Feasibility study on combined heat and power systems for hotels in the Maltese Islands

Abstract

The services sector in the Maltese Islands consumes around 29% of the total energy to satisfy the heating and cooling demands. Although several measures have been implemented to achieve the desired energy reduction, this has not been achieved yet. In the study being presented in this dissertation an investigation was carried out on the feasibility of Combined Heat and Power (CHP) and Combined Cooling, Heating and Power (CCHP) systems for the hospitality sector in Malta. The research presented makes use of a software package, RETscreen to create strategic models of a whole spectrum of hotels with different energy demands, rather than focusing on only one type of hotel. Through the use of this software different scenarios were captured using a number of different variables, including size related and financial aspects. For comparative purposes, data was normalised for all the hotels. Six hotels were chosen, two of the hotels had a 5-star rating, two had a 4-star rating and another two had a 3-star rating. All the hotels had a different footprint and different electrical and heating demands. While creating simulations with these six hotels five different variables were considered and analysed, these were CHP size, financial grants, electricity tariffs, feed-in tariffs and fuel prices. All the prices and tariffs investigated included the current price point, a higher price point and a lower price point to determine which variables had the most impact on the feasibility of working with such systems. The CHP systems were primarily sized to match the hotels’ heating demand, although models were then simulated with both oversized and undersized systems. The main outcome of this dissertation was to obtain the financial and environmental impact that a CHP and a CCHP system has on the hotels energy characteristics. The study was able to identify the key variables which have the highest impact on such projects, which were the financial incentives, the electricity prices and the size of the system. In this study the financial results were analysed, using the simple payback period, the net present value, the internal rate of return and the operating profit. The study showed that the 4-star hotels considered would benefit most from having such projects implemented, and even with minor changes in electricity tariffs it would still be financially feasible to install a CHP system for these hotels. The CCHP system which was simulated for the 4-star hotels, had an additional absorption cooling system. In this case having a CCHP system with the current initial capital investment and the current electricity prices resulted in the system not being feasible.