Optimal Multi-Period Investment Analysis for Flexible Pulp Mill Utility Systems

Book chapter, 2015

The techno-economic potential for new technologies in pulp mills is conventionally studied assuming annual averages, based on the assumption that the pulp mill is continuously operated at a constant production rate close to its design capacity. Recent work has shown, however, that a technology, such as lignin extraction, which can improve the operating flexibility of the pulp mill utility system, has a value associated with its flexibility that is not captured in such average-value models. These previous results indicated a risk of significant errors if heat load variations were not properly modelled. This paper presents a multi-period optimization model for the planning of design and operating decisions connected to pulp mill utility systems, which in this work has been extended with back-pressure and condensing turbine models. The model optimizes technology selection, equipment capacities and operating loads under the influence of demand variations, considering part-load efficiencies and operating load limits. Application of the model to an illustrative example showed that lignin extraction can compete with electricity production already at a lignin price of 22 €/MWh in the presence of variations due to poor off-design performance for the turbines. This demonstrates the usefulness of the proposed modelling approach.