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

Nov. 2, 2004
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.

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.”Replacing electric motors with more efficient versions is another straightforward fix. In some cases, you can get rebates from the local utility to help you buy efficient motors. This varies by utility company, but it’s worth checking to see if yours has a program.A similar situation involves replacing lights. By replacing high-intensity discharge (HID) lights with fluorescent fixtures, you can save considerable costs. Joel Sanderson, project analyst at Orion Energy Systems, says his company’s T8 fluorescent bulbs, electronic ballasts and reflector systems increase light output by 50% (Figure 1), reduce electricity draw by 50% and last up to 20 years.Bemis Manufacturing in Sheboygan Falls, Wis., installed Orion’s fixtures throughout its plant, and the company says it is saving $317,000 per year in electricity cost and $63,000 in reduced maintenance. Even a small machine shop can save significant money. F. Zeigler Enterprises, in Fon du Lac, Wis., says it saves $5,000 per year in electric costs with fluorescents. “In most cases, Orion’s customers routinely see a payback period of 24 months,” Sanderson says.Replacing motors and lamps is simple to do. It saves energy and it’s easy to calculate the savings and return on investment. It’s also easy to justify the expenditures to the budget committee. Perhaps even more important, motor and lamp replacements often come out of the maintenance budget, not the capital expense budget. In some plants, that’s important.

Find the culprits

Once you’ve disposed of the easy pickins, you may want to invest in some monitoring hardware and software to track down big energy wasters.

Analyzing your power quality is a good start. By using a tool similar to Fluke’s 430 Series power quality analyzer, you can check all the phases, neutrals and grounds on virtually every connection in your low-voltage electrical distribution system. The meter will measure true RMS voltage and current, frequency, power, power consumption energy, unbalance and flicker. It also captures events such as transients, interruptions, rapid voltage changes, and dips and swells.

The reason for checking power quality is simple: Electrical equipment runs most efficiently when it has clean, pure power at the correct voltage. If your system is not delivering clean power to motors, fans and lights, it is costing you money. Also, if the power quality is bad, with lots of voltage transients and flicker, it can be damaging electrical equipment. Keeping kilowatts clean keeps equipment happy.

It is also important to know which equipment is using too much power. The process becomes complicated because you need to monitor individual machines and distribution systems. Some modern motor control centers and switching systems will provide such information to PCs over a plant network, but older equipment usually doesn’t have such sophisticated power-sensing capabilities.

Maintenance engineers in process control plants might want to look to their control system vendors for support. Many modern instrumentation and control systems already collect the data needed to analyze electrical consumption. You just need to know where to look and how to get it out of the database. “Invensys Process Systems uses a combination of its I/A Series distributed control system and mainstream fieldbus modules to monitor power usage within contractual guidelines,” Shriver says. “It can also execute controls necessary to keep operating within those limits.”

If you are already using load-shedding techniques, you may want to take advantage of your process control system’s ability to monitor things. “The system can ensure that actual usage of purchased power is consistent with load shed sequences enforced by distributed I/O or controllers and, if necessary, shed low-priority plant areas when measured purchased power is in danger of exceeding contracted limits,” Shriver says. “Load balancing of this sort also improves reliability by monitoring existing and backup capacity, so that power managers can switch between them with full knowledge of the cost ramifications of that switch.”

If you don’t have such sophisticated plant-monitoring systems, you may want to install suitable hardware and software. One solution is to install newer electrical meters in place of the standard utility meters. These meters will collect consumption data and send it to PCs over an Ethernet or Internet connection, or will feed it to a handheld PDA. Then, appropriate software on a PC or Web server can load the meter data and analyze electric power consumption.

Itron, for example, sells a Web-based software package called EEM Suite that helps plants optimize energy use. At Nike’s Michael Jordan Building in Beaverton, Ore., the software analyzed the building’s electrical load profile using data collected from smart meters and sent to EEM over the Internet.

The software discovered unusually high electrical use at night. Maintenance engineers investigating the problem found two reasons. First, a faulty signal was keeping electric heaters running continuously through the night. Second, a sensor placed near the outside air intake caused return air to regulate incorrectly. Without the electric monitor, they may never have known such problems existed.

In the program’s first year of operation, Nike realized an energy savings of more than $30,000 on 1.75 kWh of electricity. “We knew we could improve our energy efficiency,” says Jim Petsche, Nike facilities manager, “but we needed more information to help us take action. The software enabled us to see where we had problems and determine the best way to solve those problems with almost no capital investment. The result was cost savings and a road map for creating energy-management strategies.” Nike has extended the use of Itron software, using 21 meters in 14 buildings.

Other Itron customers report similar successes. The University of California at Santa Barbara says it used the software and meters in 300 buildings and saved $590,000; California State University in Long Beach has the system in 87 buildings and saved $446,000. It also helped the school avoid penalties of $2.2 million one winter.

In addition to tracking down easy fixes, such software helps plant engineers manage their energy consumption. Today, plant engineers are mostly at sea when it comes to energy management. “The typical energy-management approach consists of relatively isolated components,” says Gilbert Shaw, market line manager for Itron. “This includes part-time procurement support; ad-hoc consumption monitoring systems; electric or gas usage data without knowledge of accompanying rates and costs; periodic equipment upgrades; and the occasional energy audit.”

Shaw says newer software can provide additional information needed to make intelligent energy decisions. “External data such as price feeds or weather patterns are collected in the system to accurately forecast energy consumption and cost,” he explains. “Using near real-time data about the organization’s energy consumption and production schedules, plus interfaces with providers or market operators, it can send demand forecasts. This provides the energy or operations team with the ability to take advantage of curtailment or load dispatch opportunities. Ultimately those teams can determine if their facilities are operating poorly or profitably.”

Similar software is available from a host of other vendors, including control systems companies. “Invensys provides a decision analysis methodology, which weighs current operating data, external factors such as markets and weather, and simulations of ideal scenarios to identify the decisions which will be necessary to achieve the results,” says Chris Crosby, vice president, Invensys Global Power Consulting. “A collaboration environment, built on Invensys’ ArchestrA, enables production and operations management across multiple sites, organizations, companies and geographies. This governs and tracks collaboration among specialists, operators, schedulers, etc., based on management assignments, forecasted threats and severity as conditions and roles change.”

Crosby agrees with Shaw that the typical plant’s energy management approach needs a little organization. “Customers don’t have that much time these days. The decisions they have are more complex and the time in which they need to make decisions is shorter. And they have fewer people. They are looking for ways save money and time by optimizing across multiple energy operations. They are realizing that by attempting to optimize a single generation or distribution resource, they are sub-optimizing their total business.”

Companies are seeking real-time demand management, real-time supply management and real-time supply and demand optimization. And the bigger the organization, the more committees it seems to form. “One company, for example, had a chilled water group, a steam group, a cogen group, a SCADA group, an electric systems group and an energy demand management group,” Crosby adds. “They wanted an enterprise system that would allow them to push and pull data across all of those groups.”

Roll your own?

When getting power from the local utility proves to be too expensive, too unreliable or both, it’s time to consider generating your own power. Cogeneration, or the art of generating electric power as a byproduct of your own manufacturing process, is an old, established technique. In the past, cogeneration was most efficient in plants that use large amounts of steam, but it is fast becoming an option for plants of all types and sizes. So is on-site power generation.“Most large industrial plants these days are both suppliers and users of energy and are essentially running their operation like a utility,” Crosby says. “They are generating their own energy, buying backup, converting one fuel to another, distributing it, billing end users and attempting to send price signals -- all of the things that a utility does.”The economics of cogeneration are intimidating. Calculations consider what turbines you are using, how much steam the plant needs, what the utility power rate is at the moment and so on. If you decide to go into cogeneration or on-site power generation big time, you probably will need help.On the other hand, on-site generation can be easy. For example, got a landfill nearby? If they are currently flaring off all their methane, you might be able to cut a deal. SC Johnson, a manufacturer of household cleaning products in Racine, Wis., had such a landfill near its Waxdale plant. Johnson hired Northern Power Systems to build a $6-million combined heat and power (CHP) system to supply electricity and steam for the plant.The power system runs off a combination of methane—piped 2/3 of a mile from the landfill—and natural gas. It generates 3.2 MW of electricity and produces 17,000 pounds of steam per hour. The system yields $750,000 in annual energy savings. “This is a unique project due to the combined heat and power generation,” says Chris Voell, program manager for the EPA’s Landfill Methane Outreach Program. Voell says this is only one of two projects of its kind to be run on landfill gas.It may be unique to the EPA, but not to Northern Power Systems, which has built 800 CHP systems in 45 countries. “Many of Northern’s customers are manufacturing facilities that are faced with a large capital expense to upgrade their boiler or electrical infrastructure,” says Charles Curtis, vice president of Northern’s on-site power systems group. “On-site power is one of the most significant and beneficial approaches to reducing energy costs in geographic locations where delivered utility electric rates exceed 10 cents/kWh. By installing natural gas-fired reciprocating engines or turbines, manufacturers can generate their own electricity on-site at a lower cost than they can purchase it from the local utility.”On-site power doesn’t have to use natural gas as fuel. Other options are available. “Faced with higher fossil fuel costs, more manufacturers are taking advantage of biogas, waste heat and waste fuels -- which are often a byproduct of their processes -- and using those sources to generate power,” Curtis says. “Such an approach is a cost-effective way to reduce energy costs and eliminate the disposal costs of various waste streams.”Cogeneration and on-site power rarely supply all the power for a plant. Typically, most plants keep their connection to the local utility. If cogeneration or on-site power can’t supply all the power a facility requires, the plant supplements it with utility power. Conversely, if the utility power fails, or the demand charges become excessive, the on-site system can keep the plant running at a reduced load.“Advanced installations can provide near-instantaneous backup power to a plant’s critical loads in the event of a utility outage, so the plant can continue to operate through the outage without interruption,” Curtis says. “These systems protect manufacturers from both long-term outages, like the recent blackout in the Northeast, and short-term outages, such as voltage sags and transient surges, which can trip sensitive PLC controls on processing lines.”Pokka USA, a contract bottler in Marin County, Calif., suffered through 24 power failures in two years, at a substantial cost in product line downtime, safety hazards, and scheduling disruptions. Finally, they had enough. Northern Power installed a $1.9-million, gas-fired power system (Figure 2) that provides 70% of Pokka’s power needs, 30% of its hot water needs, and reduces its energy bill by $800,000 per year. It produces electricity at a cost of 6 cents/kWh, compared to the local utility, which is charging 15 cents/kWh.Figure 2. Pokka power
The cogeneration system at Pokka Beverage delivers 70% of the plant's power and 30% of its hot water, and reduces energy costs by $800,000 per year.“While we want to believe that the energy situation of the past two years was an aberration,” says Dan Hancock, vice president of operations for Pokka, “we cannot run our business on such hope. The power losses dramatized for us the critical need to implement a plan for ensuring reliable, quality power at stable and reasonable prices.”Figure credits:
Figure 1: Orion
Figure 2: Northern Power Systems
Rich Merritt is senior technical editor for Plant Services, Control and Control Design magazines.

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