Increasing the use of wood fuel in a pulp and paper mill : investment opportunity and external costs

The potential to reduce energy demand in industrial applications is often substantiaL Since energy cost represents a considerable share of the value added in several categories of process industries, a great potential exists for cutting costs through investment, for instance in energy efficiency improvements. However, industrial energy systems form complex relations not only within the industrial unit, but also in the interaction with their surroundings. Consequently, issues such as energy prices and governmental regulations influence the systems to varying extents. At the moment environmental issues, as manifested in the Kyoto agreement, and the new common European electricity market are in focus and are likely to influence the different boundary conditions that face European industries. Therefore, when major investments are to take place, changes in such boundary conditions need to be considered.Analysing potential investments in industrial energy systems require advanced methods that manage these complex relations and interactions and concurrently consider technical, economic and environmental issues. The purpose of the thesis is to develop and co-ordinate such methods and apply them to investments in an existing process industry. A method based on optimisation is used as the main tool for analysis. Other methods are applied as complements, for example to manage different aggregation levels and to facilitate sensitivity analyses.A pulp and board mill in central Sweden is used as a case study, where investments and changes in the utility systems and the main processes are analysed. These investments are subject to changes in boundary conditions and other mill-specific changes, showing both potentially interesting investments, and also the extensive influence of different boundary conditions. It is also shown that the methods used are appropriate for the purpose at hand.