Shared resource allocation in an integrated petrochemical site by price-based coordination using quadratic approximation

Site-wide resource allocation among different partially autonomous production plants in the process industries can be realized by price-based coordination. The individual production plants pursue their own objectives and only report the amount of shared resources that they want to produce or consume as a response to the price signals. In an iterative procedure, known as tatonnement process, a central coordinator adjusts the transfer prices until an equilibrium price is achieved that results in the networks of the shared resources being balanced [1]. One of the drawbacks of the price-based coordination is the slow convergence of the tatonnement process, which is very sensitive to the step size in the price update. In this contribution we propose a new price-update step that relies on a quadratic approximation of the network balance residual. For an academic example and an industrial case study of an integrated petrochemical site, simulation results are provided that show the improved convergence rate of the proposed technique.