June 2008
PPI Special Report
High natural gas prices, hikes in the cost of petroleum-based fuels and fluctuating electricity charges continue to challenge manufacturers who want to build certainty into their cost bases. Passing the cost on to the end consumer is not an option for businesses operating in competitive global markets. In the US in recent years, for example, the cost of natural gas has been as much as four times greater than in competing countries. Meanwhile, the issue of energy efficiency is starting to gain currency in the boardroom for a different reason. As a result of the global warming and industrial emissions debates, it is becoming an important risk-management and reputation issue.
These are compelling drivers for reducing energy consumption per unit of product. However, at plant-floor level, issues such as productivity, product quality and delivery deadlines can all be more pressing. As a major user of energy in large, complex process plants around the world, the Shell Group is facing the same issues.
However, by drawing on the company’s experience of operating energy-intensive processes, Shell Global Solutions has devised an approach that aims to uncover major energy cost savings for little or highly cost-effective investment – and without committing considerable resources. This collaborative methodology couples a customer’s manufacturing expertise with the group’s energy optimization skills and has proved to be a successful formula for firms across a wide range of industries.
Seeing the bigger picture for energy Optimization
Looking at individual machines and plant components in isolation can rarely optimize energy usage. Instead, Shell Global Solutions approaches the production process as a whole. Weaknesses can then be highlighted within complex work processes.
For example, improvements can often be uncovered by optimizing equipment operating parameters and engineering design. But more dramatic modifications may be possible by re-engineering a plant’s systems and processes, for example, by updating shutdown and
startup procedures and asset-management practices. Real-time calculation of energy usage has proved valuable at some plants because it highlights inefficiencies and provides an early warning system for faults. The overall operating efficiency of equipment such as furnaces and boilers can often be improved by defining precise equipment operating parameters.
Meanwhile, a systematic approach also covers the more straightforward measures. Control systems should be installed to shut down redundant equipment; hot baths and steam lines should be insulated; and leaks should be repaired.
Experience shows that behaviour is also important: plant personnel should understand how job functions impact energy usage and what effect they might have on the bottom line. Training and improved awareness can help to generate cultural change, which is fundamental to delivering long-term value.
In reaction to rising energy costs and the increasing focus on environmental performance, many companies are starting to take a closer look at their energy management. The case studies below show how two German manufacturers have devised energy-management programmes and have made sustainable improvements without incurring significant capital expenditure.
How do other industries do it?
Kröner Stärke, a producer of high quality wheatstarch products, exports all over the world and is a leader in its field. However, wheat-starch production is one of the most energy-intensive areas in manufacturing, and energy is a major portion of the company’s operating costs. In 2003, the company became concerned at the extent of the price rises in the gas market; these were beginning to pose a major threat to its margins.
Friedrich Althoff, head of project management, Kröner Stärke, commissioned Shell Global Solutions to identify energy-saving opportunities, direct the implementation of any changes and help to deliver sustainable improvements. Advanced statistical techniques are used to benchmark historical energy consumption relative to production data; the figures are then used to measure and demonstrate actual energy savings. A range of improvements was devised for Kröner Stärke. For example, the plant’s low-pressure steam system was replaced by hot-water feeds, which enhanced efficiency, and best practices were introduced in the drying areas.
In addition, an energy-efficient and environmentally friendly biogas-fuelled combined heat and power (CHP) plant was recommended. Biogas (produced from the plant’s organic waste) was being used to fire the steam boiler. However, Shell Global Solutions recommended that the biogas could also be used in a CHP plant to produce electricity, which could be sold to the grid at a subsidised price. Hot water would also be produced, all of which could be used in the plant’s processes. The installation of a new CHP plant is planned, and this may provide a valuable additional income stream.
“The amount of gas used to generate process steam for drying wheat-starch products has been reduced by more than 13%,” says Althoff. “The aim was to reduce rising operating costs, and although the savings only partly compensate for the gas price rises, it has been a highly successful project. As a company, we take our environmental mandate extremely seriously, so the energy usage reduction is also strategically important.”
Increasing energy efficiency and enhancing competitiveness
The Meggle group of companies is one of Europe’s largest and best-known manufacturers of dairy products. It is famous for its herb butter and also produces modern dairy products such as lactose for the pharmaceutical industry. As an organization that continually seeks new ways to reduce costs and promote energy conservation, Meggle had already employed several impressive energymanagement techniques. But rising energy costs and increased competition prompted the group to explore additional ways of enhancing its performance in this area and to commission Shell Global Solutions to drive an energy-saving project at Meggle’s main site in Wasserburg.
Shell Global Solutions’ staff worked quickly to understand the site’s operations, energy infrastructure and process requirements. An energy-management team was formed from key operational personnel from the plant and Shell Global Solutions’ experienced energy-management practitioners to search for opportunities for improvement and to drive their execution.
Projects that were implemented include the introduction of a data collection system that helps plant steam consumption to be tracked in real time. This has enabled the operating parameters in the drying processes to be adjusted to decrease steam consumption and increase production while fulfilling quality requirements.
Thomas Roth, head of production and technology, Meggle, comments, “Shell Global Solutions’ consultants used their on-site presence to help heighten awareness, at all operational levels, of the high cost of energy and how different job functions affect energy usage. That has been a key benefit.”
He continues, “They adopted a rigorous scientific approach. The successes we have had so far have been based on a detailed analysis of our processes. The work has produced initial savings of $240,000 a year without extensive capital expenditure, and this figure will rise considerably, by an additional $120,000–180,000 per year, as further projects are implemented.”
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