Optimal Management of Power Generation Assets: Interaction with the Electricity Markets

Abstract For historical reasons, many large industrial sites have their own power generation units, whether it is because the site was isolated when built up or the local network wasn’t reliable enough to ensure a regular production. This can apply for energy-intensive industries like refineries or LNG plants in the Oil & Gas sector, but also mining plants, metal industries or chemical plants for instance. These generation assets are usually operated in a suboptimal way, the only concern being the safety of the process. The gist of this work will be to determine an optimal use of these assets for the industrial plant operator, considering interactions with the electricity markets. Laying on the mathematical description of this optimization problem, a model was built up following a double target. First, to develop a standard architecture that would easily be translated from one case to the other. Then, to assess how high the expected savings could go and what would the induced strategy be. This model has been applied to a refinery case study, where the expected earnings rose up to 8 M€ per year. It accounts for 1% of the turnover. The figures obtained show that this is a relevant business concept. Following this trend, other energy-intensive case studies are being considered, from cement plant to paper plant.