- 12 September 2007 -

Tackling soaring energy costs in
North America

European industry is fighting the battle against high energy costs for process industries. The same price crunch is happening in North America, and some companies are finding innovative new ways to save energy and money. Consultant Gunnar Hovstadius, PhD, explains.

There have recently been a number of articles published in Europe regarding the problems facing its process industry as the energy cost continues to rise. The same problems exist on the Western side of the Atlantic and it might be of interest to see how some of the North American utilities and industies approach these problems.

So, what are the US and Canada doing to help the process energy tackle the increasing energy costs?

The US Department of Energy has made a comprehensive market study of various types of industries and their potential for energy savings. This study shows great potential for process industry in general and especially for the pulp and paper and petrochemical industries. Of all different industrial types of machinery, pumps, fans and compressors probably offer the greatest potential for energy savings. The cost of pumping when producing paper can, for example, consist of up to 30% of the total. Several studies in both Europe and US indicate that many process industries have a saving potential of 30-50% in their pumping systems.

An interesting fact is that the power industry in some areas invests heavily in energy conservation at their customers’ sites. A good example is the western US and western Canada, where the power industry spends large amounts of money (hundreds of million of dollars) on energy efficiency at their customers’ facilities.

Supporting energy efficiency
In the Pacific Northwest there is plenty of cheap hydroelectric power available. The power cost is still very low for the industries, about 3.5 cents/kWh and another cent for demand charges. Still, the large power utilities in the region are increasing their programmes that support energy efficiency (EE) projects.

Large utilities have EE programmes for both the residential, commercial and industrial areas. Why is this so? The explanation lies in the fact that they are very close to the capacity ceiling and are therefore looking forward to see how much it would cost to put new capacity on line compared to how much it costs to save energy and not have to build new power plants. The cost of saving a megawatt hour is estimated to be only half of the cost to produce one in a new power plant. When it comes to peak power, the cost difference can reach a factor of five. This way of looking at things results in the fact that from the utilities’ point of view, investing in savings is cheaper than investing in new power plants.

A number of organizations are actively working to help industry take advantage of this situation. There are actually so many different organizations involved in promoting energy efficiency that they are competing with each other. Examples of such organizations are: US Department of Energy, The North West Energy Efficiency Alliance,
The Energy Trust of Oregon, Bonneville Power Administration (BPA), Washington State University and state energy offices. All are active in the northwestern corner of the US.

Interesting programmes that are geared towards helping the industry in the area have been launched in both Canada and the US. In Canada the leading utility in the west, BC-Hydro, re-launched its Demand Side Management programme, “Power Smart,” which offers extensive help to their customers to become more energy efficient. The programme also supports a unique new rate structure, the sole purpose of which is to encourage customers to invest in energy efficiency equipment and processes. The idea is to make energy efficiency more attractive to a customer base that is used to low energy costs. With an already low cost per kWh, there is not much incentive to become more efficient. BCH has therefore created a new approach where a customer’s energy usage during 2005 is used as a base. For 90% of this consumption level the price is lowered and for the top 10% the price is doubled. Total energy consumption equal to 2005 will cost the same, but increasing energy usage will cost twice as much per kWh. The same is of course true for decreasing energy usage. Savings will be worth twice as much as before.

On the US side of the border the Industrial Efficiency Alliance, which the power companies in the region fund, is helping the pulp and paper and food industries implement Continuous Energy Improvement Programmes. These programmes are also helping to pay for demonstration projects that can be used to show other companies how they can save by using the same kind of solutions.

Large utilities like BC-Hydro fund or co-fund consultants to help their customers get started on Energy Efficiency Activities. These consultants are paid by the utility. They offer help with education, assessments and implementation. BC-Hydro also arranges seminars and work shops where specific industries are invited to listen to experts who describe various ways of saving energy. For example, right before Christmas they arranged a two-day workshop in Vancouver for the pulp and paper industry and more recently a similar workshop for the oil and gas industry in Calgary. The goal of these conferences is to make the industries aware of the potential for savings that is at hand, which in turn will make the end users more competitive. The invited specialists describe both new energy efficient technology and best practices for running existing systems.

The workshops are regarded as a great success with 96% of the participants in the pulp and paper industry workshop rating the event as very relevant for their industry. The seminars will be followed by educational efforts and local assessments at participating plants.

Some utilities in North America are also offering generous economical help to those industries that implement savings. It is common that these incentives pay for about 30% of the project cost, but for example Idaho Power can pay up to 70% of the cost of energy efficiency projects. Such a project could include installing a variable speed drive in a pumping system.

Government help
The US Department of Energy (DOE) is also active in helping industries become more efficient. In 2006, DOE launched a programme, “Save Energy Now” that initially aimed to help industries save in the areas of process heat and steam systems. DOE contracted a number of specialists in these areas that were sent out to large energy users to conduct Energy Saving Assessments: ESAs. The programme was so successful that DOE decided to expand it to pumps fans and compressors from the beginning of 2007.

As a key element of Save Energy Now, DOE is sending such “ESA energy experts” to the nation’s most energy-intensive manufacturing facilities to conduct 250 Energy Saving Assessments during 2007. The purpose of the assessments is to identify immediate opportunities to save energy and money, primarily by focusing on energy intensive systems including process heating, steam, pumps, fans and compressed air. (Click here for more information).

A second objective is to train engineers at the chosen plants to use DOE-developed tools that help identify savings. When the specialist leaves, plant personnel should be able to use these tools on their own so that savings can be duplicated.
At a very recent pump-ESA at a large industrial plant in US saving opportunities valued to well over a million dollars per year were discovered. These opportunities came from the plant using higher than necessary pressures in water supply systems feeding a large number of sub systems. The installed motor power feeding the main headers exceeded 10,000 kW.
The plant was designed more than 40 years ago, and the water usage has been lowered through numerous process changes and improvements through the years. Yet the large water supply system has remained unchanged. With the present usage levels, the supply pressure could be roughly cut in half. The cost of doing this ESA was less than $10,000, a good return on investment. The corporate energy manager that was present during the ESA was very enthusiastic and stated that it was a no-brainer to spread these kind of activities throughout the whole corporation now that he had seen how easy to use the DOE “Pump System Assessment Tool” (PSAT) was and what results could be achieved.
A metric version of PSAT is planned to be developed in the near future.

We all have to find innovative ways of cutting down on our energy use, and there is therefore good reason for many governments and utilities to look west and learn from some of the efforts undertaken in North America.

Contact
Gunnar Hovstadius, PhD
E-mail: gunnarh@msn.com

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