Journal of Cleaner Production 137 (2016) 1179e1190

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Investment planning and strategic management of sustainable

systems for clean power generation: An -constraint based multi
objective modelling approach
Sebnem Ylmaz Balaman
Department of Industrial Engineering, Dokuz Eylul University, Tinaztepe Yerleskesi, Buca, 35160 Izmir, Turkey

a r t i c l e i n f o a b s t r a c t

Article history: Biomass based energy production has been considered as a part of the solution to energy crisis, which is
Received 3 April 2016 mainly caused by diminishing fossil fuel resources and environmental pollution from traditional fossil
Received in revised form fuel based energy production systems. Therefore, it is important to design sustainable and effective
26 July 2016
systems for biomass based energy production to provide competitive advantage on fossil fuel resourced
Accepted 27 July 2016
systems. This study develops a novel optimization model to aid investment planning and strategic
Available online 2 August 2016
management of biomass based clean power generation systems. The model integrates the location, ca-
pacity and technology decisions to nd the optimal combination of bioenergy production systems to
Keywords:
Investment planning
meet electricity demand of particular regions and accounts for multiple biomass types and power
Strategic management technologies. The modelling approach and data analysis are presented to outline the important char-
Clean power generation acteristics of the problem for minimization of the supply chain cost and minimization of the greenhouse
Bio-based supply chains gas (GHG) emissions simultaneously. To handle the multi objective problem efciently, an integrated
Multiobjective optimization 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 al-
gorithm to design the most cost effective and environment friendly supply chain, to monitor the eco-
nomic 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.

1. Introduction many parts of the world.

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
E-mail address: s.yilmaz@deu.edu.tr.
Biomass is carbon based biological material derived from living,
or recently living organisms available on a renewable basis. As an
energy source, biomass can either be used directly to produce heat
by combustion, or indirectly to produce electrical and/or thermal
energy after converting it to various forms of liquid and gaseous
fuels (i.e. biofuel). For more detailed information about conversion
processes Faaij (2006) can be referred. Biomass has a great potential
as a renewable feedstock for producing various energy forms like
electrical energy, thermal energy and energy carriers (biofuels) by
different kinds of conversion systems with different scales that use
various conversion processes. Biomass to energy supply chain is a

http://dx.doi.org/10.1016/j.jclepro.2016.07.202
0959-6526/ 2016 Elsevier Ltd. All rights reserved.
1180 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190
special form of supply chains that includes biomass to energy
conversion facilities as manufacturing facilities.
In biomass based production, a possible solution to resource
scarcity issues, concerns have been expressed about the economic
and environmental sustainability of the sector. Various biomass
based chains are operated throughout the world. However, the
wide use of biomass based systems has resulted in new challenges
such as long-distance biomass transportation in large-scale net-
works which results in additional logistics costs, energy con-
sumption and ultimately higher GHG emissions compared to
small-scale utilisation. Robust and integrated supply chains and
logistics networks need to be developed especially in large ca-
pacity systems.
These challenges have motivated researchers to develop proper
methodologies to select the most favorable supply chain congu-
ration and to identify cost-efcient abd environment friendly bio-
based supply chains. Effectively designed renewable based supply
chains can have an economic advantage over non-renewable
sourced systems and eliminate the issues related to sustainability.
In addition, to ensure sustainability in bioenergy systems optimi-
zation, usually multiple conicting objectives have to be consid-
ered. Also, due to the nature of biomass based energy supply chains,
many uncertainties exist that make the system parameters uc-
tuate in a range, such as biomass supply and price uncertainties,
energy price and demand uncertainties, production and yield un-
certainties and transportation uncertainties (Awudu and Zhang,
2012). In many cases feedstock location, processing sites and
product destinations have profound implications for the prot-
ability and environmental impacts of the overall supply chain
(Sharifzadeh et al., 2015). Therefore, it is necessary to design robust,
reliable and sustainable supply chains to deliver a competitive end
product to the end used markets and to sustainably meet the ever-
increasing energy demand. In addition, to cope with the feedstock
and technology related uncertainties effectively, a mixture of
biomass resources and multiple technologies should be taken into
account in the design phase instead of single biomass and tech-
nology. Among all the options given for a dened system compo-
nents and power generation, not all combinations may be sensible
from efciency and economic point of view. Selecting appropriate
process congurations leads to optimal plant design and operation
(Ylmaz and Selim, 2013).
These necessities bring about the main research question of this
paper; how can a biomass based supply chain be optimized in a
sustainable and efcient manner, considering different biomass
types and power technologies and capturing system specic un-
certainties in the design phase? Answering this research question,
this paper develops a novel mathematscal model to design sus-
tainable supply chains for multiple biomass based power genera-
tion systems to enhance the investment decision making and
Reference Model Optimization scope
type
Zhang and MINLP* Design of optimal supply chain structure with optimal plant
Wright sizes, locations, biomass supply, facility selection and product
(2014) distributions.
Marvin et al. MILP* Selection of facility location, capacity and technology selection
(2012) for biomass to biofuel supply chains as a network of biomass
producers, conversion facilities, and markets.
Lin et al. (2014) MILP Planning of farm management, logistics activities, facility
allocation and distribution.
Xie et al. (2014) MILP Locations and capacities of transshipment hubs, reneries and
terminals are determined by the model along with seasonal
feedstock/biofuel storage and shipment amounts.
strategic planning. The model integrates all activities in a bioenergy
supply chain from feedstock supply to power distribution, and all
elements of the chain from biomass source sites to demand nodes.
The model identies the optimal conguration of the supply chain
and selects the most appropriate power production technology to
meet the electricity demand of given regions to enhance strategic
decision making on bioenergy investments. It covers the decisions
related to location, capacity sizing and technology selection by
capturing the tradeoffs that exist between costs and emissions in
the supply chain. As solution methodology, an integrated approach
is presented that combines fuzzy decision making and -constraint
method, to capture both sustainability aspects by considering
different objectives and uncertainties in the system parameters
effectively. This method reects the characteristics of the problem
on hand. To explore the viability of the proposed model and solu-
_
tion approach a case study of Izmir, Turkey is conducted and further
enviro-economic analyses are performed to provide insights to aid
decision makers in strategic planning on bioenergy supply chains.
Computational experiments show that it is enable to provide high
quality solutions in a reasonable amount of time.
The rest of the paper is organized as follows. Section 2 provides a
comprehensive literature review on the studies that develop opti-
mization models for sustainable design of biomass based supply
chains and related it to our study. In section 2, the research gaps in
the current literature are revealed and the contributions of this
study to full these gaps are stated. Section 3 presents the problem
description, formulation of the optimization models and the solu-
tion approach. In Section 4, the methodology that integrates fuzzy
optimization and -constraint methods to solve the multi-objective
decision making problems on strategic design and management of
bioenergy supply chains is presented. Section 5 explains the case
study setting where the proposed optimization model and solution
_
methodology are applied to the region of Izmir. Section 6 proposes
the results, further analyses and discussion. Section 7 discusses the
conclusions along with future research directions.
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/ Economic Environmental Single/ Single/ Uncertainty
Process aspects aspects Multitechnology Multi consideration
type biomass
Fast e Single Single e
pyrolysis
biorenery
Biofuel e Single Single e
production
Biofuel e Single Single e
production
Bioethanol e Single Single e
production
 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190 1181

(continued )

Reference Model Optimization scope System/ Economic Environmental Single/ Single/ Uncertainty
type Process aspects aspects Multitechnology Multi consideration
type biomass

Marufuzzaman MILP The optimal size and location of chipping terminals and along Gasication Single Single e
et al. (2016) with syngas production and transportation decisions are
made.
Andersen et al. MILP All components of the supply chain such as crop elds, Biodiesel e Single Single e
(2012) storages, production plants and distribution centers are production
optimized.
Zhang and Hu MILP Determination of facility number, location, capacity and Biofuel e Single Single e
(2013) production decisions at operational level such as biomass production
collection, fuel production, fuel distribution and inventory
control and allocation for a supply chain design.
Delivand et al. LP* and Determination of optimal facility locations and scales for the Bioenergy Single Multi e
(2015) MCA* bioenergy production. The study consists of land availability production
and suitability analysis to detect a number of appropriate
locations, location allocation analysis that optimal plant
locations were found for each scenario.
Aviso et al. FLP* The optimal supply chain design considering the case of Biofuel e Multi Multi
(2011) multi-region systems that takes into account trade effects. production
Lam et al. MILP Selection of optimal technologies, plants location, and the Biofuel e Multi Multi e
(2013) annual amount of biomass product considering the objective production
functions related to environmental impact, cost functions.
Giarola et al. MILP Biomass type selection and supplier allocation, production Bioethanol Single Multi e
(2011) technology, site selection, capacity assignment and production
production planning for bioethanol facilities, logistic
distribution and transportation mode selection issues are
taken into account simultaneously.
Sharifzadeh MILP The optimal supply chain design and operational strategies Fast e Single Single
et al. (2015) under uncertainty. pyrolysis
biorenery
Giarola et al. MILP Optimize the environmental and nancial performances Bioethanol Single Single e
(2012a,b) simultaneously by considering a wide set of alternative production
production technologies and specic geographical features.
Giarola et al. MILP Strategic design and planning of feasible and sustainable Bioethanol Single Single e
(2012a,b) multi-echelon bioethanol supply chains. production
You and Wang MILP Conversion pathways and technologies, feedstock seasonality, Liquid Multi Single e
(2011) geographical diversity, biomass degradation, infrastructure biofuel
compatibility, demand distribution, and government production
incentives are optimized.
~ ez-
Santiban MILP Selection of optimal feedstock, processing technology and Biofuel Multi Multi e
Aguilar et al. product combinations. production
(2011)
Li and Hu MISP* Capital investment and logistics decisions are made. Bio-oil e Single Single
(2014) gasication
Shabani and MISP Tactical supply chain planning of a power plant considering Forest-
Sowlati uncertainties in the quality of biomass. based
(2016) biomass to
power e Single Single
generation

*MINLP: Mixed Integer Nonlinear Programming; MILP: Mixed Integer Linear Programming; LP: Linear programming; MCA: Multi criteria analyses; FLP: Fuzzy Linear Pro-
gramming; MISP: Mixed Integer Stochastic Programming.

Literature review ndings suggest that, the vast majority of the
researches focus only on biomass to biofuel supply chains without
conversion to electrical and/or thermal energy. However, in real
world applications biofuel, which is obtained from multiple sources
of biomass, is commonly converted to energy in bioenergy plants
by power engines. Also, most of the models capture one type of
biomass and one type of conversion technology/process (thermo-
chemical or biochemical), which makes them problem specic. In
addition, the literature review reveals that, none of the method-
ologies in the literature integrates the strategic decisions related to
location, capacity and technology selection for both bioenergy
plants and preprocessing facilities with tactical decisions on pro-
duction and transportation of biomass and bioenergy. Also, it can
be concluded that, none of the current studies develop and use an
optimization methodology that integrates economic and environ-
mental sustainability issues with uncertainty consideration in the
same framework in design phase.
To sum up, review of the literature suggests that, there is a need
to develop a comprehensive strategic planning approach to
congure biomass based supply chains taking into account multiple
biomass types and conversion technologies by integrating sus-
tainability and uncertainty aspects in design phase. In addition, we
can conclude that, there is a need to develop a generalizable model
that aids to optimize cases related to investment decision making
on biomass based supply chains that include both biomass pro-
cessing facilities and energy production systems by only changing
the dataset.
By addressing these gaps in the literature, this study contributes
to the related body of knowledge mainly in two ways. The rst
contribution is proposing a new optimization model in the multi-
objective framework for the strategic decision making in multiple
biomass and multiple technology based power production system
investments, to minimize the total cost while simultaneously
minimizing the harmful environmental impacts in terms of GHG
1182 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190

emissions. The main novelties in the proposed model are; (1) It is
generalizable as it covers conversion of multiple types of biomass
into energy to meet the power demand of particular region(s) and
covering multiple types of conversion technologies/processes, (2) It
integrates decisions related to both power plant technology and
preprocessing facility type. The second main contribution is pre-
senting an integrated approach incorporating fuzzy decision mak-
ing and -constraint methods to solve the presented multi-
The rst objective function, namely minimization of total
monthly supply chain cost, can be calculated as follows;
Total Supply Chain Cost Discounted Investment
Costs Operational Costs Transportation Costs Biomass Pur-
chasing Cost Auxiliary Material Cost
Eq. (1) represents the rst objective function;

20 1 0 13
X
J X
E X
C X
K X
P X
T
Min f1 DF 4@ Yec $Kec $Xec A @ k A5
j
Ypt $Kpt $Zpt
j1 e1 c1 k1 p1 t1
" 1 0 13
P
J P
E P
C X
K X
P X
T
Pec $DK2ec $Xec A @ k A5
j
Ppt $K1pt $Zpt (1)
j1 e1 c1 k1 p1 t1
" 3 2 00 1 0 113 !
P
I P
J P
C P
B X
B X
I X
J X
C X
J X
K X
T X
K
Fb ,Rijcb 5 4 Cb ,@@ Rijcb ,dij A @ Rjk
tb
,djk AA5 k
S ,FW
i1 j1 c1 b1 b1 i1 j1 c1 j1 k1 t1 k1

objective problem by capturing the problem specic uncertainties

and sustainability aspects simultaneously.
Eq. (2) shows the second objective function, namely minimi-
zation of GHG emissions associated with energy production, which
3. Methods includes (1) GHG emissions from plants associated with production
of energy, (2) GHG emissions associated with transportation of
3.1. Problem description and formulation of the models biomass.

This paper focuses on designing an optimized supply chain for !! 2 0

multi biomass based energy production considering sustainability X
T X
K I X
X J X
C X
B
aspects. The supply chain in consideration consists of the biomass Min f2 cept $ E k
4cet @ Rijcb
t1 k1 i1 j1 c1 b1
source sites to supply multiple types of biomass, facilities for 13
preprocessing of biomass, facilities for storage of biomass, X
J X
K X
T X
B
Rtb A5
jk
biomass to electricity conversion plants, electricity demand
nodes. j1 k1 t1 b1
We developed a MILP model that captures economic and envi- (2)
ronmental aspects by a multiobjective structure. The model, aims to
design the biomass based energy supply chain by making decisions Eqs. (3)e(13) represent the constraints of the model.
corresponding to; (1) conguration of the supply chain network (2)
procurement and allocation of the biomass resources; and (3) in- X
C X
J
ij
ventory, production and distribution planning, to meet the electrical Rcb  ABib ci; cb (3)
energy demand of (a) particular area(s). The model determines the c1 j1
optimal conguration of the supply chain considering the tradeoffs
between costs and GHG emissions associated with production ac-
tivities. The decisions made by the model are; X
I X
C X
K X
T
Rijcb $vbc Rjk
tb
cj; cb (4)
i1 c1 k1 t1
1. Numbers, locations and capacities of facilities, power plants,
2. Types of facilities and technologies for power plants,
3. Amounts electricity produced in each power plant,
X
I X
B
jk
X
P
4. Amounts biomass distributed between biomass source sites, Rtb  k
Zpt $Kpt ck; ct (5)
facilities and plants, i1 b1 p1
5. Amount of biomass treated/stored in facilities,
6. Amount of auxiliary material consumed in power plants.
I X
X B
ij
X
E
j
As stated before, a multiobjective model is proposed to reect Rcb  Xec $Kec cj; cc (6)
the multidimensional nature of the biomass based energy supply i1 b1 e1
chain conguration design problem under concern. The model in-
cludes three environmental and economic objectives. The objec-
tives are: (1) minimization of total cost; and (2) minimization of
J X
X B
jk
Rtb $rbft Bkft ck; cf ; ct (7)
GHG emissions (CO2 eq) related to transportation and production in
j1 b1
the supply chain. The notations of the mathematical formulations
are presented in Appendix 1.
 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190 1183

The main advantages of the -constraint technique can be sum-

X
T X
F
marized as follows;
Xftk $efn E k
ck (8)
t1 f 1
(1) Using the weighted sum method, only efcient extreme so-
lutions can be generated, while the -constraint technique
X
P
has the capability to generate nonextreme efcient solutions
Ek  k
Zpt $KEpt ck (9)
in the feasible solution space (Rezvani et al., 2015). As a
p1
consequence, with the weighting method we may spend a lot
of runs that are redundant in the sense that there can be a lot
X
L
of combination of weights that result in the same efcient
Ek DEkl ck (10)
extreme solution. On the other hand, with the -constraint
l1
we can exploit almost every run to produce a different ef-
cient solution, thus obtaining a more rich representation of
X
K
the efcient set (Miettinen, 1998).
DEkl T l cl (11)
k1
(2) The weighting method cannot produce unsupported efcient
solutions in multi-objective integer and mixed integer pro-
gramming problems, while the e-constraint method does not
X
P X
T
k
Zpt 1 ck (12) suffer from this pitfall (Reza Norouzi et al., 2014).
p1 t1 (3) In the weighting method the scaling of the objective func-
tions has strong inuence in the obtained results. Therefore,
we need to scale the objective functions to a common scale
X
E X
C
j
Xec  1 cj (13) before forming the weighted sum. In the e-constrained
e1 c1 method this is not necessary (Mavrotas, 2009).
(4) We can control the number of the generated efcient solu-
Eq. (3) restricts the biomass procurement amount from a supply tions by properly adjusting the number of grid points in each
region by the total available biomass in that region. Eq. (4) ensures one of the objective function ranges by econstraint
the ow balance of the biomass supplied from biomass source site method, which is not easy with the weighting method
to facility and from facility to biomass to energy conversion plant (Mavrotas, 2009).
considering the material loss in the biomass after the pretreatment
process (if the facility is for storage of biomass, the conversion rate Therefore, the -constraint method seems to be a good choice to
dbc is 1, which means no loss). Eqs. (5) and (6) limit the amount of solve multi-objective optimization problems.
biomass transported to the facilities and plants to the maximum Assume the following MOMP problem (Mavrotas, 2009):
capacity of the corresponding capacity levels of plants/facilities. Eq.
(7) calculate the amount of biofuel produced in biomass to energy max=min f1 x; f2 x; fm x
conversion plants. Eqs. (8) and (9) calculate the amount of electrical st x2S
energy produced in biofuel to energy conversion plants and restrict
this amount to the maximum capacity of the corresponding ca- where x is the vector of decision variables, f1 x; f2 x; fm x are
pacity levels of plants. Eqs. (10) and (11) ensure that all the elec- the m objective functions and S is the feasible region.
trical energy demand is met in the demand nodes. Eqs. (12) and In the -constraint method we optimize one of the objective
(13) ensure that at most 1 facility, biomass to biofuel conversion functions using the other objective functions as constraints incor-
plant and biofuel to energy conversion plant is constructed in each porating them in the constraint part of the model as shown below
selected location. (Chankong and Haimes, 1983);

3.2. Solution methodology
In this section, the methodology which is employed to solve the
multi-objective strategic design and management problem by
integrating fuzzy decision making and -constraint methods is
explained.
There are several common techniques to solve a multiobjective
problems, such as the weighted-sum method, the -constraint
method, the goal attainment approach, and metaheuristics (Kindt
and Billaut, 2001). Among them, weighted sum method is the
method commonly used for economic/environmental management
problems compared with other optimization approaches estab-
lished previously (Moghaddam et al., 2011, 2012). However, a well-
organized method to deal with multi-objective problems is
-constraint method (Haimes et al., 1971) which is aimed to mini-
mize only one objective function (commonly, it may be the most
preferred or primary one) and to limit the others by some allowable
values i ; i2f1; :::; mg, and in this way, transforming the multi-
objective optimization problem into a single-objective problem.
The -constraint method has several advantages over the
weighting method that merges the objective functions of the multi-
objective problem into one objective function using weighted sum.
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 empha-
sized 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 inef-
cient; 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 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190

fuzzy decision making. The modied -constraint method for the emission minimization objectives, for each solution k, the mem-
proposed problem is described as the following steps; bership degree mki is calculated based on its individual membership
Step 1. Problem P in Section 2 can be transformed into problem P0 functions by adding weight factors as follows:
according to the basic principles of the -constraint method. In P0, Pm
the objective function is corresponding to f1 of P, and f2 of P is dealt wi $mki
with as a constraint of P0. Problem P0 can be represented as follows:
mki i1
P m
i1 wi

min f1 x The solution with the maximum value of mki is selected as the
st f2 x  2 ; most preferred solution.
and constraints 3  13
3.3. Computational experiments
Step 2. To solve problem P0, we need to determine 2 (upper
bound for the second objective function) that is limited by the range
3.3.1. Case study region and biomass sources
of objective function f2. To obtain the appropriate range of f2, multi
To explore the viability of the proposed model, computational
objective model P in Section 2 is solved as a single objective problem
experiments are performed on a real-world problem in Turkey. In
using each time only one objective and ignore the other to specify
this regard, we aim to design a supply chain network for biomass
the efcient solutions (i.e. upper bound, expected value and lower _
based energy production in Izmir, which is the third largest city in
bound) for f2. For this purpose, a fuzzy logic based procedure is
Turkey. As agriculture and stockbreeding are among the most
introduced and the problem is divided into sub problems. Each time, _
common economic activities in Izmir, diverse set of biomass bio-
one of the upper, lower and expected values of the fuzzy parameters _
waste feedstock resources are available in Izmir for energy pro-
are taken into consideration and sub problems are solved according _
duction. More specically, Izmir is the second largest producer in
to either cost minimization or emission minimization objectives.
Turkish poultry sector and has the fourth largest biogas production
Step 3. The payoff table is constructed which is an asymmetric
potential from animal wastes in Turkey. The proposed model is
matrix where the matrix elements represent the optimum values of _ _
applied to all 20 counties of Izmir. All of the counties of Izmir are
the corresponding objective function. The lower, upper and ex-
considered as biomass supply sites and candidate sites for bio-
pected values of each objective function are determined based on
energy plants and preprocessing facilities in the model. The map of
the payoff table.
the case study region is depicted in Fig. 1. Each county is repre-
Step 4. Repeat to solve problem P0 with different values of 2 (i.e.
sented by a number in the model as depicted in Fig. 1. The starred
upper, expected and lower values from the payoff table), and nally,
counties on the map constitute the city centre, therefore considered
obtain a set of pareto optimal solutions.
as one county in the model.
Step 5. After a set of pareto optimal solutions are obtained, a
The proposed model includes four types of waste biomass to be
decision maker may wish to select a preferred one from them and
transformed into energy; cattle manure, laying chicken manure and
may also want to know its degree of optimality. The fuzzy-logic-
broiler chicken manure, and waste wood. The resources are not uni-
based approach (Esmaili et al., 2011) can both provide a most
formly distributed in the city, their yields vary signicantly between
preferred solution and also indicate its degree of optimality. _
counties of Izmir. The existing feedstock annual yields and location
Therefore, in this paper, it is applied to assist in choosing a
data are gathered from Republic of Turkey Ministry of Food, Agricul-
preferred solution. In the m-objective optimization problem with k
ture and Livestock and have been aggregated at county centroids.
pareto optimal solutions, the membership function mki indicates the
degree of optimality for the ith objective function in the kth solu-
3.3.2. Transportation
tion. It is dened as follows;
Given the regional focus in our case study, road transport is
considered as the preferred transportation mode as it is the most
1. In the case of objective functions being minimized; _
common transportation mode in Izmir. In this scope, transportation
8 by a single trailer truck with a load capacity of 32 tons is considered.
>
>1 ; fik x  li
>
> Currently, road transportation is the most common method for
>
< k biomass delivery especially for distances <110 km (Searcy et al.,
mki ui  fi x ; li < fik x  ui 2007). Road transportation is favorable when exibility is required
>
> ui  li
>
>
>
: and multiple forest and farm sited have to be accessed. Waste
0 ; fik x > ui biomass with high solid content (laying chicken manure and wood
waste) is considered as solid biomass, while feedstock with low total
solid content (cattle manure, broiler chicken manure) is considered
2. In the case of objective functions being maximized; as liquid/semi-solid biomass. Biomass sources are transported by
8 trucks with the cost of V0.045/t-km for solid biomass and V0.05/t-
>
>1 ; fik x > ui km for liquid/semi-solid biomass. The cost data is derived from
>
>
>
< k Marufuzzaman et al. (2014) for liquid/semi solid biomass and from
mki fi x  li ; li < fik x  ui Lu et al. (2015) for solid biomass and updated for the local conditions
>
> u i  li
>
> considering the data gathered from local logistics rms. Data on
>
:
0 ; fik x < li GHG emissions associated with transportation of biomass by trucks
is gathered from Marufuzzaman et al. (2014) and supported by the
where li and ui denote the lower and upper limits of objective data obtained from LCA software SIMAPRO.
function fi of P, respectively, and fik x represents the value of the ith
objective function in the kth pareto optimal solution, such that 3.3.3. Preprocessing facilities and bioenergy plants
fik x2li ; ui . Collection and pretreatment facilities to store, treat and
Step 6. If a decision maker offers a preferred weight vector, which distribute biomass are considered as preprocessing facility types.
represents the relative importance of each objective according to the Cattle manure, laying chicken manure, broiler chicken manure and
decision maker's preferences, for the cost minimization and maize are assumed to be collected and distributed via collection
 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190 1185

Fig. 1. The map of case study region.

centers whereas pretreatment facilities are used to treat waste where, TSb is the total solid content of biomass b and W k is the
wood to convert into wood pellet, which is a more efcient biomass amount of water (auxiliary material) used to adjust the total solid
with higher solid content than waste wood, by drying process. content of the biomass mixture in the anaerobic digestion tank.
Anaerobic digestion (AD) and gasication (G) technologies are The other data and assumptions on facilities and plants are;
considered to convert biomass into energy. AD is utilized to pro-
duce biofuel (biogas) from cattle manure, laying chicken manure 1. The electrical efciency of the cogeneration units are taken as
and broiler chicken manure, which then be converted into electrical 40%.
energy by CHP engines. Biofuel (syngas) produced from waste 2. The conversion rate of waste wood to wood pellet is to be 80%.
wood by G is assumed to be transformed into electrical energy in 3. The generated electrical energy, is assumed to be fed into the
CHP engines as well. national electricity grid.
To ensure the efciency of biogas production process in the AD 4. Two capacity levels are considered for the pretreatment facil-
plants, the total solid content of biomass slurry in the fermentation ities and biomass to energy conversion plants. These capacity
tank should vary between 7% and 12%. To represent this technical levels reported in Table 1.
limitation, Eq. (14) is added to the model in Section 2 as a case
specic contraint; Data on GHG emissions associated with bioenergy production in
plants (including conversion in CHP units) are gathered utilizing
PJ PB PT LCA software SIMAPRO and DECC (2015).
j1 b1 t1 TSb  Sjk
7%  ! tb  12% ck (14)
PJ PB PT jk
j1 b1 t1 Stb Wk 3.3.4. Economic parameters
The generated electrical energy by the plants is fed into the
national electricity grid with a price of V0.103/kWh. Seven demand

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 Total biomass capacity of PT
level plants (t/month) unit in G plant (kWe) plants (t/month) unit in AD plant (kWe) facilities (t/month)

1 1750 4500 9000 2750 3000

2 2250 6000 10,000 3250 5000

Capacity Unit investment cost of G Unit investment cost of CHP unit Unit investment cost of AD Unit investment cost of CHP unit in Unit investment cost of PT
level plants (V/ton) in G plant (V/kWe) plants (V/ton) AD plant (V/kWe) facilities (V/ton)

1 20,000 800 1600 800 1000

2 18,000 750 1500 750 750
1186 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190
nodes are considered in the different locations around the city to
meet the corresponding electrical energy demand. The price and
demand data came from Republic of Turkey Ministry of energy and
Natural Resources. It is assumed that waste biomass is supplied by
the local farmers at no charge. Monthly discount rate is taken as
0.006 and lifetime of the plants are 20 years. The length of the time
period used in our computational experiments is one month.
We obtain the data on plant investment costs corresponding to
different plant capacity levels by a survey on AD and G plant in-
stallations around the Europe and by utilizing professional expert
Table 2
The payoff values according to each objective function.
Min. Cost Upper bound
Cost (V/Month) 789,003
GHG emissions (kg CO2 eq) 154,275
Min. GHG emissions Upper bound
Cost (V/Month) 3,822,542
GHG emissions (kg CO2 eq/Month) 150,272
opinion. Do et al. (2014) is also utilized to derive the data. The in-
vestment 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 re-
ported 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 experi-
ments, 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 solu-
tion 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).
4.1. The optimized supply chain conguration
The optimized supply chain conguration is determined by the
modied -constraint method taking the steps given in Section 4.
This section describes the optimized supply chain conguration
determined by applying the model and solution algorithm.
The payoff table is obtained as described in Section 4 (Steps 2
and 3). Table 2 depicts the payoff values according to each objective
function and the upper, lower and expected values of the fuzzy
parameters (see Section 5.5).
Expected value Lower bound
717,275 645,548
147,064 132,562
Expected value Lower bound
3,474,857 3,127,371
146,641 124,371
After obtaining the payoff table, the mathematical model is
solved with six different values of 2, which are depicted in italic
characters in Table 2, and a set of pareto optimal solutions is ob-
tained. Table in Appendix 2 reports the pareto optimal solutions
according to each 2 values (upper limit for GHG emissions), along
with the strategic supply chain decisions related to decisions loca-
tion, capacity and technology of bioenergy plants and preprocessing
facilities according to each solution. The table also depicts the cor-
responding membership function (mk ) values for each solution
alternative. The membership function values are calculated as
described in Section 4 (Step 5), based on three different weight
structures for the objective functions, to reect the relative impor-
tance of the objectives and provide the DM for a more condent
solution set; wCost 0.3 and wGHG Emissions 0.7 (WS1), wCost 0.5
and wGHG Emissions 0.5 (WS2), wCost 0.7 and wGHG Emissions 0.3
(WS3).
The table in Appendix 2 provides a broader perspective to de-
cision makers by offering the results of the alternatives with three
different weight structures. Decision makers from different sectors
(governmental units or private companies) can choose the best
alternative according to their preferences related to objective
functions (costs vs. emissions). The main results that can be ob-
tained from the table are summarized in the following;
1. If minimization of GHG emissions is more important than mini-
mization of costs for a decision maker, the rst weight structure
(WS1) should be adopted (wCost 0.3 and wGHG Emissions 0.7)
and the optimal solution should be selected as the solution with
the highest mk value corresponding to this weight structure. From
the table, it can be observed that the optimal solution for this
situation is the 6th solution alternative (V3,748,708/Month total
cost and 124,371 kg CO2 eq/Month GHG emissions). In this sit-
uation, 1 collection centre with 2nd capacity level, 1 pretreatment
facility with 2nd capacity level and 1 pretreatment facility with
1st capacity level is constructed in Menemen, Merkez, Torbali,
respectively. Dikili and Urla are the selected counties for con-
struction of 1 AD plant in each with 2nd capacity level, and
Selcuk, Bergama and Menemen are the counties for construction
of 1 G plant in each with 2nd capacity level.
2. If minimization of GHG emissions and minimization of costs are
equally important for a decision maker, the second weight
structure (WS2) should be adopted (wCost 0.5 and wGHG
Emissions 0.5) and the optimal solution should be selected as the
 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190
solution with the highest mk value corresponding to this weight
structure, that is the 1st, 2nd or 4th solution (V717,275/Month
total cost and 147,064 kg CO2 eq/Month GHG emissions) in this
case. The conguration results of this solution alternative are; 1
collection centre with 1st capacity level and 1 pretreatment
facility with 2nd capacity level are constructed in Merkez and
Torbali, respectively. Dikili and Urla are the selected counties for
construction of 1 AD plant with 1st capacity level, 1 G plant in
each with 1st capacity level, respectively.
3. If minimization of minimization of costs is more important than
GHG emissions for a decision maker, the third weight structure
(WS3) should be adopted (wCost 0.7 and wGHG Emissions 0.3). It
can be observed from the table that the optimal solution for this
situation is the 1st, 2nd or 4th solution alternatives (V717,275/
Month total cost and 147,064 kg CO2 eq/Month GHG emissions).
The conguration results of this solution are; 1 collection centre
with 1st capacity level and 1 pretreatment facility with 2nd
capacity level are constructed in Merkez and Torbali, respec-
tively. Dikili and Urla are the selected counties for construction
of 1 AD plant with 1st capacity level, 1 G plant in each with 1st
capacity level.
4.2. Enviro-economic analyses
Enviro-economic analyses are presented to provide a deeper
understanding of the model and the results obtained by the pro-
posed solution methodology. If the results of the 1st, 2nd or 4th
alternatives in the table in Appendix 2 are compared to those of the
3rd alternative, it can be realized that a 9.86% decrease in total GHG
emissions can be attained with 367.51% increase in total cost. We
have observed similar percentages when we compare the 1st, 2nd or
4th alternatives with the 5th and 6th solution alternatives as well.
However, if the results of the 5th alternative are compared to those
of the 6th alternative, it can be realized that a 15.19% decrease in
GHG emissions can be attained with 6.63% increase in the total cost.
It can also be concluded from the table that, the total cost and
amount of GHG emissions do not differentiate between the values of
154,275, 150,272 and 147,064 for 2 as well as the conguration of
the supply chain, in other words the locations and capacities of
bioenergy plants and preprocessing facilities. However, giving 2
values smaller than 147,064 such as 146,641, 132,562 and 124,371
effects the total cost, GHG emissions and conguration of the supply
chain. The table reveals that decreasing the 2 value from 154,275 to
132,562 kgCO2eq/Month by 14%, causes a signicant increase in the
total cost, approximately by 367.51%, whereas a relatively small
decrease is observed in the GHG emissions by 9.8%. However, a
further decrease in 2 value from 132,562 to 124,371 kgCO2eq/
Month by 14% makes the GHG emissions decrease by the same
Fig. 2. The contribution of each cost component to the total supply chain cost ac-
cording 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 ac-
cording to WS2 (wCost 0.5 and wGHG Emissions 0.5) and WS3 (wCost 0.7 and wGHG
Emissions 0.3.
percentage (14%) and results in an increase of total cost by 11.8%.
Figure 2 and 3 illustrates the contribution of each cost compo-
nent (Discounted investment cost, operational cost, transportation
cost and auxiliary material (in our case, water) cost to the total
supply chain cost according to the weight structures given in Sec-
tion 6.1. The results denote that, discounted investment cost re-
ceives the biggest share of total cost for all weight structures, which
is followed by operational costs. The effects of transportation cost
and auxiliary variable cost on the total cost is negligible when
compared to investment and operational costs.
Further analyses on environmental impacts in terms of GHG
emissions from production and transportation activities in the
supply chain denote that GHG emissions associated with energy
production activities receive the biggest share of total GHG emis-
sions. If the rst weight structure (WS1) is selected by the decision
maker, the related optimal conguration alternative causes 124,323
kgCO2eq/Month GHG emissions from production activities while
the transportation related GHG emissions are 48 kgCO2eq/Month.
When one of the second or third weight structures (WS2, WS3) is
selected, the GHG emissions associated with production and
transportation activities are 146,543 kgCO2eq/Month and 501
kgCO2eq/Month, respectively.
5. Conclusions
This study presents a new research effort to make strategic in-
vestment decisions on biomass based production systems in a cost
effective and environment friendly way. To this aim, a multiobjective
MILP model is developed to make decisions on the biomass supply
chain design and planning. The model identies the optimal struc-
ture of the supply chain and selects the most appropriate power
production technology as well as the preprocessing plant type to
meet the electricity demand of specic regions considering objec-
tives related to the economic and environmental performance of the
supply chain. The model represents all of the supply chain activities
from biomass procurement to bioenergy production, and considers
economic and environmental objectives in an uncertain decision
environment. A methodology to solve multiobjective decision
making models is proposed and applied to the current problem on
bioenergy decision making. The methodology that combines fuzzy
decision making and -constraint methods in a novel way to capture
the trade-offs between the objectives effectively besides the system
specic uncertainties. Through computational experiments on a
_
multi biomass based energy supply chain design in Izmir, Turkey, the
viability of the proposed model and solution methodology are
demonstrated. By further analyses, it is revealed that discounted
investment costs and operational costs receive the biggest share in
the total supply chain cost, whereas the energy production activities
have higher impact on GHG emissions than transportation activities.
This study distinguishes from the current literature in several
1188 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190

ways. First, it proposes a new optimization model for strategic
management in multiple biomass and multiple technology based
supply chains that include both power plants and biomass pro-
cessing facilities to enhance investment decision making. The
proposed model is generic in its structure and can be tailored to
handle bioenergy supply chain design problems in various regions
with different types of feedstock and transportation modes using
the same general framework. The model can be readily extended to
include additional, case-specic constraints required by the
problem. Second, it presents an integrated approach incorporating
fuzzy decision making and -constraint methods to solve the pre-
sented multi-objective problem by capturing the problem specic
uncertainties and sustainability aspects simultaneously. To our
knowledge, this is the rst study to develop a solution approach
that combines fuzzy decision making and -constraint methods to
capture both sustainability aspects by handling multiple objectives
and uncertainty in the system parameters in this eld.
The results of the case study reveal that the proposed model and
solution algorithm can effectively be used in practice, to obtain the
economic and environmental benets from biomass based energy
supply chain design. The government and private investors can
employ our mathematical model and solution algorithm to design
the most cost effective and environment friendly supply chain to
meet energy demand of a specic region(s) and estimate the cost
and harmful environmental effects that generated in a particular
region by constructing the supply chain. The model also facilitates
identifying policies to support a viable, protable and eco-friendly
bioenergy industry. For example, it is possible for the model and
solution methodology to be used for policy making purposes for
governmental units to provide an overall guidance on targets for
bioenergy production considering energy demands and environ-
mental footprint limitations in a given region. However, the same
framework can also be applied at the company level, for use by a
single enterprise for strategic planning of its own activities under
similar production and environmental targets. Note that these two
problems are structurally similar, although the signicance of the
applications is markedly different.
Future research can extend the study by integrating the problem
with a district heating network to make use of the waste heat in
residential, industrial or agricultural areas to meet thermal energy
demand. Also, different modes of transportation (rail, sea etc)
can be included and the model can be extended to select the most
appropriate mode for a given region. The model can be extended to
capture the stochastic nature of biomass supply and technology
development by converting it to a Stochastic Programming model.
Including additional objectives in the proposed model may be
another extension of this study. In this regard, other environmental
objectives related to energy efciency and land use as well as social
objectives such as maximization of job creation or social accept-
ability of the energy conversion system, may be considered.
Appendix 1. The notations of the mathematical formulations.

Indices
i Biomass source sites
j Candidate locations for facilities
k Candidate locations for energy plants
l Demand nodes
b Biomass types
f Biofuel types
p Capacity levels for energy plants
e Capacity levels for facilities
t Energy conversion technology
c Facility type

Decision variables
1. Binary variables
k
Zpt 1 if an energy plant of capacity level p and technology t is located at k, 0 otherwise
j
Xec 1 if a facility of capacity level e and type c is located at j, 0 otherwise
2. Positive variables
ij jk
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 Amount of electricity produced in plant k to meet demand of node l (kWh)

Ek Amount of electricity produced at plant k (kWh)
Bkut Amount of biofuel u produced at plant k with technology t (m3)
Sk Amount of auxiliary material consumed at energy plant k (ton)
Parameters
1. Biomass supply and product demand
Tl Amount of electricity demand at demand node l (kWh)
ABib Amount of available biomass b at biomass source site i (ton)
2. Capacities
Kpt ; Kec Biomass capacity of; energy plant of capacity level p with technology t, facility of capacity level e with type c
KEpt Installed electrical capacity of plant of capacity level p with technology t (kWe)
3. Costs and prices
Ypt ; Yec Unit 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
Ppt ; Pec Unit 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)
Fb ; FW Unit cost of biomass b, auxiliary material (V/ton)
Cb Unit cost for transportation of biomass b (V/ton-km)
4. Distances
dij ; djk Distances from; biomass source site i to facility j, facility j to plant k (km)
5. Conversion rates
vbc Conversion rate of biomass b in facility with type c (%)
eb Conversion rate of biomass b to electricity (kWh/m3)
rbut Conversion rate of biomass b to biofuel u produced by technology t (m3/ton)
 S.Y. Balaman / Journal of Cleaner Production 137 (2016) 1179e1190 1189

(continued )

6. Carbon emissions
cept GHG emissions associated with 1 kWh of electricity production by technology t (kg CO2 eq)
cet GHG emissions associated with 1 ton of biomass transportation (kg CO2 eq)
7. Other parameters
DF Discounting factor

Appendix 2. The pareto optimal solutions according to each

2 values and corresponding conguration decisions.

Pareto Value of 2 Cost GHG emissions Strategic decisions for Strategic decisions for mk1 mk2 mk
optimal (kg CO2 eq/ (V/Month) (kg CO2 eq preprocessing facilities bioenergy plants
solution no. Month) (V/Month)

1 154,275 717,275 147,064
2 147,064 717,275 147,064
3 132,562 3,353,316 132,562
4 150,272 717,275 147,064
5 146,641 3,515,713 146,641
6 124,371 3,748,708 124,371
Merkez e 1 collection Dikili e 1 AD plant 1. capacity 0.97 0.24 WS1(0.3*0.97)(0.7*0.24) 0.459
centre 1. capacity level, level, WS2(0.5*0.97)(0.5*0.24) 0.605
Torbal e 1 pretreatment Bayndr e 1 G plant WS3(0.7*0.97)(0.3*0.24) 0.751
facility 2. capacity level 1. capacity level
Merkez e 1 collection Dikili e 1 AD plant 1. capacity 0.97 0.24 WS1 0.459
centre 1. capacity level, level, WS2 0.605
Torbal e 1 pretreatment Bayndr e 1 G plant WS3 0.751
facility 2. capacity level 1. capacity level
Bergama, Merkez e 1 Bergama, Menemen, Urla e 1 0.147 0.726 WS1(0.3*0.147)(0.7*0.726) 0.552
collection centre in each 2. AD plant in each 2. capacity WS2(0.5*0.147)(0.5*0.726) 0.436
capacity level level WS3(0.7*0.147)(0.3*0.726) 0.321
Bayndr e 1 pretreatment Beydag,
facility, 2. capacity level Foca e 1 G plant in each 1.
capacity level
Merkez e 1 collection Dikili e 1 AD plant 1. capacity 0.97 0.24 WS1 0.459
centre 1. capacity level, level, WS2 0.605
Torbal e 1 pretreatment Bayndr e 1 G plant WS3 0.751
facility 2. capacity level 1. capacity level
Beydag, Cesme e 1 Bergama, Seferihisar, Merkez 0.096 0.255 WS1(0.3*0.096)(0.7*0.255) 0.207
collection centre in each 1. e 1 AD plant in each 2. WS2(0.5*0.096)(0.5*0.255) 0.175
capacity level, capacity level, WS3(0.7*0.096)(0.3*0.255) 0.143
Urla e 1 collection centre 2. Selcuk, Urla e 1 G plant in
capacity level, each, 2. capacity level
Merkez e 1 pretreatment
facility in each 2. capacity
level
Menemen e 1 collection Dikili, Urla, e 1 AD plant in 0.023 1 WS1(0.3*0.023)(0.7*1) 0.707
centre 2. capacity level, each 2. capacity level, WS2(0.5*0.023)(0.5*1) 0.511
Merkez e 1 pretreatment Selcuk, Bergama, WS3(0.7*0.023)(0.3*1) 0.316
facility 2. capacity level Menemen e 1 G plant in each,
Torbali e 1 pretreatment 2. capacity level
facility 1. capacity level

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