Strategic Production Planning under Energy Market Volatility:  A Cost Optimization Approach

Strategic Production Planning under Energy Market Volatility: A Cost Optimization Approach In this work, we present an approach for utilizing electricity spot market volatility in the strategic production planning of batch processes, particularly relevant for small and medium-sized companies. As the share of renewable energy increases, electricity prices have become more volatile, creating potential for energy cost savings through flexible scheduling.Scheduling flexibility can be improved by intentionally overdimensioning the plant. Larger plants allow more product to be processed per batch without altering temperature profiles or operating modes, thus preserving product quality while enabling time-shifted production. In this work, we want to challenge this concept and investigate whether this strategy—combined with energy price-based scheduling—can reduce overall costs while meeting annual production targets.To study this, we propose a method that provides a rough estimation of relative energy cost savings depending on plant size compared to a benchmark. The method only requires knowledge of batch and setup times.