Abstract.One of the problems of the Latvian economy is related to the energy sector. In this sector the increasing competition is related to regional market expansion, building new transmission connection; fuels and electricity market price conjuncture significant change; energy efficiency requirements increasing, renewable energy requirements increasing and new market regulatory mechanisms. The system dynamics model can solve sector competitiveness problems. With the help of the developed model, it has been estimated that increase in total electricity consumption (around 10%) can be expected in Latvia during the next 10 years. Decline in electricity loss and electricity imports is predicted. Increase of the capacity of production means and the amount of the produced energy is being forecasted.
Intermittent generation (solar PV and wind energy) integration in power production portfolio as well as electricity price fluctuations have changed the running manner of conventional combined heat and power (CHP) plants: the shift from base load operation to running in cyclic modes. These cogeneration power plants are not adapted to new running conditions. The level of CHP plant flexibility should be improved to operate profitably and efficiently from both technical and fuel usage point of view. There are different ways to increase the flexibility of power plants. Before any improvements, the situation at power plants should be evaluated and the weakest points defined. In this publication, such measures are presented on Riga CHP-2 plant example: installation of heat storage tank; extension of operation rang; acceleration of start-ups.
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