An optimal planning method is proposed for the fundamental design of cogeneration plants. Equipment capacities and utility maximum demands are determined so as to minimize the annual total cost in consideration of the plants’ annual operational strategies for the variations of both electricity and thermal energy demands. These sizing and operational planning problems are formulated as a nonlinear programming problem and a mixed-integer linear programming problem, respectively. They are solved efficiently in consideration of their hierarchical relationship by a penalty method. A numerical example about a gas turbine plant is given to ascertain the validity and effectiveness of the proposed method.

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