An Optimisation Approach for Long-Term Industrial Investment Planning

Hür Bütün, Ivan Kantor and François Maréchal
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Hür Bütün: Industrial Process and Energy Systems Engineering (IPESE), École Polytechnique Fédérale de Lausanne, 1951 Sion, Switzerland
Ivan Kantor: Industrial Process and Energy Systems Engineering (IPESE), École Polytechnique Fédérale de Lausanne, 1951 Sion, Switzerland
François Maréchal: Industrial Process and Energy Systems Engineering (IPESE), École Polytechnique Fédérale de Lausanne, 1951 Sion, Switzerland

Energies, 2019, vol. 12, issue 21, 1-33

Abstract: The industrial sector has a large presence in world energy consumption and CO 2 emissions, which has made it one of the focal points for energy and resource efficiency studies. However, large investments are required to retrofit existing industrial plants, which remains the largest barrier to implementing energy saving solutions. Process integration methods can be used to identify the best investments to improve the efficiency of plants, yet their timing remains to be answered using an optimisation approach. Even more critically, such decisions must also account for future investments to avoid stranded or regretted investments. This paper presents a method incorporating investment planning over long time horizons in the framework of process integration. The time horizon is included by formulating the problem using multiple investment periods. Investment planning is conducted using a superstructure approach, which permits both commissioning and decommissioning of units in the beginning of each period. The method is applied to a large case study, with an industrial cluster neighbouring an urban centre to also explore options of heat integration between industries and cities. Compared to the business-as-usual operation, optimal investment planning improves the operating cost of the system by 27% without budget constraints and 16–26% with constraints on budget and investment periods, which is reflected as an increase in net present value and a decrease in CO 2 emissions. In all cases, the operating cost benefits pay off the investment in less than two years. The present work is efficient in finding energy saving solutions based on the interest of industries. This method adds additional perspectives in the decision-making process and is adaptable to various time horizons, budgets and economic constraints.

Keywords: process integration; investment planning; long time horizons; energy efficiency; MILP (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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