Production Planning Optimization for Power-Intensive Plants under
Peak-Valley Electricity Price
Large Air Separation as Example
Abstract
Power-intensive manufacturing plants can utilize Peak-Valley electricity price to adjust
production corresponding to different price time periods achieve lower electricity costs. This
paper based on a real large air separation site, studied the optimization of the production plan
by combining the actual production data statistical regression analysis with engineering
mathematical model, to build the mixed-integer nonlinear programming (MINLP) power cost
model, the model can predict the best optimal operating mode and the target lowest power
cost against different demanding for products, thus the optimized power cost and incremental
cost could be calculated and used as inputs for Master Production Scheduling, thereby a
significant improving the production planning process comparing using average power
consumption as basis. Implementing the new production planning and execution work process
by using Lean Six Sigma methodology, with setting new KPI focus on reducing the gap of
actual power cost and target power cost predicted by the optimization model, the preliminary
results of satisfying economic benefit. The methodology developed in this paper is workable
not only benefit the large air separation company, but also applicable to other power-intensive
industries such as cement, chlor-alkali, aluminum etc. while it happens economic down turn
and over-capacity in these industries currently and in the future.
Keywords: Production planning; Power-intensive; Peak-valley electricity price;
Optimization; Air separation plants
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