The value of flexibility for pulp mills investing in energy efficiency and future biorefinery concepts
Journal article, 2014

Changing conditions in biomass and energy markets require the pulp and paper industry to improve energy efficiency and find new opportunities in biorefinery implementation. Considering the expected changes in the pulp mill environment and the variety of potential technology pathways, flexibility should be a strong advantage for pulp mills. In this context, flexibility is defined as the ability of the pulp mill to respond to changing conditions. The aim of this article is to show the potential value of flexibility in the planning of pulp mill energy and biorefinery projects and to demonstrate how this value can be incorporated into models for optimal strategic planning of such investments. The paper discusses the requirements on the optimization models in order to adequately capture the value of flexibility. It is suggested that key elements of the optimization model are multiple points in time where investment decisions can be made as well as multiple scenarios representing possible energy price changes over time. The use of a systematic optimization methodology that incorporates these model features is illustrated by a case study, which includes opportunities for district heating cooperation as well as for lignin extraction and valorization. A quantitative valuation of flexibility is provided for this case study. The study also demonstrates how optimal investment decisions for a pulp mill today are influenced by expected future changes in the markets for energy and bioproducts.

investment under uncertainty

forest biorefinery

process integration

energy efficiency

multistage stochastic programming

energy price scenarios


Elin Svensson

Industrial Energy Systems and Technologies

Thore Berntsson

Industrial Energy Systems and Technologies

Ann-Brith Strömberg

University of Gothenburg

Chalmers, Mathematical Sciences, Mathematics

International Journal of Energy Research

0363-907X (ISSN)

Vol. 38 14 1864-1878

Driving Forces

Sustainable development

Subject Categories

Computational Mathematics

Other Engineering and Technologies not elsewhere specified

Chemical Engineering

Business Administration

Areas of Advance




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