A cogeneration plant (CHP) has the capability to provide auxiliary services and thus can contribute to improving the flexibility and reliability of the power system. This work studied the potential advantages for CHP from simultaneous participation in day-ahead markets and frequency regulation to demonstrate their effectiveness. A new cogeneration model was proposed that considers both heat recovery from flue gas condensation and thermal energy storage.

Based on multi-market optimization using real market prices, it can be concluded that providing frequency regulation services in addition to day-ahead trading can increase the annual profit of CHPs, with the result being approximately 2.75%. However, this advantage is clearly influenced by heat demand, as both high and low heat demand seasons (e.g., winter and summer) can limit the flexibility provided by cogeneration.

Additionally, a sensitivity analysis was conducted to evaluate the impacts of key factors, including electricity prices, heat demand, electricity cost, and the size of the offer for frequency reserve services, on the benefits of participating in both markets. It was found that the price difference between day-ahead and frequency regulation markets and the cost of electricity production have a clear impact on the advantages of cogeneration.