Methods developed for optimization of thermal systems usually work on a predetermined configuration of the system. Consequently, in order to select the best system, it is necessary to apply the method separately for each possible configuration and compare the results. The designer’s work would be significantly facilitated, if the optimization method could synthesize the optimal configuration of the system automatically. Such a method is presented here, based on the Thermoeconomic Functional Approach (TFA). TFA is a method developed for optimal design or improvement of complex thermal systems. It combines thermodynamic concepts with economic considerations in a systems approach. A thermal system is considered as a set of interrelated units; each unit has one particular function (purpose, or product). The documented determination of the function of the system as a whole and of each unit individually is achieved by functional analysis. The problem is mathematically formulated (objective function, constraints) at two levels: (A) optimization of operation, (B) optimization of the configuration and the design of the system. The solution is obtained by a two-level algorithm. As an example, the method is used to optimize a cogeneration system supplying a process plant with heat and electricity, which are known functions of time.

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