Energy demand and supply balancing

The paper provides an example of linear programming (LP) for energy supply planning. The objective is to bridge between LP-theory as presented here and the applications of this mathematical tool to real life events. The problem introduced in the paper is quite familiar to industrial energy planners: A firm is confronted with the question of replacing existing plant and equipment for on-site electricity and heat production or to purchase electricity from the public grid. First, the operating structure of the firm is sketched to the extent necessary to outline the decision dilemma faced by the firm's management. Second, the problem is reformulated and subsequently translated into a mathematical structure suitable for application of the LP-technique. Thereafter, the full matrix reflecting the initial problem is composed. This matrix serves as the principal input for an optimization routine installed on a personal computer. 3 figs, 1 tab