Production planning of combined heat and power plants with regards to electricity price spikes : A machine learning approach

District heating systems could help manage the expected increase of volatility on the Nordic electricity market by starting a combined heat and power production plant (CHP) instead of a heat only production plant when electricity prices are expected to be high. Fortum Värme is interested in adjusting the production planning of their district heating system more towards high electricity prices and in their system there is a peak load CHP unit that could be utilised for this purpose. The economic potential of starting the CHP, instead of a heat only production unit, when profitable was approximated for 2013-2016. Three machine learning classification algorithms, Support vector machine (SVM), Naive Bayes and an ensemble of decision trees were implemented and compared with the purpose of predicting price spikes in price area SE3, where Fortum Värme operates, and to assist production planning. The results show that the SVM model achieved highest performance and could be useful in production planning towards high electricity prices. The results also show a potential profit of adjusting production planning. A potential that might increase if the electricity market becomes more volatile