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The minimum‐cost operating strategy for an idealized refrigeration plant having cogeneration capacity was previously analysed using a linear programming model. It is shown here that the addition of chilled‐water storage can reduce energy costs by substantially altering the optimum operating strategy. A novel algorithm that uses a sequence of linear programming optimizations to analyse the dynamic behaviour of a store, is discussed. The method avoids approximations inherent in usual dynamic programming techniques, gives useful insights into the problem structure, and offers significant savings in computational time. The economic advantages of storing chilled water in the model plant are discussed, and a target figure for store capital cost is derived.

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The linear programming, energy systems analysis model, MARKAL, was used to examine the impact on the Australian energy system of a Mobil process, gas‐to‐gasoline plant producing up to 100 PJ/a of high octane gasoline from the year 2000. The total capital cost of the plant, including the drilling platform and shore‐based infrastructure, was estimated to be 4100 MSA (1982). The costs and benefits of introducing this technology were calculated for high, medium and low assumptions on indigenous oil discovery rates, imported oil prices and overall demand levels. The effect on the Australian oil refinery sector was also briefly addressed. Under the assumptions presented to the model, a sufficient requirement for a gas‐to‐gasoline plant to offer a net benefit to the overall energy system is for the real price of crude oil to increase by 50 per cent by the year 2025. Even so, if the plant were introduced in the year 2000, it could not achieve the minimum desired return on investment. If the introduction were delayed for five years the prospects would improve considerably, but there would still be a less than 30 per cent chance of exceeding a 7.5 per cent real return on capital invested. Considerable government guarantees would be necessary to underpin what would appear, from present knowledge, to be a fairly risky investment proposition.

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