Optimization of building retrofits in a combined heat and power network

We describe a mathematical model of a linear program for optimization of the following: the use of purchased and produced electricity (for power and for heat), the fuel mix in a district-heating plant, and implementation of energy-conservation measures in the building stock of the Malmö municipality. We find that energy retrofits are not profitable when compared to the cost for producing or purchasing more electric power and heat. The reasons for this result are, the low cost of electricity purchased from the national grid even under peak conditions and the exploitation of waste heat generated at the district-heating plant.