Energy-intense production-inventory planning with participation in sequential energy markets

Submission Status:revision under review
  • To support the uprise of demand response, especially in the context of industrial processes, we propose a new approach to integrally determine the production-inventory plan and the cost-minimizing bids to participate in sequential reserve and energy-only markets. In particular, our approach considers time-coupling constraints which occur in the context of a production-inventory planning problem. We extend this problem with a comprehensive bidding formulation, which allows evaluating revenues and potential cost from the market participation, considering price uncertainties and uncertain activations of committed reserve capacity. This results in a multistage stochastic mixed-integer linear program, which explicitly considers the stage-wise revelation of information in our setup. To illustrate the capabilities of our approach, we apply our model to a real-world case study in which we investigate the participation of a cement plant in the German energy-only and reserve markets. The results of our case study indicate significant revenues for flexible industrial processes when participating in German spot and reserve markets.

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Author:Markus Bohlayer, Markus Fleschutz, Marco Braun, Gregor Zöttl
Document Type:Preprint
Language:English
Date of Publication (online):2019/12/16
Date of first Publication:2019/12/16
Release Date:2019/12/16
Tag:Demand side flexibility Load management Multi market bidding Stochastic programming Production planning Demand response
Institutes:Friedrich-Alexander-Universität Erlangen-Nürnberg
Karlsruhe University of Applied Sciences
Cork Institute of Technology
Subprojects:B09
Licence (German):License LogoCreative Commons - CC BY - Namensnennung 4.0 International
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