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Strategic Perspectives on Energy Management: A Case Study in the Process Industry
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
2013 (English)In: Applied Energy, ISSN 0306-2619, E-ISSN 1872-9118, Vol. 104, 487-496 p.Article in journal (Refereed) Published
Abstract [en]

It has been anticipated that energy management will gain increased interest amongst companies in a near future. Yet, even in energy-intensive companies, like process industries, energy management is seldom treated strategically. The purpose of this study is thus to investigate the necessary prerequisites for putting energy management on the strategic agenda in energy-intensive process industries. This is done by the means of a literature review and a case study, and the analysis is based on how energy management is treated from three perspectives; a strategic perspective, an energy system utilisation perspective, and an alternative revenue perspective. The case study shows, similar to other process industry companies, that the strategic importance of energy management, to a large extent, is neglected. The research also indicates necessary prerequisites, for each perspective, for highlighting the strategic importance of energy management for a typical company in the process industry sector.

Place, publisher, year, edition, pages
Elsevier , 2013. Vol. 104, 487-496 p.
Keyword [en]
Energy management, energy-intensive production systems, energy efficiency, energy planning, specialty chemicals, case study
National Category
Production Engineering, Human Work Science and Ergonomics Business Administration
Identifiers
URN: urn:nbn:se:liu:diva-84987DOI: 10.1016/j.apenergy.2012.11.027ISI: 000316152700049OAI: oai:DiVA.org:liu-84987DiVA: diva2:563433
Note

An earlier version of this paper was presented at EurOMA 2010, 6-9 June, Porto, Portugal.

Available from: 2012-10-30 Created: 2012-10-30 Last updated: 2017-12-07
In thesis
1. Energy and Production Planning for Process Industry Supply Chains
Open this publication in new window or tab >>Energy and Production Planning for Process Industry Supply Chains
2012 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis addresses industrial energy issues from a production economic perspective. During the past decade, the energy issue has become more important, partly due to rising energy prices in general, but also from a political pressure on environmental awareness concerning the problems with climate change. As a large user of energy the industry sector is most likely responsible for a lot of these problems. Things need to change and are most likely to do so considering current and assumed future governmental regulations. Thus, the energy intensive process industries studied and focused on in this thesis exemplify the importance of introducing a strategic perspective on energy, an appropriate approach for planning, as well as the possibilities of including energy issues in a production and supply chain planning model.

The thesis aims to provide models, methods and decision support tools for energy related production and supply chain planning issues of relevance for process industries as well as for other energy intensive industries. The overall objectives are to analyze the strategic importance of energy management, production and supply chain planning, and the opportunities provided when energy is included in a production and supply chain planning model. Three different studies are carried out, analyzed, and presented as in this thesis.

The first study is a case study at a specialty chemicals company and resulted in the first paper. Since the energy issue is not only a cost issue driven by supply and demand, but also a political issue due to its environmental aspects, it is likely to believe that political influence and especially continuity will have escalating effect on the energy intensive process industry sector. Thus, the strategic dimension of energy is highly relevant in this thesis. The importance of organizational integration, having a main responsible person, locating core business, and political continuity are addressed as prerequisites for including energy into the corporate strategy. Regarding long term profitability, the importance of correctly utilizing the energy system by appropriate energy planning and with respect to energy efficiency and effectiveness in both flexibility and investment issues are addressed. Further on, the quest of finding alternative revenue while striving for a proper exergy usage is addressed.

The second study is a multiple case study with four different case companies involved; pulp, specialty chemicals, specialty oils, as well as a pulp and paper company. The need for improved production and supply chain planning is also addressed where for instance the lack of planning support for process industries is still an area of improvement. The production and supply chain planning in process industries is found to be rather poor compared to regular manufacturing companies. The planning methods found are often tailor made and adapted to the individual characteristics that are typical for many process industries. It has further on been difficult to distinguish similarities and differences among process industries regarding these planning issues and thus hard to generalize.

The third study focuses on mathematical modelling and programming developing a combined supply chain and energy optimization model for a pulp company. Taking the first papers together there are reasons to believe that a planning and optimization model that take energy aspects in consideration, as a previously missing link, will contribute to improve the operations in process industries. A clear impact of involving energy issues into the supply chain planning is shown. The results show that a different production schedule is optimal when the energy issues are applied, and depend on, for instance, variations in energy prices such as the one for electricity. This is shown by using a model for a supply chain where the energy flow, and especially the utilization of by-products, also is involved.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2012. 45 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1555
Series
LiU-TEK-Lic, 2012:40
Keyword
Process industry, energy-intensive production systems, production planning, energy planning, Supply chain planning and optimization, energy management
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-84990 (URN)LiU-TEK-LIC 2012:40 (Local ID)978-91-7519-762-3 (ISBN)LiU-TEK-LIC 2012:40 (Archive number)LiU-TEK-LIC 2012:40 (OAI)
Presentation
2012-11-16, ACAS (Hus A), Campus Valla, Linköping University, Linköping, 10:15 (English)
Opponent
Supervisors
Available from: 2012-11-22 Created: 2012-10-30 Last updated: 2012-11-22Bibliographically approved
2. Planning production and supply chain in energy intensive process industries
Open this publication in new window or tab >>Planning production and supply chain in energy intensive process industries
2014 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

To make a difference among the energy intensive process industries, this dissertation addresses production planning and supply chain planning problems related to industrial energy management issues. The energy issue is turning more and more important from different angles, involving price as well as environmental problems due to climate change leading to political pressure on all energy users. The process industry sector is one of the largest users of energy, and thus important to analyse. Process industries are also capital intensive and operate on large and expensive process equipment, making it imperative to plan their production well in order to reach preferable capacity utilisation. Therefore this dissertation strives to locate the most important energy management issues for the long term profitability of process industries, and investigates the  symbiotic effects of including energy issues in production and supply chain planning.

Three different studies at three case companies are carried out, analysed, and presented in five papers. The cases represent the process industry sectors: chemicals, pulp, and steel. Both qualitative case study methodologies as well as quantitative mathematical modelling and optimisation approaches have been practiced. The research questions are analysed from both an energy system and from a production process point of view, separately as well as combined. Energy is somewhat considered to be the main workforce for process industries and this dissertation exemplifies some of its most important dimensions in this context.

Several prerequisites for putting energy management on the strategic agenda are located in a specialty chemical industry where the importance of introducing a strategic perspective on energy, the way energy is used, and the possibilities of increasing alternative revenue from utilising by- and/or co-products differently are pinpointed. Approaches for including energy issues in planning processes are also suggested in terms of a MILP model for the entire supply chain of a pulp company, including decisions on purchase and transportation of raw maerials, production allocation, energy mix, and distribution. Another example is presented based on the perspectives of economics of scale and lot sizing through economic order quantity principles in a steel company. By using real company data, energy smart approaches in planning and scheduling are developed with respect to the most important intersections between the production processes and their supporting energy system. The accumulated resource intensity and embedded energy could, and probably should, hence be more fairly  reflected in the product price. The research finally shows some possible impact with including energy issues in a production and supply chain planning model. By planning differently, production prioritisations can be done, and it is not only possible without any large investments, but also prosperous with savings on both energy and money within reach.

To conclude, planning of production and supply chain has either a direct or an indirect impact on the energy cost-effectiveness of a company. This dissertation argues that such impact also exists in its mutual form, and is very important when the energy issues are large enough, as they often are in the energy intensive process industry sector. Decision makers should thus beware of the short end of the stick that might be  devastating in the long run, but also aware of all the possibilities that can bring success and prosperity when the future begins.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2014. 75 p.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1635
Keyword
Process industry, Energy-intensive production processes, Energy system, Energy management, Production planning, Supply chain planning, Case studies, Mixed Integer Linear Programming, Modelling, Specialty chemicals, Pulp, Steel
National Category
Engineering and Technology Business Administration Economics and Business Energy Systems
Identifiers
urn:nbn:se:liu:diva-112289 (URN)10.3384/diss.diva-112289 (DOI)978-91-7519-173-7 (ISBN)
Public defence
2014-12-18, ACAS, A-huset, Campus Valla, Linköpings universitet, Linköping, 10:15 (English)
Opponent
Supervisors
Available from: 2014-11-21 Created: 2014-11-21 Last updated: 2017-06-26Bibliographically approved

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Rudberg, MartinWaldemarsson, MartinLidestam, Helene

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