A Linear Programming Model for Renewable Energy Aware Discrete Production Planning and Control

Abstract

Industrial production in the EU, like other sectors of the economy, is obliged to stop producing greenhouse gas emissions by 2050. With its Green Deal, the European Union has already set the corresponding framework in 2019. To achieve Net Zero in the remaining time, while not endangering one's own competitiveness on a globalized market, a transformation of industrial value creation has to be started already today. In terms of energy supply, this means a comprehensive electrification of processes and a switch to fully renewable power generation. However, due to a growing share of renewable energy sources, increasing volatility can be observed in the European electricity market already. For companies, there are mainly two ways to deal with the accompanying increase in average electricity prices. The first is to reduce consumption by increasing efficiency, which naturally has its physical limits. Secondly, an increasing volatile electricity price makes it possible to take advantage of periods of relatively low prices. To do this, companies must identify their energy-intensive processes and design them in such a way as to enable these activities to be shifted in time. This article explains the necessary differentiation between labor-intensive and energy intensive processes. A general mathematical model for the holistic optimization of discrete industrial production is presented. With the help of this MILP model, it is simulated that a flexibilization of energy intensive processes with volatile energy prices can help to reduce costs and thus secure competitiveness while getting it in line with European climate goals. On the basis of real electricity market data, different production scenarios are compared, and it is investigated under which conditions the flexibilization of specific processes is worthwhile.