Processing Pathway/ Supply Chain Optimization Problems for Emerging Energy Technologies: Issues and Some Promising Directions

CATEGORY: SUPPLY CHAIN MANAGEMENT
PSE2015 - ESCAPE25
12th International Symposium on Process Systems Engineering and 25th European Symposium on Computer Aided Process Engineering
31 May - 4 June 2015
Copenhagen, Denmark

Processing Pathway/ Supply Chain Optimization Problems for Emerging Energy Technologies: Issues and Some Promising Directions
Jay H Lee
Korea Advanced Institute of Science and Technology (KAIST), Republic of Korea
Processing pathway / supply chain optimization problems for emerging energy technologies (e.g., renewable energy, carbon capture and utilization) are oftentimes characterized by a large number of technological options, significant amounts of uncertainty, and multi-scale nature of decisions. This presentation examines these characteristics through practical examples and offers some promising research directions.
The problem of large number of technological options will be first introduced through the examples of microalgae-based bio-refinery and CO2 capture/conversion. Superstructure based modeling and optimization will be presented as a tool to investigate the problem at a high level in the presence of significant technological and economic uncertainties. Then, the presentation will move onto the issue of coupling between long-term planning decisions like capital investment and policy and shorter-term decisions like production capacity operation and logistics. This aspect manifests itself as a large number of decision variables and constraints complicating solution of the optimization. The optimization complexity gets greatly amplified when the issue of uncertainty is added to the problem. We will examine both two stage and multi-stage problems. Examples of biofuel processing supply chain and energy portfolio optimization for power generation will be used to bring out the essential features and complications. For solutions, stochastic programming and approximate dynamic programming will be introduced.
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