In this 10-minute podcast, we discuss the process of planning and executing an energy management project and the importance of getting the benchmarks and baseline performance established early in the planning.
These benchmarks and baselines are helpful not only in project justification and return on investment post project, but also help to justify the ongoing support required to maintain the savings over time.
Jim: Hi, this is Jim Cahill, and welcome to another edition of “FIRSTHAND: Operational Certainty Consulting in a Pod” podcast series. Today, I’m joined by Sam Thiara, and Sam is in our operational certainty consulting team and covers the Europe, Middle East, and Africa regions. And Sam gets involved with improving the performance of manufacturing plants through digital transformation initiatives. Welcome, Sam.
Sam: Hello, Jim. Thank you for inviting me back to this energy management podcast.
Jim: It’s great to speak with you too, Sam. So let’s get started. What are common concerns you hear that drive manufacturers to seek help in energy management initiatives?
Sam: Customers tell us they have several factors that drive energy management initiatives within their facilities. The need to control operating costs, especially so in energy-intensive industries where energy can often represent up to 50%, if not more, of a site’s operating cost, improving energy efficiency goes direct to the company’s bottom line, helping their competitiveness, and in many cases, releasing additional capital from lower fuel bills.
Equally, we are seeing many plants looking to eliminate or minimize sources of energy wastage, such as excessive steam leaks, and the reuse of processed waste gases. We’re also seeing an increasing number of manufacturers adopting energy management standards, such as ISO 50001, placing a systematic focus on plants to become increasingly more energy efficient by bringing people, processes, technology, and best practices together.
Jim: So, it sounds like there’s concerns around costs, emissions, and standards that are driving this. If a manufacturer or a producer decides to move forward and work with the Emerson energy management consulting team, what are common preparation steps they would take to prepare for the engagement?
Sam: Well, this can depend on the customer’s experience, capabilities, and the maturity of their energy programs. In some cases, we have been asked to provide plant-wide assessments, helping a site prepare a master plan, and help prioritize improvement opportunities based upon multiple criteria, such as profitability, production, environmental, and safety, and in almost all cases, supporting an economic case for project justification.
In cases where a site has undertaken their own assessment, we get called in to help improve the performance of specific assets, such as boilers, process fired heaters, and furnaces, to much larger assets, like powerhouses, distillation units, and steam systems. The typical and most common starting point tends to begin by undertaking a discovery study where we work closely with our customers to investigate and provide solutions to overcome the root cause of an underlying issue that results in poor energy efficiency.
Jim: It sounds like getting involved early from the upfront analysis and project justification phase all the way through being able to measure the results and get return on investment is a very effective way to go. So, how does an engagement typically kick off?
Sam: It’s important for us to start off any engagement with an understanding of the process, taking into account customer observations, insights, and identify problems, evaluating documentation, and in many cases, undertaking some form of process data analysis. A preliminary assessment, which in many cases can be undertaken remotely, offers our consultants deep insights into operational and performance issues, helping establish any gaps that can be equated to, for example, fuel savings, emissions reductions, improving performance, and increasing reliability.
Jim: Based on the experiences of the team, what are typical timelines in executing these kinds of projects?
Sam: Again, these can vary depending on the scope of the opportunity. But for typical process assets, it’s reasonable to expect a four to six-week time frame to undertake a consulting engagement. I would consider boilers, distillation units, heaters being typical engagements of this nature. Implementation of any proposed solutions can also vary between those that are considered low-effort improvements, such as improving control loop performance, to those that require changes to a unit’s control strategies, to those that require additional modernization or even replacement.
Jim: Yeah, I can see how these timelines could vary significantly based upon what needs doing the scope and the business objectives for the projects. So, how are measurements made to determine the return on investment?
Sam: Many facilities provide process data, such as the cost of energy, fuel flows, pressures, and steam and power demand, that help our consultants assess operational performance. Much of this information is often available from plant historians, and we use this data and run the numbers through our financial models to help ascertain the savings or improvement opportunity. And to quantify improvements, we undertake formal benchmarking by working with our customers to define success criteria and KPIs before we proceed with any project.
Jim: I think including that benchmarking as part of the project to really understand the ROI delivered to help the customers justify future projects is a critical piece there. What post-project activities are typically required?
Sam: In helping plants to sustain their improvements over time, training is an integral part of any improvement project. Any new system can present challenges to operators as they transition to their new operating environment. Now, we often use simulation-based training systems to help support the learning process. And being able to work on simulation systems during the learning phase doesn’t compromise actual plant operation. It gives operators confidence when they begin to ultimately operate the running plant.
Jim: Simulation can really help with getting the operators familiar with how it’s gonna work, especially if there are significant changes. Also, when new people come aboard, having those systems ready to train them before they’re working on the actual process. So, yeah, that sounds like a best practice there.
Sam: One of the key post-project activities is in ensuring that the system does, in fact, operate as designed. Measuring energy and operational KPIs designed into a system helps track performance in meeting any initial success criteria. It also helps support ongoing training if any deviations are observed.
Jim: Based on some of the projects the team has done, are there some results you can share of what you’ve been able to quantify?
Sam: We have several use cases where customers have achieved success with their energy projects, and I can give you some example from numerous industries. A chemical company using process waste gas as a fuel source which help reduce their natural gas consumption by a million BTUs and also reduce emissions by 30%.
A petrochemical company achieving a 35% reduction in energy consumption and achieving payback within two months within their distillation units. A pulp and paper company who achieved boiler efficiency improvements in excess of 3%, providing payback within 24 months and beating their own initial expectations.
An aromatics plant that delivered savings of €2.1 million within their distillation unit. And finally, a steel producer who gained a 56% internal rate of return against the forecasted 46% within their powerhouse operations by improving electrical power production by 26%.
Jim: Wow, those are some pretty impressive numbers and across so many different industries there. So, Sam, where would you recommend people go to learn more about Emerson’s approach to energy management?
Sam: I would recommend two online resources. The first is EmersonAutomationExperts.com, and the second is EmersonExchange365.com. Now, both provide insights into technologies and solutions across a spectrum of applications and industries Emerson operates in, and the content is primarily authored by experienced engineers and consultants.
Jim: Well, I think those are some great suggestions there, and I really appreciate your time today, Sam.
Sam: Thank you, Jim.
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