A Price-based Demand Response Programme for an Industrial Company : A Case Study of the Waste Management Industry

Abstract: Climate change mitigation and sustainable economic development areon the main agenda of many developed countries. Moreover, emerging economies,such as China which makes up 18.5% of the world’s population, are facingmajor problems of air and water pollution. These have led to serious investmentin renewable energy sources (RES) of power such as wind and solar.Increasing the capacity of RES leads to large power fluctuations, which can bedifficult to predict. If this fluctuation is not met by a balance in supply anddemand, power supply can be cut off leading to major economic losses. It isthen essential to develop techniques which allow for quick adjustments in thesupply and demand of power.Industrial consumers of power are one of the principal consumers ofelectricity. If exposed to market prices, they are seen as a great source to helpimplement RES into the power system. In this project, a short-term schedulingtool is developed which allows industrial companies with manufacturingprocesses and onsite power generation to schedule energy production andconsumption based on hourly day-ahead electricity prices. The tool integratesthe benefits of the price-based unit commitment (UC) problem with pricesensitivedemand response (DR) and uses the mixed integer linear programming(MILP) optimisation technique. It determines the operating points ofschedulable equipment and machines in manufacturing processes and thegeneration level of all controllable power generation units. Finally, it informsin a simplified manner the power needs of each location for each hour of theplanning period, stating how much power needs to be purchased or sold to thegrid.To test the developed tool a case study of a real waste management companyis used. In this case study the modelled industrial process is the materialrecycling facility and the power generation technologies are the municipal solidwaste incineration plant, landfill biogas gensets and solar photovoltaic (PV)system. Three zones are defined. The first has a material recycling facility(MRF) and onsite municipal solid waste incineration (MSWI) plant, the seconda MRF and the third landfill gensets and a PV system. The results showedall zones with MRFs shifting demand from peak periods to off-peak periodsand zones with onsite generation shifting power supply from off-peak periodsto peak periods.Due to the particularity of the case study, a novel feature was added tothe short-term scheduling tool. The MSWI plant, considered to have low operatingcosts, needed a long-term price forecast mechanism to avoid operationat maximum capacity in the short-term. To tackle this issue, the future valueof municipal solid waste (MSW) in the storage bunkers of the MSWI plantwere considered.The results showed that the developed tool is capable of adapting thesupply and demand of power of an industrial company to market price, whichcan help in the integration of RES into the power system. Moreover, the toolcan also reduce the energy costs of manufacturing processes and increase therevenues from power generation assets.