liu.seSearch for publications in DiVA
Change search
ReferencesLink to record
Permanent link

Direct link
A pulp and paper mill in the deregulated electricity market: strategies for electricity production
Linköping University, Department of Mechanical Engineering, Energy Systems. Linköping University, The Institute of Technology.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

The deregulated electricity market has changed the prerequisites for the different actors in the market, both electricity producing companies and electricity purchasers. Companies may purchase electricity directly on the spot market and/ or use different derivatives, such as forwards and futures, as hedging instruments. There are various strategies for acting in the market and this paper explores alternative strategies for a Swedish board mill where hedging contracts to secure the price of electricity cover part of the electricity demand. The remaining demand is purchased on the spot market or produced on site. The back-pressure turbines on site are subject to possible changes in order to determine whether it is profitable to make additional investments aimed at reducing costs.

Producing electricity close to the demand is a favourable alternative due to reduced losses in the grid and a lesser risk of power failure. Using back-pressure turbines on site meets these requirements and may also help to reduce the risk of power shortages. In certain situations, offering electricity production when there is a lack of electric power in the national grid is a possible alternative aimed at increasing income.

The result shows that the choice of hedging strategy strongly influences the possibility of reducing costs. It is also shown that the different hedging strategies depend on factors such as the amount of electricity produced on site and the spot price.

National Category
Engineering and Technology
URN: urn:nbn:se:liu:diva-88511OAI: diva2:604583
Available from: 2013-02-11 Created: 2013-02-11 Last updated: 2013-02-11
In thesis
1. Analysing strategic energy-related investments in process industries: applied studies at a pulp and board mill
Open this publication in new window or tab >>Analysing strategic energy-related investments in process industries: applied studies at a pulp and board mill
2002 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

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.

Place, publisher, year, edition, pages
Linköping: Linköpings universitet, 2002. 96 p.
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 791
MIND, Industrial energy systems, Investment, pulp and paper
National Category
Engineering and Technology
urn:nbn:se:liu:diva-39957 (URN)51863 (Local ID)91-7373-476-4 (ISBN)51863 (Archive number)51863 (OAI)
Public defence
2002-12-11, Planck's hörsal, Fysikhuset, Linköpings Universitet, Linköping, 10:15 (Swedish)
Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2013-02-11

Open Access in DiVA

No full text

Search in DiVA

By author/editor
Karlsson, Magnus
By organisation
Energy SystemsThe Institute of Technology
Engineering and Technology

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 27 hits
ReferencesLink to record
Permanent link

Direct link