Production planning under RTP, TOU and PPA considering a redox flow battery storage system

Markus Hilbert (), Andreas Dellnitz () and Andreas Kleine ()
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Markus Hilbert: FernUniversität in Hagen
Andreas Dellnitz: Leibniz FH School of Business
Andreas Kleine: FernUniversität in Hagen

Annals of Operations Research, 2023, vol. 328, issue 2, No 10, 1409-1436

Abstract: Abstract Due to climate change and the increasing scarcity of resources, the sustainability performance of companies is increasingly becoming the focus of science and practice. Consequently, bicriteria energy-efficient production planning under price-dynamic electricity tariffs—e.g., real-time-pricing (RTP) or time-of-use (TOU)—is meanwhile well established, often fathoming the tradeoffs between electricity costs of production and another criterion such as makespan. However, tradeoffs between electricity costs and electricity consumption in general are rarely the focus of such analyses. So-called green power purchase agreements (PPAs), which are becoming increasingly popular in the European business community as a means of improving corporate sustainability performance, are also largely ignored. Thus, for the first time in the scientific literature, we put this type of electricity tariff to the test by analyzing the tradeoffs between electricity costs and electricity consumption in a lot-sizing and scheduling context. Here, we additionally consider a real-world redox flow battery storage system that may be the system of the future, which is also new to the literature on lot-sizing and scheduling. Even more: due to the complex nature of our bicriteria mixed-integer problem, we develop and present suitable heuristics. These include an energy-efficient allocation heuristic in the case of PPA and, among others, a fix-relax-and-optimize heuristic combined with a decomposition approach in the case of RTP and TOU. Ultimately, a scenario analysis demonstrates the performance of these heuristics.

Keywords: Lot-sizing and scheduling; Real-time pricing; Time-of-use; Green power purchase agreement; Battery storage (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10479-023-05338-x

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