A linear programming model for distribution of electrical energy in a steel plant

The energy crisis is one of the deterrents of economic growth in a developing country like India. Rapid industrialization and poor capacity utilization of power plants make the operations of energy consuming industries like integrated steel plants extremely difficult. This case study discusses the development and implementation of a mixed integer linear programming model for optimal distribution of electrical energy in an integrated steel plant. The model considers the balance equations of capacity, material, thermal and electrical energy, oxygen. It also considers the constraints of yields, product routes, net realizations, variable costs, market demands and commitments to decide not only the hierarchy of shutdowns in the event of a power crisis but also the optimal product mix in each level of power availability. The round-the-clock implementation of the model increased the net profit per ton of saleable steel by 58% in 1986. Since then, the model, which is generic in nature, has been successfully integrated into the decision-making process. The cumulative benefit from this work will be at least 73 million U.S. dollars.