Energy Management Strategies for
Operational Excellence
Dick Hill
Vice President
ARC Advisory Group
dhill@arcweb.com
2
© ARC Advisory Group
Why is Energy Management so Important?
Business
Drivers
Energy
Volatility
Operations
Cost
Regulator...
3
© ARC Advisory Group
Global Energy Demand will Double by 2050
Source: World Energy Council
Non-OECD countries account fo...
4
© ARC Advisory Group
Manufacturing‟s
Energy Footprint
5
© ARC Advisory Group
Industry‟s Role in Energy Consumption
Industry is #1 Consumer of Energy
But, is trending down.
31%
...
6
© ARC Advisory Group
The Cost of Energy Projected to Rise
Source: US Energy Information Administration
Prices (2009 doll...
7
© ARC Advisory Group
US Manufacturing Energy Footprint
Source: US Department of Energy
Losses amount to several quadrill...
8
© ARC Advisory Group
Where is Energy Consumed?
 Process Heating (Fired
Heaters) is Number
One Energy Consumer
 Machine...
9
© ARC Advisory Group
Process Industries are the Most Energy Intensive
(Amount of Energy Used Per Unit of Activity)
Energ...
10
© ARC Advisory Group
Energy Management
Current Realities
11
© ARC Advisory Group
Where is your Energy Leadership?
9%
27%
15%
36%
12%
Corporate BU Plant None Don't Know
1. Corporat...
12
© ARC Advisory Group
2010 Survey: Management Commitment
25.6%
17.4%
15.1%
41.9%
Corporate
Business Unit
Plant
No Energy...
13
© ARC Advisory Group
Do you have “Energy Management Teams”
at your Plants?
Yes No Don't Know
19% 19%
63%
1. Yes
2. No
3...
14
© ARC Advisory Group
Is Automation & Controls an Active
Member of your Energy Teams?
Yes No Don't Know
19%
33%
48%
1. Y...
15
© ARC Advisory Group
2010 Survey:
Plant-Level Energy Management Teams
54%39%
7%
Does your plant have an active
Energy M...
16
© ARC Advisory Group
Monitor “Energy Costs” in Real Time?
30%
11%48%
11%
For Accounting For Ops No Don't Know
1. Yes – ...
17
© ARC Advisory Group
Does you Operators have “Energy KPIs”?
17%
27%50%
7%
Extensive Some None Don't Know
1. Yes – Exten...
18
© ARC Advisory Group
27%
52%
15%
6%
Do you monitor the energy costs of your
industrial manufacturing processes?
In real...
19
© ARC Advisory Group
What % of Energy Usage have On-Line
Measurements?
<10% 10-
15%
15-
20%
20-
30%
30-
40%
40-
50%
>50...
20
© ARC Advisory Group
To What degree is Energy an active
component of your APC Control?
None Some Most All
25%
17%17%
42...
21
© ARC Advisory Group
2010 Survey: Control of Energy
26%
10%
17%8%
7%
6%
26%
What percentage of energy measurements are
...
22
© ARC Advisory Group
Do You Benchmark Energy Metrics?
1.Don‟t Know
2.No
3.Yes: Internally Only
4.Yes: Externally Also
23
© ARC Advisory Group
2010 Survey:
Energy Metrics and Benchmarking
0% 10% 20% 30% 40%
Internally
Externally
Not benchmar...
24
© ARC Advisory Group
10 Recommendations for
Energy Management
25
© ARC Advisory Group
10 Energy Optimization Recommendations
1. Secure Management‟s Full Support
2. Plant-level Energy T...
Thank You.
For more information, contact the author at
dhill@arcweb.com or visit our web pages at
www.arcweb.com
27
© ARC Advisory Group
Questions for the Panel
 Q: Erik, How do you balance safety requirements with energy optimization...
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Energy Management Strategies for Operational Excellence @ ARC's 2011 Industry Forum

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Energy Management Strategies for Operational Excellence @ ARC's 2011 Industry Forum by Dick Hill.
10 Energy Optimization Recommendations
1.Secure Management‟s Full Support
2.Plant-level Energy Teams –Include Automation
3.Build an Energy Strategic Plan
4.Perform Energy Audits –Current Reality
5.Establish Energy Metrics
6.Benchmark: Other Plants & Other Companies
7.Energy KPIs –Not just for Management
8.On-Line Energy Measurements –Fill Gaps
9.Automate to Optimize
10.Empower the Worker

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Energy Management Strategies for Operational Excellence @ ARC's 2011 Industry Forum

  1. 1. Energy Management Strategies for Operational Excellence Dick Hill Vice President ARC Advisory Group dhill@arcweb.com
  2. 2. 2 © ARC Advisory Group Why is Energy Management so Important? Business Drivers Energy Volatility Operations Cost Regulatory Compliance Investor Confidence Energy Issues Impacts The Ability to Sustain Your Business
  3. 3. 3 © ARC Advisory Group Global Energy Demand will Double by 2050 Source: World Energy Council Non-OECD countries account for the majority of the nearly 50% projected increase in global energy used by 2035 Source: EIA, International Energy Outlook 2010
  4. 4. 4 © ARC Advisory Group Manufacturing‟s Energy Footprint
  5. 5. 5 © ARC Advisory Group Industry‟s Role in Energy Consumption Industry is #1 Consumer of Energy But, is trending down. 31% 28% 22% 19% Source: EIA Annual Energy Review 2008 0 5 10 15 20 25 30 35 40 2008 2013 2018 2023 2028 2033 2010 2020 2030 31% 28% 20% 21% 114 QBTUs 2035 100 QBTUs 2008 US Data
  6. 6. 6 © ARC Advisory Group The Cost of Energy Projected to Rise Source: US Energy Information Administration Prices (2009 dollars per unit) 2009 2035 CAGR Low Sulfur Light Price ($ per barrel) 61.66 125.03 2.8% Imported Crude Oil Price ($ per barrel) 59.04 114.05 2.6% Gas Wellhead Price ($ / Mcf) 3.71 6.53 2.2% Coal Minemouth Price ($ / ton) 33.26 34.11 0.1% Electricity (cents per kilowatt- hour) 9.8 9.2 -0.2%
  7. 7. 7 © ARC Advisory Group US Manufacturing Energy Footprint Source: US Department of Energy Losses amount to several quadrillion BTUs and billions of dollars in lost revenues every year.
  8. 8. 8 © ARC Advisory Group Where is Energy Consumed?  Process Heating (Fired Heaters) is Number One Energy Consumer  Machine Drive is Number Two Source: EIA Annual Energy Review 2008 5.8 2.8 1.2 0.2 0.1 0.1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 QuadrillionBtu 0.1 0.2 0.2 0.2 0.7 1.6 3.6 0.0 1.0 2.0 3.0 4.0 Conventional Electricity Generation Electrochemical Processes Process Cooling and Refrigeration Facility Lighting Facility HVAC Machine Drive Process Heating Quadrillion Btu W.A.G.E.S Water Air Gas (Fuel) Electric Steam
  9. 9. 9 © ARC Advisory Group Process Industries are the Most Energy Intensive (Amount of Energy Used Per Unit of Activity) Energy Consumption (Trillion Btu) Petroleum Chemicals PaperPrimary Metals Food Processing Nonmetallic Minerals Tobacco/Beverages Furniture Leather Machinery and Computers Wood Transportation Fabricated Metals Textiles/Apparel Plastics/ Rubber Electrical Printing Miscellaneous 1 10 100 1000 10 100 1000 10000 EnergyIntensity (ThousandBtu/$GDP) Energy-Intensive Industries Industrial Energy Intensity vs. Energy Consumption Mining Source: US Department of Energy
  10. 10. 10 © ARC Advisory Group Energy Management Current Realities
  11. 11. 11 © ARC Advisory Group Where is your Energy Leadership? 9% 27% 15% 36% 12% Corporate BU Plant None Don't Know 1. Corporate Leader – “Energy Czar” v 2. Business Units have their own v 3. Plants have their own v 4. None v 5. Not sure v
  12. 12. 12 © ARC Advisory Group 2010 Survey: Management Commitment 25.6% 17.4% 15.1% 41.9% Corporate Business Unit Plant No Energy Czar Does your Company have an "Energy Czar" (e.g.Energy Leader)? Company Energy Leadership Over 40% Responded: No Energy Leader Source: ARC Energy Management Survey 2010
  13. 13. 13 © ARC Advisory Group Do you have “Energy Management Teams” at your Plants? Yes No Don't Know 19% 19% 63% 1. Yes 2. No 3. Don‟t Know
  14. 14. 14 © ARC Advisory Group Is Automation & Controls an Active Member of your Energy Teams? Yes No Don't Know 19% 33% 48% 1. Yes 2. No 3. Not Sure
  15. 15. 15 © ARC Advisory Group 2010 Survey: Plant-Level Energy Management Teams 54%39% 7% Does your plant have an active Energy Management Team? Yes No Don't know 54 % have Active Energy Team 49% 42% 9% Is Automation and Controls an active member of the energy management team? Yes No Don't know Less than Half Sited Automation Membership on Management Team Source: ARC Energy Management Survey 2010
  16. 16. 16 © ARC Advisory Group Monitor “Energy Costs” in Real Time? 30% 11%48% 11% For Accounting For Ops No Don't Know 1. Yes – For Accounting Purposes v 2. Yes – For Operations Purposes v 3. No Real Time monitoring v 4. Don‟t Know v
  17. 17. 17 © ARC Advisory Group Does you Operators have “Energy KPIs”? 17% 27%50% 7% Extensive Some None Don't Know 1. Yes – Extensive 2. Yes – Some 3. None 4. Don‟t Know
  18. 18. 18 © ARC Advisory Group 27% 52% 15% 6% Do you monitor the energy costs of your industrial manufacturing processes? In real time for operating purposes Periodically for accounting purposes Do not monitor energy costs Don't know 2010 Survey: Operations-Level Energy Monitoring 47% 43% 8% 2% Do you provide Console Operators with Energy-related KPIs? None Some Most All 27 % Monitor Energy Costs in Real-Time Nearly Half Sited No Energy-Related KPIs for Operators Source: ARC Energy Management Survey 2010
  19. 19. 19 © ARC Advisory Group What % of Energy Usage have On-Line Measurements? <10% 10- 15% 15- 20% 20- 30% 30- 40% 40- 50% >50% 10% 15% 20% 5% 10% 15% 25% 1. <10% 2. 10-15% 3. 15-20% 4. 20-30% 5. 30-40% 6. 40-50% 7. >50%
  20. 20. 20 © ARC Advisory Group To What degree is Energy an active component of your APC Control? None Some Most All 25% 17%17% 42% 1. None 2. Some 3. Most 4. All
  21. 21. 21 © ARC Advisory Group 2010 Survey: Control of Energy 26% 10% 17%8% 7% 6% 26% What percentage of energy measurements are online and available? 5% to 10% 11% to 15% 16% to 20% 21% to 30% 31% to 40% 41% to 49% 50% or more 53 % Have 20 % or less of Energy Measurements On-Line Source: ARC Energy Management Survey 2010 49% 35% 16% 0% To what degree is energy an active component of advanced process control (APC) models? None Some Most All For 49 % Energy is Not an Active Part of APC
  22. 22. 22 © ARC Advisory Group Do You Benchmark Energy Metrics? 1.Don‟t Know 2.No 3.Yes: Internally Only 4.Yes: Externally Also
  23. 23. 23 © ARC Advisory Group 2010 Survey: Energy Metrics and Benchmarking 0% 10% 20% 30% 40% Internally Externally Not benchmarking Don't know Are You Benchmarking Your Energy Efforts? 35 % or More are Not Benchmarking Source: ARC Energy Management Survey 2010
  24. 24. 24 © ARC Advisory Group 10 Recommendations for Energy Management
  25. 25. 25 © ARC Advisory Group 10 Energy Optimization Recommendations 1. Secure Management‟s Full Support 2. Plant-level Energy Teams – Include Automation 3. Build an Energy Strategic Plan 4. Perform Energy Audits – Current Reality 5. Establish Energy Metrics 6. Benchmark: Other Plants & Other Companies 7. Energy KPIs – Not just for Management 8. On-Line Energy Measurements – Fill Gaps 9. Automate to Optimize 10.Empower the Worker Energy Optimization Requires People, Process and Technology Water Air Gas (Fuel) Electric Steam
  26. 26. Thank You. For more information, contact the author at dhill@arcweb.com or visit our web pages at www.arcweb.com
  27. 27. 27 © ARC Advisory Group Questions for the Panel  Q: Erik, How do you balance safety requirements with energy optimization?  Q: Erik (and panel) What are the biggest challenges in bringing about changes of this nature?  Q: Erik (and panel) How does one best drive energy optimization as a way of doing business?  Q: At Hatch, what has been other experiences in the topic of „Energy Management and Optimization‟?  Q: Frank, How do you plan to coordinate energy usage and KPIs for operational purposes with energy usage and KPIs for accounting/business purposes  Q: Dave Kay: At Husky Energy, what has been your experience in the topic of „Energy Management‟?

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