Take control of your electric power cost, quality, and reliability

With fewer power plants being built, Senior Technical Editor Rich Merritt advises plant mangers to gain control of electric power cost, quality and reliability — and even think about generating their own electricity.

By Rich Merritt

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Electricity consumption is going up across the United States, but utilities are not keeping up their end. Few new plants are being built, and the power-generating infrastructure is becoming old and unreliable. Accordingly, you can expect more power shortages, blackouts and interruptions; decreasing power quality and higher electricity rates in the next few years.

It’s time for you to take control, cut back the excess power your plant is wasting, take steps to deal with power quality issues, and perhaps even think about generating your own electricity.

Some of the ways to save energy are like picking low-hanging fruit. Glenn Givens, professional engineer and consultant at Innovention Industries in Burlington, Ontario, works with several Canadian paper mills. “As far as I've seen, large savings can be made with very little cost and no new equipment,” Givens says. “Most of it is a no-brainer. As energy costs rise, people start thinking about ways to save when they weren't thinking before.”

Electric utilities love to hit manufacturing operations with peak demand charges and variable rates. If you are aware of what they are doing, you can save a lot of money just by being careful. “Mills pay more for power used during peak demand times, the amount of which is defined in an energy procurement contract,” says James Shriver, industry consultant for Invensys’ Power Division. “A mill consuming 10,000 MWh of electricity a day in an energy market where demand charges vary between $6 and $30 per kW, for example, could save more than $300,000 a year by reducing demand 15%.” (See sidebar, “Shave those peaks.”)

Shave those peaks

Demand charges can be huge. Consider a mill whose highest demand is 20 MW and has an average load of 16 MW. Rates are $0.05/kWh for energy, and $10/kW demand. Its monthly KWh usage is 16,000 kW x 24 hr/day x 30 days/month = 11,520,000 kWh. Its Energy charge is 11,530,000 x $0.05 = $576,000/month and its demand charge is 20,000 x $10 = $200,000/month. In this example, a 3 MW (15%) reduction in demand would yield savings of $30,000 per month, or $360,000 per year.

Picking the low-hanging fruit can be easy and profitable. At the opposite extreme, you can spend lots of money on cogeneration or onsite power generation and save millions of dollars in energy costs. In this article, we’ll look at both extremes to find ways you can cut energy costs and increase reliability of your plant’s electric power systems.

The power problem
Your plant may be in trouble, especially if you rely completely on electric power from your local utility. According to the September 2004 issue of Electric Power Monthly, a publication of the Department of Energy, total net generation of electric power in June 2004 was 342.4 teraWatt-hours (TWh), a 5.7% increase from the 324.0 TWh generated in June 2003. Power consumption, therefore, is up by 18.4 TWh in one year.

The projected growth in commercial and industrial electricity demand from 2002 to 2025 will require significant additions of base-load generating capacity, says the DOE’s report, “Annual Energy Outlook 2004 with Projections to 2025”.

Alas, the same report says that new plant construction is slowing. “More recently, however, developers have reported that they are delaying or canceling planned plants,” the report says. “New additions slowed in 2003, and that trend is expected to continue in the near term.”
 Not only that, but the installed base is getting old, and some plants may be closing. Many nuclear plants are reaching a critical age where they have to be closed or renovated. According to the DOE, the average age of conventional U.S. power plants is 39.5 years, and several plants, now generating 82 GW of power, will soon be closing. If both nukes and conventional power plants in your region close, you could be in trouble. Although your utility will continue to supply electricity, expect it to be more expensive, less reliable and subject to rolling shutdowns.


Figure 1. Shed some light
Installing fluorescent fixtures (right) in place of high-intensity discharge lamps
(left) not only saves electricity, it brightens the factory up.

The no-brainers
Givens says his paper mill clients have been saving money with simple solutions. “They've saved a lot of energy merely by fixing steam leaks, running things when lower electricity rates are on or when demand is low, avoiding peak demand periods, and shutting down one piece of equipment when there are two in parallel and only one is needed,” he explains. “A refiner, for example, typically idles at 100 to 500 KW. If you shut one down, you save its idle power.” At 6 cents per kWh, that doesn’t seem like much, but during a year’s time it becomes significant.

“They also run small sub-processes at full throttle for a short time, then shut them down,” Givens says. “Measure the power consumption on a sub-process running at, say, 20% of capacity. At 100% capacity, depending on the process, the electric consumption may only be 10% higher. So it's easy to calculate the savings. In one case, they actually put the cumulative dollars on the DCS screen.”

Givens’ clients run high-consumption equipment when electricity is cheaper, such as at night, and less energy-intensive equipment during the day. “On hot summer days, they get a price update every hour or as often as they like,” he says. “They use the Web site of the body that oversees the entire electric power production for the whole province. When electric charges are high, they may run a paper grade that doesn't require energy-intensive equipment.”

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