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Supply Chain Planning andDesign for Biodiesel Production Via
Wastewater Sludge
Sandra Duni Eksioglu, PhDIndustrial Engineering Department
Clemson University
International Congress and Expo on
BIOFUELS & BIOENERGYAugust 25-27, 2015
Bioenergy: Opportunities Bioenergy production is expected to increase:
RFS: Production of biofuels by 2022: 36BGY o 2013: 14BG of corn-ethanol & 1BG of biodiesel
It is a clean and renewable source of energy.
It reduces the risk of oil embargos, price strikes, geopolitical dependence
It supports US farmers and local economy
www.wfpa.org
Bioenergy: Major Challenges Technological challenges
Food versus fuel debate
Biomass logistical/transportation challenges:Biomass supply is constrained by land availability Biomass is seasonalBiomass looses dry matter with time Production yields are uncertain Bulky & difficult to transport Widely dispersed geographically Small & medium-sized farms
US is committed to reduce GHG emissions by 17% below 2005 levels by 2020
Environmental policy focuses on physical processesEnergy efficient facility/vehicles: USDA Alternative Fuel & Fleet Efficiency programs Alternative fuels: Biodiesel Income Tax Credit, Excise Tax Credit, Alternative Fuel Excise Tax
Focus on physical processes overlooks the impact of business processes and operational practices on emissions
Inventory replenishment decisions impact emissions Inventory Inventory
Outsourcing, centralized warehousing, rapid-response logistics, just-in-time production, etc. impact emissions.
Bioenergy and Environment
BIODIESEL Supply Chain Structure
Municipal WWT Plants
Pulp & Paper
Meat Packing
Poultry Slaughtering &
Processing
Animal & Marine
Fresh/Frozen Fish
Sludge Supply Biocrude Plants
Diesel Plants
Customers
Research QuestionsEstimate supply-chain related costs for production of biodiesel.
Biomass transportation (sludge):What factors have a great impact to the transportation cost of sludge?Under what conditions pipeline becomes a viable transportation mode?
Supply chain design and management:Should a biocrude plant be co-located at a WWT facility? What factors have a great impact on the supply chain costs?
Provide insights about biodiesel supply chain related costs to potential investors.
BIODIESEL Supply Chain
Solution Approach
Sludge TransportationTechno-Economic
Analysis
Sludge Supply AnalysisRegression Analysis
GIS Tools
Supply Chain Design & Mgmt.:Bi-level stochastic Optim. Model
Model Validation & VerificationGIS Tools
Case StudyNumerical Analysis
Input Analysis
Transportation Cost Analysis
I. Facility-owned Single Trailer Truck, 30m3 capacity.
Similar analyses is conducted for rented Single Trailer Truck, facility-owned and rented Tandem Trucks of 30m3 and 40m3 capacity.
(a) Fixed costs ($/m3)
Fuel cost
Labor cost
Maintenance and repair costTire cost
Cost of ownershipAnnual sale taxesLicense fees and taxes
Management and overhead costInsurance cost
(b) Variable costs ($/m3/mile)
Transportation Cost Analysis
II. Pipeline Transportation of SludgeRaw Activated
SludgeDensity 1100 @ 22 0C 1200 @ 25 0C kgm-3
Viscosity 1.0 @ 22 0C 1.5 @ 25 0C cp
Total solids 0.50% 5.00%
ParameterEnhanced
Activated SludgeUnit
0
0.05
0.1
0.15
0.2
0.25
0.5 1.5 2.5 3.5 4.5 5.5
VC
Tra
nsp
orta
tion
($/
m3/
mile
)
Slurry Design Velocity (m/sec)
150 m3/day
320 m3/day
480 m3/day
700 m3/day
1,000 m3/day
2,000 m3/day
Smaller the capacity, higher transp. costs.
Transportation Cost Analysis Data: Mississippi Department of Environmental Quality. Pipeline vs. truck for volume of sludge shipped: 843.5 m3/day
Variable cost ($/mile/m3) is smallest for facility-owned tandem trailer truck.
As transportation distance increases, pipeline costs decrease.
0.04
0.05
0.06
0.07
0.08
0.09
0.1
0.11
0 200 400 600 800 1000
Pipeline Transportation
Tandem Trailer (own)
Single Trailer (own)
Tandem Trailer (rent)
Single Trailer (rent)
Distance (miles)
DV
C (
$/m
3/m
ile)
Summary: Sludge Transportation Costs
150 250 350 480 700 1000
Own Single Trailer Truck 0.101 0.103 0.103 0.101 0.103 0.103
Rent Single Trailer Truck 0.131 0.131 0.133 0.131 0.133 0.133Own Tandem Trailer Truck 0.098 0.098 0.098 0.096 0.098 0.096Rent Tandem Trailer Truck 0.125 0.125 0.125 0.123 0.125 0.123Pipeline (100 miles) 0.301 0.215 0.175 0.144 0.115 0.092
MODE OF TRANSPORTATION
Volume Shipped (m3/day)
$/gallon of biodiesel
25 50 75 100 125 150 175 200
Own Single Trailer Truck 0.077 0.096 0.114 0.133 0.152 0.171 0.191 0.208
Pipeline (150m3/day) 0.077 0.152 0.226 0.301 0.375 0.449 0.524 0.598
Pipeline (480m3/day) 0.037 0.073 0.109 0.144 0.180 0.216 0.251 0.287
Pipeline (1,000m3/day) 0.024 0.047 0.070 0.093 0.115 0.138 0.161 0.184
MODE OF TRANSPORTATION
Distance (miles)
$/gallon of biodiesel
A Two-Stage Stochastic Prog. Model
First-stage decisions x
Uncertainty()
Second-stage decisions y(, x)
Biomass supply uncertainty
Strategic decisions:-Plant locations/sizes-Pipeline location/size-Nr. of trucks purchased
Planning decisions:-Production-Transportation-Shortage
Model Formulation: Constraints
Supply Point k
SupplyPoint k+1
)(1 kjmy
)(1,1,1 mjky
Plant j
Plant j+1
)()(1 1
1 k
J
j
M
mkjm Sy
Sludge SupplyTrans. Mode m
)(2 jiyRefinery i
Refinery i+1
Plant j
Plant j+1)(2
1,1 ijy
L
lljl
I
iji xBCy
11
2 )(
i
J
jji BdCy
)(1
2 Production Capacity
F
ffkjfkjm zPCy
1
1 )(
jkjkjm trCapy 11
1 )(
K
k
M
m
I
ijikjm yy
1 1 1
21 )()(
)()(1 1
32
J
j
G
gigji yy
Pipeline & Truck Capacity
Flow Balance
)(1,1 jmky
Model Formulation: Constraints
I
iggig by
1
3 )()(
Demand is Satisfied
3igy
31,1 tgy
Customer g
Customer g+1
Marketg
1gRefinery i
Refinery i+1
}1,0{ljx
}1,0{fkjz
Binary Const.
ngigjikjm Ryyy )(),(),(),( 321
Zj
Non-Negativity Const.
Solving the Two-Stage SP Model
NO
Solve sub-problems(yn(), n) , Calc. UB
n = n +1 Add nth optimality
cut to MP.
Solve the Master Prob. (xn, zn, vn) & LB
L-shaped algorithmInitialize; n = 1
UB – LB < n > Nmax
Stop; Report solution
YES
1. Using CPLEX
2. Lagrangean Relax.
Solve Master Prob.
Solve Master Prob.
1. One aggregate cut2. Multiple cuts
Optimality Cut
Optimality Cut
Scenario Definitions & Probabilities:Supply Uncertainty
Scenario Explanation Probability
1-5 Historical data collected from previous five years 0.15*5 = 0.75
6 Sludge supply of every facility is increased by 20% 0.05
7 Sludge supply of every facility is decreased by 20% 0.05
8 Supply from WWT plants changes by as much average change of population in MS in the last 10 year
0.05
9 Sludge supply from pulp & paper industry decreases by 20% 0.05
10 Sludge supply from poultry increased by 20% 0.05
Computational Results
Val. of Stochastic Solution $3. 36M
Stochastic Solution Costs: $311.60 MCapacity: 80MGYProduction: 75.59MGY
Expected Val. Solution:Costs: $314.96 MCapacity: 75MGYProduction: 72.55MGY
Inv. Costs Prod. CostsTrans. Costs
Distribution of Unit Cost ($2.72/gal)
1. Large capacity plants centrally located.2. Co-locate with large WWT facilities.3. Truck transportation
Modeling Environmental Policies
Evaluate the impact of environmental policies on supply chain operations.
The following constraints is added to the mathematical model:
for each
Modeling Carbon Cap
capK
k
J
j
M
m
J
j
I
i
I
i
G
gigigjijikjmkjm Cyeyeye
1 1 1 1 1 1 1
332211 )()()(
The following term is added to the objective function:
Where, is the carbon tax (in $/kg).
Modeling Carbon Tax
I
i
G
gigig
K
k
J
j
M
m
J
j
I
ijijikjmkjm yeyeyep
1 1
33
1 1 1 1 1
2211 )(**)(**)(**
Modeling Carbon Cap-and-Trade The following constraints is added to the mathematical model:
The following term is added to the objective function:
cp is the market price of carbon (per ton).
each for 0)(
0)(
)()()()()(1 1
33
1 1 1 1 1
2211
ct
ct
Cctctyeyeye capI
i
G
gigig
K
k
J
j
M
m
J
j
I
ijijikjmkjm
))()(( ctctcp
Modeling Carbon Offset The following constraints is added to the mathematical model :
The following term is added to the objective function:
co is the offset price of carbon (per ton).
))((0 ctc
eachforct
Cctyeyeye capI
i
G
gigig
K
k
J
j
M
m
J
j
I
ijijikjmkjm
0)(
)()()()(1 1
33
1 1 1 1 1
2211
Computational Results
Problem parameters: (94/26/10/52/3/3/s) Stopping criteria: Error gap < 1% OR Nr. of iterations 1,000.
Problem size: 7,436 binary and integer variables; 8,242 continues variable (per scenario)
0
5,000
10,000
15,000
20,000
25,000
5 6 7 8 9 10
CP
U t
ime
(sec
)
Number of scenarios
BSCN-LBSCN-MLBSCN-LR-LBSCN-LR-ML
CPLEX could not find a solution
within 1% error gap in 36,000
CPU sec.
BSCN-L BSCN-LR-L
Stopped due to iteration with
(2.77-4.29)% & (3.51-5.68)%
opt. gapBSCN-ML
BSCN-LR-MLStopped due to
1% error
Transportation under Regulatory Policies
(a) Carbon Cap 2800 tons/year
(c) Carbon Cap 2000 tons/year
(b) Carbon Cap 2400 tons/year
Jackson POTW, Hinds County
Weyerhaeuser Co. Pulp & Paper
Complex, Lowndes County
Hattiesburg South Lagoon, Jones County
Forest POTW, Scott
County
Peco Foods, Madison County
Oxford POTW, Lafayette County
Summary & Conclusions Transportation activities in the supply chain will add on
average $0.16/gal to the cost of sludge-based biodiesel.
Investments in improving biocrude technology will have a great impact on biodiesel production level and costs.
Carbon regulatory policies will have an impact on supply chain operations. Shifting transportation modes from truck to pipeline.
Stochastic programing model provides better solutions to our problem.
Research Team Department of Industrial Eng., Clemson Univ.
Sandra D. Eksioglu, PhDE-mail: [email protected]
Mohammad MarufuzzamanE-mail: [email protected]
Department of Chemical Eng. Mississippi State Univ.
Rafael Hernandez, PhD
Todd French, PhD
Andro Mondala, PhD
Department of Civil & Env. Eng. Mississippi State Univ.
Dennis D. Traux, PhD
Theoretical Results
