Sensitivity analysis of investments in the pulp and paper industry On investments in the chemical recovery cycle at a board mill

In the pulp and paper industry, energy costs represents a relatively large proportion of the value of production. When investing in new equipment, considerations concerning boundary conditions, such as electricity and oil prices, are therefore of great importance. A vital requirement is the identification of other key parameters influencing production costs as well as possible interaction between these parameters. In this paper, a sensitivity analysis is accomplished by using an optimization model that minimizes the system cost combined with a systematic approach involving a statistical method. The paper analyses the possibilities of investing in a new chemical recovery cycle, including a new recovery boiler and evaporation plant, at a Swedish board mill. The study includes a survey of future changes, together with forecasts of boundary conditions, such as changes in the price of electricity and oil. Interactions between different parameters are also examined. Copyright © 2002 John Wiley & Sons, Ltd.