Demand Side Dispatching, Part 1: A Novel Approach for Industrial Load Shaping Applications

In order to develop effective Demand Side Management (DSM) programs, it is important to properly understand the cogeneration capabilities of large industrial customers. Projecting historical trends may be simple and convenient, but can lead to erroneous conclusions. A better understanding can be obtained by analyzing specific details of the Combined Heat and Power (CHP) system in the customer's plant.The authors present a new methodology which they call "Demand Side Dispatching". This methodology comprises developing simple yet realistic mixed integer linear models of the customer's CHP and solving such models using proven Mixed Integer Linear Programming algorithms to determine globally optimum operating policies. This methodology in effect predicts rational customer responses to varying steam/power load scenarios to alternate fuel/power contracts.Such analyses could either be done individually for each customer or combined to provide a composite regional picture. The intended application is to study the impact of different rate schedules on the customer's CHP operating policy, and hence on the utility demand profile. By including potential alternate cogeneration equipment options in the models, it would also be possible to understand which rate schedules provide incentives for future cogeneration, and which do not.An illustrative example is provided. The results of an industrial application (an oil refinery) are presented in Part 2 of this paper.