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Design and Operation of a Hydrogen Supply Chain

Daniel Dumke — Mon, 13 Feb 2012 10:41:04 +0000

Increasing oil prices make it more rewarding to look for alternative energy sources to fuel future propulsion.
In the case of the reviewed paper today I selected one of a few papers I recently discovered on this topic. If you like to know more just let me know.The basic assumption of this paper sets hydrogen as the replacement energy storage for oil.

Oil availability peak

Expert opinions diverge on how long oil based energy reserves might last, but even energy companies only admit another 70 years. That sounds like a lot of time… But the implementation of a hydrogen supply chain, which differs to a great extend from current processes also would take decades.

Problem / Model

The authors focus their model on the hydrogen demand for transportation vehicles only. Other aspects where energy/hydrogen might be needed are not considered. The problem can be defined as follows:

The hydrogen supply chain of interest consists of: medium-to-large centralized hydrogen production facilities, transportation modes and large-scale storage facilities. We assume that hydrogen may be produced from three different energy sources: natural gas (methane), coal and biomass via two distinct types of commercially proven technologies, namely steam methane reforming and gasification. The purified hydrogen generated from the central facility has to either be liquefied or compressed before being stored or distributed. Liquid hydrogen is stored in super-insulated spherical tanks to minimize heat loss and boil-off rate, then delivered via tanker trucks or railway tank cars. In contrast, compressed-gaseous hydrogen is stored in pressurized cylindrical vessels to increase the energy density, and distributed by tube trailers or railway tube cars. The different types of storage facilities would be located either next to the production facilities or away from the production source serving as distribution terminals.

The model focusses on three strategic decisions to fulfill customer needs:

number,
location and
type and capacity of hydrogen production plants and storage facilities.

Three scenarios for the configuration are analyzed:

Distribution of liquid hydrogen with railway and truck-transportation to various storage facilities,
Distribution of the hydrogen in compressed form, and
Distribution only by tanker trucks.

The authors apply their model to the case of Great Britain and use this as a basis to estimate the demand level for transportation purposes.
Based on these assumptions the authors develop a mixed-integer linear program.
The objective function is based on the facility capital and operating cost:

The aim of the proposed model is to minimise both capital and operating costs of the hydrogen supply chain. The former are one-time costs associated with the establishment of production plants, storage facilities, and transportation links. On the other hand, operating costs are incurred on a daily basis and are associated with the cost of production of hydrogen at the plants, the cost of their storage, and the cost of their transportation through the network. Although a variety of metrics could be investigated in a more detailed study, such as well-to-wheel analysis of CO2 emissions, we focus on cost here.

Results

Figure 1 shows the selected optimal design of the supply chain for Great Britain. And figure 2 lists the overall costs.

Figure 1: Scenario 3: Optimal Network Structure (Almansoori and Shah, 2006)

Figure 2: Cost of the Hydrogen Network in three Cases (Almansoori and Shah, 2006)

The authors conclude:

The model and assumptions presented in this paper reveal that the optimum future hydrogen supply chain might consist of medium-to-large, centralized methane steam reforming plants. The hydrogen produced from these plants will then be delivered as a liquid via tanker trucks and stored in centralized storage facilities.

Conclusions

The authors already mention some weaknesses of the proposed model. The focus is on the simulation of a future state of the network, any pre-existing facilities and capabilities are basically ignored and on these grounds the “best” model is selected. But the current state might influence the future network. Also the authors do not cover how the future network should be developed and which parts should be established first.

Also, one has to note that the difference between the cost of scenarios 1 and 3 (figure 2) are quite low, the authors still decide against an additional distribution via railway: “This is because it is more favourable to use tanker trucks instead of railway tank cars for transporting liquid hydrogen due to the flexibility in operations.”
An assumption which I find questionable at least: A mixed transportation should usually combine the aspects of flexibility of a road transportation and the cost advantages of rail transport.

Reference:

Almansoori, A., & Shah, N. (2009). Design and operation of a future hydrogen supply chain: Multi-period model International Journal of Hydrogen Energy, 34 (19), 7883-7897 DOI: 10.1016/j.ijhydene.2009.07.109

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Cost of Green SC - This Week in Supply Chain Management (5 / 2012)

Daniel Dumke — Fri, 03 Feb 2012 14:32:35 +0000

This week I draft-finished my second to last chapter of the dissertation. But I saved the best for last so beginning on Monday I will summarize the key results of my simulation study on disruptions in network design.
I still found the time to browse the web and these are the articles I found interesting this week.

Articles

On the research front have a look at the article by Andreas. He highlights a new literature review on the different types of methods used. Conclusion: “Particularly, the article confirms my suspicion that there is “shortage of studies conducted on the supply chain as a network of enterprises“. Instead, most research turns out to focus on a single enterprise or on the relationships of a single enterprise with its suppliers or customers”. (SCM Research)
Furthermore I discovered this new paper on a related topic: how greening the supply chain design impacts cost and environmental footprint. “The results indicate that in most cases using shared warehouses from Third Party Logistics operators improves both the cost and the environmental performance of a company. In all cases shared use of transportation operations minimizes the amount of CO2 and PM emissions generated, while dedicated use minimizes costs”. (Sciencedirect)
Finally, I stumbled upon a blog by Professor Tim Zak of the Carnegie Mellon University, which since 2011 contains contributions by him and several students of his. I for example liked the summary of “IKEA’s intelligent packaging implies LEGO’s bricks”. (CMUSCM Blog)

Already tweeted

There are also some article I already tweeted during the week. You can follow me on twitter.

The Impact of Supply Chain Integration on Performance in China http://t.co/SC62OfuV
Supply chain is main risk for Airbus A350 program @MarketWatch http://t.co/96sxtjNP
Great article by @TimMojonnier: Tsunami Disrupts JIT Automotive Supply Chain Leaving Suppliers Devastated http://t.co/JmdbWujt
Prof Wilding – Comments on “After the flood – lessons from Thailand” discussing Supply Chain Risk Management http://bit.ly/yiYHuR
Supply Chain Management: Creating A Better World through Supply Chains http://t.co/bigsUaM7)
The evolution of the supply chain business model http://t.co/2dfHkk1L via @guardian

Enjoy your weekend!

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Designing the Green Supply Chain

Daniel Dumke — Mon, 09 Aug 2010 11:20:00 +0000

Nowadays green logistics is an often heard buzz-word, but already eleven years ago Beamon published an article about the challenges with creating Green Supply Chains.

Traditional vs. Extended Supply Chain

A traditional supply chain has been mostly a one-way street. The issues analyzed were eg. the number of echelons, buyer-supplier relationships and inventory levels.

As a basis the extended supply chain has to consider at least the recycling / re-use and remanufacturing processes to be complete. More important though the strategy of the company has to be adjusted to include environmental aspects as waste, resource / energy use and pollution as well.

Emerging Risks & Performance measures

These new aspects also come with certain problems.

The uncertainty associated with the replacement/recovery process (in time requirements, quality, and quantity of returned products, packaging, and/or containers)
The reverse distribution process itself (collection and transportation of used products, packaging, and/or con- tainers)

In addition new performance measures beside the traditional customer satisfaction and cost have to be established to assess and manage the environmental aspects. Measures have to be created which can be used to estimate the total impact of the product life cycle.

Evolving to a Green Supply Chain

Beamon suggests the following steps to evolve into a green supply chain:

Identify processes
Develop a performance measurement system
Measure the supply chain system
Prioritize
Develop alternatives and select approach
Establish auditing and improvement procedures

Conclusion

I was thinking a lot about the risk measures suggested in this article. The concept of Beamon concludes with steps on how to evolve to a green supply chain (not as the title suggest “design” it). For this “re-design” task, where each single process has to be analyzed, a detailed measuring system might be adequate. But how should you design a new green supply chain from scratch?

Reference:

Beamon, B. (1999). Designing the green supply chain Logistics Information Management, 12 (4), 332-342 DOI: 10.1108/09576059910284159

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