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Multi-Stage Stochastic Programming for Natural Gas Infrastructure Design with a Production Perspective

In: Stochastic Programming Applications in Finance, Energy, Planning and Logistics

Author

Listed:
  • Lars Hellemo

    (Department for Industrial Economics and Technology Management, Norwegian University of Science and Technology, Alfred Getz veg 3, NO–7491 Trondheim, Norway)

  • Kjetil Midthun

    (Department for Applied Economics and Operations Research, SINTEF Technology and Society, NO–7465 Trondheim, Norway)

  • Asgeir Tomasgard

    (Department for Industrial Economics and Technology Management, Norwegian University of Science and Technology, Alfred Getz veg 3, NO–7491 Trondheim, Norway)

  • Adrian Werner

    (Department for Applied Economics and Operations Research, SINTEF Technology and Society, NO–7465 Trondheim, Norway)

Abstract

We present a multi-stage stochastic model that analyzes investments in natural gas fields and infrastructure. New projects are evaluated together with existing infrastructure and planned expansions. Several uncertain factors both upstream and downstream such as reservoir volumes, the composition of the gas in new reservoirs, market demand and price levels can influence the optimal decisions. The model focuses also on the impact of the sequencing of field developments and new infrastructure on the expected security of supply. In order to analyze all these aspects in one model, we propose a novel approach to scenario trees, combining long-term and short-term uncertainty. Dimensionality and solution times of realistic investment cases from the Norwegian Continental Shelf are discussed.

Suggested Citation

  • Lars Hellemo & Kjetil Midthun & Asgeir Tomasgard & Adrian Werner, 2013. "Multi-Stage Stochastic Programming for Natural Gas Infrastructure Design with a Production Perspective," World Scientific Book Chapters, in: Horand I Gassmann & William T Ziemba (ed.), Stochastic Programming Applications in Finance, Energy, Planning and Logistics, chapter 10, pages 259-288, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814407519_0010
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    Citations

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    Cited by:

    1. Bordin, Chiara & Mishra, Sambeet & Palu, Ivo, 2021. "A multihorizon approach for the reliability oriented network restructuring problem, considering learning effects, construction time, and cables maintenance costs," Renewable Energy, Elsevier, vol. 168(C), pages 878-895.
    2. Seljom, Pernille & Tomasgard, Asgeir, 2015. "Short-term uncertainty in long-term energy system models — A case study of wind power in Denmark," Energy Economics, Elsevier, vol. 49(C), pages 157-167.
    3. Sergei Schreider & Jonathan Plummer & Daniel McInnes & Boris Miller, 2015. "Sensitivity analysis of gas supply optimization models," Annals of Operations Research, Springer, vol. 226(1), pages 565-588, March.
    4. Vitor Miguel Ribeiro & Gustavo Soutinho & Isabel Soares, 2023. "Natural Gas Prices in the Framework of European Union’s Energy Transition: Assessing Evolution and Drivers," Energies, MDPI, vol. 16(4), pages 1-46, February.
    5. Fodstad, Marte & Midthun, Kjetil T. & Tomasgard, Asgeir, 2015. "Adding flexibility in a natural gas transportation network using interruptible transportation services," European Journal of Operational Research, Elsevier, vol. 243(2), pages 647-657.

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