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Industrial Energy Management Achieving energy efficiency in South - - PDF document

DEPARTMENT OF MINERALS AND ENERGY DME-Danida Capacity Building in Energy Efficiency & Renewable Energy Industrial Energy Management Achieving energy efficiency in South Africas industry Course Objectives DEPARTMENT of MINERALS and


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SLIDE 1

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Industrial Energy Management

Achieving energy efficiency in South Africa’s industry

Industrial Energy Management 2

DEPARTMENT of MINERALS and ENERGY

Course Objectives

  • Relate industrial energy management to South African context
  • Provide strategic leadership for the implementation of energy

management in light of the “culture” of your organisation

  • Assess current organisational energy management capacity
  • Plan actions to increase capacity
  • Provide leadership for development and implementation of:
  • policy,
  • rganisational structure
  • Training and communications
  • information management;
  • Make the business case
  • Provide leadership for in-house assessment of energy use and

identification of savings opportunities

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 1: Introduction to Industrial Energy Management

Context for energy management Defining energy management

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SLIDE 2

Industrial Energy Management 4

DEPARTMENT of MINERALS and ENERGY

Module 1 Objectives

Define energy management Provide a rationale for industrial energy

management

Describe energy supply pressures and

government actions

Explain effective energy management

as a multi-dimensional activity

Industrial Energy Management 5

DEPARTMENT of MINERALS and ENERGY

Defining Energy Management

Purchase or supply

energy at lowest cost

Use energy at

highest possible efficiency

Employ most

efficient technology possible “The judicious and effective use of energy to maximize profits (that is, minimize costs) and enhance competitive positions.”

(Capehart, Turner and Kennedy. Guide to Energy Management, 2nd Edition. Fairmont Press Inc., 1997

“The judicious and effective use of energy to maximize profits (that is, minimize costs) and enhance competitive positions.”

(Capehart, Turner and Kennedy. Guide to Energy Management, 2nd Edition. Fairmont Press Inc., 1997 Industrial Energy Management 6

DEPARTMENT of MINERALS and ENERGY

Industrial Energy Management in South Africa . . . Why Now?

Industrial competitiveness in a global market Restructuring of the energy supply sector Energy supply limitations Environmental management

ISO14001

Climate change

emission reduction credits

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SLIDE 3

Industrial Energy Management 7

DEPARTMENT of MINERALS and ENERGY

Government Action

National energy efficiency strategy Promoting behavioural change:

Capacity building in energy efficiency and

renewable energy (CaBEERE) programme supported by Danida

Corporate commitment programme

3 key components:

M&T Motivation – training and awareness Corporate commitment - policy Industrial Energy Management 8

DEPARTMENT of MINERALS and ENERGY

Industry Sector Objectives

  • To delineate the growth of industrial

energy consumption from the rate of growth in industrial output

  • To bring energy intensities of major

industrial sectors into line with international standards and best practice

Industrial Energy Management 9

DEPARTMENT of MINERALS and ENERGY

Energy Supply

Diverse energy supply mix Natural gas supply growing to

maximum projected in 2008 – source change opportunities?

Electricity generation surplus projected

to run out 2007 – dealing with a supply deficit?

Renewable energy opportunities?

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SLIDE 4

Industrial Energy Management 10

DEPARTMENT of MINERALS and ENERGY

3 Questions

What are the three highest operating

expenses?

What is the potential saving that could

be achieved in each?

What priority should energy

management be given?

Industrial Energy Management 11

DEPARTMENT of MINERALS and ENERGY

Energy is a Manageable Expense

Cost & Manageability

50 100 150 200 250 Energy Labour Materials (R1,000's)

25% 5% 10% Industrial Energy Management 12

DEPARTMENT of MINERALS and ENERGY

The Dimensions of Energy Management

T e c h n i c a l

Behavioural Organisational

!

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SLIDE 5

Industrial Energy Management 13

DEPARTMENT of MINERALS and ENERGY

Who What Creates Savings?

  • 4%

3% 16% 23%

  • 10%
  • 5%

0% 5% 10% 15% 20% 25% Technology Technology People Only People & Technology

Actual Savings

ETSU GPG084: Managing and Motivating Staff to Save Energy

Industrial Energy Management 14

DEPARTMENT of MINERALS and ENERGY

An Energy Managing Company – ChiRex Ltd.

Achievement:

9% reduction in energy

and water budget = £ 212 000 per year

How did they do it?

Senior management

support through energy policy

Energy account centre

structure

Energy teams Create awareness Monitoring and targeting

for information management

ETSU Good Practice Case Study 331: ChiRex

  • Ltd. (fine organic chemicals)

Industrial Energy Management 15

DEPARTMENT of MINERALS and ENERGY

What this course is about

Strategic approach Assessing and building capacity Organisational commitment and energy policy Organisational structure Training and communicating Energy monitoring, targeting & reporting The business case Energy assessment and opportunities

identification

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DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 2: A Strategic Approach to Energy Management

Organisational change Strategic phases in energy management

Industrial Energy Management 17

DEPARTMENT of MINERALS and ENERGY

Module 2 Objectives

Describe the organisational culture that

prevails in your company

Contribute to change in the

  • rganisation towards effective energy

management

Approach the implementation of energy

management practices strategically

Industrial Energy Management 18

DEPARTMENT of MINERALS and ENERGY

Planning for Organisational Change

Senior Managers

may care about

the organisation's

survival

its efficiency or

profitability

more than energy

conservation itself

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SLIDE 7

Industrial Energy Management 19

DEPARTMENT of MINERALS and ENERGY

Achieving Organisational Change

Who’s Responsible?

energy managers or

coordinators

line managers

responsible for the

  • verall efficiency of

their departments

What are their

responsibilities?

monitoring consumption setting targets identifying and correcting

faults

motivating staff identifying and

implementing energy saving measures

Industrial Energy Management 20

DEPARTMENT of MINERALS and ENERGY

Connecting Energy Management to Senior Management

Provide

management information on energy consumption to senior managers

Demonstrate

effectiveness of energy management

Industrial Energy Management 21

DEPARTMENT of MINERALS and ENERGY

Phases in Organisational Change

Desire to improve energy performance

stimulates action

Uncertainty about effectiveness of actions

creative ideas

Reconsidering the problem/opportunity

new solutions

Improved control becomes “business as

usual"

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Industrial Energy Management 22

DEPARTMENT of MINERALS and ENERGY

Organisational Culture

Can the

  • rganisational

culture be

Exploited? Circumvented? Changed? Industrial Energy Management 23

DEPARTMENT of MINERALS and ENERGY

Corporate Culture

Entrepreneurial:

innovation and rapid growth leadership from a

charismatic CEO

change is a constant

process

plan only in the short term quick returns are usually

expected on investments.

The implications for energy management are the importance of gaining the support of the CEO, and of demonstrating that quick returns are possible. The implications for energy management are the importance of gaining the support of the CEO, and of demonstrating that quick returns are possible.

Industrial Energy Management 24

DEPARTMENT of MINERALS and ENERGY

Corporate Culture

Team-oriented

wide participation

and cooperation in

  • perations, planning

and decision-making

Energy efficiency

teams

planning is long-term longer term return

  • n investment.

In this kind of organization an energy efficiency committee will likely be instrumental in moving forward; such a committee should be broadly representative of the

  • rganisation--plant, human

resources, finance, etc. In this kind of organization an energy efficiency committee will likely be instrumental in moving forward; such a committee should be broadly representative of the

  • rganisation--plant, human

resources, finance, etc.

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Industrial Energy Management 25

DEPARTMENT of MINERALS and ENERGY

Corporate Culture

Hierarchical

more conservative in risk-

taking

more formal accountability

structures

need for solid and

comprehensive management information

may take longer to institute

information-gathering system.

There may be a need to clearly establish responsibility for energy management in this kind of

  • rganisation, even to

create and energy management department. There may be a need to clearly establish responsibility for energy management in this kind of

  • rganisation, even to

create and energy management department.

Industrial Energy Management 26

DEPARTMENT of MINERALS and ENERGY

Corporate Culture

Market Culture

productivity and

achievement

  • utward-looking

plan mainly in the

short term

high level of

decentralisation

In terms of energy management strategies, the creation of “energy accountability centres”, discussed later in this guide, may be a natural step. In terms of energy management strategies, the creation of “energy accountability centres”, discussed later in this guide, may be a natural step.

Industrial Energy Management 27

DEPARTMENT of MINERALS and ENERGY

Identifying the Culture

Entrepreneurial Team Hierarchical Market Characteristic innovation growth

  • participation

cooperation

  • structure

control

  • productivity

achievement

  • Focus
  • utward-

looking

  • staff-
  • riented
  • rganisation-
  • riented
  • towards

competitors

  • Planning

very short- term

  • long-term
  • medium-

term

  • short-term
  • Risk

Tolerance tolerate high risk

  • tolerate

uncertainty

  • needs

certainty

  • prefer

predictability

  • Leadership

charismatic

  • supportive
  • conservative
  • managerial
  • Structure

flexible

  • cooperative
  • rigid
  • cost centres
  • Authority

leader - concentrated

  • meetings
  • rules
  • delegated
  • TOTAL
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Industrial Energy Management 28

DEPARTMENT of MINERALS and ENERGY

Corporate Culture and Change – Some Tips

Entrepreneurial:

Get CEO’s support, demonstrate rapid payback

Team-oriented:

Set up broadly representative energy committee

Hierarchical:

Place responsibility on the organisation chart

Market:

Establish decentralised energy account centres Industrial Energy Management 29

DEPARTMENT of MINERALS and ENERGY

The Problem

Some organisations have saved 20 to 40% of their energy costs through energy management—why doesn’t it happen everywhere? Some organisations have saved 20 to 40% of their energy costs through energy management—why doesn’t it happen everywhere?

Industrial Energy Management 30

DEPARTMENT of MINERALS and ENERGY

Why doesn’t it happen?

Lack of an “energy efficiency culture” and awareness Lack of policies that specifically address energy

management

No energy management plan Insufficient skills for energy analysis, identification

and implementation of energy management measures

Inadequate energy use information Lack of knowledge about when and where energy is

used in the plant

Lack of the business processes to implement energy

management as “business as usual”

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Industrial Energy Management 31

DEPARTMENT of MINERALS and ENERGY

Characteristics of Energy Managing Organisations

broad awareness of energy efficiency collect and utilise information to manage

energy use - energy monitoring & targeting

energy management plan—short term and

long term—and acting on it

energy management integrated into the

  • verall structure of the organisation

leadership from a “champion” or energy

management team

energy management policy

Industrial Energy Management 32

DEPARTMENT of MINERALS and ENERGY

Energy Master Planning

3 inter-related elements:

a strategic approach integration of related management

practices

information management Industrial Energy Management 33

DEPARTMENT of MINERALS and ENERGY

A Strategic Approach

Maintain Control of Energy Consumption

Time Relative Effort

Gain Control Invest Invest Invest Invest

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Industrial Energy Management 34

DEPARTMENT of MINERALS and ENERGY

Gain Control

Time Relative Effort

Gain Control

  • Energy loads
  • Operating practices
  • Purchasing strategies
  • Motivation and training

Industrial Energy Management 35

DEPARTMENT of MINERALS and ENERGY

Invest

Time Relative Effort

Invest Invest Invest Invest

  • Efficient equipment and

technology

  • Energy information system
  • Energy related training

Industrial Energy Management 36

DEPARTMENT of MINERALS and ENERGY

Maintain Control

Maintain Control of Energy Consumption

Time Relative Effort

  • Monitoring & targeting
  • Motivating staff
  • Maintain senior management commitment
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Industrial Energy Management 37

DEPARTMENT of MINERALS and ENERGY

Continuous Improvement

Measure Analyse Take Action Data Information Result

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 3: Assessing the Organisation

Priorities for organisational capacity building

Industrial Energy Management 39

DEPARTMENT of MINERALS and ENERGY

Module 3 Objectives

Assess the organisation in regard to six

critical management functions

Use the organisational assessment to

build consensus around energy the critical issues, and to plan actions that will increase organisational capacity

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Industrial Energy Management 40

DEPARTMENT of MINERALS and ENERGY

Assessing the Organisation

Six energy management functions Five Levels of development An organisational profile

Industrial Energy Management 41

DEPARTMENT of MINERALS and ENERGY

A Balanced Profile

Energy Policy Organizing Skills & Knowledge Information Systems Marketing & Communicating Investing

4 3 2 1

Industrial Energy Management 42

DEPARTMENT of MINERALS and ENERGY

An Unbalanced Profile

Energy Policy Organizing Skills & Knowledge Information Systems Marketing & Communicating Investing

4 3 2 1

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Industrial Energy Management 43

DEPARTMENT of MINERALS and ENERGY

Interpreting the Profile

Strive for

balance

Concentrate

  • n raising

the lowest scores

Move all

factors upwards

Energy Policy Organizing Skills & Knowledge Information Systems Marketing & Communicating Investing

4 3 2 1 Move upscale Focus on low scores

Industrial Energy Management 44

DEPARTMENT of MINERALS and ENERGY

Improving Matrix Scores does pay off!

Case Energy Policy Organizing Skills & Knowledge Information Systems Marketing Investment Rating Net Change % Savings Before 0.5 1.0 3.0 2.0 2.0 2.0 10.5 The Sears Group GPCS 327 After 3.5 3.5 4.0 3.5 4.0 3.5 22.0 11.5 7.2 Before 1.0 2.0 1.0 1.0 1.0 3.0 9.0 British Telecom GPCS 324 After 4.0 2.0 3.0 3.0 4.0 3.0 19.0 10.0 3.0 Before 1.5 1.0 0.5 1.0 0.0 1.0 5.0 Digital Equipment Corporation GPCS 341 After 3.5 3.0 3.0 4.0 3.5 1.0 18.0 13.0 12.5

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 9.0 10.0 11.0 12.0 13.0 14.0 Net Change in Energy Management Matrix Rating Percentage Energy Savings 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 9.0 10.0 11.0 12.0 13.0 14.0 Net Change in Energy Management Matrix Rating Percentage Energy Savings

Industrial Energy Management 45

DEPARTMENT of MINERALS and ENERGY

Good Practice Case –

What did they

achieve?

$600,000 per year initial

savings measures

10% energy reduction

target

How did they do it?

Top management commitment in

Energy Policy

Integration into organisational

structure (HSE and ISO14001)

Employee training Energy Reduction Management

System – M&T

Marketing & Communicating

through employee awareness campaigns

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Industrial Energy Management 46

DEPARTMENT of MINERALS and ENERGY

Planning for Change

from here To get here Actions needed

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 4: Developing an Energy Policy

A rationale for the energy policy The elements of effective energy policies

Industrial Energy Management 48

DEPARTMENT of MINERALS and ENERGY

Module 4 Objectives

Play a key role in the development of a

corporate energy policy

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Industrial Energy Management 49

DEPARTMENT of MINERALS and ENERGY

An Energy Policy Statement

Industrial Energy Management 50

DEPARTMENT of MINERALS and ENERGY

Rationale for the Energy Policy

Expresses corporate commitment Sustains the effort in the event that

Personnel changes Perceived corporate priorities change Industrial Energy Management 51

DEPARTMENT of MINERALS and ENERGY

Energy Policy

Purpose

Public expression of

your organisation's commitment to energy management

Working document

to guide your energy management practices and to provide continuity

Other Benefits

Clear statement of

goal

Agreed targets Ensure required

resources

Formal backing of

top management

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Industrial Energy Management 52

DEPARTMENT of MINERALS and ENERGY

5 Key Elements

Commitment Review Implementation Applicability Thrust

Energy Policy

A personal message from top management with a commitment to regular policy review. Guidance on how the policy objectives are to be met A new and challenging dimension to energy and environment. Directive on which parts

  • f the organisation are

covered by the policy How an organisation knows goals have been achieved.

Industrial Energy Management 53

DEPARTMENT of MINERALS and ENERGY

Goals, Objectives, & Targets

Policy components Time scale Primary staff involvement Goals Long-term Top and senior managers Objectives Medium-term Middle managers Targets Short-term Operational staff

Industrial Energy Management 54

DEPARTMENT of MINERALS and ENERGY

Goals – long term

Broad statement of organisation’s

commitment; e.g.

Reduce operating costs through EE Minimise GHG emissions Minimise the environmental “footprint” Optimise energy security

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Industrial Energy Management 55

DEPARTMENT of MINERALS and ENERGY

Objectives – medium term

More specific articulation of how goals

will be achieved, organisational functions that will be involved; e.g.

Implement energy M&T Assign energy budgets to operating units Reduce energy consumption by x% over 5

years

Industrial Energy Management 56

DEPARTMENT of MINERALS and ENERGY

Targets – short term

Specific, measurable expression of what

will be achieved; e.g.

reduce energy costs by x% in the next 12

months

reduce energy consumption (GJ or kWh)

by y% in the next 12 months

reduce CO2 emissions (tonnes) by z% in

the next 12 months.

Industrial Energy Management 57

DEPARTMENT of MINERALS and ENERGY

Sample Energy Policy Contents

Part 1

Declaration of

commitment to energy management

Statement of policy Statement of

  • bjectives, separated

into short and longer term goals Part 2

Action plan Resource requirements, Responsibility and

accountability

Energy management

committee

Review procedure

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SLIDE 20

Industrial Energy Management 58

DEPARTMENT of MINERALS and ENERGY

Developing a Policy

Consult

plant operations, finance, purchasing,

human resources, marketing and sales, corporate communications and information services, etc.

Draft Ratify

Industrial Energy Management 59

DEPARTMENT of MINERALS and ENERGY

Corporate Culture and Policy Development

Corporate Culture Appropriate Formulation Process Entrepreneurial Top down Team Bottom up Hierarchical Top down Market Top down and middle out

Industrial Energy Management 60

DEPARTMENT of MINERALS and ENERGY

A Case Study – ICI PLC

Environmental

management goals:

to be prudent in the use

  • f the world’s natural

resources by minimising waste

to provide customers

with goods produced in an environmentally sound way.

Four objectives:

reduce environmental

impact of new plants by use of best environmental practice

reduce waste by 50% by

1995, using 1990 as the baseline year

establish a revitalised

and more ambitious energy and resource conservation programme

encourage recycling in its

businesses and with customers

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DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 5: Organisational Structure for Energy Management

Placing authority and responsibility in the organisation chart

Industrial Energy Management 62

DEPARTMENT of MINERALS and ENERGY

Module 5 Objectives

Provide guidance on how best to place

responsibility in the organisational structure for energy management

Industrial Energy Management 63

DEPARTMENT of MINERALS and ENERGY

Organising

Responsibility--

concentrated or distributed?

Energy management is

a management function

All managers are

responsible

Accountability should

be distributed to those who control energy

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Industrial Energy Management 64

DEPARTMENT of MINERALS and ENERGY

Top Management

to get agreement for major spending on

staff or energy measures

to provide a summary of progress to gain recognition and prestige for your

activities

Industrial Energy Management 65

DEPARTMENT of MINERALS and ENERGY

Energy Management is a Managerial Function

energy policy management

information

reporting policies and practices

for the purchase and combustion of fuels

energy awareness 'good housekeeping'

and plant operating practices

training needs energy efficiency

  • pportunities

identification

investment programme review procedures for

return on investment

Industrial Energy Management 66

DEPARTMENT of MINERALS and ENERGY

Integration of Responsibility

Responsible Person Function Director Mgr A Mgr B

  • Asst. C
  • Asst. D

Measure consumption

  • Identify energy cost centres
  • Track performance

Set targets for energy usage Develop conservation programme

  • Inspect equipment

Select projects for improvement Allocate budget and resources Prepare documentation Provide training Review new projects for energy efficiency Carry out energy management audits Key: Approval Authority Responsible for Work Perform Work Provide Technical Support

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Industrial Energy Management 67

DEPARTMENT of MINERALS and ENERGY

Accountability

delegation of responsibility to appropriate

budget holders - “energy accountability centres (EACs)”

  • verall responsibility for co-ordination and

reporting

clear lines of reporting and accountability to

that person

clear lines of reporting and accountability to

top management

a clear inter-departmental committee

structure for managing energy

Industrial Energy Management 68

DEPARTMENT of MINERALS and ENERGY

Energy Accountability Centres

Assign accountability for energy budgets to line

managers

Performance improvement arises from

responsibility for energy budget required information on energy performance

Identified by

mapping sub-metering schemes on organisational structure

Management of energy = management of finances Requires use of MT&R techniques Industrial Energy Management 69

DEPARTMENT of MINERALS and ENERGY

Organising for Implementation

get the right mix of skills and experience in the right place at the right time. get the right mix of skills and experience in the right place at the right time.

Phase 1 – Gaining Control

  • energy efficiency as applied to

premises, plant and controls

  • education and training

Phase 2 - Investing

  • accounting and financial investment

appraisal

Phase 3 – Maintaining Control

  • motivation, incentives, promotion and

publicity

  • design and operation of management

information systems.

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DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 6: Training and Communicating

Communicating for awareness, training for competence

Industrial Energy Management 71

DEPARTMENT of MINERALS and ENERGY

Module 6 Objectives

Plan and implement internal and

external communications strategies for the energy management programme

Plan and implement personnel training

programmes

Provide advice on the motivation of

staff in support of energy management goals

Industrial Energy Management 72

DEPARTMENT of MINERALS and ENERGY

Train for Competence, Communicate for Awareness

Actions

Training Communication

Targets

Facility Staff Occupants Users

Outcomes

Competencies Awareness

Feedback

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Industrial Energy Management 73

DEPARTMENT of MINERALS and ENERGY

Marketing and Communicating

Communicate to:

raise awareness of the importance of

energy efficiency to cost control and environmental conservation

promote energy efficiency measures publicise energy management

achievements inside and outside the

  • rganisation

Industrial Energy Management 74

DEPARTMENT of MINERALS and ENERGY

Planning Communications

Who are the targets? What are the objectives for the strategy? How are you going to achieve these

  • bjectives?

What resources are available to do this? How are you going to justify the strategy to

senior management?

Industrial Energy Management 75

DEPARTMENT of MINERALS and ENERGY

Successful Communication Strategies

Clear goals and objectives Address assessed needs Use existing communications vehicles Clear targets/messages Variety of media Regular and ongoing Evaluation of impact

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SLIDE 26

Industrial Energy Management 76

DEPARTMENT of MINERALS and ENERGY

Sample Communication Tools

Articles in corporate

newsletter

Fact sheets Formal

announcements from management

Work group focus

meetings

“Energy days” Posters, stickers,

calendars

Slogan, mascot Progress reports Link to home Rewards and

incentives

Quantitative

feedback

Industrial Energy Management 77

DEPARTMENT of MINERALS and ENERGY

Training can create . . .

Technical skills and knowledge for

  • perations, maintenance, assessment

Awareness of energy efficiency as a

corporate priority

Understanding of the issue Commitment to achievement of goals Understanding of personal impact on

energy consumption

Industrial Energy Management 78

DEPARTMENT of MINERALS and ENERGY

Types of training

Short, intensive, face-to-face workshops Formal courses for credit, certification,

qualification

Institutional continuing education

courses

Independent study, distance learning On-the-job training

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Industrial Energy Management 79

DEPARTMENT of MINERALS and ENERGY

Criteria for selection

Level of support available Requirements for flexibility Accessibility Customisation Transfer to the workplace

Industrial Energy Management 80

DEPARTMENT of MINERALS and ENERGY

A Basis for Planning

Level Supportive Context Program Design Individuals and Relationships Measurement

  • f Outcomes

4 Comprehensive policy on energy use practices, actively supported by senior management and key

  • rganizational functions—HR,

financial, technical— encompassing all practices that impact directly and indirectly on energy use.

  • Systematic design process utilized,

based on deliberate assessment of needs and circumstances of targets, providing regular, ongoing intervention to achieve clearly understood and articulated

  • utcomes as integral element of
  • verall energy management

strategy.

  • Energy management fully

integrated into management structure; clear designation of responsibility for energy use practices and consumption.

  • Regular quantitative assessm
  • f procedures, values &

attitudes, energy use indicat vis à vis program objectives, with mechanism to refine program design as needed.

  • 3

Basic policy objectives actively supported by key organizational functions.

  • Deliberate needs analysis applied to

design of customized program for clearly articulated outcomes.

  • Energy manager accountable

to energy committee representing all users, chaired by a senior line manager.

  • Feedback of M&V informatio

the program design process

  • 2

A basic adopted policy on energy use practices, with general awareness as part of the

  • rganization’s policy structure.
  • Ongoing training and

communication adapted to

  • rganizational needs and

circumstances on the basis of subjective, anecdotal evidence.

  • Energy manager designated,

reporting to ad-hoc committee, but line management and authority are unclear.

  • Application of some form of
  • n energy performance, not

specifically keyed to program

  • utcomes.
  • 1

Guidelines respecting energy use practices informally incorporated into job descriptions and procedures.

  • Ongoing training and

communication using “off the shelf” programs, in parallel with other energy management initiatives.

  • Energy management the part-

time responsibility of someone with only limited authority or influence.

  • Intuitive sense of program

impact on part of EM based anecdotal evidence.

  • No organizational recognition of

energy as manageable or an

  • rganizational priority.
  • Sporadic use of “off the shelf”

programs without clear determination of their fit to needs.

  • No energy management or

any formal delegation of responsibility for energy consumption.

  • No effort to assess specific
  • utcomes of training and

communication initiatives.

  • Industrial Energy Management

81

DEPARTMENT of MINERALS and ENERGY

4 Key Success Factors

supportive context: the organisation regards

energy efficiency as a corporate priority, and acts accordingly

program design: the training and communication

initiatives are well-designed

individuals and relationships: proponents of

efficiency improvement are able to make and influence decisions

measurement of outcomes: the organisation

measures the impact of these initiatives and uses that information to refine future actions

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Industrial Energy Management 82

DEPARTMENT of MINERALS and ENERGY

Motivating Employees

answer the question “what’s in it for me?” build commitment to achieving the corporate

goal

demonstrate the importance of energy

efficiency

involve people in the process provide a means for feedback communicate effectively accomplish “attitude adjustment”

Industrial Energy Management 83

DEPARTMENT of MINERALS and ENERGY

How to Motivate

Strategies

ensure that people

get something out of what you propose

give rewards and/or

recognition

link energy savings to

the individual’s own best interests

Factors

financial rewards job security job enrichment peer pressure public recognition increased responsibility

and greater autonomy.

Industrial Energy Management 84

DEPARTMENT of MINERALS and ENERGY

Whom to Motivate

Senior managers

improve the performance of your organisation

through cost reduction and increased profitability

Middle managers

make them budget holders on energy costs

Key personnel (plant managers, maintenance

staff, system operators)

measure their personal performance and job

satisfaction in terms of increasing the energy efficiency of the plant they control

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Industrial Energy Management 85

DEPARTMENT of MINERALS and ENERGY

Whom to Motivate

General staff

Make it personal - environmental considerations

may be as significant as saving money

emphasise benefit of having a stronger, more

competitive company--for example, in terms of job security and wages

Industrial Energy Management 86

DEPARTMENT of MINERALS and ENERGY

Whom to Motivate

Energy Management “Champions”

having clear goals, discrete assignments,

measurable outcomes

  • pportunities to meet new challenges

work with others as a team learn new skills and knowledge to enrich their jobs receiving recognition

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 7: Energy Monitoring, Targeting & Reporting

The power of effective energy information management

slide-30
SLIDE 30

Industrial Energy Management 88

DEPARTMENT of MINERALS and ENERGY

Module 7 Objectives

Understand how MT&R can manage

your energy consumption downward

Use existing energy data Describe the difference in purpose and

activity of M&V and M&T

Industrial Energy Management 89

DEPARTMENT of MINERALS and ENERGY

Information Systems and MT&R

Information Systems Comprehensive system sets targets, monitors consumption, identifies faults, quantifies savings and provides budget tracking. “ Monitoring and targeting reports for individual areas based on sub- metering, but savings not effectively reported to user. “ Monitoring and targeting reports based on supply meter data. Energy unit has ad-hoc involvement in budget setting. “ Cost reporting based on invoice data. Engineer compiles reports for internal use within technical department. “ No information systems. No accounting for energy consumption. “

Measure Analyze Take Action

Data Information Result

Industrial Energy Management 90

DEPARTMENT of MINERALS and ENERGY

The Benefits of MT&R

  • Cost savings due to energy reduction - 5 to 15% typical
  • Coordination of energy management policy
  • selection of most effective initiatives
  • Acquisition of financing for energy efficiency projects
  • baseline energy use & verification of savings
  • Improved product and service costing
  • Improved budgeting
  • Better preventative maintenance
  • Improved product quality
  • better control of production processes
  • Waste avoidance
  • water consumption & materials management
slide-31
SLIDE 31

Industrial Energy Management 91

DEPARTMENT of MINERALS and ENERGY

Three Distinct Functions

Monitoring

The regular

collection of data on energy use

Analysis of data The investigation of

deviations from expected performance

Targeting

the identification

  • f the level of

energy consumption which is desirable

Reporting

putting information in a

form that enables control

  • f energy use and

achievement of targets

Industrial Energy Management 92

DEPARTMENT of MINERALS and ENERGY

Where can you apply MT&R?

Utility Inputs

Gas, fuel, electricity Water, air, steam Etc.

Specific Systems

Processes Boilers Compressor etc.

Cost centre or

department

Industrial Process, Department Cost Centre Etc… Steam Cooling Electricity Fuel

  • Comp. Air

Waste Heat Materials Product Waste Material

Industrial Energy Management 93

DEPARTMENT of MINERALS and ENERGY

MT&R Tasks

Measuring energy consumption over time Relating energy consumption to drivers Setting targets for reduced consumption Frequent comparison of consumption to

targets

Reporting variances Taking action to correct variances

slide-32
SLIDE 32

Industrial Energy Management 94

DEPARTMENT of MINERALS and ENERGY

Data and Information

Data is the

“raw material”

Information is

the “refined product”

Action

decisions need information

Industrial Energy Management 95

DEPARTMENT of MINERALS and ENERGY

Data May Already Exist!

Consumption data Consumption drivers

production in

manufacturing plants

Units Quantity (mass or

volume)

On-line time

Weather - CDDs possibly sales

Sources:

Monthly utility invoices Production records Manual data forms

periodically

Portable data loggers Fully automated

measurement

Industrial Energy Management 96

DEPARTMENT of MINERALS and ENERGY

Two Critical Questions

How does energy use

vary with production (or weather, or some other driver)?

How does the relation

between energy use and production (or other driver) change with time?

slide-33
SLIDE 33

Industrial Energy Management 97

DEPARTMENT of MINERALS and ENERGY

A Worked Example

How many energy saving measures have

been introduced?

When did each take effect? How much energy has each measure

saved?

Are all the energy saving measures still

working?

Have any breakdowns been restored? How much energy will be required for a

budgeted production of 120 tonnes a week in the next quarter?

What further savings can be achieved? Industrial Energy Management 98

DEPARTMENT of MINERALS and ENERGY

Understanding what drives energy consumption

y = 514.86x + 61116

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 50 100 150 200 Production (tonnes) Electricity (kWh)

A functional relationship between production & energy consumption

Industrial Energy Management 99

DEPARTMENT of MINERALS and ENERGY

Understanding the trends with CUSUM

  • 250,000
  • 200,000
  • 150,000
  • 100,000
  • 50,000
  • 50,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 Week CUSUM Electricity (kWh)

Critical points - what happened?

slide-34
SLIDE 34

Industrial Energy Management 100

DEPARTMENT of MINERALS and ENERGY

Controlling performance

  • 5,000
  • 5,000

10,000 15,000 20,000 1 3 5 7 9 1 1 1 3 1 5 1 7 1 9 2 1 2 3 2 5 2 7 2 9 3 1 3 3 3 5 Week

Electricity (kWh)

We use control charts for

  • ther management priorities--

why not for energy use? Demo Demo Demo

Industrial Energy Management 101

DEPARTMENT of MINERALS and ENERGY

What are Targets?

Targets

  • Are a statement of what management

wishes to achieve

  • Are determined from a position of

knowledge

  • Must challenge the organization but be

achievable

  • Convey management priorities
  • Have two essential components:

an amount a time

From Energy-Wise Practice 6, NZ Energy Efficiency and Conservation Authority

Industrial Energy Management 102

DEPARTMENT of MINERALS and ENERGY

Setting targets

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 50 100 150 200 Production (tonnes) Electricity (kWh) Base Consumption High Elimination Improved Best Historical Specific Arbritray

Options for quantifiable performance targets

slide-35
SLIDE 35

Industrial Energy Management 103

DEPARTMENT of MINERALS and ENERGY

Benchmarks as Targets

54 56 58 60 62 64 66 68 70 72 74 1 2 3 4 5 6 Week Number Therms/tonne 460 480 500 520 540 560 580 Tonnes/week Industrial Energy Management 104

DEPARTMENT of MINERALS and ENERGY

Process Energy Use

Theoretical Equipment kWh/tonne Equipment kWh/tonne Actual kWh/tonne System kWh/tonne

Time

Target kWh/tonne

Graph is not zero based and not to scale

kWh/tonne of Production

Industrial Energy Management 105

DEPARTMENT of MINERALS and ENERGY

What Types of Actions Must be Taken?

Time

Target kWh/Tonne Theoretical Equipment kWh/Tonne

Graph is not zero based and not to scale

Equipment Improvements System Operation Improvements Variability Reduction

kWh/Tonne of Production

slide-36
SLIDE 36

Industrial Energy Management 106

DEPARTMENT of MINERALS and ENERGY

How Will It Sustain Savings?

Energy Consuming System

Measure Action Data Collection & Analysis Operators & Maintenance Management Supervisors

Summary Information Exception Reports & Budget Control Information

“People in the (feedback) loop”

Industrial Energy Management 107

DEPARTMENT of MINERALS and ENERGY

Reporting Principles

Information directed according to who

has control / direct influence

Recipient must understand what it

means to them

Minimum extraneous information There must be a means of ensuring

action

Industrial Energy Management 108

DEPARTMENT of MINERALS and ENERGY

Who Needs What & When?

X

Operators & Maintenance

X X X X

Supervisors

X X X X

Managers Exception Report Key Indicators

(1)

Weekly Report Monthly Report Annual Report

(1) Key Indicators appropriate to tasks/responsibility

An example – each organization & site is unique

slide-37
SLIDE 37

Industrial Energy Management 109

DEPARTMENT of MINERALS and ENERGY

Information Needs and Decision Making

Level of Decision Making Information Operational Control Managerial Control Strategic Planning Source internal internal external Precision high medium Low Timing exceptional periodic Irregular Notice sudden Anticipated none Information Needs Nature warning results Predictive

Industrial Energy Management 110

DEPARTMENT of MINERALS and ENERGY

A Starting Point

Read meters daily/weekly:

Identify best performance modes/periods Track your “turn down”

Measure & feedback process equipment

performance by batch/period:

Best practice suggests an opportunity of 6%

  • r more

Industrial Energy Management 111

DEPARTMENT of MINERALS and ENERGY

Case: M&T in a Brewery

Actions:

Used existing

computer systems and utilities metering supplemented with additional sub- metering

Expanded the system

for data collection and analysis as savings warranted

Reference: ETSU Good Practice Case Study #273: Charles Wells Ltd., Eagle Brewery

Results

Costs: £15,000 initial,

£9,000/yr. for 4 years, plus £1,200/yr. O & M

Savings:

£24,660 (energy), £15,190

(water), £39,850 total in first 12 months

£524,320 over next 4

years, average 11,700 GJ/yr.

Payback in 5 weeks

slide-38
SLIDE 38

Industrial Energy Management 112

DEPARTMENT of MINERALS and ENERGY

MT&R and Water Efficiency

y = 13.457x + 1441.4 2000 4000 6000 8000 10000 100 200 300 400 500 600 Production, tonnes Water Consumption, cubic metres

Industrial Energy Management 113

DEPARTMENT of MINERALS and ENERGY

Measurement & Verification

A process of

quantifying energy consumption before and after an Energy Conservation Measure is implemented to verify and report on the savings actually achieved

Industrial Energy Management 114

DEPARTMENT of MINERALS and ENERGY

Why Verify Savings?

to increase energy

savings

to reduce the cost of

financing projects

to encourage better

project engineering

to demonstrate and

capture the value of reduced GHG emissions

slide-39
SLIDE 39

Industrial Energy Management 115

DEPARTMENT of MINERALS and ENERGY

Spend more to reduce costs?

Verification

Increases the

confidence of funders

reduces the

investment risk

reduces your

costs of borrowing

Industrial Energy Management 116

DEPARTMENT of MINERALS and ENERGY

M&V Options under the IPMVP

  • A. Partially Measured Retrofit Isolation

With assumption/stipulations

  • B. Retrofit Isolation

Fully measured

  • C. Whole Facility
  • r sub-metered part
  • D. Calibrated Simulation

With software Industrial Energy Management 117

DEPARTMENT of MINERALS and ENERGY

Expectations and Uncertainty

What is uncertainty? How much

uncertainty can we tolerate?

What is our purpose

for implementing a Verification Method?

What are the

sources and degrees

  • f uncertainty?
slide-40
SLIDE 40

Industrial Energy Management 118

DEPARTMENT of MINERALS and ENERGY

Sources of Uncertainty in M&V

Instrumentation Error Modeling Error Sampling Error

Random error in sampling

Assumption Error

Anticipated Not anticipated Industrial Energy Management 119

DEPARTMENT of MINERALS and ENERGY

Un-quantifiable Uncertainty

Human errors Technique errors

manual measurements

Unaccounted for changes in conditions Placement of transducers

automated measurements

M&V plan should present the range of

possible impacts

Industrial Energy Management 120

DEPARTMENT of MINERALS and ENERGY

The Cost of M&V Depends Upon..

Option selected ECM number complexity & interactions Number of energy flows isolated (A,B,D) Complexity of measurements Sample sizes & metering duration Engineering required for stipulations (A & D) Effort required to document the base year Required accuracy Reporting requirements

slide-41
SLIDE 41

Industrial Energy Management 121

DEPARTMENT of MINERALS and ENERGY

Savings Determination

Savings = Baseline Energy Use adjusted

  • post ECM use

Savings = Baseline Energy Use adjusted

  • post ECM use

Industrial Energy Management 122

DEPARTMENT of MINERALS and ENERGY

Quantitative Basis for M&V

Energy performance model:

Prior year’s data – if there are no “factors

  • f influence”

Regression analysis – as in M&T Simulation Industrial Energy Management 123

DEPARTMENT of MINERALS and ENERGY

Baseline Adjustments

Changes in production and/or weather Changes in operating schedule or

processes

Changes in function of the facility

slide-42
SLIDE 42

Industrial Energy Management 124

DEPARTMENT of MINERALS and ENERGY

Monitoring of Energy… Always a Good Practice

Gain & maintain control of energy consumption

Avoid slippage

Verify the savings from a retrofit

M&V may be part of an Energy Performance

Contract (EPC)

Report savings from an Awareness Campaign

Reinforce peoples actions Report to management

All of the above! DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 8: Developing the Business Case

Analysing the investment

  • pportunity

Financing implementation

Industrial Energy Management 126

DEPARTMENT of MINERALS and ENERGY

Module 8 Objectives

Establish the business case for energy management

investments

Calculate simple payback and ROI Do cash flow analysis Determine NPV and IRR Propose alternative strategies for financing projects Consider the use of energy performance contracting Assess the potential for employing the clean

development mechanism (CDM)

slide-43
SLIDE 43

Industrial Energy Management 127

DEPARTMENT of MINERALS and ENERGY

Investment Needs

new equipment building renovations process

improvements

staff training energy information

system

  • ther priorities

Industrial Energy Management 128

DEPARTMENT of MINERALS and ENERGY

Making the Case

the size of the energy problem the technical and good housekeeping

measures to reduce waste

the predicted return on any investment the real returns achieved on particular

measures over time

Industrial Energy Management 129

DEPARTMENT of MINERALS and ENERGY

Steps in Building the Business Case

Assess the baseline Identify and prioritise possible

measures

Analyse costs and benefits

investment appraisal

Select financing and implementation

mechanism

slide-44
SLIDE 44

Industrial Energy Management 130

DEPARTMENT of MINERALS and ENERGY

Assessing the Baseline

Ensure that:

best performance from existing plant and

equipment being achieved

energy tariffs and purchase agreements optimised the most cost-effective energy forms—fuels or

electricity—being used as efficiently as possible

  • perations and maintenance optimised

Industrial Energy Management 131

DEPARTMENT of MINERALS and ENERGY

Identify and Prioritise Measures

Focus on largest energy consumers first Internal identification of opportunities

“7 Steps”

External identification

energy audit Industrial Energy Management 132

DEPARTMENT of MINERALS and ENERGY

Consider all the Costs

direct project costs new maintenance costs cost of operational adjustments

(additional staffing, different production rates, etc.)

training of personnel on new technology

  • r operations
slide-45
SLIDE 45

Industrial Energy Management 133

DEPARTMENT of MINERALS and ENERGY

Consider all the Benefits

Financial:

energy savings water savings maintenance savings increased

productivity

improved product

quality Non-financial:

improved workplace

environment

mitigation of

external environmental impact

Industrial Energy Management 134

DEPARTMENT of MINERALS and ENERGY

Setting Priorities

Consider:

energy consumption per unit of production current state of repair and energy efficiency of

plant and services, including controls

residual life of existing plant and equipment effect on staff attitudes and behaviour

Industrial Energy Management 135

DEPARTMENT of MINERALS and ENERGY

Objectives of Investment Appraisal

to determine which investments make the

best use of available money

to ensure optimum benefits from any

investment made

to minimise the risk from making investments to provide a basis for subsequent analysis of

the performance of the investment

slide-46
SLIDE 46

Industrial Energy Management 136

DEPARTMENT of MINERALS and ENERGY

A “Level Playing Field”

Energy management

investments should be assessed by the same criteria as investments in other priorities

Industrial Energy Management 137

DEPARTMENT of MINERALS and ENERGY

Financial Analysis Methods

Simple Payback Period Return on Investment Life Cycle Analysis

Net Present Value Internal Rate of Return

( )

Savings Annual Cost Capital years SPP = % 100 × = Cost Capital Flow Cash Net Annual ROI

Industrial Energy Management 138

DEPARTMENT of MINERALS and ENERGY

Cash Flow Analysis

slide-47
SLIDE 47

Industrial Energy Management 139

DEPARTMENT of MINERALS and ENERGY

Cash Flow Table

Table 8.1: Cash Flow Table for Purchase of new Boiler Capital Expenditure R100,000 Expected Savings R48,000/year 90% on delivery/commissioning, and 10% performance guarantee due at one year Half in first year, full amount in all remaining years (Values in R’000) Year 1 2 3 4 5 Costs (90.0) (10.0) Savings 24.0 48.0 48.0 48.0 48.0 Net cash flow (90.0) 14.0 48.0 48.0 48.0 48.0 Net Project Value (90.0) (76.0) (28.0) 20.0 68.0 116.0 Industrial Energy Management 140

DEPARTMENT of MINERALS and ENERGY

Cash Flows

Capital costs:

design, planning, installation and commissioning usually one-time costs

Annual cash flows:

annual savings or costs taxes, insurance, equipment leases, energy costs,

servicing, maintenance, operating labour

Intermittent cash flows

  • ccur sporadically during life of project

Industrial Energy Management 141

DEPARTMENT of MINERALS and ENERGY

Other Factors in Annual Cash Flow Calculations

marginal tax rate applied to positive or

negative cash flows

impact of asset depreciation on taxes

slide-48
SLIDE 48

Industrial Energy Management 142

DEPARTMENT of MINERALS and ENERGY

Time Value of Money

where

FV

= future value of the cash flow

PV

= present value of the cash flow

i

= interest or discount rate

n

= number of years into the future n

i x PV FV ) 1 ( + =

  • r

n

i FV PV ) 1 ( + =

Industrial Energy Management 143

DEPARTMENT of MINERALS and ENERGY

Discount Factors

Table 8.2: Discount Factors 1/(1 + i)n Year (n) 1 2 3 4 5 Discount Factor 6% 1 0.942 0.888 0.840 0.792 0.747 10% 1 0.909 0.826 0.751 0.683 0.620 20% 1 0.833 0.694 0.579 0.482 0.402 30% 1 0.769 0.591 0.456 0.350 0.270 40% 1 0.714 0.510 0.364 0.260 0.186 45% 1 0.690 0.476 0.328 0.226 0.156 50% 1 0.666 0.444 0.297 0.198 0.132 Industrial Energy Management 144

DEPARTMENT of MINERALS and ENERGY

Net Present Value Calculation

Table 8.3: NPV Calculation Year 1 2 3 4 5 Net cash flow (R$000s) (90.0) 14.0 48.0 48.0 48.0 48.0 The discounted cash flow at 10% can be found as follows: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1 x (90.0) 0.909 x 14.0 0.826 x 48.0 0.751 x 48.0 0.683 x 48.0 0.620 x 48.0 = (90.0) = 12.73 = 39.65 = 36.05 = 32.78 = 29.76 NPV = the sum of all these values = 60.97 (compare to net project value = 116.0)

slide-49
SLIDE 49

Industrial Energy Management 145

DEPARTMENT of MINERALS and ENERGY

Internal Rate of Return

The Discount

Factor for which NPV = 0

Often the basic

criterion for corporate investment decisions

Year net cash flow discount rate NPV IRR

  • 90000

10 R61,048.67 30% 1 14000 20 R25,216.05 2 48000 25 R11,885.44 3 48000 30 R753.50 4 48000 35

  • R8,627.04

5 48000

DEMO 2 DEMO 2

Industrial Energy Management 146

DEPARTMENT of MINERALS and ENERGY

Payback and IRR

Industrial Energy Management 147

DEPARTMENT of MINERALS and ENERGY

Risk and Sensitivity Analysis

Consider three scenarios:

Optimistic Realistic Pessimistic

in energy costs interest rates tax rates

slide-50
SLIDE 50

Industrial Energy Management 148

DEPARTMENT of MINERALS and ENERGY

Financing Alternatives

In-House

from a central budget from a specific

departmental or section budget

payment for energy

services by individual budget holders

retaining the savings

achieved.

External

capital loans energy performance

contracts

leasing Industrial Energy Management 149

DEPARTMENT of MINERALS and ENERGY

Energy Performance Contracts and ESCOs

A comprehensive package of services:

An energy efficiency opportunity analysis Project development Engineering Financing Construction/implementation Training Monitoring and verification

Industrial Energy Management 150

DEPARTMENT of MINERALS and ENERGY

Benefits of EPC

Reduced or eliminated need for corporate capital Decreased operating costs Turnkey installation Participation of local energy utilities Enhanced staff training Savings fund repayments, based on performance

against quantifiable results

Accelerated equipment upgrading, retrofits, and/or

modernization

Transferred risk to a third party (ESCO)

slide-51
SLIDE 51

Industrial Energy Management 151

DEPARTMENT of MINERALS and ENERGY

EPC Options

First Out

ESCO retains savings until an agreed-upon

financial goal is achieved; client company then receives future savings

Shared Savings

ESCO and client company share savings as they

are achieved

Industrial Energy Management 152

DEPARTMENT of MINERALS and ENERGY

EPC Options

Guaranteed Savings

ESCO guarantees project costs (exclusive of

client add-ons); debt service is covered by the income stream

Discounted Energy Savings (Chauffage)

Client company pays ESCO a fee equal to the

base year energy bill minus an agreed upon discount; ESCO pays actual energy bill

Industrial Energy Management 153

DEPARTMENT of MINERALS and ENERGY

Clean Development Mechanism

1 1. . P Pr ro

  • j

je ec ct t I Id de en nt ti if fi ic ca at ti io

  • n

n 2 2. . P PD DD D D De ev ve el lo

  • p

pm me en nt t 4 4. . V Va al li id da at ti io

  • n

n 5 5. . L Le et tt te er r

  • f

f A Ap pp pr ro

  • v

va al l 6 6. . R Re eg gi is st tr ry y 8 8. . V Ve er ri if fi ic ca at ti io

  • n

n 9 9. . C Ce er rt ti if fi ic ca at ti io

  • n

n D De es si ig gn ne ed d O Op pe er ra at ti io

  • n

na al l E En nt ti it ty y D DN NA A

C CD DM M E EB B – – U UN NF FC CC C

D De es si ig gn ne ed d O Op pe er ra at ti io

  • n

na al l E En nt ti it ty y

C CD DM M E EB B

  • U

UN NF FC CC CC C

3 3. . C CD DM M-

  • E

EB B A Ap pp pr ro

  • v

va al l

  • f

f t th he e M Me et th ho

  • d

do

  • l

lo

  • g

gy y 7 7. . M Mo

  • n

ni it to

  • r

ri in ng g

P Pr ro

  • j

je ec ct t

1 10 0. . S Sa al le e

  • f

f C CE ER R

slide-52
SLIDE 52

Industrial Energy Management 154

DEPARTMENT of MINERALS and ENERGY

Small-scale CDM Projects

More economical for execution than

large projects

renewable energy projects up to 15 MW energy efficiency improvement with

savings up to 15 GWh/year

  • ther GHG emission reduction projects that

themselves have direct emissions less than 15 kt CO2e/year

DEPARTMENT OF MINERALS AND ENERGY

DME-Danida Capacity Building in Energy Efficiency & Renewable Energy

Module 9: 7 Steps for Energy Management

Assessing energy use Identifying opportunities for savings

Industrial Energy Management 156

DEPARTMENT of MINERALS and ENERGY

Module 9 Objectives

Advise on the implementation of a

systematic assessment of energy systems and identification of savings

  • pportunities
slide-53
SLIDE 53

Industrial Energy Management 157

DEPARTMENT of MINERALS and ENERGY

The Seven Steps

Industrial Energy Management 158

DEPARTMENT of MINERALS and ENERGY

Seven Steps to Energy Savings

1. Understand the Cost of Energy 2. Compare Yourself 3. Understand When Energy is Used 4. Understand Where Energy is Used 5. Match the Requirement (Eliminate Waste) 6. Maximize Efficiency 7. Optimize Energy Supply

Industrial Energy Management 159

DEPARTMENT of MINERALS and ENERGY

Step 1: Understand the Cost of Energy

Electricity

Demand (R/kVA) Energy (R/kWh)

Fuel

Cost per m3 or litre or tonne Cost per equivalent kWh or GJ

slide-54
SLIDE 54

Industrial Energy Management 160

DEPARTMENT of MINERALS and ENERGY

Why Understand Costs?

Verify your bills - spot errors. Be aware of the impact of tariff changes. Be aware of how usage patterns impact

unit costs

i.e. the incremental cost of energy Industrial Energy Management 161

DEPARTMENT of MINERALS and ENERGY

Unexpected Cost Increase

May 2003

600 000 kWh cost R 168 000

June 2003

601 000 kWh cost R 170 688 Energy up by 0,16% Costs up by 1,1% ??? Industrial Energy Management 162

DEPARTMENT of MINERALS and ENERGY

Impact of the Rate

A 100 kVA load for 10 hours = approx. 1000 kWh

R0.09/kWh Energy Off-peak R0.28/kWh Energy On-peak R12/kVA Maximum Demand

slide-55
SLIDE 55

Industrial Energy Management 163

DEPARTMENT of MINERALS and ENERGY

Billing Analysis

0K 50K 100K 150K 200K 200 400 600 800 Jul 92 Aug 92 Sep 92 Oct 92 Nov 92 Dec 92 Jan 93 Feb 93 Mar 93 Apr 93 May 93 Jun 93

Energy Demand

E n e r g y k W h D e m a n d k V A

Monthly Demand & Energy

ABC Manufacturing and Processing Industrial Energy Management 164

DEPARTMENT of MINERALS and ENERGY

Comparative Energy Costs

Comparative Energy Costs, R/GJ

20 40 60 80 100 electricity coal HFO LPG

These are costs at point of purchase, but what about efficiency of conversion to end- use?

Industrial Energy Management 165

DEPARTMENT of MINERALS and ENERGY

Don’t Pay Too Much!

A utility metering error at one industrial

plant resulted in a 66% increase in electricity costs

In some areas demand charges make

up 40-50% of an electricity bill

slide-56
SLIDE 56

Industrial Energy Management 166

DEPARTMENT of MINERALS and ENERGY

Step 2. Compare Yourself

Externally

versus industry figures

  • ther benchmarking studies

Internally

Historical comparison Temporary metering &

analysis

Permanent metering – need

manageability

Measure Analyze Take Action

Data Information Result

Measure Analyze Take Action

Data Information Result

Industrial Energy Management 167

DEPARTMENT of MINERALS and ENERGY

Benchmark Comparisons

Internal benchmarks (for example):

Average for Period:

92 kWh/kg

Minimum Month:

77 kWh/kg

Maximum Month:

165 kWh/kg

External benchmarks:

Best industry practice:

65 kWh/kg

Industry average:

85 kWh/kg

Industrial Energy Management 168

DEPARTMENT of MINERALS and ENERGY

Finding Internal Benchmarks by Regression Analysis

25,000 35,000 45,000 55,000 65,000 75,000 Monthly Energy (kWh) 100 200 300 400 500 600 700 800 900 1000 Monthly Production (kg)

slide-57
SLIDE 57

Industrial Energy Management 169

DEPARTMENT of MINERALS and ENERGY

Step 3: Understand When Your Plant Uses Energy

Hour of the Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 20 40 60 80 100 120 140 Industrial Energy Management 170

DEPARTMENT of MINERALS and ENERGY

An Electrical Fingerprint

00:00:00 07:59:59 16:00:00 00:00:00 07:59:59 16:00:00 00:00:00 07:59:59 15:59:59 00:00:00 08:00:00

Time of day

500 1000 1500

Kilowatts (kW) Friday Saturday Sunday Monday Long-weekend shutdown

3rd Shift 2nd Shift 1st Shift

Baseload = 950 kW Peak = 1350 kW

Industrial Energy Management 171

DEPARTMENT of MINERALS and ENERGY

Patterns Revealed

Peak Demand Night Load Start-Up Shut-Down Weather Effects Cyclical Loads Interactions among

systems

Production Effects Problem Areas

slide-58
SLIDE 58

Industrial Energy Management 172

DEPARTMENT of MINERALS and ENERGY

Savings Opportunities

Scheduling – reduce startup peaks Investigate off-production usage Infrequent demand peaks – avoidable Shift on-peak to off-peak usage pattern Equipment loading – consider

sequencing

Industrial Energy Management 173

DEPARTMENT of MINERALS and ENERGY

Expensive Co-incidences

Purchased too quickly, electricity can be

as much as 200 times more expensive

One 15-30 minute period sets the demand

portion of the bill for the whole month

Industrial Energy Management 174

DEPARTMENT of MINERALS and ENERGY

Step 4: Understand Where Your Plant Uses Energy

Refrigeration 40.0% Other 40.0% Compressed Air 20.0%

Demand

Refrigeration 50.0% Other 15.0% Compressed Air 35.0%

Energy

slide-59
SLIDE 59

Industrial Energy Management 175

DEPARTMENT of MINERALS and ENERGY

The Load Inventory

Load Description Quantity Unit kW Total kW Diversity Factor Peak kW Hours Energy kWh Plant Lighting 50 0.5 25.0 100% 25.0 400 10,000 Air Compressor 1 50.0 50.0 100% 50.0 732 36,600 Punch Press (Idle) 2 15.0 30.0 100% 30.0 300 9,000 Punch Press (Engaged) 2 75.0 150.0 10% 15.0 40 6,000 Cooling Pump 1 20.0 20.0 80% 16.0 150 3,000

Total Load

136.0 64,600

Industrial Energy Management 176

DEPARTMENT of MINERALS and ENERGY

Demand Breakdown

Plant Demand (kW)

Air Compressor 38% Plant Lighting 17% Punch Press (Idle) 22% Punch Press (Engaged) 11% Cooling Pump 12% Industrial Energy Management 177

DEPARTMENT of MINERALS and ENERGY

Energy Breakdown

Plant Energy (kWh)

Cooling Pump 5% Punch Press (Engaged) 9% Punch Press (Idle) 14% Plant Lighting 14% Air Compressor 58%

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Industrial Energy Management 178

DEPARTMENT of MINERALS and ENERGY

Unnoticed Consumption

Unknown, and in many cases,

unnecessary uses of energy can amount to 5% or more of the entire electricity bill!

What is 5% of you electricity bill? Industrial Energy Management 179

DEPARTMENT of MINERALS and ENERGY

Identify Opportunities: Starting at the End Use

Understand When Understand Where Maximize Efficiency Match the Requirement Optimize Supply Find the Savings Opportunities Compare Yourself Understand Costs Understand Present Usage

Industrial Energy Management 180

DEPARTMENT of MINERALS and ENERGY

Logical Order

1st - Match the

requirement = Eliminate the waste

2nd - Maximise the

efficiency

3rd - Optimise the

source

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Industrial Energy Management 181

DEPARTMENT of MINERALS and ENERGY

Step 5: Eliminate Energy Waste

“Turn it off”

Lights, fans, pumps, conveyors Compressed air & vacuum leaks Freezer/cooler air leakage Leaking steam traps

Turn it down

Temperature, water & air flow Compressed air pressure & flow

Control it

Exhaust / make-up air balance Industrial Energy Management 182

DEPARTMENT of MINERALS and ENERGY

Step 6: Maximise Efficiency

Filters and lubrication Clean heat exchangers and pipes Minimise refrigeration “lift”

Condenser size and pressure

Motor conditions

voltage & cooling

Combustion efficiencies Sequence compressors and pumps

Industrial Energy Management 183

DEPARTMENT of MINERALS and ENERGY

Overall Approach: Match & Maximize

Action Lower Cost (operational) Higher Cost (technological) Eliminate Waste 1. Manual control 2. Automatic control Maximise Efficiency 3. Operating conditions 4. Efficient equipment

Reduce Losses Match the Need Reducing waste is as simple as turning it off! Efficiency is a result of good maintenance

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Industrial Energy Management 184

DEPARTMENT of MINERALS and ENERGY

Why this Order?

End-use actions influence all other parts

  • f the system – do this first

Lower cost actions are operational – at

end-use

Higher cost actions are technological –

higher efficiency components

End-use determines supply requirement

Industrial Energy Management 185

DEPARTMENT of MINERALS and ENERGY

Step 7: Optimise the Supply

Heat Recovery – utilizing waste heat

sources

Heat Pumps – using a low grade heat

source

Co-generation – generate heat and

electricity

Renewable energy – solar, wind… Competitive Supplier – negotiate supply

contracts

Industrial Energy Management 186

DEPARTMENT of MINERALS and ENERGY

Consider Heat Recovery

Waste heat Source?

quantity temperature

Use?

energy & temperature time coincidence location

Practical recovery % ?

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Industrial Energy Management 187

DEPARTMENT of MINERALS and ENERGY

Apply Heat Recovery

“Low Technology”

Heat from air

compressor

“Higher Technology”

Boiler blow-down De-superheat

refrigerant

Boiler economiser Industrial Energy Management 188

DEPARTMENT of MINERALS and ENERGY

Cost vs. Benefits

Benefits:

direct energy savings in-direct energy

savings

comfort/productivity

increases

  • peration &

maintenance cost reductions

environmental

impact reduction

Costs:

direct

implementation costs

direct energy costs in-direct energy

costs

  • peration &

maintenance cost increase

Industrial Energy Management 189

DEPARTMENT of MINERALS and ENERGY

Environmental Impact

On-Site Combustion Utility Power Generation Direct Emissions NOX, VOC, SO2, CO2 Indirect Emissions NOX, VOC, SO2, CO2 You Utility

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Industrial Energy Management 190

DEPARTMENT of MINERALS and ENERGY

GHG Emission Factors . . . Environmental impact

Energy Source Emission Factor (kg CO2/ekWh) Electricity from grid 0.90 Coal 0.33 (2.44 tonnes CO2/tonne coal) typical

1

Heavy Fuel Oil 0.26 LPG 0.21 Natural Gas 0.19

1 Emission factors for coal depend on the type and

quality of coal and its calorific content (assumed to be 26.5 GJ/t here).

Industrial Energy Management 191

DEPARTMENT of MINERALS and ENERGY

How do we begin?

Plan strategically (module 1) Assess the organisation & act

to move upscale (module 2)

Implement MT&R (module 3) Assess current use - identify

savings opportunities (module 4)