Optimizing multi-resource-based energy supply chains in developing economies: A periodic review model for affordable and sustainable solutions

• Published in: Computers & industrial engineering 2024-06, Vol.192, p.110188, Article 110188
• Main Authors: Mun, Kwon Gi, Cai, Wenbo, Rodgers, Mark, Choi, Sungyong
• Format: Article
• Language: English
• Subjects: Data-driven policymaking; Developing economies; Energy supply chain optimization; Periodic review model; Public sector development
• ISSN: 0360-8352; 1879-0550
• DOI: 10.1016/j.cie.2024.110188

•Trade-offs among energy-mix, facility capacity, and transmission technology.•The interactions among electricity consumption, electricity demand, electricity price, and economic factors.•Optimal periodic review beats current practices in investment, energy-mix, generation cost, coal use, and yield.•Optimizing energy supply chains cuts carbon emissions and costs. Electricity shortages are prevalent in developing countries, further exacerbated by the advocacy of zero-carbon policies to mitigate global climate change. This transition away from fossil fuels poses significant challenges in establishing cost-effective and sustainable energy supply networks. To tackle these challenges, this research assesses the influence of operational efficiencies, advancements in transmission technology, and strategic facility placements on the design of energy supply chains. We prioritize factors such as investment requirements, transmission yield, energy mix, carbon emissions, and social costs. We construct a robust optimization model with stochastic parameters that examines extreme scenarios. Applying this framework to a real-world case in Pakistan spanning a 30-year planning horizon, we present a novel approach that simultaneously diversifies raw material reserves while determining optimal power generation capacity and transmission technologies. Our analysis shows that integrating renewable energy resources and changing transmission methods within the current energy mix can yield an affordable and sustainable energy supply chain, reducing reliance on coal. Consequently, the study case demonstrates substantial reductions in carbon emissions and social costs by 85.68 % and 17.81 %, respectively, in the second and third 10-year planning intervals.