ESPO is honored to publish a paper entitled “Holistic energy procurement planning for large industrial consumers through energy resources expansion and participation in multiple electricity markets and contracts” in the journal of “Applied Energy”. Ali Sadeghi, as the first author, was a M.Sc. of electrical engineering from the Shahrood University of Technology, Shahrood, and had worked on this topic in his dissertation supervised by Dr. Morteza Rahimiyan.
Scientific description
Energy procurement planning (EPP) for large industrial consumers (LICs) is a complex and critical task due to their high energy intensity and the strong interdependence between energy consumption and production processes. This complexity is further heightened by the diversity of procurement options, including both conventional and renewable energy resources, and participation in multiple electricity markets and contract types. This paper presents a holistic EPP model that integrates all essential aspects of energy procurement for LICs. The model enables optimal decisions on the size and technology of new energy resources and supports energy trading across various market mechanisms, such as capacity certificates, futures, and wholesale electricity markets, and contract types, including bilateral agreements, feed-in-tariff schemes, and power purchase agreements, spanning short-, medium-, and long-term horizons. The integration of load management with the industrial production process enables realistic and flexible demand-side participation in both incentive-based and price-based demand response programs. To address uncertainties, such as the availability of conventional and renewable energy sources, market and contract prices, fuel costs, industrial commodity prices, and electricity demand, a risk-constrained stochastic programming approach is employed. The effectiveness of the model is demonstrated through a case study of the Shahrood cement plant in Iran. Figure 1 clarifies the proposed EPP framework.
Figure: The proposed holistic EPP framework for a LIC.
Industrial applications
In reality, LICs can invest their own energy resources or procure their energy consumption through electricity markets and contracts. The proposed framework can be used by LICs to make their optimal energy portfolio. The proposed decision-making framework captures the operational behavior of LICs within integrated price- and incentive-based demand-response programs, while accounting for techno-economic uncertainties spanning short- to long-term horizons.
Acknowledgement
The real-world data of prices in bilateral contracts, wholesale electricity market, futures market, capacity certificate market, power purchase agreement with grid operator, and transit cost were obtained from Iran database. Additionally, the cement plant is located at Shahrood, Iran, and the hourly historical meteorological data were obtained from NASA database. All data are related to 2021 and 2022.
Paper access and citation
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Sadeghi A, Rahimiyan M. Holistic energy procurement planning for large industrial consumers through energy resources expansion and participation in multiple electricity markets and contracts. Applied Energy. Volume 401, Part C, 126815, 15 December 2025.