On the Potential of Electrified Supply Chains to Provide Long Duration Demand Flexibility

TL;DR

The paper examines whether fully electrified supply chains can provide long-duration demand flexibility by coordinating electrified manufacturing and transport with renewable generation. It develops a centralized MILP framework that integrates manufacturing processes, electric trucking, and wind/solar availability, and compares supply-chain flexibility to grid-scale battery storage under different carbon-tax scenarios. A cement-case study across 20 East Coast cities demonstrates that load shifting over multi-day timescales is possible at low carbon taxes, leveraging warehouse stockpiling and manufacturing scheduling to align with wind variability. The results indicate superior renewable utilization and flexibility at modest costs compared to BESS, with truck capital costs and asset mix guiding where flexibility originates; the work also highlights practical limitations and avenues for future refinement.

Abstract

Demand flexibility can offset some of the variability introduced on the supply-side by variable renewable generation. However, most efforts (e.g. control of residential vehicle charging) focus on short durations -- typically on the scale of minutes to hours. This paper investigates whether a fully electrified supply chain (transport and manufacturing) could provide demand flexibility over longer durations, exploiting the latency that typically exists between the processing of raw material to the delivery of finished product. Using a case study of the cement industry along the East Coast of the United States, we demonstrate that electrified supply chains could shift gigawatt-hours (GWh) of electricity demand for durations of more than a week, largely following wind power variability. Furthermore, we show that this occurs using low levels of carbon taxing (below $50/tn), at which battery storage is not economically viable. A sensitivity analysis shows potential to provide flexibility in all considered cost scenarios, although where the flexibility comes from can change (e.g. transport vs manufacturing). We show that today's cost of electrified heavy goods vehicles are the most significant parameter -- with substantially lower costs yielding a more demand-flexible supply chain.

Figures (8)

• Figure 1: A visualization of the coupled supply chain and power network operation problem, illustrating how renewable energy generated in the power system is used within the supply chain to manufacture finished products. These products are stored in a warehouse and transported to consumers using electric trucks, which are charged along the route.
• Figure 2: Diagram illustrating the electrified supply chain process for finished products. The key stages include manufacturing (using raw materials), transportation, warehouse storage, and consumer delivery of the finished product, along with imports of additional finished products.
• Figure 3: A visualization of the East Coast case study. Manufacturing locations are marked with pink stars, while demand locations are shown with blue stars. Arrows demonstrate the moving trucks, and the bubbles show the stockpiled inventory at each location. The right-hand side shows how the system evolves after two weeks of operation.
• Figure 4: Illustrates the effect that different levels of carbon tax have on the supply chain capital expenditure, broken down into the equipment, trucks, and warehouse cost.
• Figure 5: The average utilization percentages of trucks, warehouse, and equipment at different levels of a carbon tax (in $/tn). The top plots show absolute utilization, and the bottom ones show the change from the zero carbon tax case.