CHP Assets Can Double Businesses Profitability in PJM

In PJM, Combined Heat and Power (CHP) assets operating in frequency regulation (RegA) and Sync Reserve combinations can more than double business profitability compared to a Day Ahead (DA) only strategy according to GridBeyond’s latest report Unlocking maximum value from CHP assets in PJM. 

In the report, GridBeyond explores a full year simulation that compares a DA strategy only approach to a strategy that includes participation in frequency regulation (RegA) and synchronized reserves (Sync Reserve) for CHP. To quantify the financial and operational benefit of different strategies for market participation, GridBeyond's study made use of a backcast. This used historical data and market prices to simulate how a CHP plant would have performed with the two different strategies throughout 2023. GridBeyond’s technology integrated machine learning–based price forecasting, Monte Carlo simulations, and mathematical optimization to determine optimal dispatch strategies for both scenarios. 

While many operators still rely on static, pre-scheduled operation of their CHP systems, this analysis proves that this approach fails to fully capture the value available, especially when participating in both energy and ancillary service markets. By leveraging real-time market data, predictive analytics, and machine learning algorithms, CHP assets can operate not just efficiently, but strategically, said the report. 

“CHP are often viewed as stable, behind-the-meter assets, but when enhanced with AI-driven forecasting and optimization, they respond to market signals to generate revenues and savings for businesses,” said Michael Phelan, CEO of GridBeyond. 

For example, during periods of low electricity prices the CHP unit may be operated at its minimum output, while electric heat pumps are run at higher capacity to satisfy thermal demand. During price peaks, flexible electrical loads at the site may be curtailed, and heat pumps ramped down, allowing the site to export more electricity to the grid while maintaining thermal balance. As prices stabilize, the system gradually returns to baseline. This enables CHP operators to take full advantage of revenue opportunities in both the Day-Ahead and Real-Time energy markets, as well as in RegA and Sync Reserve markets. The integration of forecasting tools, including short- and medium-term price predictions, allows the system to anticipate market trends and pre-position the CHP accordingly, further improving performance. 

GridBeyond | https://gridbeyond.com/