Image courtesy Newcastle Port Corporation CENTRE FOR OPTIMAL PLANNING & OPERATIONS. Productivity and Efficiency for the Energy & Resources Sector

Transcription

1 Image courtesy Newcastle Port Corporation CENTRE FOR OPTIMAL PLANNING & OPERATIONS Productivity and Efficiency for the Energy & Resources Sector

2 The energy and resources sectors are critical drivers of the Australian economy. The energy supply industry directly contributed over $90 billion to the Australian economy in 2010/11. The Australian coal and petroleum industries contributed approximately $56 billion to industry value added in 2010/11. The Australian electricity and gas supply industries contributed another $23.6 billion to industry value added. Together they represented 6% of GDP. To remain globally competitive, efficiency and productivity gains are vital in these sectors and a key focus of the research at the Centre for Optimal Planning and Operations (C-OPT) operating within the Newcastle Institute for Energy and Resources (NIER). The optimisation specialists at C-OPT use advanced analytical techniques to investigate aspects of industry, business, and other organisational activities as a basis for making smarter decisions and improving operational practice. Cutting costs for organisations by getting more out of their existing resources is a key outcome of such improvements. The University of Newcastle has a strong commitment to fundamental and applied research. The Excellence in Research Australia (ERA) worldclass rating of 5 for Applied Mathematics reflects the University s strategic appointments of world leading researchers in C-OPT. To drive this program further, there is opportunity for industry to engage directly with the expertise within C-OPT and to play a lead role in the sector with the establishment of an industry funded Chair in Optimal Planning and Operations. The appointment of a Chair fully engaged with challenges and opportunities relevant to the sector provides significant advantage to industry. A Chair can also attract government funding to develop industry expertise in the form of joint industry academic research projects and PHD student placements. It presents the most direct engagement between industry and research and development within the Newcastle Institute for Energy and Resources.

3 MINING Operating within the Newcastle Institute for Energy and Resources, C-OPT engages with a range of leading researchers focused on materials handling, storage, and transport for the minerals sector. Research expertise and experience at C-OPT can assist the sector in achieving productivity gains in areas such as: > Optimising extraction sequences > Designing haulage systems > Scheduling haulage trucks > Planning infrastructure expansions > Optimising materials transport > Managing demand > Designing contracts > Planning maintenance > Managing stockyards. CASE STUDIES Open Pit Mine Production Planning Scheduling extraction of material from an open-pit mine is crucial for both life-of-mine planning and tactical planning during the exploitation of the ore body. Mining companies today rely on optimisationbased software tools to ensure the extraction is sequenced so as to maximise profit. In the case of life-of-mine planning, such software automatically and rapidly calculates the net present value of the mine from a given ore body model. Such tools are essential for valuing new mining projects, (and revaluing current projects), and critical to decisions on (re-)investment in new mines. They are also used in what-if analysis to decide the optimal capacity and timing of commissioning of new mine processing plant capacity. Prior to around 2005, the state-of-the-art in software to support this type of planning was less than ideal and based on approximate methods with the risk of sub-optimal solutions and often with slow convergence. This led BHP-Billiton to undertake the research needed to create new models and algorithms. C-OPT researchers collaborated with BHP-Billiton between to design and prototype such new methods. The research enabled much larger and more accurate models to be solved and integrated the use of stockpiles and stockpile blending. This work informed the development of BHP-Billiton s in-house software, now in use at BHP- Billiton sites around the world. Data and Maintenance Planning Tools in Coal Export Supply Chains Shipping data generation tools developed by C-OPT researchers and delivered to the Hunter Valley Coal Chain Coordinator (HVCCC) are essential for both the strategic infrastructure expansion analysis and the annual capacity planning work the HVCCC carries out as part of its core mission. A capacity assessment tool developed by C-OPT researchers is in use by the HVCCC to direct annual maintenance planning, including all preventive rail and port terminal maintenance, together with an automated maintenance optimisation capability to re-time maintenance tasks. Use of these tools results in increases in throughput of millions of tonnes per annum. Noting that Newcastle is the largest coal export port in the world, by volume, with its exports worth approximately 5% of Australia s total export earnings, C-OPT s research has national benefits as well as benefits for the (local) industry.

4 OIL & GAS Global energy demand is expected to grow by more than 33 percent by 2035, with most of that energy being supplied by oil and gas. The oil and gas industry is changing, there is reverse growth in the use of petroleum in transport, Middle East oil exports are going mostly to Asian markets rather than the US or Europe, and the potential supply of gas at relatively low cost may result in expansion of gas markets in most parts of the world. It is an industry that must operate as efficiently and cleanly as possible. Research expertise and experience at C-OPT that can assist the sector in achieving efficient and clean operations includes: > Predictive analytics > Scheduling refinery production > Planning infrastructure expansions > Optimising transport > Designing contracts > Planning maintenance > Optimising global operations > Planning life-of-field depletion. Maritime Inventory Routing One of the largest US oil & gas companies annually transports significant volumes of vacuum gas oil (VGO) from supply points in Europe to refineries in the United States. Optimising these transportation costs can provide significant cost savings. This involves the simultaneous scheduling of seagoing vessels (loading and discharging at multiple ports) and managing of product inventory at ports (each with different daily production or consumption rates and inventory limits). The problem is further complicated by load or discharge quantity restrictions and draft limits at ports and complex transportation cost calculations. An integer-programming based optimisation approach was developed capable of solving practically sized problems to optimality or producing high-quality solutions in especially difficult situations. CASE STUDY An in-house developed decision support tool, partly inspired by the research, significantly improves the analytical capability of traders and schedulers yielding both transport cost savings and trading profit opportunities. The decision support tool for optimising the ship schedule while managing the inventory levels at the refineries may be run anywhere from a few times a week to several times per day depending on available volumes of VGO, the current state of the shipping market, and VGO values in both the United States and Europe. After analysing the result of the optimisation, ship chartering decisions are made for only the first few weeks of the planning horizon, which leaves the flexibility to change the schedule and alter decisions further out into the future.

5 ENERGY There is a range of intersecting issues currently at the forefront of the national research agenda with energy security, productivity and efficiency critical enablers for our economy. The rise of gas and rapid development of infrastructure requires optimisation and planning methods. The role of the electricity supply sector in the productivity downturn has been attributed to rapidly rising demand for electricity during the last decade that required a substantial increase in new supply capacity. C-OPT operates in a collaborative environment within the Newcastle Institute for Energy and Resources with researchers in smart grids, smart infrastructure, and future networks. C-OPT works closely with the Centre for Intelligent Electricity Networks on areas that aim to develop higher efficiency, enable energy demand management, and assist with the integration of new energy sources and loads, such as renewable energy and electric vehicles. C-OPT can assist the sector in achieving efficiency and increased productivity with: > Transmission network expansion planning > Network contingency planning > Contract design and dynamic pricing > Generation scheduling > Minigrid network design. CASE STUDY Contingency Analysis in Electricity Distribution Electricity outages have major impacts for distributors and their customers. Therefore, detailed analysis of potential outage scenarios is conducted to prepare contingency plans that enable rapid reconnection. So-called (n-1)-contingency analysis requires, for each outage scenario involving loss of a single network branch, deciding which switches in the network to either open or close, so as to activate alternative routes in the network. Finding the best switch reconfiguration (and related adjustments) is a complex task, highly time-consuming, and impractical to carry out manually for all outage scenarios. This led Energy Australia (now AusGrid) to collaborate with C-OPT researchers in to develop an optimisation software tool that automatically evaluates all contingency scenarios, and optimises the contingency plan under each. Tests on a large network within the concession area of Energy Australia, with 4 generators, 1645 branches, 158 switches and 6 tapchangers, demonstrated that optimised contingency plans could be produced in a matter of minutes, with many scenarios optimised within 90 seconds. This offered enormous savings in valuable time for Energy Australia power engineers, and immediately highlighted the vulnerable branches in the network, where outages would cause significant operational problems. This is essential information for network enhancement and upgrade projects for increasing network reliability.

6 C-OPT LEADERSHIP Professor Martin Savelsbergh is a logistics and optimisation specialist with experience in mathematical modelling, optimisation methods, performance analysis, supply chain management, production planning, and transportation. Before joining the University of Newcastle in October 2011, Martin led the Business and Services Analytics research program in the Mathematics, Informatics, and Statistics division of CSIRO. He was previously Schneider professor in the H. Milton Stewart School of Industrial and Systems Engineering of Georgia Institute of Technology, Atlanta, GA, and Research Director at its Supply Chain and Logistics Institute. Prof Martin Savelsbergh: PH Martin.Savelsbergh@newcastle.edu.au Professor Natashia Boland leads research initiatives to develop integrated airline planning systems for aircraft, maintenance and crew. These plans are more efficient, more robust to operational changes and yield lower cost on the day recovery options. She has worked on new models for minigrid network design and new algorithms for (n-1)-contingency analysis in electricity distribution networks. She has designed new methods for scheduling the extraction sequence for open-pit mining, and has led research on decision support for planning in coal export supply chains. Prof Natashia Boland: PH Natashia.Boland@newcastle.edu.au