Characterizing Price-Responsive Demand Flexibility from Electrified Supply Chains

Abstract

A target has been set to have 100% carbon pollution-free electricity by the year 2035 in the US, requiring an increased reliance on renewable sources. However, as renewable energy sources become integrated into power systems, they introduce fluctuations in power supply due to their stochastic nature. Battery Energy Storage Systems (BESS) are typically used to address these fluctuations but are unsuitable for longer timescales due to the associated costs. As of now, electric freight transportation in supply chains is in the early stage of deployment. This paper presents a solution to help mitigate the challenge associated with renewables and reduce the variation in supply by leveraging the flexibility of supply chains and integrating electrified supply chains into power systems planning and operation. We propose a model for the coupled system containing constraints from both the system's transport and manufacturing processes. The model utilizes the batteries of the electrical trucks in the supply chains to help manage fluctuations from renewables on the power system side. A power penalty is implemented for non-renewables to incentivize the use of renewables. The proposed model incorporates Vehicle-to-Grid (V2G) technology and smart charging. To demonstrate the effects of our model, we conduct a realistic case study of the electrified cement supply chain in the Southeast of the United States. Different levels of power penalties are applied to show the impact of varying incentives. We demonstrate that, unlike BESS, our proposed model combined with supply chain flexibility can increase the utilization of renewables for lower incentives.