Product details

International Coal (IC) operates a large coal-fired power-generation plant. Coal with a variety of calorific values, emissions (pollutants) characteristics and prices is sourced from a number of countries. In addition there is a limited amount of (mixed) coal in the on-site stockpile. The plant can also co-fire: buying, blending-in and burning biomass, for which IC receives a supplementary payment from government. When generating power, electricity transmission and carbon emission charges must be paid. Future electricity prices paid to IC vary by month, peak/off-peak and weekday/weekend. The IC coal-buying team must determine an optimal burning schedule for the next 5 months: how much of which types of fuel to burn in each period. The objective is to maximise operating profit, subject to physical generation capacity and emissions constraints. An additional consideration could be investigation of the financial case for installing flue-gas desulphurisation technology. This task can be addressed with standard spreadsheet software (eg Excel and its Solver), or specialised mathematical programming tools. It might be used as a fairly large and realistic example of an optimisation problem as part of an operational research or spreadsheet modelling course, with or without accompanying material on eg linear programming.