PLANT AND FACILITIES ENGINEERING WITH WASTE AND ENERGY MANAGEMENT:MANAGING ENERGY

7. MANAGING ENERGY

7.1. Why Energy Is an Important Resource

Until 1973, when the oil embargo occurred, energy was regarded as an uncontrollable overhead item, but rapid escalation in energy costs changed this perception and elevated energy to the status of a key resource to be productively utilized. Since energy has become plentiful, many enterprises have simply adjusted their budgets to higher prices and have forgotten the easily implemented opportunities for energy conservation and cost reduction.

This section offers an integrated approach for finding, evaluating, prioritizing, and implementing energy conservation opportunities and energy and utility system improvements. Plant or facilities engineers or other managers should devote a significant amount of time to energy management. If techniques described here are applied, significant energy-saving opportunities should be found.

7.1.1. Why Engineers Should Be Concerned about Energy

Engineers should be aware of and take action to overcome these conditions:

Failure to recognize energy as one of the five key resources to be managed Missed conservation opportunities sapping profits Emphasis by engineers on other resources (labor, machines) Lack of concern about energy in capital decisions Ignoring that energy price increases continue to occur A lack of understanding of the total cost of energy Ignoring that energy savings drop directly to the bottom line Poor administrative controls of energy costs Poor maintenance of energy equipment and systems

7.1.2. What Are Enterprise Resources?

Resources are needed to activate any enterprise. Most enterprises have the following resources at their disposal:

Labor / manpower Material Machines Technology / data Energy

How and in what proportion resources are consumed depends on the type of activity or operation in which the enterprise is engaged. Although energy may be a small portion of running a garment factory or manual assembly plant, a metal fabricating shop with large punch presses or a heavy chemical plant may have a large proportion of its budget in energy. Energy is sometimes an essential part of the process (melting, heat treating, welding, chemical processing), while at other times it may facilitate the operation (heating, comfort, driving machines).

7.1.3. Energy Productivity

As a key enterprise resource, energy productivity can be computed. By definition, productivity mea- sures the output vs. the input, and the index is found by applying formulas similar to the following:

Other combinations may reveal trends in particular situations. Productivity measures plotted over time can show trends in utilization of the energy resource relative to a baseline that can signal problems or show progress in energy reduction.

7.1.4. Energy Myths

To begin an energy conservation program, engineers must overcome myths that inhibit consideration of many opportunities that if implemented would produce sizeable savings for this valuable resource. Some myths are:

Energy costs are a small part of the budget. We have no big energy consumers.

We’ve already minimized energy consumption. Its not in the budget.

We don’t have time to reduce energy.

Its cheaper to let machines run. Energy is plentiful.

8.2. Energy and Utility Concerns for Plant Engineers

8.2.1. The Energy Process

The entire effort to obtain and maintain an adequate, dependable, and cost-effective supply of energy is a process that is more extensive than most people realize. The process should be conceptualized in terms of a business process in which all steps from conception to termination are considered. Although the energy process may vary with the type of enterprise, some typical steps in the energy process include:

1. Planning the process

2. Determining energy needs for process, building heat, and other uses

3. Selecting of energy form

4. Negotiating rates with utilities

5. Designing the optimum system installation

6. Anticipating future needs

7. Detailing maintenance requirements of the system (periodic, preventive, predictive)

8. Conducting daily operation of the system

9. Accommodating environmental concerns

10. Using waste heat or material for energy

11. Conducting energy-related waste disposal

12. Administering the energy effort (invoice processing, etc.)

13. Taking regular energy assessments for continuous improvement in energy conservation

14. Justifying and replacing equipment

15. Replacing energy sources with more efficient or lower-cost sources

16. Iteratively reassessing and reengineering the process

8.2.2. The Energy System

The energy system includes not only the equipment in the plant or facility, but utilities that supply energy (gas, electric, water) to the plant. The system also includes secondary energy supplies such as steam and compressed air. The distribution system, the protective devices, and all equipment needed to supply energy to the process or operation of the facility, equipment, or operations are parts of the energy system. Aside from maintaining good relationships with utility companies, the main concern of a plant engineer or plant manager is to keep the in-plant system functioning effectively at all times.

While this chapter focuses predominately on energy conservation and cost reduction, the impor- tance of system operation and maintenance cannot be overemphasized. We tend to take energy for granted, but continual vigilance is needed to ensure that energy is available for the process to run, the building to be heated, and paychecks to be printed on time. Some action items on energy system operation and maintenance are included in the energy-assessment procedure in Sections 8.6–8.8.

8.2.3. Managing Utility and Service Systems

The effective management of utilities and services is a primary responsibility of most plant and facilities engineers. The scope of utility and service systems includes:

Electric, gas, and water supplied by outside utility systems Piping systems

Steam generation and distribution systems Chiller systems, cooling towers

Heating, ventilation, refrigeration, and air conditioning systems Building instrumentation and control systems

Pollution-control systems, dust-collection systems Telephone and communication systems Compressed air systems

To be able to manage these complex systems, the plant engineer should (Rospond 1999):

1. Become familiar with all utility and service equipment

2. Establish contact with all utilities; gain their cooperation

3. Conduct an audit of each system to determine current condition and needed corrective mea- sures

4. Determine availability of installed spares, spare components and replacement parts, and backup systems

5. Ascertain ownership of utility equipment such as substations, transformers, and lift pumps

6. Develop effective preventive and corrective maintenance programs

7. Implement continuous improvement of utility and service operations

8. Upgrade training of employees responsible for these systems

9. Justify and install state-of-the-art equipment where possible

10. Monitor power quality, upgrade system for digital computer systems

11. Improve transformer efficiency

See the Appendix for specific improvement possibilities.

8.2.4. Demand and Power Factor

Demand and power factor are often major invisible electric costs. Many electric utilities do not show data on these items on electric bills, and it is incumbent upon the energy manager to obtain these data. Electric utilities base demand charges on an integrated peak demand in kilowatts over the highest 30 minutes during any 1-, 6- or 12-month period, depending on the utility’s policy. Power factor charges occur when inductive or capacitive loads get out of phase with current supplied, as shown in Figure 6.

Power factor is the difference between current used in kilowatts (kW) and current supplied in kilovolt amperes (kVA) as shown in this example.

A small factory has a monthly demand of 237 kW and 324 kVA as measured by utility meters.

When capacitors are installed, power factor increases to 93% (well above the 85% level), thus avoiding the penalty. The payback is as follows:

Adding capacitors means the circuit capacity is thus increased to allow adding more load. Note: Demand and power factor calculations in each utility area differ, hence the above example would have to be revised to meet local conditions.

Demand and power factor charges are often a major percentage of the total power cost and to a large extent are controllable. Demand can be controlled by shedding loads when peak demands are approached, either manually or through the use of a programmable energy controller. Power factor can be eliminated by replacing inefficient motors or installing capacitors that limit reactive current to levels acceptable to the utility. Controlling demand and minimizing reactive current makes signif- icant reductions in power costs obtainable. Solutions to reducing costs of these items are included in Sections 8.6–8.8

8.3. Financial Considerations about Energy Management

8.3.1. Assessing the Cost of Energy

The real cost of energy is not just the price per gallon, Mcf or kWh but in executing the process that provides energy to run the business. Because energy is an essential resource for almost any manu- facturing or processing operation, massive effort must be expended to keep the supply of energy available in the proper quantity and quality at the minimum cost consistent with keeping the enterprise in effective operation.

The most costly aspect of energy is unavailability. When energy becomes unavailable, costs soar and adverse consequences result:

Production interruptions Missed schedules

Lost customers

Penalties for shutting down customers production lines Spoiled work, rework, non-value-added activity

Costly cleanout of ruined product from processing equipment Likewise, the benefits of effective energy management can be measured in terms of lost production avoided, productivity improvement, continued customer satisfaction, and profitability increases. The real cost of energy is in executing the process that provides the energy supply to run the business.

By having the cost of energy failures highlighted through the use of activity-based costing, the engineering manager can determine the cost–benefit ratio of operating the system to avoid future failures.

Another caveat in determining the real costs and benefits of effective energy management is where to focus effort. Prevalent philosophies today include ‘‘pick the low-hanging fruit’’ and ‘‘don’t sweat the small stuff.’’ Often these philosophies lead to missing the really big winners. While there may be some merit to each of these philosophies, the real savings in energy systems may be from finding less obvious, high-return savings that will provide long-term solutions to complex problems.

8.3.2. Justifying Energy-Conservation Opportunities Using Activity-Based Costing

While energy costs are typically considered overheads, costs can be traceable to specific activities within the operation. Applying activity based costing, life-cycle costing, or other systems that provide accurate data on energy use allows opportunities for conservation and system upgrade to be identified and justified.

Too often, worthwhile energy projects are killed by the one-year payback syndrome. In addition to being too strict, the one-year payback concept ignores the time value of money, a fundamental of engineering economy. In many energy and environmental projects, the payback is nowhere close to a one-year undiscounted payback.

To get top management’s attention, the project author must get outside of the narrow confines of labor or utility savings and include the benefits of a dependable, cost-effective energy process to justify energy related projects. Management reacts best to $$$$ and ####, so it is essential that you speak their language. The basis, for these savings is in keeping records using activity-based costing. If energy problems cause lost production, customer dissatisfaction, or excessive costs, ABC cost data that quantify these problems should get top management project approval.

Especially useful in justifying energy improvements is rework, reinspection, repackaging, or any other re-word that connotes non-value activity caused by energy failures or inadequacies.

8.3.3. Using Life-Cycle Costing to Assess Return on Energy Projects

Life-cycle costing is also useful in justifying energy projects because all benefits and costs throughout the expected life of the project or equipment are predicted, and disposal costs at the end of the project are included. Placing a value on environmental conservation, energy availability, and system depend- ability in a LCC calculation can further assist in justifying energy projects.

Data from ABC can also be used to substantiate life-cycle costing. The use of activities as the basis for cost justification gives a true representation of what actually happens in the organization, and can demonstrate interdependencies of energy with other activities in the organization. See Chap- ters 88–92 for more detail on costing.

8.3.4. Impact of Utility Deregulation

Until recently, utility companies had monopolies in certain areas of the country, but as a result of deregulation, it is now possible to purchase gas or electric from other utility companies and have it delivered through systems of the former utility company. The impact on energy users is that oppor- tunities for significant savings now exist as a result of deregulation. Energy managers should inves- tigate the possibilities for accessing savings from deregulated utilities to improve profitability of the company.

8.4. Relationship between Energy and Environment

8.4.1. Pollution from Energy Production and Waste Heat Recovery

Energy and environment are inextricably intertwined issues. Energy production is one of the chief causes of air pollution, and conversely, energy production can be a major solution to environmental problems. Acid rain caused by burning fossil fuels and discharging pollutants such as nitrous oxide and sulfur dioxide results in harm to aquatic life, animals, vegetation, and humans.

Some solutions for both energy and environmental problems lie in burning trash or other waste material after all recyclables have been removed. While this approach reduces waste streams by over 90%, so-called environmentalists raise a loud cry about burning anything, even though benefits far outweigh costs. The ultimate solution to energy-related pollution is conservation.

8.4.2. Cogeneration

The concept of cogeneration is both environmentally friendly and energy cost effective. Definitions of cogeneration include topping and bottoming systems. A topping system primarily generates elec- tricity, and an alternative use is found for the exhaust steam. The bottoming system produces heat to facilitate a process, and the excess is captured for electric power generation or other uses as a byproduct.

Typical cogeneration methods include use of waste process gases to drive gas turbines for electric generation, recapture of low-pressure steam for electric generation or driving machinery, and use of waste steam or heat for electric generation and peak shaving. Incineration of waste materials as fuel for steam generation, process heat, district heating or air conditioning, or electric generation is a growing cogeneration option.

8.5. Establishing Strategies for an Effective Energy-Management Program

8.5.1. Strategies and Tactics for Major Energy Improvements

1. Convince your management of the value of energy conservation and systems improvement.

2. Get energy improvement into the budget.

3. Develop a strategic objective to have the best installed energy systems and make the most efficient use of energy possible.

4. Develop and implement a specific plan for taking energy assessments.

5. Identify every energy-consuming device in the facility.

6. Conduct a comprehensive analysis of all energy equipment.

7. Develop a plan to upgrade technology of all energy equipment.

8. Review energy bills and find demand power factor and contract rates.

9. Negotiate with utilities to get lower rates and better breaks on charges.

10. Audit past bills, and get adjustments where possible.

11. Find real costs of energy deficiencies and unavailability.

12. Justify new technologies and permanent solutions to energy problems.

13. Reengineer the energy process, and stop doing business as usual.

14. Make energy an iterative process that is under frequent review.

15. Use steps in the detailed procedure that follows.

8.5.2. Starting an Energy-Management Program

Central to an energy-improvement effort is an energy assessment. Whether techniques of energy improvement are called surveys, audits, or assessments depends on objectives and individual pref- erences. An audit focuses on the quantitative aspects of energy consumption and finds savings op- portunities by analysis of current energy use patterns and consumption data. A survey usually focuses on qualitative opportunities that produce easily implemented improvements. An assessment usually follows a structured approach to identify, evaluate, and implement energy saving projects or system improvements. Often the terms are interchangeable, and all approaches yield good results. In the remainder of this chapter the term assessment will be used most frequently Managers or engineers finding ways to reduce energy requirements should not be concerned with terminology as much as results.

The methodology shown in the Appendix provides a step-by-step approach to energy conservation and cost reduction. It includes practical solutions, many of which can be implemented at little or no cost. Examples will be discussed along with application of the methodology. By following the steps in the methodology, the energy-analyst should find numerous energy-saving opportunities.

Generally, an energy assessment will include finding energy-saving and system-improvement op- portunities. The procedure in the Appendix shows the detailed steps to assess energy opportunities. Before the assessment starts, one person and / or a multidisciplinary team should be assigned to conduct the assessment, and each member should be trained in their specific roles. The composition of the team depends on skills available in the organization. Normally a combination of engineers, supervisors, operators, and human resource people have sufficient diversity of background to generate creative ideas for energy improvements.

8.6. Steps in an Energy Assessment

Prepare for the assessment:

Make a commitment to energy improvement. Select an individual or a team to improve energy. Collect data for energy bill analysis.

Identify operations and components of the energy system to include in the assessment. Obtain instrumentation to do a credible technical assessment.

Determine who controls those operations or components.

Obtain agreement from operations chiefs to proceed with the assessment. Get a computerized energy analysis program if available.

Collect data on energy consumption, practices: Review energy bills for past two years. Record demand and power factor data.

Get utility to show power factor and demand on monthly bills. Find criteria for power factor and demand charges.

Input to computer spreadsheet and make charts and graphs, convert to BTU / caloric equivalent.

Take plant tours to identify energy opportunities:

Observe present / potential energy waste and system problems. Record nameplate data, load rating, etc.

Review the energy system.

Find all energy system equipment, including invisible. Fill out energy data sheets.

Compute theoretical load, compare with billed load. Make inferences about discrepancies.

Analyze data from steps 1 and 2.

Correlate data with production or activity level. Find the big energy consumers.

Apply activity-based costing to find energy-related delays.

Develop and evaluate energy conservation solutions.

Revise team assignment to develop solutions. Use teams to get ownership of improvements. Use checklists to find energy savings.

Follow energy-improvement opportunities (see Section 8.7). Apply analytical techniques:

What, where, when, who and why?

Eliminate, combine, resequence, and simplify operations. Apply systematic creative thinking, brainstorming.

Evaluate solutions, select best alternatives: Conduct economic evaluation.

Use ABC and LCC. Consider people aspects. Assess feasibility.

Quantify and prioritize energy-improvement opportunities.

Avoid the one-year payback syndrome. Show costs of energy unavailability.

Present findings to management: Develop each recommendation fully. Prepare a coherent report.

Show why management should accept your recommendations.

Express recommendations in management’s language ($$$$ and ####). Rehearse the presentation, and present the report succinctly.

Gracefully accept management’s decision.

Implement improvements and monitor results: Assign responsibility for implementation. Establish measures of specific improvements. Verify savings.

Chart energy productivity.

Modify improvements if required.

Avoid false savings due to external changes.

8.7. Energy-Improvement Possibilities

Facility

Install enough insulation, weather stripping. Seal off leakage through windows, cracks. Evaluate refenestration (window replacement). Install vestibules at doors.

Seal around dock doors / use flap doors to seal out cold air. Reduce solar gain (insolation) to reduce cooling load. Close all doors and other openings in winter.

Energy infrastructure in the plant

Give the energy infrastructure and other energy delivery systems constant attention. Make someone responsible for operating and maintaining energy systems in the facility. Check ownership of interface devices with the utility supplier.

Set up a preventive maintenance program for every part of the system, including: Contacts, insulation, dust and dirt on equipment, heat buildup in ducts and switches.

Note failure points and correct the root problem immediately. Reengineer the system to bring it to state of the art.

Electrical

Upgrade electrical distribution systems.

Control peak load demand, shed loads using prioritized controller. Run equipment off peak where possible.

Retrofit for higher voltages.

Correct power factor by using energy-efficient motors or capacitors. Turn off equipment when not needed.

Monitor and upgrade power quality for digital equipment.

Natural Gas

Check for leaks and explosion hazards. Check piping for corrosion.

Check for improper installations.

Utility deregulation

Become familiar with new regulations and procedures.

Contact potential energy suppliers for quotes, interview alternate suppliers. Beware of bogus suppliers offering unrealistic deliverables.

Carefully evaluate economics of all offers; determine the real cost. Negotiate rate reductions.

Take full advantage of deregulation.

Lighting

Reduce number of fixtures.

Avoid electrician’s dream (excessive lighting).

Install more efficient lighting fixtures, electronic ballasts, and long-life bulbs. Use task lighting, reduce lighting in nonproduction areas.

Turn off lights when not in use.

Balance lighting heat load with air conditioning.

Install occupancy sensors or more switches to turn off unneeded lights. Utilize photocell and / or timers on lighting, especially outdoors.

Tie lighting into building control systems.

Process

Run process equipment only when needed. Avoid short runs on process equipment. Consider energy in scheduling production.

Make energy a prime consideration in replacing process equipment. Schedule operations / production around energy considerations. Reduce run times of equipment to bare minimums.

Use waste heat to run the process or supplement primary energy sources.

Heating, ventilation

Select heating equipment carefully for maximum efficiency. Install programmable thermostats, energy controllers. Control heating using computer building controllers.

Avoid pulling out heat, make up air loss with waste heat. Burn waste material for building heat.

Don’t heat seldom used space. Use radiant heat in isolated spots.

Install ceiling fans to bring heated air to the floor level. Change to cheaper energy sources.

Keep filters, coils, and ductwork clean.

Expand comfort zone in summer and winter. Use passive / low-energy cooling where possible.

Air conditioning systems (see also heating and air ventilation ideas) Use outside air to cool building before using ACU.

Clean ACU filters.

Use timers to control HVAC.

Install energy-management systems to control HVAC.

Replace refrigerant compressors or chillers with more efficient units. Redesign system for best efficiency and maximum output / kwh. Evaluate gas cooling as an alternative to electric cooling.

Conduct vigorous preventive / predictive maintenance on system. Insulate ductwork and piping in AC system.

Indoor air quality

Eliminate pollutants (smoke, dust, vapors) Introduce properly filtered fresh air

Do more frequent changes of the air in the building

Change controls, improve dampers, use variable speed blowers Rebalance system to accommodate varying demands

Boilers, steam, hot water Check fuel air ratio, NOX Check flame pattern Check stack temperature

Check CO content in stack Insulate pipes

Preheat makeup water with waste heat Heat air using heat exchangers.

Return steam condensate and keep it warm. Repair hot spots in fire box.

Correct steam leaks and repair traps. Install automatic controlled blowdown. Implement effective boiler water treatment. Consider cogeneration or alternate fuels.

Compressed air system

Repair air leaks.

Run at lowest possible pressure.

Reclaim waste heat for winter heating or heating restroom water. Install refrigerant air dryers and maintain effectively.

Install cooling towers for water-cooled compressors. Discontinue running cooling water down the sewer. Replace energy-inefficient motors and compressors. Keep maintenance records to justify new equipment.

Automate compressor system controls to minimize energy use. Evaluate load / unload against intermittent stop / start cycle. Avoid improper use of compressed air (blowing chips).

Obtain high-quality intake air using filters and coolest possible air. Practice effective preventive maintenance.

Consider alternative energy to power compressors.

Install remote monitoring of air compressors with diagnostics.

Motors / drives

Replace old motors with energy-efficient motors. Install capacitors on poor power factor motors.

Turn off motors when not needed (unless startup demand negates savings). Install variable-speed drives where possible.

9. SUMMARY: CREATING EXCELLENCE IN PLANT AND FACILITIES ENGINEERING

A key goal of this chapter has been to motivate industrial engineers assigned to plant and facilities engineering duties to strive for excellence. By keeping mindful of organizational strategy and applying effective industrial engineering and management techniques, including those described in this chapter, the industrial engineer can function as a plant or facilities engineer to create continuous improvement in productivity and quality for the benefit of the organization.