Sustainable Optimal Production Scheduling Methodology Under Implicit Demand Response and Carbon Policy: A Manufacturing Industry Case Study

Abstract

This paper examines sustainable production scheduling strategies within the framework of implicit Demand Response programs and proposes a methodology for integrating an Emissions Trading scheme as a carbon reduction policy, focusing on an European manufacturing case study industry. The study first evaluates the impact of Time-of-Use pricing and Real-Time-Pricing on optimal scheduling plans for a multiple single-machine production process with shared workers and resources with sequence-dependent set-ups, highlighting how these electricity tariffs influence electricity costs, emissions, and overall consumption. By introducing an energy vector into the optimisation cost, the effects of price-based Demand Response programs on production scheduling are evaluated, ensuring cost-effectiveness while addressing the carbon footprint. Second, for the most environmentally friendly electricity tariff, a sensitivity analysis under an Emissions Trading policy examines the role of recommended carbon tax values from CE Delft in managing both direct and indirect CO2 emissions of the case study, determining carbon tax values and free carbon credits cap that balance industry and policymakers goals. The findings suggest that integrating an Emissions Trading policy tailored to include indirect emissions could enhance sustainability practices in manufacturing industries, aligning with future regulatory frameworks aimed at reducing carbon footprints. This research contributes to advancing green production scheduling practices by proposing practical applications of carbon policies in industrial operations, emphasising the need for tailored solutions to address complex energy and environmental challenges.

Keywords: Demand response, electricity tariffs, carbon policy, emissions trading, energy-aware scheduling, single-machine