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A profitability constraint for energy utilization pathways in optimization modelling

Parrilla-Martínez, Javier

The utilization pathways of certain energy sources may become unprofitable when production costs surpass remunerations. In fact, some completed studies, which optimize energy systems as a whole from the macroeconomic perspective of a single observer, might have violated the principle of profitability. The solution to avoid this issue is to resort to an exogenous approach to the modelling of remunerations. This methodology is based on the integration of a profitability constraint into every optimization model for any energy utilization pathway. The constraint constitutes a restriction on utilization pathway’s costs from the standpoint of plant operators or investors concerned. The aim of these constraints is to ensure profitable investments at the microeconomic level of each utilization pathway. Besides, integrating profitability constraints is clearly an easy task for energy system models with a single sector (data block). But if there is more than one sector, it is not straightforward to model energy and material flows across such blocks. This objective can be achieved through two sets of specific variables: the energy and material contributions to a facility and the virtual flows.
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DOI: 10.5445/IR/1000123424
Veröffentlicht am 09.09.2020
Cover der Publikation
Zugehörige Institution(en) am KIT Institut für Industriebetriebslehre und Industrielle Produktion (IIP)
Publikationstyp Forschungsbericht/Preprint
Publikationsjahr 2020
Sprache Englisch
Identifikator KITopen-ID: 1000123424
Umfang 34 S.
Schlagwörter Utilization pathway, profitability constraint, remuneration, sector, interface, observer, contribution, virtual flow, add-on module, bioenergy subsystem, energy configuration
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