Energy Costs Presented by: Gary A. Swanson, PE President - Energy - - PowerPoint PPT Presentation

10 Strategic Steps to Reducing Your Energy Costs

Presented by: Gary A. Swanson, PE President - Energy Management Solutions - (612) 819-7975 And Matt Haley President - Matt Haley & Associates – (612) 598-8743

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10 Step Summary

• 1. Supply Services
• 2. Price Risk

Management

• 3. Energy

Conservation

• 4. Minimize Energy

Usage

• 5. Utility Programs
• 6. Manage Demand
• 7. Data Management
• 8. Equipment

Purchases

• 9. Maintenance

Programs and Training

• 10. Utility Infrastructure

Costs

Energy costs may only be 5% of your total costs but energy cost savings go directly to your bottom line and increase profits

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Energy Components

Supply Side Demand Side

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Supply Services

Review Tariffs

– 23% on incorrect tariffs – Can change with operation changes – Economic development rates – May be able to collect savings from the last year

Aggregate meters

– Can save customer charge and demand – Combined could qualify for large volume tariffs

Saved one customer $500,000 by utilizing EDI rate

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Supply Services

Review Bills

– Large bills are generally hand billed Found $180,000 billing error for one customer

Sales Tax Exemption

– Changes with operational change – Recover past funds in some states

Saved one customer $138,000

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Energy Supply

Procurement

– Deregulated state (12 active) – Other State Rules (2 MW MN)

Negotiate With Utility

– Need viable threat

Gas bypass Generation Expansion at other site or moving facility

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Energy Supply

Self Generate

– Cogeneration

Need good steam or hot water load May be able to generate for $.07/kWh Government organization may be able to provide free audit

– Wind Generation

May be able to generate for $.04/kWh with no capital cost

– Needs to be installed before 12/31/05 – Will not replace current supplier but can supplement more expensive power

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Wind Map

Color $/kWh $ 0.0300 $ 0.0380 $ 0.0430 $ 0.0500

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Price Risk Management

Hedging is not speculation

– Provide guaranteed price

Meet budget Future pricing of products Lock in profit

Speculation is taking a risk in hopes for an unknown reward Not hedging is speculation

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Price Risk Management

Many Ways to Hedge

– Local utility – Marketer – Commodity broker (lowest cost) – Physical vs. financial

Need Information to Make Educated Decision Need to Evaluate Technicals as Well as Fundamentals Aggregate Facilities all Over the Country Need to Evaluate all Options to See Which is Right for Your Facility

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HVAC Lighting Compressed Air Motors Gas Process

Energy Usage Profile

Complete an Energy Assessment

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Energy Conservation

Why look at this now?

– Gas costs have tripled

6 year payback is now 2 years

– Electric costs have gone up dramatically – New technologies are helping reduce payback – Corporations are developing conservation programs (CSR)

All leading to new opportunities to reduce energy costs

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Energy Conservation

Lighting (50%)

– New high bay fluorescents can save 50% – Lighting control – Rebates – Many projects less than 2 year payback Saved $145,000 for one customer and received $125,000 rebate, with a 2 year payback

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Energy Conservation

Compressed Air (35-50%)

– Fix leaks yearly – New ASD trim machines – Regenerative dryers – Lower air pressure – Adequate storage – Tie units together Saved over $250,000 per year by adding controls to tie four units together and eliminate a 500 HP unit

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Energy Conservation

Motors (10%)

– Premium efficient or Ultra efficient motors – Adjustable speed drives – Synthetic oil – Synchronous belt drives – Buying programs (save 15%) One facility had 100 - 7.5 and 10 HP motors that saved over $150,000/yr.

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Energy Conservation

HVAC (25%)

– Energy Management Systems – Night set back controls – Exhaust fan timers – Waste heat recovery – Economizer control

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Energy Conservation

Refrigeration (20%)

– Control compressors – Synthetic oil – Drives on compressors, evaporators and pumps – Defrost sensors

Saved one customer $148,000/yr. by adding a control system

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Minimize Energy Usage

Turn equipment off when not needed

– Lights off at night – Equipment off during breaks and lunch – Dust collection system (drives with valves) – Control aux. equipment when equipment is off – Turn off idling equipment

Shift usage Night and lunch walk through useful Saved a customer $54,000 by turning off lights in Mezzanine Saved another customer $120,000 by turning off injection molding grinders

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States With Utility Incentives

Also Iowa

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Utility Programs

Customers pay into program today Goal is to get more money out then you put in Audits/Studies One customer received $330,000 rebate for a process improvement

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Manage Demand

Can represent 30-50% of your electric bill Everyone has control options (10%) Control strategies depend on your rate structure

– Control plant load – Control with utility signal

Need interval load data

– Review peaks and minimum load

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Load Profile

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Data Management

Review usage (gas, electric and water) Compare to other plants Track Btu per unit produced Track Greenhouse gas savings

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Electric Reporting

Electric Cost Per Month

$74,000 $76,000 $78,000 $80,000 $82,000 $84,000 A u g

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O c t

• 2

D e c

• 2

F e b

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A p r

• 3

J u n

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Month Cost ($)

Electric Usage Per Month

500,000 1,000,000 1,500,000 2,000,000 Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03 Month kWh Energy Rate per Month

$0.042 $0.044 $0.046 $0.048 $0.050 $0.052 $0.054 $0.056 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Month $/kWh

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Benchmarking

Benchmarking - kWh Per Ton

20 40 60 80 100 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Month kWh/Ton

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Purchase Energy Efficient Equipment

Rebates Energy Efficient Options New Technologies Utilize Existing Equipment Best Practices Utility Engineering Studies

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Maintenance Programs and Training

Can reduce usage through new equipment but also need to maintain equipment Properly maintained system can save 5% of energy usage

– Compressed air and steam leak checks (yearly) – Steam traps (25% failed in 3 yrs.)

Cost $4,000 per trap

– Boiler tune up twice a year (1-2%)

Unfortunately this takes a back seat to running plant

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Minimize New Utility Infrastructure Costs

Negotiate with utilities to reduce

• r eliminate

infrastructure costs required for expansions and changes at plants

Reduced infrastructure requirements from $3,000,000 to $1,200,000 for one client

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Any Questions?