Downloaded from orbit.dtu.dk on: Mar 18, 2023 Value Chain Optimisation of Biogas Production Jensen, Ida Græsted Publication date: 2017 Document Version Publisher's PDF, also known as Version of record Link back to DTU Orbit Citation (APA): Jensen, I. G. (2017). Value Chain Optimisation of Biogas Production. DTU Management. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.  Users may download and print one copy of any publication from the public portal for the purpose of private study or research.  You may not further distribute the material or use it for any profit-making activity or commercial gain  You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. PHD THESIS V C O ALUE HAIN PTIMISATION IN B P IOGAS RODUCTION IDA GRÆSTED JENSEN SEPTEMBER,2017 TechnicalUniversityofDenmark DTUManagementEngineering Building426 DK-2800KongensLyngby,Denmark Phone+4545254800 www.man.dtu.dk P REFACE ThisthesishasbeensubmittedtotheDepartmentofManagementEngineering at the Technical University of Denmark (DTU), in partial fulfilment of the requirementsforacquiringthePhDdegree. Theworkhasbeensupervisedby MarieMünsterandDavidPisinger(DTU),andOleJørgenHanssen(Ostfold Research,Norway). ThePhDstudyhasbeenfundedbytheDanishCouncilofStrategicresearch aspartoftheinterdisciplinaryresearchprojectBioChainandwasconducted fromAugust2013toSeptember2017. The thesis consists of two parts. The first part introduces the thesis background and motivation. It gives a brief overview of methods applied and a summary and discussion of the achieved results. The second part is acollectionofthesixresearchpapersthathasbeenwrittenduringthePhD study. IdaGræstedJensen September,2017 iii S UMMARY With an increased focus on climate change and an increasing number of unpredictable and fluctuating renewable energy sources, a predictable renewable energy carrier is needed to stabilise energy production. Biogas can potentially be used for this but biogas projects struggle with becoming economicallyfeasible. In this PhD thesis, the focus is to create models for investigating the profitability of biogas projects by: 1) including the whole value chain in a mathematical model and considering mass and energy changes on the upstreampartofthechain;and2)includingprofitallocationinavaluechain consistingofheterogeneousowners. Toaddressthefirstpoint,amathematical modelbasedonnetwork-flowoptimisationhasbeendevelopedtoincludethe massandenergylossesinthechain. Furthermore,amethodforsimplifying thecalculationoftransportationcostshasbeenincluded. Last, thecostson thebiogasplanthasbeenincludedinthemodelusingeconomyofscale. For the second point, a mathematical model considering profit allocation was developedapplyingthreeallocationmechanisms. Thismathematicalmodel canbeappliedasasecondstepafterthevaluechainoptimisation. Afterconcentratingonhowtomakebiogaseconomicallyfeasible,theuse ofbiogasintheenergysystemisconsideredbyapplyingtheenergysystems modelBalmoreland: 1)increasingthecostofCO toreachacombinedgoalof 2 biogasandbiomethane;and2)includingtheproductionofrenewablegasand fuelsintheenergysystemsmodeltofindtheoptimalenduseofeachtypeof gasandfuel. Themaincontributionsofthisthesisarethemethodsdevelopedonplant level. Boththemathematicalmodelforthevaluechainandtheprofitallocation modelcanbegeneralisedandusedinotherindustrieswheremassandvalue ofthegoodsinthechainchangesindependentlyfromeachotherandwhere several heterogeneous owners interact to make the value chain work. This couldbeotherbioenergyprojectsaswellase.g. avaluechainforclothingor cars. v D ANSK SAMMENFATNING Medøgetfokuspåklimaændringerogenstigendemængdeuforudsigelige og varierende vedvarende energikilder er der behov for en forudsigelig vedvarende energibærer for at stabilisere energiproduktionen. Biogas kan potentielt benyttes til dette, men biogasprojekter slås ofte med at være økonomiskrentable. I denne ph.d.-afhandling er der fokus på at udvikle modeller for at undersøgedenøkonomiskerentabilitetafbiogasprojektervedat:1)inkludere hele værdikæden i en matematisk model og tage hensyn til masse- og energiforandringeridenførstedelafkæden;og2)inkludereprofitallokering i en værdikæde bestående af heterogene ejere. Til det første punkt er en matematisk anlægsmodel baseret på network-flow optimering udviklet for at inkludere masse- og energitabet i kæden. Derudover er der udviklet en metode til forenkling af beregningen af transportomkostningerne. Endelig er stordriftsfordelene medtaget i modellen i form af omkostningerne på biogasanlægget.Foratadresseredetandetpunktblevenmatematiskmodeltil profitallokeringudvikletvedbrugaftretildelingsmekanismer.Dennemodel kananvendesefterbrugafanlægsmodellen. Efterathaveværetkoncentreretomhvordanbiogaskangøresøkonomisk rentabelt,adresseresanvendelsenafbiogasienergisystemetvedatanvende energisystemmodellenBalmorel,hvor:1)CO -omkostningernevarieresforat 2 nåetkombineretmålforbiogasogbiometan;og2)produktionaffornybare gasser og brændsler inkluderes i energisystemmodellen for at finde den optimalebrugafhvertypegasogbrændsel. Devigtigstebidragfradenneafhandlingerdemetoder,dererudvikletpå anlægsniveau.Bådedenmatematiskemodelforværdikædenogprofitalloke- ringsmodellenkangeneraliseresoganvendesiandreindustrier,hvormasse ogværdiafvarerneikædenændresuafhængigtafhinanden,oghvorflere heterogeneejereinteragererforatfåværdikædentilatfungere.Dettekunne væreandrebioenergiprojektersåvelsomf.eks.enværdikædetiltøjellerbiler. vii A CKNOWLEDGEMENT This thesis is a product of a long journey from my starting point knowing closetonothingaboutbiogasandtheenergysystem. First, Iwanttothank thelargegroupofsupervisorswhoagreedtobepartofthejourney. Iwantto thankMarieMünsterforleadingmeintothemysteryworldofenergysystems andforseeingthingsfromanotherperspectivethanmyoperationsresearch perspective. IwanttothankDavidPisingerforhisenthusiasm,forhiswayofalways providing relevant feedback in the most positive way, and for still wanting tobemysupervisorafterseveralsupervisor-dutiesduringmybachelorand masterstudies. Icantrulysaythatyouarethebestsupervisorfromthefieldof operationsresearch,Ihaveeverhad. Ole Jørgen provided me with feedback, which was necessary in the last phaseofthejourney,andforthisIowehimthanks. IwanttothankNinaJuul, who was initially one of my supervisors, for being the connection between operationsresearchandenergy,whichleadmesafelythroughthefirsthalfof mystudies. IwanttothankallofmycolleaguesfromSystemsAnalysisforcreatinga niceworkingenvironmentwithjusttheamountofsweetsthatisneededto getthroughatoughday. AveryspecialthanksgoestoLiseSkovsgaardfor fruitfularticlewriting,forsharinggoodandbadpartsofboththePhDandlife outside,andforbeingagreatmoralsupport. HenrikKlingeJacobsen,Hans Ravn,AmaliaRosaPizarroAlonso,andRasmusBoBramstoftPedersenwere allpartofmakingthisthesishappenwithfruitfuldiscussionsofeverything fromtechnicaldetailsinbiogasconversiontomodellinginBalmorelandwith articlewriting. Theprojectwasnevergoingtohappenwithouttheprojectpartnersofthe BioChainproject,soabigthankgoesouttothem. Inparticular,Iwanttothank Sven G. Sommer, SDU, for his role as project leader, Alessio Boldrin, DTU, andJinMiTriolo,SDU,formakingthejointarticlehappen,LoneAbildgaard, AgroTech,andAlanLunde,MaabjergBioenergy,forprovidingmewithdata and for discussing the results of the models, and Kari-Anne Lyng, Ostfold ix