Benefits of using an optimization methodology for identifying robust process integration investments under uncertainty—A pulp mill example

Abstract

This paper presents a case study on the optimization of process integration investments in a pulp mill considering uncertainties in future electricity and biofuel prices and CO 2 emissions charges. The work follows the methodology described in Svensson, E. et al. (2008b) where a scenario-based approach is proposed for the modelling of uncertainties. The results show that the proposed methodology provides a way to handle the timedependence and the uncertainties of the parameters. For the analyzed case, a robust solution is found which turns out to be a combination of two opposing investment strategies. The difference between short-term and strategic views for the investment decision is analyzed and it is found that uncertainties are increasingly important to account for as a more strategic view is employed. Furthermore, the results imply that the obvious effect of policy instruments aimed at decreasing CO 2 emissions is, in applications like this, an increased profitability for all energy efficiency investments, and not as much a shift between different alternatives.

An optimization methodology for identifying robust process integration investments under uncertainty

“…The usefulness of the methodology is justified by the fact that it is the first approach to apply a multistage stochastic programming approach for the optimization of these kinds of investments in process integration. The methodology is illustrated in Svensson et al (2008b), where a case study using the described methodology for the evaluation of energy efficiency measures at a pulp mill is presented, see also Svensson et al (2008a).…”

“…(2), we expect to find solutions that improve the investment planning of process integration measures, both since this methodology may produce solutions that are not found in a traditional investment analysis, and since it makes it possible to find solutions that are robust (Svensson et al, 2008b).…”

A scenario-based modelling approach to identify robust transformation strategies for pulp and paper companies

“…Papers presenting scenario-based frameworks to evaluate the robustness as well as the financial performance of a number of strategic options have only considered limited trend-based scenarios, such as energy market-related trends in Svensson et al (2009), market price trends in Palma et al (2010), and technological development trends in Svensson and Berntsson (2011).…”

“…Based on stochastic programming, a scenario-based approach is presented in Svensson et al (2009) to estimate the expected net present value of a number of energy efficiency investments, in the case of a P&P mill, under uncertain energy and carbon market conditions. In Svensson and Berntsson (2011), a similar methodology is proposed to assess the profitability of investments in cogeneration, lignin separation and carbon capture, while considering, besides uncertain energy market, future uncertainties related to the development in investment costs and proven functionality for the technologies considered.…”

Implementation of lignin-based biorefinery into a Canadian softwood kraft pulp mill: Optimal resources integration and economic viability assessment

“…Recently, researchers from Sweden have applied process integration in the context of forestry biorefinery with a focus on using pinch analysis tools and techniques in order to find energy-efficient designs for bioethanol production plant [16]. Other studies have been carried out in the context of uncertainties in future European market conditions of electricity and CO 2 emissions charges, which affect the decisions on investments in process integration measures for increased energy efficiency of pulp mills [17,18]. Overall, evaluating potential savings prior to design is a key feature that process integration is providing, being a global system approach.…”