Flexibility in planning and operation of sawmill: An investigation of the potential for industrial demand response using MILP cost optimisation models

Abstract

Recent and future development of the electricity system calls for actions to match demand and supply. One action that this thesis investigates is the potential of de mand response within the wood industry. The purpose is to investigate how this can be implemented with strategic planning and operation and what the implications are on both the sawmill and on the electricity system. Efficient representation of the Sawmills has previously been performed with MILP models and is hence chosen as the main tool for this study. Together with four scenarios and data retrieved from industry partners, the study reveals the relation between overcapacity and demand to be determining the potential for flexibility. The results indicate that the chamber kilns are suitable to respond to short peaks (up to a couple of hours) in electricity prices whilst the progressive kilns can be used to manage and smooth variations of longer duration (in the range of 100 hours). The magnitude of the flexible loads are approximate 5-60 kWh/h, which is not significant in the context of the Swedish electricity system. However, if the entire sawmill industry would respond such aggregate response can hav an impact on the electricity market. Further studies are recommended to include an investigation of the tipping-point of the profitability for flexible operation, i.e., what electricity prices or economic stimulation are needed to make the savings of the flexible operation larger than the expenditures.