Optimal sizing for residential CHP system Hongbo Ren a, * , Weijun Gao a , Yingjun Ruan b a Faculty of Environmental Engineering, The University of Kitakyushu, Kitakyushu 808-0135, Japan b Faculty of Human-Environment Engineering, Kyushu University, Fukuoka 812-8581, Japan Received 3 August 2006; accepted 9 May 2007 Available online 18 May 2007 Abstract Residential CHP systems have been introduced around Japan recently, and expected to diffuse more and more. During the process of boosting the adoption of residential CHP systems, both manufacturers and customers are interested to know the optimal capacity of power generator for the unit, and once the unit has been installed, what dispatch strategy to use in order to minimize a customer’s cost of meeting its electricity and heat requirements. In this paper, a mixed integer nonlinear programming model has been developed. The objective is to minimize annual cost of the energy system for a given residential customer equipped with the CHP plant, combining with a storage tank and a back-up boiler. The model reports the optimal CHP system capacities that customers could employ given their electricity and thermal requirements. Using this model, an investigation was conducted of economically optimal CHP investment for a prototypical residential building. Furthermore, a sensitivity analysis was elaborated in order to show how the optimal solutions would vary due to changes of some key parameters. In addition, as a main component of residential CHP system, the optimal size of the storage tank was analyzed. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Residential CHP; Optimization; Sensitivity analysis; Storage tank 1. Introduction Increasing concern regarding the depletion of fossil energy resources and the pollution of the environment has justified the interest in developing high efficiency energy generation techniques. Co-generation, also know as CHP (combined heat and power), is a well known high efficient approach to generate electricity and thermal energy from a single fuel source. This means lower fuel consumption, the energy is generated at a lower cost, and in a more environmentally friendly way. Furthermore, co-generation can provide high- quality and reliable electricity supply. All these have made the use of CHP plants more attractive. In the future these solutions will inevitably be more and more common [1,2]. In Japan, CHP systems have been developed rapidly during the last 20 years, and are mainly installed in the industrial and commercial sectors. However, in recent years, as a key sector of energy consumption, residential building is becoming an attractive consumer of CHP sys- tems. Osaka Gas has developed the commercialized resi- dential gas engine CHP system in March, 2003. And now a 0.7–1.0 kW class polymer electrolyte fuel cell (PEFC) CHP system is being developed for the Japanese residential market. It is believed that residential CHP offers significant benefits to energy suppliers (improved profitability, cus- tomer retention, etc.), to household (reduced energy bills) and to society (reduced CO 2 emissions, reduce primary energy consumption, avoidance of central plant and net- work construction) as a whole. The Japanese Government, through the Ministry of Economy, Trade and Industry (METI) is actively supporting the commercialization of residential CHP systems in Japan. In 2005, METI funded the commercialization process through a US$ 23 million Large Scale Monitoring Program, involving subsidies for approximately 400 CHP systems across the market. As a three-year program, the goal of METIs Large Scale Monitoring Program is to prepare Japan’s 46-million 1359-4311/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.applthermaleng.2007.05.001 * Corresponding author. Tel.: +81 093 695 3715; fax: +81 093 695 3335. E-mail address: d6640401@hibikino.ne.jp (H. Ren). www.elsevier.com/locate/apthermeng Available online at www.sciencedirect.com Applied Thermal Engineering 28 (2008) 514–523