  In countries with an extended use of district heating (DH), the integrated
operation of DH and power systems can increase the flexibility of the power
system achieving a higher integration of renewable energy sources (RES). DH
operators can not only provide flexibility to the power system by acting on the
electricity market, but also profit from the situation to lower the overall
system cost. However, the operational planning and bidding includes several
uncertain components at the time of planning: electricity prices as well as
heat and power production from RES. In this publication, we propose a planning
method that supports DH operators by scheduling the production and creating
bids for the day-ahead and balancing electricity markets. The method is based
on stochastic programming and extends bidding strategies for virtual power
plants to the DH application. The uncertain factors are considered explicitly
through scenario generation. We apply our solution approach to a real case
study in Denmark and perform an extensive analysis of the production and
trading behaviour of the DH system. The analysis provides insights on how DH
system can provide regulating power as well as the impact of uncertainties and
renewable sources on the planning. Furthermore, the case study shows the
benefit in terms of cost reductions from considering a portfolio of units and
both markets to adapt to RES production and market states.
