Supply%20Chain%20Planning%20and%20Design%20for%20Biodiesel%20Production%20Via%20Wastewater%20Sludge

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Supply Chain Planning andDesign for Biodiesel
Production Via Wastewater Sludge

• Sandra Duni Eksioglu, PhD
• Industrial Engineering Department
• Clemson University
• International Congress and Expo on
• BIOFUELS BIOENERGY
• August 25-27, 2015

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Bioenergy Opportunities

• Bioenergy production is expected to increase
• RFS Production of biofuels by 2022 36BGY
• 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
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Bioenergy Major Challenges

• Technological challenges
• Food versus fuel debate
• Biomass logistical/transportation challenges
• Biomass supply is constrained by land
  availability
• Biomass is seasonal
• Biomass looses dry matter with time
• Production yields are uncertain
• Bulky difficult to transport
• Widely dispersed geographically
• Small medium-sized farms

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Bioenergy and Environment

• US is committed to reduce GHG emissions by 17
  below 2005 levels by 2020
• Environmental policy focuses on physical
  processes
• Energy 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.

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BIODIESEL Supply Chain Structure
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BIODIESEL Supply Chain

• Research Questions
• Estimate 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.

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Solution Approach
Sludge Transportation Techno-Economic Analysis
Input Analysis
Case Study Numerical Analysis
Sludge Supply Analysis Regression Analysis GIS
Tools
Model Validation Verification GIS Tools
Supply Chain Design Mgmt. Bi-level stochastic
Optim. Model
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Transportation Cost Analysis

• 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.

(b) Variable costs (/m3/mile)
(a) Fixed costs (/m3)
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Transportation Cost Analysis
II. Pipeline Transportation of Sludge
Smaller the capacity, higher transp. costs.
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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.

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Summary Sludge Transportation Costs
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A Two-Stage Stochastic Prog. Model
 
Biomass supply uncertainty
First-stage decisions x
Uncertainty ?(?)
Second-stage decisions y(?, x)

• Strategic decisions
• Plant locations/sizes
• Pipeline location/size
• Nr. of trucks purchased

• Planning decisions
• Production
• Transportation
• Shortage

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Model Formulation Constraints
Trans. Mode m
Flow Balance
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Model Formulation Constraints
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Solving the Two-Stage SP Model
L-shaped algorithm
Optimality Cut
1. One aggregate cut 2. Multiple cuts
Initialize n 1
Solve the Master Prob. (xn, zn, vn) LB
n n 1 Add nth optimality cut to MP.
Solve Master Prob.
Solve sub-problems (yn(?), ?n) , Calc. UB
1. Using CPLEX 2. Lagrangean Relax.
UB LB lt ? n gt Nmax
NO
YES
Stop Report solution
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Scenario Definitions ProbabilitiesSupply
Uncertainty
Scenario Explanation Probability
1-5 Historical data collected from previous five years 0.155 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
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Computational Results
Distribution of Unit Cost (2.72/gal)
1. Large capacity plants centrally located. 2.
Co-locate with large WWT facilities. 3. Truck
transportation
Expected Val. Solution Costs 314.96
M Capacity 75MGY Production 72.55MGY
Val. of Stochastic Solution 3. 36M
Stochastic Solution Costs 311.60 M Capacity
80MGY Production 75.59MGY
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Modeling Environmental Policies

Evaluate the impact of environmental policies on
supply chain operations.
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Modeling Carbon Cap

• The following constraints is added to the
  mathematical model
• for each ???

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Modeling Carbon Tax

• The following term is added to the objective
  function
• Where, is the carbon tax (in /kg).

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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).

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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).

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Computational Results
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. gap
BSCN-ML BSCN-LR-ML Stopped due to 1 error
Problem parameters (94/26/10/52/3/3/s) Stopping
criteria Error gap lt 1 OR Nr. of iterations
1,000.
Problem size 7,436 binary and integer
variables 8,242 continues variable (per scenario)
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Transportation under Regulatory Policies
Weyerhaeuser Co. Pulp Paper Complex, Lowndes
County
Oxford POTW, Lafayette County
Forest POTW, Scott County
Peco Foods, Madison County
Jackson POTW, Hinds County
Hattiesburg South Lagoon, Jones County
(c) Carbon Cap 2000 tons/year
(a) Carbon Cap 2800 tons/year
(b) Carbon Cap 2400 tons/year
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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.

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Research Team

• Department of Industrial Eng., Clemson Univ.
• Sandra D. Eksioglu, PhD
• E-mail seksiog_at_clemson.edu
• Mohammad Marufuzzaman
• E-mail maruf237_at_gmail.com
• 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

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QUESTIONS
Sandra D. Eksioglu, PhD Clemson
University Department of Industrial
Engineering seksiog_at_clemson.edu
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Theoretical Results