A multi-site production and microgrid planning model for net-zero energy operations

Abstract

This paper aims to address two critical questions pertaining to sustainable manufacturing operations. First, how to model and design a multi-facility, production-logistics system under product demand and energy supply uncertainty? Second, is it economically viable to achieve net-zero energy operations through renewable microgrid integration? To answer both questions, we present a joint production scheduling and microgrid sizing model to decarbonize the manufacturing, transportation and warehousing operations by harnessing onsite wind and solar energy. The integrated planning model is solved as a two-stage optimization program: first, scheduling the production to meet the uncertain demand; second, sizing and siting the microgrid systems to meet the electric load of multiple facilities. The preliminary results show that net-zero energy operation is feasible and affordable in locations where the capacity factor of wind and solar generation exceeds 0.25 and 0.45, respectively. Sensitivity analysis shows that battery system combined with solar photovoltaics is cost-effective despite the high capital cost of storage devices. Two managerial insights are also derived. First, integrating onsite renewable power is the ultimate key to realizing net-zero energy industrial operations. Second, grid-connected microgrid generation with net metering results in lower capacity investment than island operation.