The development of a system to optimise production costs around complex electricity tariffs

Abstract

Rising South African electricity prices and reduced sales following the 2008 economic recession have led cement manufacturers to seek ways to reduce production costs. Prior research has shown that reduced electricity costs are possible by shifting load from expensive Eskom peak pricing periods to lower cost times. Due to the complex considerations and variables in cement production, this is not typically implemented. Several simulation and optimisation models are available in literature to schedule plant operation in an electricity cost effective manner. However, these models have not been implemented in practice. The simulation models are reviewed and evaluated for the task of scheduling cement production on South African factories. A model is identified to be implemented, and the requirements for implementing this model on a cement factory are investigated. A computerised management system is designed to automatically incorporate the required information and data to implement the optimisation model on a practical level. An interface is also designed to allow factory personnel access to the optimised production plan. The system is implemented and evaluated through system level testing. Four case studies are presented within which the system is implemented on South African cement factories. The performance of the system is evaluated over a nine month period, within which a total cost saving of R8.6-million is reported.