(760c) Renewable/Fossil Fuel Supply Selection and Supply Chain Optimization for a Synergized Upstream, Downstream and Power Economy System

The current environment of low oil prices constitutes a substantial headwind for much of the energy value chain, especially for energy systems where the upstream, downstream, and power sectors are synergized with the aid of governmental subsidies. In such cases, the economic viability of the downstream and power sectors depends heavily on the technology costs and the government regulation on oil prices, which are often fixed. In the current decade, energy systems with an abundant supply of oil were able to achieve sizable margins in the downstream sector within the high oil price environment. However, the uncertainty of future oil prices makes it difficult to put forward strategies for the energy and petrochemical sectors. An energy model that takes into account the incorporation of renewable resources mixed with fossil fuels, a dynamic selection of hydrocarbon prices, and a flexible downstream sector that is capable of liquid or gas feedstock inlets can lessen the burden that oil price fluctuations have. In this work, we present a model where static and dynamic optimization techniques are applied to the dynamic identification of prices that optimize supply decisions and minimize fuel and technology costs within a synergized upstream, downstream and power economy system. Emphasis is placed on understanding the role of modeling in the energy sector and understanding energy balances to develop a modern integrated energy planning model.