MPEC strategies for cost optimization of pipeline operations

This study develops a mathematical program with equilibrium constraints (MPECs) approach for efficient operation of gas pipelines. The resulting model handles time dependent operations in order to determine minimum energy consumption and operating cost over a given time horizon. The MPEC structure also allows flow reversals, flow transitions and other nonsmooth elements to be incorporated within the approach. Applied to industrial gas pipelines, this approach can also deal with customer demand satisfaction in the presence of compressor outages and minimize recovery time for systems that are unable to meet customer demands at all times. A large-scale oxygen pipeline case study is considered to demonstrate this approach and complex energy pricing schemes are also applied to this problem. These schemes include time of day electricity pricing, along with extensions to Real Time Pricing and Day Ahead Pricing. Compared to flat rate and minimum energy optimizations, respectively, we observe operating cost savings up to 5.13% for time of day electricity pricing and up to 12.85% for Real Time Pricing. (C) 2009 Elsevier Ltd. All rights reserved.