The electric power demands of many petrochemical plants are matched by supplies from an in-house cogeneration system and from the electric grid. However, due to the fluctuations of fuel costs, production, and electricity rates, it is necessary to balance electric supply between these two sources. In reality, uncertain effects play a very important role in this decision-making problem. One of the most important uncertainties is the occurrence of power interruptions from either one of the supply

more »

... ources, which could endanger operability and reliability of plant operations. To minimize the total energy cost under consideration of unexpected power failures, we break up the solution of the problem into two layers. The outer layer is to determine the optimum contracting of three-section time-of-use rate. We use an artificial neural network regression model as a meta-model to simulate the contour plot of a nonconvex cost function. The occurrences of incidental power failures are simulated by the Monte Carlo method. The inner layer is to determine the optimum operation of the cogeneration system. Since the searching space is huge in the outer layer and the Monte Carlo simulation in the inner layer is time consuming, we implement an interactive sampling search approach to find the optimal contract capacity in this multi-local-optima problem. Index Terms-Cogeneration, meta-model approach, Monte Carlo simulation, optimal contract, uncertainty factors.