INCREASING THE ECOEFFICIENCY AND ECONOMY OF AN ENERGY SYSTEM: A MULTIOBJECTIVE OPTIMIZATION APPROACH

1
INCREASING THE ECO-EFFICIENCY AND ECONOMY OF AN
ENERGY SYSTEM A MULTIOBJECTIVE OPTIMIZATION
APPROACH.Presented at theInternational
Association for Energy Economics26th Annual
International Conference PRAGUE, CZECH REPUBLIC

ESCUELA DE EXTENSIÓN EN CANADÁ UNIVERSIDAD
NACIONAL AUTÓNOMA DE MÉXICO (UNAM) JULIO DE 2004.
Carlos E. Escobar-Toledo. carloset_at_servidor.unam.m
x Faculty of Chemistry, National University of
Mexico
1
2
Abstract

• Energy is fundamental in the sustainable
  developing strategy, because
• The necessity to perform scenarios for both,
  energy demand and energy availability to sustain
  the economic and social development of the
  country.
• To measure the effects of environment quality.

3
INCREASING THE OVERALL ECO-EFFICIENCY ECONOMY
OF ENERGY SYSTEMS.
Produce more efficiently
Discovery of large new reserves of HC at low
costs.
PETROLEUM RESOURCES
Avoid environmental damage.
Innovations in energy conversion efficiency.
4
Abstract

• We propose a multiple objective model
  optimization system for planning the energy
  production/generation, the environment effects
  and the full economy, in order to evaluate the
  fuel policy.
• We also built an assessment methodology for
  evaluating and selecting new energy technologies
  clustered into a set of projects, in a framework
  of an RD program.....

5
METHODOLOGICAL FRAMEWORK FOR RD PRIORITY SETTING.
ENERGY RD STRATEGY PRIORITIES
ANALYSIS OF THE NATIONAL ENERGY SYSTEM
ANALYSIS OF ENERGY SYSTEMS
CHARACTERIZATION OF ENERGY TECHNOLOGIES
6
VISION OBJECTIVES
VISION To promote the development of
sustainable strategies, which provide energy
required for supporting economic growth and
improving quality of life, while minimizing
health and environmental negative impacts of
energy supply.
MAIN OBJECTIVE To enhance capabilities for
comparative assessment of different energy supply
options and strategies in the process of planning
and decision making for the energy sector.
7

• The second objective, is to study the economic
  and environmental impacts of expansion of the
  generating/production system until 2025, using
  one base and several alternative cases. The study
  is realized in four stages
• Plant level analysis.
• Fuel chain level analysis.
• System level analysis.
• Decision making analysis.

8
In order to achieve these objectives, the work
was divided in two parts

• The implementation and use of the
  computer-based tool this is the MULTIOBJECTIVE
  model that includes environmental factors in the
  process of planning and decision making for the
  Energy sector.

• The acquisition, implementation and use of the
  Energy and Power Evaluation Program (ENPEP), a
  model for planning and decision making for the
  Energy System, from IAEA Project MEX/0/012 .

9
(No Transcript)
10
THE ENECMA SYSTEM

• The system has 3 sub models (input-output)
• The energy sector the primary energy
  availability is represented by crude oil and
  natural gas and consequently by refining
  products and by hydrocarbons separated from wet
  natural gas C1, C2,C5.
• For electricity it was considered specifically
  dry natural gas, fuel-oil, nuclear, hydro and
  some renewable (solar and wind).
• The non energy sectors. They are represented by
  48 sectors of the economy including the final
  demand.

11
Multiple objectives model
Max (Min) GDP, Labour, Taxes, Emissions
12
SOME NEW PETROLEUM REFINING TECHNOLOGIES IN
RD PROJETS

• ULTRASOUND MICROWAVES FOR FRONT-END CRUDE
  TREATMENT.
• ELECTRICAL/CHEMICAL PROCESSES.
• CRUDE OIL HYDROSTRIPPING.
• BIOTECHNOLOGY FOR SULPHUR REDUCTION.
• MOLECULAR DESIGN FOR CATALYST SYNTHESIS.
• MICROREACTION, HEAT MASS TRANSFER.

13
SOME NEW PETROLEUM REFINING TECHNOLOGIES TAKEN
INTO ACCOUNT IN THE RD PROJECTS

• USE OF MEMBRANES IN HC SEPARATION PROCESSES.
• SENSOR TECHNOLOGY.
• INNOVATIVE WASTE TREATMENT.
• NATURAL GAS CONVERSION TO LIQUID FUELS.
• COKE MANAGEMENT.

14
ELECTRICITY TECHNOLOGIES

• Gas fired combined cycle units
• Gas fired turbines.
• Coal fired dual units (fuel-oil) with gas
  desulphurization systems.
• Nuclear Power plants.
• Dendroenergy, wind, solar
• Hydro

15

• There are 14 alternative cases selected for
  study
• Impact of higher demand growth
• A1 Demand growth of 6 per year.
• Analysis of the nuclear option
• B1. Nuclear unit cost of only 1,292 USD/kW.
• B2. Forced Nuclear introduction one unit forced
  in 2012.
• Impact of fossil fuel prices
• C1. Slightly higher fossil fuel prices.
• C2. Natural gas prices 38 higher.
• C3. Relative to 1998, the natural gas price
  increases to a factor of 4.14 higher in 2010 and
  declines to 1.38 higher in 2024.

16

• Limitation on the introduction of new gas-fired
  units
• D1. Limitation to only 3 combined cycle units per
  year.
• D2. Limitation in the supply of natural gas
  starting in 2010.
• Variation of the discount rate
• E1. Real discount rate of 12 per year.
• E2. Real discount rate of 8 per year.
• Changes of the System reliability
• F1. Loss of load probability of 1 day per year.
• F2. Loss of load probability of 5 days per year.
• F3. Decreased cost of energy not served.
• Introduction of renewal technologies
• H2. New solar and wind candidates, which will
  not be evaluated for lack of data.

17
(No Transcript)
18
SYSTEM LEVEL ANALYSIS

• General assumptions for the base case
• Nuclear cost of 2, 485 USD/kW.
• Price of natural gas of 2.66 USD/GJ in 1998, with
  an average escalation of 0.08 per year.
• No supply limit for natural gas.
• Real discount rate of 10 per year.
• Cost of energy not served of 1.50 USD/kWh.
• A maximum reserve margin of 30 and a minimum of
  10.
• Wet flue gas desulphurization (FGD) on new dual
  coal fired units.

19
DEMAND

• The scenario of evolution of the demand of
  electricity adopted for the system level analysis
  is
• Starting with 21,236 MW in 1998, an average
  growth rate of 5.4 per year to reach 37,962 MW
  in 2009.
• A projection until 2027 with an average growth
  rate of 4.5 per year, to reach 73,686 MW.

20
RESULTS

• The least cost expansion plan in the base case
  was
• 118 combined cycle plants, with 64,428 MW.
• 6 gas turbines, with 1,074 MW.
• 2,539 MW of 5 committed hydro projects.

21
PLANT LEVEL ANALYSIS

• The principal results of the plant level analysis
  are
• For base loaded operation at 80 capacity
  factor, the combined cycle has the lowest annual
  unit cost, at 179 USD/yr-kW.
• The dual plant with 260 USD/yr-kW and the nuclear
  with 329 USD/yr-kW are not competitive, not even
  at 100 capacity factor.
• For peak load operation below 20 capacity
  factor, the gas turbine with 85 USD/yr-kW has the
  lowest annual unit cost.

22
(No Transcript)
23

• Relative to the base case, case of high gas
  prices (C3) has the highest impact in the
  expansion plan. Total discounted cost increases
  to 76.3 billion USD.

159 dual coal fired units, with 55,650 MW
24

• Relative to the base case, case of gas supply
  limitation (D2) decreases 61 the capacity based
  on natural gas in the expansion plan. Total
  discounted cost increases to 55.9 billion USD.

122 dual coal fired units, with 42,700 MW
25
CO2 and NOx emissions for full energy chains
26
DECISION ANALYSIS

• The decision analysis serves to compare the base
  case objective function cost and environmental
  emissions
• B2. One forced nuclear plant in 2012
• D1. Limitation to only 3 combined cycle units per
  year.
• D2. Limitation in the supply of natural gas
  starting in 2010.
• F1. Loss of load probability of 1 day per year.
• F2. Loss of load probability of 5 days per year.

27

• If only cost is considered, the decreased
  reliability case and the base case are the best
  ones.
• If the emissions costs are included, then the
  case of forced nuclear and the high reliability
  case are the best.
• A range of costs for the emissions taken from the
  European ExternE study were chosen as follows
• 18-100 USD/ t of CO2.
• 1,115-3,300 USD/t of SO2.
• 1,265-3,850 USD/t of NOx.
• 1,210-5,775 USD/t of TSP.

28
The nuclear option always is the more expensive,
later the dual-coal with FGD. On the other hand,
for capacity factors less than 20 the gas
turbine units are the most attractive ones. For
capacity factors greater than 20, the most
attractive plants are the combined cycle.
29
CONCLUSIONS

• The main results are
• The plant level analysis produced an initial
  selection of candidate technologies.
• The fuel chain level analysis is completed (with
  some difficulties because of the type of
  information required).
• The system level analysis is performed for the
  base case and 10 alternatives.
• The model gives useful information about the
  optimal expansion plans, taking into account
  costs, environmental emissions and diversity of
  the energy capacity mix.

30

• The possibility of increases in natural gas
  prices or gas supply limitations makes it
  desirable to consider some diversification using
  alternative technologies such as coal-fired
  units, fuel oil units, or nuclear units.
• The potential of wind, solar and dendroenergy was
  not evaluated because of lack of technical and
  economic information. Therefore, it is
  recommended to include in the future such
  technologies in others evaluations of the model.

31

• The specific environmental emissions of the
  alternatives included are
• Combined cycle (natural gas)
  0.496 g NOx/kWh 392 g CO2/kWh.
• Gas turbine (natural gas) 0.730 g NOx/kWh 583 g
  CO2/kWh.
• Dual (coal) 0.880 g SO2/kWh 2.880 g NOx/kWh
  0.122 g PST/kWh 747 g CO2/kWh.
• Nuclear (enriched uranium) 35.963 kBq/kWh.

32
OPTIMAL PARETO SOLUTION UNTIL 2024
33
Gas supply scenario, 2001-2010
Growth 4.0
Growth 9.3
millions of cubic feet/day
Production of PEP
Available to PGPB
02
00
03
01
04
05
06
07
08
09
10

• The availability to PGPB for period 2001-2010
  will increase in 2,063
• Mcfd.
• The more important projects are Cuenca de
  Burgos, Sur de Burgos, Cantarell, Crudo Ligero
  Marino, Veracruz y Macuspana.

34
Processing infrastructure
Fractioning Mb/d
liquids recuperation Mcf/d
gas sweetening Mcf/d
La Venta
Pajaritos
Morelos
Cd. Pemex
577
2000
Cangrejera
a
Cactus
734
2005
2000
4,732
Nvo Pemex
4,020
2000
2010
764
6,116
2005
4,754
2005
2010
6,926
5,604
2010
Reynosa
condensate sweetening Mbbl/d
Poza Rica
Matapionche
144
2000
192
2005
2010
192
35
Natural gas Demand, 2001-2010
Millions cubic feet/day
Growth8.0
Growth6.8
Domestic
Iindustrial
Oil Industry
Electricity
36
PGPBs Growth of production
Growth
PGPB Supply
2001
2010
Natural Gas (millions of cubic feet/day
4,214
5,973


GLP (million barrels/day)
290
392

Ethane (millions barrels/day)
182
239

Natural Gasoline (millions barrels/day)
115
146
37
THE PETROCHEMICAL INDUSTRY IN MEXICO.

• The necessity of restore our Petrochemical
  Industry as a foundation of Industrial
  development in order to add more value to the
  industrial chains beginning with our resources on
  hydrocarbons.

38

• THE PETROCHEMICAL INDUSTRY SYSTEM
• IS A LARGE, COMPLEX, AND CONSTANTLY CHANGING
  INDUSTRY.
• THERE ARE MORE THAN 8000 DIFFERENT COMPOUNDS IN
  COMMERCIAL PRODUCTION.
• DERIVED FROM PETROLEUM, NATURAL GAS AND COAL.
• CAPITAL INTENSIVE.
• ENERGY INTENSIVE.
• OLIGOPOLISTIC IN STRUCTURE.
• THE PETROCHEMICAL PRODUCTS MULTIPLY THEIR VALUE
  ALONG THE CHAIN OF PRODUCTION UNTIL THEIR FINAL
  DESTINATION
• p-XYLENE INCREMENTS 170 TIMES IN A SHIRT
• PVC INCREMENTS 40 TIMES IN A TENNIS BALL
• ACRYLONYTRILE INCREMENTS 150 TIMES IN A SWEATER

39

• CHARACTERISTICS OF TOP PRODUCERS
• THEY
• OPERATE EFFICIENTLY TO A COMPETITIVE SCALE TAKING
  ADVANTAGE OF ECONOMIES OF SCALE.
• IMPROVE THEIR
• LEARNING CURVES
• THECNOLOGY OF PRODUCTION
• SELECT CAREFULLY
• THEIR PRODUCTION CHAINS
• THEIR UP DOWN STREAM PRODUCTS
• THEIR INVESTMENTS ACCORDING TO SUPPLY DEMAND
  World BALANCE.
• MAXIMIZE THE ADDED VALUE OF THEIR PRODUCTS.

40
Petrochemical Industry characteristics

• The Petrochemical Industry is based upon the
  production of chemicals from petroleum and
  natural gas.
• The structure of the petrochemical industry is
  extremely complex, involving thousands of
  chemicals and processes. It is severely
  cross-linked, with the products of one process
  being the feedstock of many others. For most
  chemicals the production route from feed stocks
  to final products is not unique, but include many
  possible alternatives. As complicated, as it may
  seem, however this structure is comprehensible,
  at least in a general form.

41
Critical Factors

• In this decade, the three critical factors in the
  industry changing face are severe cyclically in
  profits, globalization and continuing and
  substantial industry experience curve effects.
  These critical factors with supply demand
  equilibrium, have combined to present dilemma for
  industry players, in whose strategies have been
  produce more added value by means of complex
  technologies.
• Fortunately, the petrochemical industry has a
  built flexibility, which allow it to adapt to its
  ever-changing environment.

42
Petrochemical Industry characteristics

• At the beginning of the production chain are the
  raw feedstock petroleum and natural gas. From
  these are feedstock produced a relatively small
  number of important building blocks. These
  primarily include the lower olefins and aromatics
  as ethylene, propylene, butylenes, butadiene,
  benzene, toluene and xylenes.

43
(No Transcript)
44
Petrochemical Industry characteristics

• These building blocks are then converted into a
  complex array of thousands of intermediate
  chemicals and therefore technology processes. The
  final products of the petrochemical industry are
  generally not consumed directly, but are used by
  other industries to manufacture consumer goods.
  In fact, there is a multitude of production
  routes available for most chemicals.

45
Petrochemical Industry characteristics

• In the actual industry, there are many chemicals,
  which are produced by more than one technology.
  Such versatility, adaptability and dynamic nature
  are three of the important features of the modern
  petrochemical industry.

46
Classification of Petrochemicals

• The classification and description of
  petrochemical end products is not an easy task,
  because petrochemicals find their way into such a
  broad diversity of products and frequently a
  particular product will fall into more than one
  category. However it is generally agreed that the
  main end products are in the form of polymers and
  copolymers plastics, elastomers and fibers.
  Other products are solvents, detergents, paints,
  coatings, pigments, dyes, cosmetics,
  pharmaceutical forms, and food uses

47
(No Transcript)
48
A model
49
Model Interpretation

• Where M number of processes N number of
  chemicals xj production level of process j
  pi feedstock of chemical i consumed qj
  amount of chemical i produced aij amount of
  chemical i produced by process j (gt 0 if chemical
  i is produced, lt 0 if ti is consumed, 0
  otherwise) ?ci weight of fraction carbon in
  chemical i si available supplies of
  feedstock i di consumer demand for chemical
  i cj industrial capacity for process j.

50
Petrochemistry in Mexico

• In Mexico, PETRÓLEOS MEXICANOS, PEMEX, is a
  corporate organization divided into five
  subsidiaries
• PEMEX-EXPLORACIÓN Y PRODUCCIÓN (PEP), who
  explores and produces, crude oil and natural gas.
  
• The natural gas processing is charged to PEMEX
  GAS Y PETROQUÍMICA BÁSICA, who produces and
  commercializes natural gas and transfers natural
  gas liquids from its cryogenic and separation
  plants to PEMEX PETROQUÍMICA and to PEMEX
  REFINACIÓN.

51
Petrochemistry in Mexico

• This last subsidiary produces and commercializes
  a fuels trough the processing of a lot of crude
  oil slates coming from PEP. It helps to meet
  Mexicos energy demand, but also transfers
  certain cuts of the refining processes to PEMEX
  PETROQUÍMICA.
• The subsidiary PEMEX INTERNACIONAL commercializes
  abroad crude oil, natural gas, and fuels of many
  kinds and petrochemicals, through importing
  or/and-exporting activities.

52
PEMEX is now only very concentrated in the
research and production (extraction) of crude oil
and natural gas. The only business is then, to
export oil, and to meet the energy demand based
on natural gas, but PEMEX DOES NOT REALLY TAKES
INTO ACCOUNT THE REFINING AND PETROCHEMICAL
INDUSTRIES. Thats why PEMEX does not take
advance technologically and then weakness the
country's energy sustainability.
53
SOME DATA ABOUT REFINING AND PETROCHEMICAL
INDUSTRY
54
Pemex Petroquímica production by building blocks
(10 3 tonnes)
1998
1999
2001
2002
2000
From
methane
4 374
3 019
2 271
1 752
1 663
ethane
2 945
2 696
2 636
2 408
2 039
Aromatics and derivatives (benzene, toluene,
xylenes)
1 402
1 235
667
642
670
propane-propylene
243
193
180
127
115
Others (including del butane -butylenes
derivatives)
996
848
1083
1065
1113
TOTAL
9 961
7 991
6 836
5 994
5 869
55
The imports of petroleum derivatives and
petrochemical products take the 67 of the total
exportations value.
September, 2002 (10 9 US)
56
(No Transcript)
57
FINAL PETROCHEMICALS
Installed Capacity
From 1998 to 2002, the production capacity,
rices only 1.6 ( 2001 2002).
Production capacity thousands tonnes
58

Final Petrochemicals
Production Thousands of tonnes
59
Final Petrochemicals 103 tonnes
Imports - exports
Apparent Consumption
60
Final Petrochemicals
Inversión
Reducción () 5.4 31.8 14.2
61
GOALS
To revert this panorama it has been proposed to
make structural changes in order to (re) built
the industrial chains based on petrochemicals, to
meet the real coordination among the PEMEX
subsidiaries. They should transfer the necessary
raw materials, in order to active the
production chains, optimise benefits to have
coordinated investments an (re) planning their
activities to increace their global
efficiency.
62
To restore the important added value of the
Mexican Petrochemical Industry in a planning
horizon of 15 years, analysing also the
relationship between the energy policy and our
industrial development.
Then
63
(No Transcript)
64
(No Transcript)
65
THE DECISION MAKING IS MULTICRITERIA

• Criteria should be
• Maximise added value on the whole petrochemical
  chains.
• Minimise the use of scarce resources and then
  maximise the sustainability.
• Minimise the use of energy in all processes.
• Maximise de internal rate of return in new or
  revamp processes.

66
THE DECISION MAKING IS MULTICRITERIA

• Maximise the utilisation of new technologies and
  then, the competitively
• Export only finished goods and strength the
  internal market.
• Minimise the damage to the environment.
• Maximise the thermodynamic availability
• in all parts of the chemical reaction chains.

67
The planning process of the Mexican
petrochemical industry should solve what
products, which new technologies or revamp the
actual ones to operate a minimum cost diversify
the production answer for whom produce, in a
framework of strategic changing.
68
(No Transcript)
69
(No Transcript)