......................................................................................... 17
3.2 Design economics................................................................................................................... 19
3.3 Carbon dioxide (CO
2
) emissions ............................................................................................. 19
3.4 Energy Flow and DE Centre Efficiency ................................................................................... 20
3.5 Redundancy Analysis .............................................................................................................. 20
4 Counterfactual Modelling ......................................................................................................... 21
5 How to Use the Tool ................................................................................................................. 24
5.1 Design of new energy centres ................................................................................................ 24
5.2 Operational optimisation of existing energy centre/ tool in simulation mode ..................... 24
5.3 Project options ....................................................................................................................... 25
5.4 Design Options ....................................................................................................................... 25
5.5 Entering User Inputs............................................................................................................... 26
5.6 Design Approach .................................................................................................................... 28
5.7 Model Inputs .......................................................................................................................... 29
5.8 Creating superstructure ......................................................................................................... 30
5.8.1 Creating superstructure for new design ............................................................................. 30
5.8.2 Building model for existing DE solution .............................................................................. 33
5.9 Running the Optimisation ...................................................................................................... 35
5.10 Viewing results ..................................................................................................................... 36
5.11 Error check ........................................................................................................................... 36
5.12 Model Anomalies ................................................................................................................. 37
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5.13 Error messages ..................................................................................................................... 37
6 Conclusions and recommendations .......................................................................................... 38
6.1 Conclusions ............................................................................................................................ 38
6.2 Recommendations ................................................................................................................. 38
References ........................................................................................................................................ 39
Appendices ........................................................................................................................................ 40
Appendix A: Description of worksheets in tool............................................................................ 40
Appendix B: Energy price present value ...................................................................................... 43
Appendix C: Carbon price calculation ........................................................................................... 44
Appendix D: Solar heater model .................................................................................................. 45
Appendix E: Flowchart for selecting number of DE systems ....................................................... 46

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List of Figures
Figure 1 Model flow chart 8
Figure 2 Cell/worksheet colour codes 9
Figure 3 Format for energy demand 11
Figure 4 Energy demand profiles 12
Figure 5 User input: fuel price 12
Figure 6 User input: electricity tariff and tariff structure 13
Figure 7 User input: grid emission factors 13
Figure 8 User input: Project data 14
Figure 9 Format for DE systems 15
Figure 10 DHN model inputs: pumping energy and heat loss 16
Figure 11 DHN model inputs: cost 16
Figure 12 Operating schedule for design with thermal storage 17
Figure 13 Operating schedule for design without thermal storage 18
Figure 14 Design solution configuration (with thermal storage) 18
Figure 15 Tool output: DE centre economics 19
Figure 16 Tool output: DE centre emissions 19
Figure 17 Tool output: Energy flow and DE centre efficiency 20
Figure 18 Tool output: Redundancy Analysis 20
Figure 19 Counterfactual model input: gas boiler 21
Figure 20 Counterfactual model input: air source heat pumps 22
Figure 21 Counterfactual user inputs 22
Figure 22 Counterfactual model outputs 23
Figure 23 Using the tool: design of a new energy centre 24
Figure 24 Using the tool: simulation mode 25
Figure 25 Using the tool: optimisation options 25
Figure 26 Using the tool: design options 26
Figure 27 Using the tool: site information 26
Figure 28 Using the tool: energy demand data 27
Figure 29 Using the tool: energy profile 27
Figure 30 Using the tool: cost data 28
Figure 31 using the tool: grid emission factor 28
Figure 32 Using the tool: design approach electricity production 29
Figure 33 Using the tool: model inputs (selection of DE systems) 29
Figure 34 Using the tool: number of each type of DE system in the superstructure 30
Figure 35 Creating superstructure: Step 1 30
Figure 36 Creating superstructure: Step 2 31
Figure 37 Creating superstructure: Step 4 31
Figure 38 Creating superstructure: Step 4 (continued) 32
Figure 39 Creating superstructure: Step 5 32
Figure 40 Creating superstructure: Step 5 (continued) 33
Figure 41 Building model for existing design: capital cost sheet 34
Figure 42 Building model for existing design: deleting excess units (Part 1) 34
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Figure 43 Building model for existing design: 'calculations <any technology>' sheet 35
Figure 44 Building model for existing design: deleting excess units (Part 2) 35
Figure 45 Running the model 36
Figure 46 Error messages in the WB! Status page 37



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Executive summary

The UK is committed to reduce carbon emissions by up to 30% by 2020 and by up to 80% by 2050
(Climate Change Act, 2008). Distributed Energy (DE) has gained interest over the past few years as a
way to maximise the efficient use of fuels to produce electricity and heat near the end users, and
therefore to reduce carbon emissions.
The ETI Macro DE project aims at evaluating future opportunities for technology development with
respect to Distributed Energy in zones with electricity demand of up to 50 MWe. The purpose of
Work Package 4 (WP4) within the ETI Macro DE project is to develop the methodology for the design
of optimised macro DE solutions or energy centres, and to implement this methodology in a
software tool.
The design tool generates the design for an optimised energy centre and estimates costs for DE
solutions (the energy centre and district heating network, DHN) to meet the heat requirements of
each characteristic zone.
The design methodology within the software tool allows the systematic design of DE solutions which
satisfy aggregated thermal and electrical demands. The design involves selecting which supply units
will comprise the DE solution and specifying the best operating schedule to guarantee minimum
total annualised cost (capital and operating costs). The lack of software packages in the market with
these functionalities made a case for required the development of such a methodology and software
tool.
This report summarises the principles of the design tool and explains how to use the software.


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Chapter 1
1 Introduction
The DE tool is a complete modelling software package created in MS Excel for design of new
distributed energy centres and operational optimisation of existing energy centres. Deliverables 4.1
and 4.2 of the ETI Macro DE project provide comprehensive descriptions of the modelling and design
approach, assumptions made, etc.
The software tool was created in MS Excel, as it is a user-friendly and familiar environment.
Calculations required for solving the mixed integer linear optimisation problem (MILP) are carried
out with the Excel add-in Whats Best!. Whats Best! is a compilation of solvers for different
optimisation problems (linear, non-linear, mixed-integer, etc.), which can be used directly within
Excel spreadsheets or called from Visual Basic. Research experience with What's Best! within the
Centre for Process Integration, at the University of Manchester, is that it provides a powerful
approach for solving large mixed-integer linear problems, i.e. linear problems involving many
discrete decision variables. Note that a Whats Best! license is required to run the design tool.
The tool has two modes: design and simulation. In the design mode a DE solution is designed given
the aggregated thermal and electrical demands of a characteristic zone, available DE systems, and
other economic parameters such as electrical tariffs and asset life. The results in this mode will
include the DE solution configuration and its capital cost, the operating schedule for the best
performance, thermal storage requirements, net operating cost of satisfying heat demand, total CO
2

emissions, and consumption of fuels of various types.
In simulation mode the user can simulate and optimise the operation of a specified existing DE
solution. In addition, the user could evaluate a DE solution and carry out sensitivity analyses with
respect to fuel type, fuel price and power tariffs. In this mode the DE solution is fixed, and the
operating modes of the DE systems are optimised in order to maximise the performance of the
energy centre in each time band. The results in this mode includes the operating schedule for the
best performance, net operating cost of satisfying heat demand, total CO
2
emissions, and
consumption of fuels of various types, if applicable. It is assumed that the investment in the
equipment has already been made in this case.
The software tool also addresses feasibility of a design (i.e. the ability to meet the peak thermal
demand and satisfy average thermal requirements for all time scenarios) as well as optimality, with
respect to a range of performance objectives, subject to relevant constraints, e.g. carbon dioxide
emissions.
The approach selected for design of DE solutions involves many integer variables (related to the
number of DE systems and the number of time bands), as well as continuous variables. There is also
a large number of constraints (e.g. 50% < load < 100%) to take into account. Despite that, key
relationships can be represented using linear functions, which makes the problem relatively easy to
solve using a suitable optimisation algorithm.

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How do I use DE Tool?
Figure 1 provides an overview of the modelling approach applied in the tool.
Figure 1 Model flow chart
Inputs into the tool include aggregated thermal and electrical demand (demand profiles), DE
systems, fuel prices, electricity price, emission factors and DHN parameters. The superstructure
created using the available technologies and the peak thermal demand is reduced to the best
solution by MILP optimisation for minimum cost.
The tool provides information on;
the operating schedule for the design,
economics of the design
carbon dioxide emissions from the centre
energy flows in the energy centre
performance of counterfactuals these are reference technologies, namely stand-alone gas
boilers and air source heat pumps, against which DE is to be compared.

Peak
demand
DE systems
Fuel price
Constraints
Minimum part load for DE systems
System heat balance
Energy balance for thermal storage
Create
superstructure
for design
M
I
L
P

o
p
t
i
m
i
s
a
t
i
o
n

Demand
profiles
Demand represented using 39 time
bands
Other Inputs
Electricity tariff and structure
Grid emission factor
Fuel emission factor
Heat distribution losses
Project life time
Heat
distribution
costs
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Cell colour coding
The user enters data into shaded cells and worksheets. All other cells and worksheets that do not
require input data are protected to prevent the user from accidentally deleting a formula or
reference cell. Appendix A contains description of all worksheets in the tool. The DE tool colour
coding chart for input and output cells is presented in Figure 2.



Input and Output cells/worksheets

Yellow cell User input

Yellow worksheet Model Input

Green worksheet For user input

Red worksheet Tool output

Blue worksheet Locked/protected worksheet

Figure 2 Cell/worksheet colour codes
1.1 Installing the software
To install the tool check that What'sBest! is available and installed and macros are enabled.
The What'sBest! license can be purchased and installed on a desktop PC or a laptop with Microsoft
Windows 7, Vista, or 98, Windows NT 4.0, Windows XP and an already existing Microsoft
Excel version 2002 or higher version 2007 with about 40 MB of free disk space.
It can be enabled by checking the What'sBest! add-in using the Tools/Add-Ins or Excel Options dialog
box. If What'sBest! does not appear in the current list of add-ins, the Browse option can be used to
locate it. The add-in file WBA.XLA, or WBA.XLAM, is typically found in the Library subdirectory or the
WB subdirectory on the C: drive. The What'sBest! functions are only available when the What'sBest!
add-in is active within Excel.
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To enable macros, follow the steps below:
1. Start the Excel application.
2. Choose the Microsoft Office Button.
3. Choose Excel Options.
4. In the categories pane, choose Trust center.
5. Click on the Trust centre settings box.
6. Select the Enable all macros tab in the ribbon check box
7. Choose the OK button to close the Options dialog box.
1.2 Summary
This manual provides guidance on using the ETI Macro Distributed Energy design tool developed at
the University of Manchester. This guide describes the main inputs and outputs of the tool, explains
the modelling of counterfactuals, and presents step-by-step instructions on using the tool.
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Chapter 2
2 Tool Inputs
Tool inputs are divided into two; user inputs (Sections 2.1 and 2.2) and model inputs (Section 2.3).
Performing sensitivities on tool inputs is described in Section 2.4.
2.1 Demand profile
Aggregated yearly thermal and electrical demand are represented using 39 time bands consisting of
7 time bands on a weekday, 6 time bands on a weekend day and 3 seasons in a year (Winter,
Summer and Transition). Data for each time band include the average thermal and electrical
demand, the duration of the time band and the number of days per year to which the time band
applies. The definition of the time bands can be adjusted by the user; however, the maximum
number of time bands is 39. The format for entering the thermal demand is shown in Figure 3. Note
that the electrical demand can be entered in a similar format.

Figure 3 Format for energy demand

The user needs to provide information about the peak and baseload energy demand for the three
seasons as the peak thermal demand is used to determine the capacity/number of units in the
superstructure (Deliverable 4.1). The annual demand profile can be generated by clicking Calculate
on the Energy demand data page of the tool. An example is shown in Figure 4.
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Figure 4 Energy demand profiles
2.2 Other user inputs
Other inputs include fuel prices (Figure 6), average electricity price (Figure 7), the grid emission
factors (Figure 8), and information on the project such as the energy centre life time and discount
rate (Figure 9). The energy prices in Figure 6 and 7 represent the present value for energy prices
(with carbon price added) for a 2010 baseline calculated from energy price projection for the project
lifetime, as shown in Appendix B. The carbon price represents a penalty for CO
2
emissions added to
the fuel price to encourage design of CO
2
reducing DE schemes; Appendix C contains information on
how carbon price can be calculated.

Figure 5 User input: fuel price
Contained within the tool are nine fuels, as shown in Figure 6. The user enters the fuel price
1
in
p/kWh and the tool converts the price to standardised units. The values shown in Figure 6 represent
the present value for energy price (Appendix B).

1
the basis for fuel price is Gross Calorific Value (GCV), also known as Higher Heating Value (HHV)
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Figure 6 User input: electricity tariff and tariff structure
The electricity market structure can be flat or variable. If the structure is flat, a single electricity price
is required for all the time bands; otherwise, either a dual tariff is required reflecting peak and off-
peak electricity price or multiple tariffs may be defined according to the time band. The user is
expected to specify the market structure and electricity price.


Figure 7 User input: grid emission factors
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The grid emission factor
2
for both export and import of electricity, as shown in Figure 8, is required
by the DE tool. The user can use different emission factors in each time band. The grid emission
factors entered should represent the period of interest to the user and be averaged over this period.
For example if the average CO
2
emissions over a 25 year period are required, then the inputs should
be an average of the projections over 25 years.

Figure 8 User input: Project data
Information on the project economics, namely project life and discount rate, is required to annualise
costs, as shown in Figure 9. The tool calculates and applies the annualisation factor, based on these
inputs. It is important that these same values are used in the processing of fuel costs used as inputs.

2.3 DE systems
The tool currently has 17 technologies of various capacities, as shown in Table 1.
Table 1 DE systems available in tool
Technology Available sizes (thermal capacity, MWh
th
)
1 Gas engine 0.47 1.62 2.29 4.42 5.24 6.95 7.00
2 Gas turbine 8.38 15.23 18.39 22.78
3 Gas boiler 0.25 1.40 3.50 7.00 10.00 20.00
4 Diesel engine 0.52 1.39 5.15
5 Biodiesel engine 0.52 1.39 5.15
6 Landfill gas engine 0.47 1.39 2.74
7 Fuel cell (natural gas) 0.19 0.50 0.90 1.80
8 Solar heater 0.1 2.10 6.00 10.50
9 Heat pump (waste heat) 3.17 4.00 4.15 4.75 37.05
10 Large scale combined cycle gas turbine
(LS-CCGT)
38.53 54.55
11 Dual fuel engine 2.20 3.31 6.88
12 Energy from Waste (EFW): incineration 12.00 39.00
13 EFW anaerobic digestion (AD) 0.27 1.40 4.06
14 Biomass combined heat & power (CHP) 6.36 58.35 87.58
15 Biomass gasification 11.69 20.42 49.73
16 Biomass boiler 0.84 1.00 3.00
17 Ground source heat pump 2.00

Each technology (apart from solar heaters) is entered in the format shown in Figure 5. (The format
for entering solar heaters is in Appendix D.)


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the present value for the grid emission factor can be estimated by taking an average over the project life.

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Figure 9 Format for DE systems
The user may not need to change the inputs for these DE systems. If new technologies are to be
included, these can be added to the library by replacing an existing unit while maintaining the
format.
2.4 Performing sensitivity analysis with the tool
All tool inputs (both user and model) can be changed; however their formats need to be maintained.
Changing inputs that affect the superstructure (Figure 1) require the superstructure to be re-created.
How to create the superstructure is described in Section 5.8.
2.5 Heat distribution
Heat produced by the energy centre is distributed to end users via the District Heating Network
(DHN); this system of transmission and distribution pipes with heat exchangers and pumps is used to
transfer the heat from the energy centre (where it is produced) to the end users. The model for the
DHN cost was developed within the ETI Macro DE project. Its detailed description is in the D.H.N.
Design and Algorithm Verification document prepared by Mooney Kelly NIRAS (MKN). The DHN cost
is not an integral part of the optimisation; however, the cost of distributing heat, distribution losses
and pumping energy required by the network is accounted for in the tool. In order to estimate the
heat loss and pumping energy, the user needs to input the heat loss and the pumping energy as a
percentage of the annual thermal demand, as shown in Figure 10.
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Figure 10 DHN model inputs: pumping energy and heat loss
The calculated network cost (using the algorithm developed by MKN) should also be included as an
input to the DE tool. Figure 11 presents an example

Figure 11 DHN model inputs: cost
The annualised cost of the network is added to the total annualised costs for the energy centre to
give the total annualised cost of the DE solution. Dividing the total annualised cost of the DE solution
by the thermal demand gives the cost of heat delivered to end users in /kWh.



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Chapter 3
3 Tool Outputs
The methodology for the design of distributed energy centres is described in Deliverable 4.1
(Deliverable 4.1, February 2011), where optimisation is used to capture trade-offs in the design. In
summary, the design is subject to optimisation, given an objective function and a set of constraints
(e.g. to ensure the system attains energy balance, as explained in Deliverable 4.1). A globally optimal
solution is obtained, providing a design and operating schedule.
Tool outputs refer to the design, the operating schedule, design economics, carbon dioxide
emissions, energy flows, global energy efficiency and results of redundancy calculations at the global
optimum.
3.1 Operating schedule of DE solution
The operating schedule, as shown in Figure 12, shows which technologies would be operated and
their output in each time band.

Figure 12 Operating schedule for design with thermal storage
For the particular design shown in Figure 12, where the thermal demand is satisfied and all
electricity generated is sold to the grid, the DE solution consists of gas boilers, gas engines, dual fuel
engines (using natural gas and diesel as fuels) and EFW Anaerobic Digestion. In some time bands, the
heat generated does not satisfy the thermal demand; instead, heat is provided by the thermal
storage unit. Conversely, in some time bands, surplus heat is produced, to provide stored heat.
Figure 13 shows a design where thermal storage has been disallowed. In this case the thermal
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demand (represented by red lines and X markers) is met in every time band as none of the heat
produced is diverted to storage.

Figure 13 Operating schedule for design without thermal storage
The selected DE solution is reported by the tool on the Results page. Figure 14 shows an example
of an optimised DE solution.

Figure 14 Design solution configuration (with thermal storage)
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3.2 Design economics
The economic analysis of the energy centre includes the total annualised capital cost, total operating
cost (sum of fuel and maintenance cost), revenue from electricity sold to the grid and cost of
importing electricity. The cost of heat delivered to users by the energy centre is an output of the
tool. All tool outputs are shown on the Results sheet of the tool, as shown in Figure 15.The cost of
heat delivered is the minimum price at which heat can be sold for the energy centre to break even.

Figure 15 Tool output: DE centre economics
The capital cost includes cost for replacement of DE systems during the project life. Other
assumptions related to the energy centre economics are described in Deliverables 4.1 and 4.2.
3.3 Carbon dioxide (CO2) emissions
The DE centre CO
2
emissions can be categorised into;
emissions from fuel burnt to satisfy the energy demand (fuel CO
2
emission)
emissions corresponding to imported electricity from the grid (CO
2
emission debit)
avoided emissions corresponding to electricity sold to the grid (CO
2
emission credit).
The sum of the fuel CO
2
emissions and emission debits less emission credits is defined as the global
CO
2
emissions. All four emission types are reported by the tool, as shown in Figure 16. The global
CO
2
emissions per unit of heat delivered is also an output of the tool.

Figure 16 Tool output: DE centre emissions
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3.4 Energy Flow and DE Centre Efficiency
In the DE tool, heat and electricity produced, as well as fuel consumed by the energy centre, is
calculated for the optimum design, as shown in Figure 17. From the energy flows, the DE centre
overall energy efficiency (defined as the ratio of total useful energy to the fuel consumed) is
calculated.

Figure 17 Tool output: Energy flow and DE centre efficiency
3.5 Redundancy Analysis
To ascertain the ability of technologies in the DE solution configuration to meet the peak demand
when CHP units are unavailable, a redundancy analysis is carried out on the energy centre design.
The installed heat capacity of boilers and other technologies selected is compared to the peak
thermal demand, as shown in Figure 18. Both the energy flows from the centre and redundancy
calculations can be used to assess the contribution to energy security of the energy centre.

Figure 18 Tool output: Redundancy Analysis


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Chapter 4
4 Counterfactual Modelling
In order to assess the potential contribution of macro-scale DE to Great Britain (GB), it is necessary
to compare the performance of DE solutions to other non-DE approaches for delivering heat in GB.
The business as usual approach is to provide heat using stand-alone boilers to meet residential
and commercial heating demands. In the future, it is also expected that individual air source heat
pumps may become an attractive low-carbon technology option which could replace conventional
boilers. These alternatives, against which DE is to be compared, are referred to as counterfactuals.
Counterfactual technologies refer to baseline heat supply systems. The DE tool contains models for
two systems:
Natural gas boilers, as are currently predominantly used in the UK to satisfy domestic and
commercial heat demand
Air source heat pumps, which may offer a low carbon alternative to boilers in the future.
The DE tool includes models for gas boilers and air source heat pumps, for 2010, 2020 and 2030, as
shown in Figures 19 and 20.

Figure 19 Counterfactual model input: gas boiler
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Figure 20 Counterfactual model input: air source heat pumps
The user inputs needed to estimate cost and emissions of the counterfactuals are shown in Figure
21. Costs and emissions associated with the counterfactuals are calculated on the Counterfactuals
page of the DE tool; Figure 22 provides an example.

Figure 21 Counterfactual user inputs
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Figure 22 Counterfactual model outputs

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Chapter 5
5 How to Use the Tool
5.1 Design of new energy centres
To design a new energy centre, the user should specify the project objective and provide site
information on the Start page of the tool shown in Figure 23.

Figure 23 Using the tool: design of a new energy centre
Once the problem objective is selected, appropriate settings are automatically selected. The user
should then specify the optimisation objective, which will be discussed further in Section 5.3.
5.2 Operational optimisation of existing energy centre/ tool in simulation mode
If the user needs to optimise an existing energy centre, this option should be selected on the Start
page of the tool, as shown in Figure 24. In this case the DE tool optimises the operating schedule of
the centre. Then the user needs to specify the optimisation objective (see Section 5.3).
25

Figure 24 Using the tool: simulation mode
5.3 Project options
Once the user has specified how the tool is to be used (i.e. design mode or simulation mode), the
optimisation objective needs to be selected. Three objectives are defined, as shown in Figure 25:
Minimum cost: Global optimum is reached at minimum total annualised cost
Minimum cost with constraint on carbon emissions: user constrains the CO
2
emissions to a
maximum of some percentage of the emissions of a counterfactual gas boiler. Then the
optimiser satisfies this constraint at minimum cost.
Minimum cost with constraint on capital investment: the user specifies the maximum capital
investment for the design that minimises the total annualised cost.

Figure 25 Using the tool: optimisation options
5.4 Design Options
The user can decide to allow thermal storage and/or heat dumping in the design. Allowing thermal
storage in the design allows CHP units to continue running when electricity prices favour production
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of electricity and thermal demand is low. The excess heat produced is stored until needed (within a
24 hour day). Assumptions related to the thermal storage model are presented in Deliverable 4.1.
Heat in excess of demand may be produced if the heat dumping option is selected. The cost of
dumping heat, e.g. to a cooling tower, is not taken into account. Grid emission factor inputs are used
to determine credits for CO
2
emissions associated with electricity generated (claiming rate) while
heat is rejected (i.e. dumped without being used to satisfy heat demand) see Figure 26.
Figure 26 shows how these two options are represented in the tool:

Figure 26 Using the tool: design options
5.5 Entering User Inputs
User inputs refer to inputs required for a basic run of the tool in either design mode (for new energy
centre design) or simulation mode (for an existing energy centre). User inputs need to be entered in
the correct format. All user input cells are marked yellow; these include:
On the Start page, site information, referring to data about the site, as shown in Figure 27.

Figure 27 Using the tool: site information
Energy demand data (including annual energy demand, peak energy demand and demand in
time bands for both electricity and heat). The annual energy demand for both electricity and
heat need to be entered in the Start page of the tool. The heat and electricity demand in each
time band are entered in the Energy Demand Data page of the tool. The same format as
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shown in Figure 28 is used for both thermal and electrical demand. The energy profile for a year
is generated by the tool by clicking calculate buttons for both thermal and electrical demand,
as shown in Figure 29.

Figure 28 Using the tool: energy demand data


Figure 29 Using the tool: energy profile
Cost data: information on cost of fuels and electricity tariff/tariff structure need to be specified
on the Economic Data page of the tool, as shown in Figure 30.
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Figure 30 Using the tool: cost data
Emissions data: information on the grid emission factor should be provided on the Economic
Data page of the tool, as shown in Figure 31.

Figure 31 using the tool: grid emission factor
5.6 Design Approach
The user needs to choose how electrical demand will be handled in the design of the energy centre.
Three options are provided:
All electricity produced can be sold to the grid (in this case, power requirements for DHN
pumping are imported from the grid),
Aim to satisfy the electricity demand of the zone (electricity produced satisfies electrical demand
of the zone),
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Allow electricity sales and purchase (where the electricity generated is more than the demand,
electricity is sold to the grid; where there is a deficit in electricity production, electricity is
bought from the grid).
The user needs to specify the approach to be applied in the design by ticking the option on the
Start page, as shown in Figure 32.

Figure 32 Using the tool: design approach electricity production
5.7 Model Inputs
Model inputs include the DE systems to be considered during design and the maximum number of
each type of unit that can be installed.
The inputs of models of existing technologies in the tool (worksheets marked yellow) need not
be changed by the user. If the user intends to perform some sensitivity studies, e.g. on fuel
prices, or if the user wishes to include new technologies, existing values can be replaced by the
user. The format shown in Figure 5 should not be changed. The user can select which
technologies to include in the design from the DE systems page by checking or unchecking the
appropriate boxes, as shown in Figure 33.

Figure 33 Using the tool: model inputs (selection of DE systems)
Inputs related to the number of units of a particular technology in the superstructure: the user
can select the number of units of a particular technology to be included (in the superstructure).
The default is determined by dividing the peak thermal demand by the highest rated capacity of
each technology this information can be found on the Energy systems page of the tool, as
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shown in Figure 34. The user may change this number before building the model (explained in
Section 5.8).

Figure 34 Using the tool: number of each type of DE system in the superstructure
5.8 Creating superstructure
Creating the superstructure essentially creates the overall model that is to be optimised. While
building the superstructure the user is advised to close all other Excel workbooks.
5.8.1 Creating superstructure for new design
If the project objective is design a DE centre the steps below are necessary to create the
superstructure to be optimised and this should be done after completing Sections 5.1, 5.3, 5.5 and
5.7 (which deals with selecting technologies to be included in the superstructure).
Steps to creating superstructure for new design
The steps necessary to build a suitable superstructure:
1. On the Start page, the user should Save and proceed to input data, as shown in Figure 35.

Figure 35 Creating superstructure: Step 1

2. On the Energy Demand Data page, having entered required user inputs, the user should click
on Save and proceed, as shown in Figure 36. A message box pops up showing the peak thermal
demand.
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Figure 36 Creating superstructure: Step 2
3. On the Economic Data having entered relevant inputs in yellow cells and the electricity market
structure, the user should Save and Proceed, as shown in Figure 37. A message box would pop
up showing the maximum power production. Note that the choice of market structure is
important as the electricity price has a strong influence on the design.

4. Some messages pop up, as shown in Figures 37 to 39. The first message confirms the maximum
power production. The second message box notes that models should be updated whenever
fuel prices change. The third message box directs the user to the DE systems page.

Figure 37 Creating superstructure: Step 4

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Figure 38 Creating superstructure: Step 4 (continued)
5. On the DE systems page, as shown in Figure 39, the user may add technologies to the
superstructure or remove them from the design. This step allows the appropriate settings to be
saved.

Figure 39 Creating superstructure: Step 5
6. To create models, the user should click the command button beneath the DE system of interest.
Technologies can be excluded from the design, by deselecting the model and clicking the
command button beneath the DE system of interest. Once satisfied with the technologies added
to the superstructure, the user should click on Save and proceed to create the superstructure.
Note that creating the superstructure could take some time, even hours, depending on the
maximum number of units for each technology, an example of which is shown in Figure 40. The
number of units can be adjusted by the user from the default settings. If any changes are made
to the technology models or inputs such as fuel prices, then the superstructure will need to be
re-created.

33

Figure 40 Creating superstructure: Step 5 (continued)
After completing step 5, click save and proceed on Figure 39. The user is directed to the start page
where Sections 5.4 (selecting design option) and Section 5.6 (selecting design approach) can now be
completed before running the optimisation (Section 5.9 below).
5.8.2 Building model for existing DE solution
This is applicable if the tool is in simulation mode where the project objective is Optimise an existing
DE centre. The steps below should be followed to build the existing model that is to be optimised. In
this case, only the operating cost is optimised as the DE solution is fixed.
Steps to model existing DE solution
1. On the Start page, the user should Save and proceed to input data, as shown in Figure 35
above.
2. On the Energy Demand Data page, having entered required user inputs, the user should click
on Save and proceed, as shown in Figure 36. A message box pops up showing the peak thermal
demand.
3. On the Economic Data having entered relevant inputs in yellow cells and the electricity market
structure, the user should Save and Proceed, as shown in Figure 37 above. A message box
would pop up showing the maximum power production. Note that the choice of market
structure is important as the electricity price has a strong influence on the design.
4. Some messages pop up, as shown in Figures 37 to 39 above. The first message confirms the
maximum power production. The second message box notes that models should be updated
whenever fuel prices change. The third message box directs the user to the DE systems page.
5. On the DE systems page, as shown in Figure 39 above, click on Delete models to save
appropriate settings this is required especially if the tool was previously used to design new
energy centres.
6. In this step, technologies in the energy centre should be specified by ticking relevant boxes. If
technologies in the centre are not in the library of DE systems (Table 1) the user can substitute
the systems in the library, while adhering to the format shown in Figure 5. New CHP units should
34
replace existing CHP units while new heat only units should replace existing heat only units for
consistency in calculations.
7. For handling the number of units in the design refer to the flowchart in Appendix E.


Figure 41 Building model for existing design: capital cost sheet


Figure 42 Building model for existing design: deleting excess units (Part 1)
35

Figure 43 Building model for existing design: 'calculations <any technology>' sheet


Figure 44 Building model for existing design: deleting excess units (Part 2)
Having followed the flowchart in Appendix E, the user is directed to the Start page, where Sections
5.4 (selecting design option) and Section 5.6 (selecting design approach) can now be completed
before running the optimisation (see Section 5.9).
5.9 Running the Optimisation
After completing the steps outlined above for creating superstructure for new design (Section 5.8.1)
or modelling an existing DE solution (Section 5.8.2) and assuming all model inputs are correct, the
user is ready to run the optimisation by clicking Run on the Start page. The optimisation usually
takes around 5 minutes; it may take more or less time.

Calculations <any technology>
36
Figure 45 Running the model
On clicking Run, message boxes ask the user to confirm optimisation settings and that the
optimisation is ready to run. The user can view the progress of the optimisation on the pop-up
window as shown in Figure 42. The optimisation can be interrupted if it has been running for some
time and the user observes that the objective is not changing.

Figure 46 Running the model: Optimisation progress
5.10 Viewing results
The optimisation stops once the global optimum has been reached (as shown in Figure 43) or if the
optimisation is interrupted by the user. On clicking OK, the user is directed to the Results page.
The design, its operating schedule, project economics, carbon dioxide emissions associated with the
design, energy flows in the centre and results of redundancy calculations for the energy centre can
be viewed.

Figure 47 Viewing results: Global optimum
5.11 Error check
The DE tool performs an error check on the energy demand, as shown in Figure 44, to ensure
demand in time bands (entered in MW) add up to the annual thermal demand of the zone (in GWh).
The check could be beneficial when the user decides to change the time band structure.

Figure 48 Error check: energy demand aggregation
37
5.12 Model Anomalies
While the model is reasonably robust, there are several issues the user should be aware of when
reviewing the results of the optimisation. These are reported below and on the WB! Status page.
A feasible design may not be obtained. An infeasible design may arise if the optimisation is too
highly constrained. For example, the number of units in the superstructure may have been
specified in such a way that the capacities of the units cannot satisfy the thermal demand. If
design feedback is Infeasible design, the user should check the number of units allowed for
each technology to ensure there is sufficient thermal capacity to satisfy the thermal demand.
Input errors will naturally give rise to output errors. A significant potential source of error is that
when fuel prices are changed, the DE systems associated with these fuels need to be re-
modelled (re-included in the superstructure) before the optimisation is re-run.
The optimisation may not converge for some time (e.g. hours) there may be not change in the
objective. In this case, the user can interrupt the optimisation and proceed to view results.

5.13 Error messages
The optimisation may stop abruptly without user interruption. This suggests a bug in the software; it
is recommended that the user closes other excel files, checks all inputs, re-creates the
superstructure for the heat units and runs the optimisation again. Error messages and warnings can
be viewed on the WB! Status page in the tool, as shown in Figure 45.

Figure 46 Error messages in the WB! Status page
38
Chapter 6
6 Conclusions and recommendations
6.1 Conclusions
This DE design tool was developed at the Centre for Process Integration, at the University of
Manchester in line with the requirements of the ETI Macro DE project. The DE tool has been used in
diverse ways within the project, including for design of new energy centres and simulation and
optimisation of an operational plant. The tool was applied extensively to explore the concepts of
using time bands to represent variable demand, to design DE centres for characteristic zones
identified during the project, to evaluate the impact of DE in future scenarios, and to assess DE
technology developments. The tool has thus been used extensively, and has had its robustness and
user interface enhanced during this process. Nevertheless, it has been developed primarily as a
research tool, rather than as commercial software. As pre-prototype software, it is expected that
users will have a good understanding of distributed energy and of aspects of the modelling.
The software manual summarises the features of the tool and describes how the tool can be used
for both design of new distributed energy centres and operational optimisation of existing energy
centres. Steps required for entering inputs, running the model and checking results are outlined.
Error messages associated both with the model (model anomalies) and with the tool are described.
6.2 Recommendations
Future recommendations with regards tool improvements are categorised below;
User interface: It is recommended that the user interface be developed further to provide a
smoother process for setting up and running design cases.
Automated data entry: If the tool is to be used for multiple designs, designing an interface to
automatically enter input data would be useful.
Automated output: A design interface to automatically record tool output would be valuable if
many designs are to be developed.
Heat distribution network: Currently the heat distribution network cost is an input; heat losses
and pumping costs are estimated. The design and optimisation of the heat network is not part of
the DE solution optimisation. It is recommended that the heat network design and DE centre
design are considered simultaneously.
Heat storage: Currently, the energy balance must be balanced in each 24-hour period.
Therefore, any heat stored must be used within that period. Extending the model to consider
longer periods (e.g. 48 hours, to accommodate weekends, or much longer periods, to consider
larger scale heat storage) would extend the scope of the tool considerably.
Multi-objective optimisation: The tool optimises by minimising the total annualised cost, taking
into account constraints related to carbon emissions. If a multi-objective optimisation approach
were developed, the flexibility and applicability of the tool could be greatly enhanced.

39
References
Deliverable 4.1 Macro DE Project: Description of design methodology and tool effectiveness,
February 2011
Deliverable 4.2 Macro DE Project: Application of Energy Centre Design Tool to Characteristic Zones,
March 2012
Macro DE Project Technology Library (WP 3.2), June 2011
Mooney Kelly NIRAS. (2012, March). D.H.N. Design and Algorithm Verification Report Rev. 3 for the
Macro DE project.
UK Governments Interdepartmental Analysts Group (IAG) guidance, 2011. Valuation of Energy Use
and Greenhouse Gas Emissions for Appraisal and Evaluation. DECC and HM Treasury




40
Appendices
Appendix A: Description of worksheets in tool

Sheet Name Description Comment
Start Sheet contains general information
about the design
Yellow cells for user input
Energy demand data Demand input for both electricity
and heat is entered on this sheet and
profile can be generated by clicking
Calculate.
Yellow cells for user input
Economic data Sheet contains information on
project data, fuel prices and grid
emission factor
Yellow cells for user input
DE systems Sheet contains:
All technologies in the tool
Default values for number of units
of each technology in the superset
Yellow cells for user input
(default already set)
Counterfactuals Contains models of reference
technologies. i.e. gas boilers and air
source heat pumps
Yellow cells for user input

Results Contains tool outputs such as cost,
carbon emissions, etc.
Scroll down page to view
all results
Operating costs For model calculations Minimum user
intervention
Capital costs For model calculations Minimum user
intervention
Gas engines Contains model input for gas engines Model input can be
adjusted but format may
not be changed
Calculations gas engines Model calculations for gas engines Minimum user
intervention
Gas turbines Contains model input for gas
turbines
Model input can be
adjusted but format may
not be changed
Calculations gas turbines Model calculations for gas turbines Minimum user
intervention
Boilers Contains model input for gas boilers Model input can be
adjusted but format may
not be changed
Calculations boilers Model calculations for gas boilers Minimum user
intervention
Engines ULSD (diesel engines) Contains model input for ultralow
sulphur diesel (ULSD) engines
Model input can be
adjusted but format may
not be changed
Calculations engines ULSD Model calculations for ULSD engines Minimum user
intervention
Fuel cells Contains model input for fuel cells Model input can be
adjusted but format may
not be changed
41
Calculations fuel cells Model calculations for fuel cells Minimum user
intervention

Engines B100 (biodiesel)

Contains model input for B100
engines

Model input can be
adjusted but format may
not be changed
Calculations B100 engines Model calculations for B100 engines Minimum user
intervention
Engines LEG (landfill gas) Contains model input for LEG
engines
Model input can be
adjusted but format may
not be changed
Calculations LEG engines Model calculations for LEG engines Minimum user
intervention
Solar heaters Contains model input for solar
heaters
Model input can be
adjusted but format may
not be changed
Calculations solar heaters Model calculations for solar heaters Minimum user
intervention
Heat pumps Contains model input for heat
pumps
Model input can be
adjusted but format may
not be changed
Calculations heat pumps Model calculations for heat pumps Minimum user
intervention
GSHP Contains model input for gas source
heat pump (GSHP)
Model input can be
adjusted but format may
not be changed
Calculations GSHP Model calculations for gas source
heat pump (GSHP)
Minimum user
intervention
Dual fuel engines Contains model input for dual fuel
(gas/diesel) engines
Model input can be
adjusted but format may
not be changed
Calculations Dual fuel engines

Model calculations for dual fuel
engines
Minimum user
intervention
LS-CCGT Contains model input for large scale
combined cycle gas turbines (LS-
CCGT)
Model input can be
adjusted but format may
not be changed
Calculations LS-CCGT Model calculations for large scale
combined cycle gas turbines (LS-
CCGT)
Minimum user
intervention
EFW Incineration Contains model input for energy
from waste (EFW) by incineration
Model input can be
adjusted but format may
not be changed
Calculations EFW incineration Model calculations for energy from
waste (EFW) by incineration
Minimum user
intervention
EFW-AD Contains model input for EFW
anaerobic digestion (AD)
Model input can be
adjusted but format may
not be changed
Calculations EFW-AD Model calculations for EFW
anaerobic digestion (AD)
Minimum user
intervention
Biomass CHP Contains model input for biomass
CHP
Model input can be
adjusted but format may
42
not be changed
Calculations biomass CHP Model calculations for biomass CHP Minimum user
intervention

Biomass gasifier

Contains model input for biomass
gasifier

Model input can be
adjusted but format may
not be changed
Calculations biomass gasifier Model calculations for biomass
gasification
Minimum user
intervention
Biomass boilers Contains model input for biomass
boilers
Model input can be
adjusted but format may
not be changed
Calculations biomass boilers Model calculations for biomass
boilers
Minimum user
intervention


43
Appendix B: Energy price present value

User input for electricity and fuel price are discounted (over the project life) and annualised (using
the annualisation coefficient) to give the equivalent present value for the base year.
A step by step guide is presented below:
1. Information on energy price projection on an annual basis for the project lifetime is required (UK
Governments Interdepartmental Analysts Group (IAG) guidance, 2011).
2. Using equation B.1, calculate the discount factor for every year from the start year of the project
to the project lifetime:


=

()

(B.1)
where DR is the discount rate and n is the year
3. For each year under consideration discount the energy price using the discount factors
calculated in Step 2, as shown in equation (B.2):



=
( ) ( ) (B.2)

4. Calculate the annualisation coefficient by summing the discount factors for every year for the
project lifetime as shown below;
=

()

(B.3)

5. Calculate the present value for the energy price using equation (B.4); this gives the price of
energy used in the tool. (Note that the carbon price can be added to this value.)

=
( )


(B.4)
44
Appendix C: Carbon price calculation

The carbon price can be included in the energy price present value as a ways of indirectly driving CO
2

reducing distributed schemes.
Equations for estimating the carbon price for fuel(s) and electricity are presented below.
1. Carbon price for fuel estimation;

=
,
/


,
/
0.1 (C.1)

,
/

=

( )


(C.2)
,
/
=

( )


(C.3)

2. Carbon price for electricity estimation;

=
,
/


,
/
0.1 (C.4)

,
/

=

( )


(C.5)
,
/
=

( )


(C.6)

The calculated values in equations C.1 and C.4 are added to the fuel price(s) and electricity price
respectively.

45
Appendix D: Solar heater model


Figure D.1 Solar heaters: Representation in tool

46
Appendix E: Flowchart for selecting number of DE systems












Start
Enter number of units on DE
systems sheet (Figure 40)
Is number of
units the
same for all
capacities of a
technology?
Yes
No Enter maximum number of
units on DE systems sheet
(Figure 40)
Proceed to Capital cost
sheet (Figure 41)
Delete rows of excess units
created as shown in Figure
42 for a typical gas engine
(note the row numbers)
Proceed to Calculations
<any technology> sheet, as
shown in Figure 43
Delete entire rows using the
same row number as in
capital cost sheet (Figure 44)
Proceed to DE systems
sheet
Click command button beneath
technology of interest on DE
systems sheet (Figure 39)
On DE systems sheet
click Save and proceed
(Figure 39)
End
Click command button
beneath technology of
interest on DE systems
sheet (Figure 39)