Optimize Power Distribution by Minimizing Distribution Costs
Cemex is one of the world’s largest cement providers, and is a market leader in several countries all over the world. With multiple mergers and acquisitions, many of which are designed to reduce operating costs and improve efficiency, Cemex has grown from a single Mexican cement plant to a global leader in the cement industry.
The consumption of electricity accounts for a major portion of the production cost of producing cement. So, a recent acquisition involved the agreement of Cemex to a consortium to build and operate Mexico’s largest privately owned electricity project.
Since 1998 this project has provided the 60% of the power required for all of their Mexican cement plants. However with improvement of operating efficiency playing an important role in Cemex’s success, the company continually drives to achieve this in all areas of their business.
A recent initiative began looking at ways to optimize the distribution of power to its Mexican plants through the minimization of distribution costs.
Cemex wanted a tool which would allow them the ability to examine efficiency within their power distribution channels using historical information, real-time data and forecasted demands.
The system had to capture the complex distribution and pricing rules from their agreement with the National Power Company (NPC), incorporate a tariff structure with tiered rates that varied by time of day, by region and by time of year, as well as produce detailed cost and efficiency reports.
Visual8 created a detailed Power Distribution Simulator model of the entire power distribution process from the Generating Station, through an Interconnection Point coupled to the transmission grid, to each of the demand points (Cement Plants).
The model was designed to utilize demand data, in 5 minute increments, from either historical stores, live streaming information directly from the plants, or forecasted production schedules and simulate the allocation of the generated power across the transmission grid to each of the demand points. During each simulation run, all power supplied, consumed, sold to NPC, and costs incurred every 5 minutes were logged.
Through a series of input tables and forms, users could alter any of the various operating parameters such as Generator output, power allocation order and limits for the plants, scheduled maintenance and breakdowns, then immediately evaluate the impact of the changes through a number of performance, costing and efficiency reports accessible both during and after each simulation run.
Training and extended support were also provided to ensure the successful usage and interpretation of the simulation model’s results.
By effectively analysing potential improvements to their distribution process, then implementing rules based on these changes, Cemex were able to achieve the optimization they sought through the minimization of costs incurred throughout each day.
Using a simulation modeling approach gave Cemex an unparalleled view of their current power distribution process.
The Power Distribution Simulator allowed them to gain insight and better understand some of the following issues:
- Impact of limits in power assigned to each customers.
- Capacity restraints in the Power generation and distribution systems.
- Cost Variation throughout the simulated period and the effect of changes to allocation order.