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Article history:
Received 3 April 2016
Received in revised form
26 July 2016
Accepted 27 July 2016
Available online 2 August 2016
Biomass based energy production has been considered as a part of the solution to energy crisis, which is
mainly caused by diminishing fossil fuel resources and environmental pollution from traditional fossil
fuel based energy production systems. Therefore, it is important to design sustainable and effective
systems for biomass based energy production to provide competitive advantage on fossil fuel resourced
systems. This study develops a novel optimization model to aid investment planning and strategic
management of biomass based clean power generation systems. The model integrates the location, capacity and technology decisions to nd the optimal combination of bioenergy production systems to
meet electricity demand of particular regions and accounts for multiple biomass types and power
technologies. The modelling approach and data analysis are presented to outline the important characteristics of the problem for minimization of the supply chain cost and minimization of the greenhouse
gas (GHG) emissions simultaneously. To handle the multi objective problem efciently, an integrated
approach based on fuzzy decision making and -constraint method is proposed and used, considering
both sustainability aspects and uncertainties in the system parameters. The viability of the proposed
_
approach is explored on a case study of Izmir
region in Turkey. Different supply chain conguration
alternatives are provided for the case study region considering various weights for objective functions
representing relative importance of each objective. Corresponding supply chain performance measures
in terms of total cost and GHG emissions are proposed and discussed for each conguration alternative.
Further enviro-economic analyses denote that discounted investment cost and GHG emissions associated
with energy production activities receive the biggest shares in the total cost and in the total GHG
emissions, respectively. The government and private investors can employ the model and solution algorithm to design the most cost effective and environment friendly supply chain, to monitor the economic and environmental performance of the current biomass based supply chains and identify policies
to support a viable, protable and eco-friendly energy industry.
2016 Elsevier Ltd. All rights reserved.
Keywords:
Investment planning
Strategic management
Clean power generation
Bio-based supply chains
Multiobjective optimization
1. Introduction
The legislative regulations such as the Kyoto Protocol (1997), the
European Union Emission Trading System (2009) and the European
Climate Change Programme (2000), force companies to change the
way they make their decisions and manage their supply chains in
an energy efcient way (Marufuzzaman et al., 2014). Production of
bioenergy, biofuels and bioproducts is one of the most promising
alternative energy pathways that has been rapidly developing in
1180
Reference
Model
type
Optimization scope
2. Literature review
Table given below presents a literature review on studies that
develop optimization models to make decisions related to biomass
based supply chains considering economic and environmental
sustainability. Table depicts type of the model developed in each
study, optimization scope of the study, system/process type
considered in the study. The last ve columns of the table shows
that whether the study captures economic and environmental
sustainability aspects, handles single/multi technology and
biomass type, and considers uncertainty in system parameters.
System/
Process
type
Fast
pyrolysis
biorenery
Biofuel
production
Biofuel
production
Bioethanol
production
Single
Single
Single
Single
Single
Single
Single
Single
1181
(continued )
Reference
Model
type
Optimization scope
Marufuzzaman MILP
et al. (2016)
MILP
Giarola et al.
MILP
(2012a,b)
You and Wang MILP
(2011)
~ ezSantiban
Aguilar et al.
(2011)
Li and Hu
(2014)
Shabani and
Sowlati
(2016)
power
generation
MILP
MISP*
MISP
System/
Process
type
Gasication
Single
Single
Biodiesel
production
Single
Single
Biofuel
production
Single
Single
Bioenergy
production
Single
Multi
Biofuel
e
production
Biofuel
e
production
Multi
Multi
Multi
Multi
Bioethanol
production
Single
Multi
Fast
pyrolysis
biorenery
Bioethanol
production
Single
Single
Single
Single
Bioethanol
production
Liquid
biofuel
production
Single
Single
Multi
Single
Biofuel
production
Multi
Multi
Bio-oil
gasication
Forestbased
biomass to
Single
Single
Single
Single
*MINLP: Mixed Integer Nonlinear Programming; MILP: Mixed Integer Linear Programming; LP: Linear programming; MCA: Multi criteria analyses; FLP: Fuzzy Linear Programming; MISP: Mixed Integer Stochastic Programming.
1182
20
Min f1 DF 4@
"
"
J X
E X
C
X
j1 e1 c1
J P
E P
C
P
j1 e1 c1
i1 j1 c1 b1
Fb ,Rijcb 5
4
K X
P X
T
X
0
@
K X
P X
T
X
00
Cb ,@@
b1
k A5
Ypt $Kpt $Zpt
13
k A5
Ppt $K1pt $Zpt
k1 p1 t1
B
X
13
k1 p1 t1
j
Pec $DK2ec $Xec A
J P
I P
C P
B
P
J X
I X
C
X
(1)
Rijcb ,dij A
i1 j1 c1
J X
K X
T
X
113
Rjk
,djk AA5
tb
j1 k1 t1
K
X
!
k
S ,FW
k1
3. Methods
3.1. Problem description and formulation of the models
This paper focuses on designing an optimized supply chain for
multi biomass based energy production considering sustainability
aspects. The supply chain in consideration consists of the biomass
source sites to supply multiple types of biomass, facilities for
preprocessing of biomass, facilities for storage of biomass,
biomass to electricity conversion plants, electricity demand
nodes.
We developed a MILP model that captures economic and environmental aspects by a multiobjective structure. The model, aims to
design the biomass based energy supply chain by making decisions
corresponding to; (1) conguration of the supply chain network (2)
procurement and allocation of the biomass resources; and (3) inventory, production and distribution planning, to meet the electrical
energy demand of (a) particular area(s). The model determines the
optimal conguration of the supply chain considering the tradeoffs
between costs and GHG emissions associated with production activities. The decisions made by the model are;
1.
2.
3.
4.
Eq. (2) shows the second objective function, namely minimization of GHG emissions associated with energy production, which
includes (1) GHG emissions from plants associated with production
of energy, (2) GHG emissions associated with transportation of
biomass.
Min f2
T
X
cept $
t1
J
X
K
X
T
X
B
X
4cet @
k1
K
X
!!
k
13
J X
I X
C X
B
X
Rijcb
i1 j1 c1 b1
Rtb A5
jk
j1 k1 t1 b1
(2)
Eqs. (3)e(13) represent the constraints of the model.
J
C X
X
ij
Rcb ABib
ci; cb
(3)
c1 j1
I X
C
X
Rijcb $vbc
i1 c1
I X
B
X
jk
Rtb
j1 b1
cj; cb
(4)
P
X
k
Zpt
$Kpt
ck; ct
(5)
cj; cc
(6)
ck; cf ; ct
(7)
p1
ij
Rcb
E
X
Xec $Kec
e1
i1 b1
J X
B
X
Rjk
tb
k1 t1
i1 b1
I X
B
X
K X
T
X
jk
T X
F
X
t1 f 1
Ek
Xftk $efn
P
X
k
Zpt
$KEpt
ck
ck
(8)
(9)
p1
Ek
L
X
DEkl
ck
(10)
cl
(11)
l1
K
X
DEkl T l
k1
P X
T
X
k
Zpt
1
ck
(12)
cj
(13)
p1 t1
E X
C
X
Xec 1
e1 c1
1183
max=min
st x2S
f1 x; f2 x; fm x
max =min f1 x
st f2 x 2 for max functions;
f3 x 3 for min functions;
fm x m ;
x2S:
By introducing the ranges i ; i2f1; ; mg of objective functions
the efcient solutions of the problem are obtained.
Despite its advantages over the weighting method, it is emphasized in the literature that the -constraint method has two points
that need attention in its implementation (Ahmadi et al., 2014). The
rst problem is with the calculation of the ranges of objective
functions over the efcient sets. To overcome this decit, this study
employed a fuzzy logic based procedure to determine the ranges
more realistically and considering the system uncertainties. The
second problem with this technique is that the generated pareto
optimal solutions using this method may be dominated or inefcient; therefore, it is necessary to select the most efcient one among
them. Fuzzy decision making is utilized herein to eliminate this
shortcoming.
In this paper a modied version of the -constraint method is
proposed to address these issues by combining the method with
1184
emission minimization objectives, for each solution k, the membership degree mki is calculated based on its individual membership
functions by adding weight factors as follows:
min f1 x
st f2 x 2 ;
and constraints 3 13
8
>
1
>
>
>
>
<
k
mki ui fi x
>
ui li
>
>
>
>
:
0
fik x li
li < fik x ui
;
;
fik x > ui
8
>
1
>
>
>
>
< k
mki fi x li
>
u i li
>
>
>
>
:
0
fik x > ui
li < fik x ui
;
;
fik x < li
mki
Pm
i1
P
m
wi $mki
i1
wi
1185
PJ
7%
PB
PT
PB
PT
b1
j1
PJ
j1
b1
t1
TSb Sjk
! tb
jk
t1 Stb
12%
ck
(14)
Wk
Table 1
Capacity levels and unit investment costs per installed capacity depending on capacity levels of the plants.
Capacity Total biomass capacity of G Installed capacity of cogeneration Total biomass capacity of AD Installed capacity of cogeneration
level
plants (t/month)
unit in G plant (kWe)
plants (t/month)
unit in AD plant (kWe)
1
2
1750
2250
3000
5000
Capacity
level
Unit investment cost of AD Unit investment cost of CHP unit in Unit investment cost of PT
plants (V/ton)
AD plant (V/kWe)
facilities (V/ton)
1
2
20,000
18,000
800
750
1600
1500
4500
6000
9000
10,000
2750
3250
800
750
1000
750
1186
Table 2
The payoff values according to each objective function.
Min. Cost
Upper bound
Expected value
Lower bound
Cost (V/Month)
GHG emissions (kg CO2 eq)
789,003
154,275
717,275
147,064
645,548
132,562
Upper bound
Expected value
Lower bound
Cost (V/Month)
GHG emissions (kg CO2 eq/Month)
3,822,542
150,272
3,474,857
146,641
3,127,371
124,371
opinion. Do et al. (2014) is also utilized to derive the data. The investment costs per kilowatt of installed power are taken into
consideration in a manner that they decrease with higher capacities
because of economies of scale. The investment costs per kilowatt of
installed power depending on capacity levels and counties are reported in Table 1. Annual operational costs of plants and storages are
taken as 5% of investment costs. This percentage is also obtained by a
survey on biogas plant installations and storages and by utilizing
professional expert opinion. It should be noted that, unit costs are
computed considering monthly capacity of the facilities and plants.
3.3.5. Uncertainty treatment
In practical cases on biomass based energy systems, system
parameters are affected signicantly by economical, social and
environmental policies as well as the uctuations in the market
conditions. Considering this fact, uncertainties in the following
parameters of which values are highly impacted by governmental
policies, competition between rms in the related market and
natural conditions about weather, soil etc are handled and
included to the methodology in this study;
1. Investment and operational costs
2. Transportation costs
3. Biomass yields
Therefore, we dene the coefcients in the model corresponding
to each of the above mentioned parameters within a range. The lower
and upper bounds for these coefcients are assumed to be 90% and
110% of their expected values in our computational experiments.
4. Results and discussion
This section presents the results of the computational experiments, provides further analyses of the results and a discussion on
the viability of the proposed methodology along with some
managerial insights. The proposed mathematical model and solution methodology are coded in ILOG CPLEX Optimization Studio
(Version 12.2). The numerical experiments were performed on an
Intel Core Quad 2.66 GHz processor with 6 GB RAM on a 64-bit
platform under Windows 7 environment. The large-scale MILP
model is composed of 1347 constraints and 7641 variables (of
which 160 are integer variables).
Fig. 2. The contribution of each cost component to the total supply chain cost according to WS1 (wCost 0.3 and wGHG Emissions 0.7).
1187
Fig. 3. The contribution of each cost component to the total supply chain cost according to WS2 (wCost 0.5 and wGHG Emissions 0.5) and WS3 (wCost 0.7 and wGHG
Emissions 0.3.
1188
Decision variables
1. Binary variables
k
Zpt
j
Xec
2. Positive variables
Rcb ; Rtb
Amount of biomass b shipped from; biomass source site i to facility j with type c, facility j to energy plant k with technology t (ton)
DEkl
Ek
Bkut
Sk
ij
jk
Parameters
1. Biomass supply and product demand
Amount of electricity demand at demand node l (kWh)
Tl
ABib
2. Capacities
Kpt ; Kec
KEpt
3. Costs and prices
Ypt ; Yec
Ppt ; Pec
Fb ; FW
Cb
4. Distances
dij ; djk
5. Conversion rates
vbc
eb
rbut
investment cost of; energy plant of capacity level p with technology t, facility of capacity level e with type c (V/ton), CHP (V/kWh
operational cost of; energy plant of capacity level p with technology t, facility of capacity level e with type c (V/ton), CHP (V/kWh)
cost of biomass b, auxiliary material (V/ton)
cost for transportation of biomass b (V/ton-km)
1189
(continued )
6. Carbon emissions
cept
cet
7. Other parameters
DF
GHG emissions associated with 1 kWh of electricity production by technology t (kg CO2 eq)
GHG emissions associated with 1 ton of biomass transportation (kg CO2 eq)
Discounting factor
Value of 2
Pareto
optimal
(kg CO2 eq/
solution no. Month)
Cost
GHG emissions
(V/Month) (kg CO2 eq
(V/Month)
154,275
717,275
147,064
147,064
717,275
147,064
132,562
3,353,316 132,562
150,272
717,275
146,641
3,515,713 146,641
124,371
3,748,708 124,371
147,064
Merkez e 1 collection
centre 1. capacity level,
Torbal e 1 pretreatment
facility 2. capacity level
Merkez e 1 collection
centre 1. capacity level,
Torbal e 1 pretreatment
facility 2. capacity level
Bergama, Merkez e 1
collection centre in each 2.
capacity level
Bayndr e 1 pretreatment
facility, 2. capacity level
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mk1
mk2
mk
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0.24
WS1(0.3*0.97)(0.7*0.24) 0.459
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