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How much energy
is used to process
metal?
Lessons learned from
18 energy audits
in Ukrainian machinery
Published by:
Advisory Services for Energy Efficiency in Companies
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Commissioned by:
German Federal Ministry for Economic Cooperation and Development (BMZ)
Registered offices:
16b Antonovycha St., 01004, Kyiv, Ukraine
Т.: +380 44 594 07 60
https://www.giz.de/ukraine-ua
Overall Project Management: Ricardo Külheim
Concept and text: Stefan Landauer
Data analysis: Pavlo Pertko - ENERGOMANAGEMENT PRO LLC
With contribution by: Svitlana Chebotaryova, Alina Rekrutiak, Hanna Bodnar, Anatolii Cherniavskiy
Design: Kateryna Yashyna
Image credits: https://www.shutterstock.com/
GIZ is responsible for the content of this publication.
© GIZ 2020
2
© GIZ Ukraine 2020, outline machinery
3
Contents
What is this handout about?
GIZ work in Ukraine
What is the Advisory Services for Energy Efficiency
in Companies project?
Challenging economic environment and its impact on energy
efficiency
What sources of energy are used and in which quantity?
Energy use in the machinery
What subsections of the production consume the most energy?
How much money is spent on energy in industrial machinery
plants?
What are energy efficiency measures and where is the largest
savings potential?
Relevant energy efficiency measures
What is the CO2eq reduction/investment ratio through the
implementation of energy efficiency measures?
Energy consumption, potential savings
How much energy is used to process metal?
Take away messages
04
05
06
09
10
12
14
15
16
22
26
27
28
30
© GIZ Ukraine 2020, outline machinery
4
What is this handout about?
Dearreader,
The machinery is the driving force behind
the economy of any country. As Ukraine is
no exclusion, the development of machin-
eryenterprisesisofsuperiorpriorityforthe
economicgrowthofournation.
However, do you know exactly how much
energy is needed to process 1 kg of metal
and other materials to manufacture
engineeringproducts?Howmuchmoneyis
spent on the energy needed to produce a
certain part? Are you aware which produc-
tion areas, relevant energy-saving poten-
tials are waiting to be discovered, and how
cost-reducing energy saving measures
with rapid returns can protect the environ-
mentandyourwallet?
This short outline provides insight into the
energyconsumption,energycosts,energy-
saving potential, specific energy-saving
measures and the greenhouse gas impact
ofmachine-buildingindustriesinUkraine.It
reports the results of a series of energy
audits, provided by the Deutsche
Gesellschaft für International Zusam-
menarbeit (GIZ) GmbH and demonstrates
the impact of GIZ projects currently being
implemented within the energy efficiency
andclimatesectorinUkraine.
Therefore, the content of this short report
willbeofinteresttoCEOs,companyowners,
managers and investors in the Ukrainian
machine-building industry. Relevant to all
stakeholders, this outline is not targeted at
energy efficiency experts only; hence, the
use of technical jargon has been
minimized, and complex technical issues
simplified.
© GIZ Ukraine 2020, outline machinery
5
The Deutsche Gesellschaft für Interna-
tionale Zusammenarbeit (GIZ) GmbH is
a German development agency. Active
in 120 countries around the world, GIZ is
a provider of international cooperation
services for sustainable development
and international education work and
strives towards a more sustainable
future. GIZ has over 50 years of experi-
ence in a wide variety of areas, includ-
ing economic development and
employment, energy, environment,
peace and security. GIZ diverse exper-
tise is in high demand around the globe
and it continues to collaborate with the
German Government, European Union
institutions, the United Nations, the
private sector, and governments of
other countries. GIZ collaborates with
businesses, NGOs, and research institu-
GIZ work in Ukraine
tions, fostering interaction between
development policy and other policy
fields and areas of activity. The German
Federal Ministry for Economic Coopera-
tion and Development (BMZ) is GIZ main
commissioning party.
GIZ has been assisting Ukraine since
1993 in its transition to a democratic
state based on the rule of law. Current-
ly, 352 national and 52 international
employees and 6 development workers
are working in the office and on
projects. Located in Kyiv, the country
office opened in 2009.
Ukrainian-German cooperation cur-
rently focuses on good governance,
energy efficiency, and sustainable
economic development.
© GIZ Ukraine 2020, outline machinery
6
Economics is the principal driver for
industry and, subsequently, the largest
incentive for increasing energy efficiency is
to lower total operating costs. Fortunately,
there are numerous opportunities for
increasing efficiency in small- to
medium-sized companies. Studies have
shown that up to 35% of energy
consumption within the entire Ukrainian
industry could be reduced in the near term
throughcost-effectiveefficiencymeasures.
The Federal Ministry for Economic
Cooperation and Development of
Germany (BMZ) pledged its support for
the Ministry for Development of
Economy, Trade and Agriculture of
Ukraine (MDETA) and has since imple-
What is the Advisory Services for Energy Efficiency
in Companies project?
mented a range of measures to bolster
means for improving energy efficiency.
One of them is the project Advisory
Services for Energy Efficiency in
Companies that GIZ has been
implementing since 2017, on behalf of the
German Government.
The project provides direct technical
support to Ukrainian industries, which
includes conducting energy audits and
developing pilot projects, which are
specifically tailored to the needs of
local industries. The results of these
energy audits enable Ukrainian
industries to develop technically and
economically sound energy efficiency
investment measures.
SinceOctober2018,ateamofnationaland
international certified energy auditors has
assessed the level of energy efficiency of
65 industries according to ISO standard
50002, Part 2. This audit phase was
completed in July 2019, with a focus on
industrial sectors such as bakeries, dairy
production, and non-metallic building
materials. As a result, 20 companies were
selected to be audited for investment
gradeaccordingtoISO50002type3,which
was concluded in March 2020.
were audited according to
ISO standard 50002
65 industries
© GIZ Ukraine 2020, outline machinery
7
The current outline is a byproduct of
these activities, taking advantage of
assessing 18 industrial machinery
plants, and identifying their energy use
patterns to determine promising
energy-saving measures. The outline
reveals typical consumption profiles as
a first approximation, which contributes
to a better understanding of energy
efficiency in the Ukrainian industrial
sectors. In turn, this also provides
greater comparability amongst sectors.
Subsequently, this document has the
potential to stimulate and encourage
decision-makers to put energy
efficiency into practice.
© GIZ Ukraine 2020, outline machinery
8
What is an energy
audit according
ISO 50002?
What is an investment-grade audit?
Owners or managers of industrial parks
and factories are not always aware of
the possibilities for energy efficiency
improvements. Conducting an energy
audit is the first step to investigate the
opportunities for energy savings, priori-
tizing projects, tracking progress, and
making system adjustments after
investments.
ISO 50002 specifies the process require-
ments for carrying out a comprehen-
sive energy audit. It is applicable to all
types of establishments and organiza-
tions, and all forms of energy and
energy use. This standard also specifies
the principles of carrying out energy
audits, requirements for the common
processes during energy audits.
An investment-grade audit is the most
detailed energy audit. It analyzes the
financial aspects of energy savings and
the return on investment from potential
changes or upgrades. A building opera-
tor typically uses the investment-grade
audit as a budgeting tool when planning
facility upgrades.
© GIZ Ukraine 2020, outline machinery
9
Machineryisoneoftheleadingindustries:its
share in the Ukrainian industry structure is
about7.3%.Overthepasttenyears,itsshare
peaked in 2012, when it amounted to 10.32%,
and reached its low point in 2016 (6.1%)1
.
Ukrainehasenormousopportunitiesforthe
development of agricultural machinery and
the provision of food and processing
companies with modern equipment.
2011–2017 witnessed an increase in the
production of electrical equipment, motor
vehicles,electronicandopticalproducts.
At the same time, the dynamics in terms of
the main types of products indicate the
irregularity of contracts and instability of
production. The industry also encounters
challengesassociatedwiththedeterioration
offixedassets.
Challenging economic environment and its impact on
energy efficiency
The low level of energy efficiency of the
equipment and suboptimal use of produc-
tion capacities significantly reduce the
profitabilityofproduction.
As a result, the number of large and medi-
um-sized machine-building enterprises in
Ukraineisdeclining.
Thus,from2010to2018,thenumberoflarge
enterprisesdecreasedby52%(from52to25
companies), and medium-sized - by 20%
(from 921 to 757). Instead, the number of
small enterprises increased by 4.7% (from
5,765to5,941)1
.
Improvingthecompetitivenessinthisindus-
try requires the energy modernization of
Ukrainian enterprises: the introduction of
new technologies and the implementation
ofenergyefficiencymeasures.
© GIZ Ukraine 2020, outline machinery
1. Official site of the State Statistics Service. URL: http://www.ukrstat.gov.ua
10
Carbon dioxide (CO2
) is a colorless gas formed during the combustion of any
material containing carbon and important greenhouse gas.
Carbon dioxide equivalent CO2
eq is a measure used to compare the emis-
sions from various greenhouse gases based upon their global warming
potential.
For example, the global warming potential for methane over 100 years is 21.
This means that emissions of one metric ton of methane equivalent to emis-
sions of 21 metric tons of carbon dioxide.
What sources of energy are used and in which quantity?
The 18 assessed industries consumed
between 0.4 and 62.7 GWh of energy in
2018. The inclusion of both large
industries and smaller Ukrainian
machine-building plants in the audit-
ing process accounts for the striking
difference between the smallest and
largest value.
The enterprises can be split into two
groups by their energy consumption
levels, the one consuming from 0.4 to 9.6
GWh a year, and two enterprises that
were consuming 29.7 and 62.7 GWh/year
respectively. The annual average repre-
sented by the last bar to the right (see
Figure1onthenextpage)makes3.8GWh
and has been calculated without taking
into account the two enterprises with
considerable consumption levels.
© GIZ Ukraine 2020, outline machinery
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35.2
27.6
17,4
6,6
11
Figure 1. Electricity, natural gas, wood, and coal con-
sumption by each production facility in GWh and emis-
sions in thousands of tCO2
eq in 2018
Gigawatt hours, abbreviated as GWh, is a unit of energy repre-
senting one billion (1 000 000 000) watt-hours and is equivalent
to one million kilowatt-hours.
Electricity GWh/year Wood and coal GWh/year
Natural gas GWh/year
Emissions in thousands tCO2
eq/year Total consumption GWh/year
As seen in Figure 1, each bar stands for an individual machinery plant, revealing its specific annual consumption of electricity (blue) and natural gas (red), wood, and coal
(yellow) in GWh in 2018. The total energy consumption (black) and carbon dioxide emission in thousands of tons of carbon dioxide is highlighted in green.
1
16.9
12.8
29.7
15.1
2
0.7
1.1
1.8
1.1
3
3.9
4.2
8.1
4.6
4
0.1
0.3
1.8
2.2
1.8
5
3.4
6.2
9.6
6.3
6
1.1
0.2
1.3 62.7
0.6 32.3
8
0.8
2.0
2.8
2.0
9
2.3
6.3
8.6
6.2
10
0.4
0.4
0.3
11
1.9
3.5
5.4
3.6
12
0.8
1.4
2.2
1.5
13
0.5
0.9
1.4
0.9
14
1.1
6.1
7.2
5.8
15
0.5
1.2
4.9
6.6
5.1
16
1.3
1.3
1.2
17
0.4
1.5
1.9
1.4
18
0.3
0.2
0.5
0.3
Average
1.0
0.2
2.6
3.8
2.7
What sources of energy are used and in which quantity?
© GIZ Ukraine 2020, outline machinery
12
The next pie chart reveals the share of
the main energy sources - electricity,
natural gas, wood, and coal in 2018.
Figure 2 shows that the machine-building
industry is highly dependent on electricity
(50.4 %) with natural gas trailing well
behind (19.9%). This is due to a consider-
able reduction of its consumption in the
productionprocesses,e.g.,forquenching,
melting, or drying of varnish and paint
Figure 2. Shares of electricity, natural
gas, wood, and coal in 2018
Energy use in the machinery
materials. Other natural gas consuming
processes are heating, hot water supply
for business needs, etc. Wood and coal
are predominantly used for heating and
hot water supply purposes and generally
account for 29.7 % of total consumption.
© GIZ Ukraine 2020, outline machinery
Electricity consumption
Natural gas consumption
Wood consumption
Coal consumption
50.4%
1.4%
28.3%
19.9%
13
Energy use in the machinery
Figure 3. Energy consumption in 2018
shares among production processes,
infrastructure, and losses
Energy losses occur throughout
the energy supply and distribution
system. Energy is lost in power
generation and steam systems,
both off-site at the utility and
on-site within the plant boundary,
due to equipment inefficiency and
mechanical and thermal limita-
tions. Energy is lost in distribution
and transmission systems carry-
ing energy to the plant and within
the plant boundaries. Losses also
occur in energy conversion sys-
tems (e.g. heat exchangers, pro-
cess heaters, pumps, motors)
where efficiencies are thermally
or mechanically limited by materi-
als of construction and equipment
design.
Figure 3 indicates how much energy is
consumed by a typical machine-build-
ing plant for production, heating and
hot water supply purposes.
As expected, 85.5% of the energy is
consumed by the production processes
with the heating and hot water supply
systems using about 8.2%, and the
remaining 6.3% are lost.
© GIZ Ukraine 2020, outline machinery
Energy consumption for heating and hot
water supply (HWS)
Energy consumption in production
processes
Energy losses
8.2%
85.5%
6.3%
14
What subsections of the production consume the most energy?
© GIZ Ukraine 2020, outline machinery
0
AsitisshowninFigure4,theaverageelectric-
ityconsumptionoftheproductionequipment
duringmetalprocessingstandsat41.3%while
thermal processing takes 18.2 %, compres-
sors consume 15.5% and the remaining 25%
areused by other consumers. Themaximum
and minimum electricity consumption values
are included in numeric format. It should be
notedsome production equipmenthad tobe
included under ‘other consumers’ as it was
not possible to separate it due to the lack of
technicalmeteringsystems.Electricitylosses
havebeenincludedhere,too.
Figure 5 shows the main groups of consum-
ers of natural gas and other fuels used
mostly for heating and hot water supply as
well as for production purposes (thermal
furnaces, drying chambers, etc.). The group
Otherconsumersincludesthecategories
Figure 4. What are the relevant users
of electricity?
Figure 5. What are the relevant users
of natural gas, wood, and coal?
Total consumption of electricity
/natural gas, wood, and coal
(average)
Minimum values Maximum values
25%
50%
75%
100%
11.4%
7.2%
6.3%
28%
5%
11%
100%
75.1%
60.6%
12.7%
6.7%
3.7%
Thermal
furnaces
Drying
cameras
Others
Heating
0
20%
40%
60%
80%
60.2%
41.3%
25.7%
32.2%
7.2%
18.2%
22%
15.5%
8.1%
30%
25%
19%
Metal
processing
Heat
treatment
of metal
Compres-
sors
Other
that could not be specified, plus losses. The
average consumption for heating and hot
watersupplyaccountsfor75.1%drying
cameras - 11%, thermal furnaces consume
7.2%, and other unspecified consumers
(includinglosses)accountfor6.7%.
15
How much money is spent on energy in industrial machinery plants?
Energy costs depend upon the amount of
energy consumed, whilst the prevailing
energy price scale and fixed costs for the
supplyinstallationaresubjecttofluctuations
over time. Typical purchasing prices on
electricity and natural gas per consumed
MWh for the years 2016 to 2019 are
highlightedinTable1.Whileforelectricitythe
average price per MWh had increased from
2100UAHin2016steadilyto2460UAHin2019,
the price for natural gas dropped in 2018
Figure 6. Purchase costs for electricity, natural
gas, wood, and coal in 2018 in the machinery
industry
from1220UAHto690UAHin2019.
Figure 6 shows the total and the share
between costs spent on electricity, natural
gas, wood,andcoalbyatypicalplantin2018.
That year 11.9 million UAH (80.5 % of the
energy costs) were spent on electricity, 1.41
million UAH (9.5 % of the energy costs) were
used to pay for natural gas, 1.18 million UAH
(8%oftheenergy costs)werepaidforwood
and0.3millionUAH(2%oftheenergycosts)
werepaidforcoal.
Table 1. Costs of energy
from 2016 to 2019 in
UAH/MWh
* The price of natural gas has
been reduced due to
amendments by the Cabinet of
Ministers of Ukraine # 2931
.
© GIZ Ukraine 2020, outline machinery
Purchase price of electricity
Purchase price of natural gas
Purchase price of wood
Purchase price of coal
80.5%
(11,90 million
UAH)
9.5%
(1,41 million
UAH)
2%
(0.3 million UAH)
8%
(1,18 million
UAH)
Electricity
Year Natural gas
2100
2016 690
2180
2017 1030
2460
2018 1220
2460
2019 690*
Wood and coal
750
800
896
893
1.https://zakon.rada.gov.ua/laws/show/485-2019-%D0%BF.
16
What are energy-efficiency measures and where
is the largest savings potential?
Energy Efficiency Measures (EEMs)
are energy-using appliance, equip-
ment, control system, or practice
whose implementation results in
reduced energy use while main-
taining a comparable or higher
level of service. EEMs decrease the
amount of energy needed to pro-
vide the same level of comfort or
utility (e.g. a heating or cooling
system that provides the same
comfort with less fuel or electricity;
a boiler of comparable size and
features that uses less gas).
To manage the diversity of potential EEMs, we classified them into the following subgroups of consumers:
2
1
Heat generation
and distribution
3 Compressed
air
4 Electrical
devices
5 Ventilation and
air-conditioning
6 Lighting
7 Production
processes
© GIZ Ukraine 2020, outline machinery
Electricity generation
and supply
17
What are the potential annual energy savings?
Figure 7. What are the relevant areas of energy savings in machinery plants?
The following figure shows potential annual
energysavingsinMWharrangedindifferent
groups of consumers as an average of the
18assessedplants.
The most relevant consumer groups in
regardtopotentialsavingsareledbyventila-
tion and air-conditioning (488 MWh/year)
followed by boiler house and heat distribu-
tion(458),lighting(181),electricitygeneration
and supply (123), production processes (94),
andcompressedairproduction(93).Electric
motorsrankthelast(48).
458
93
48
488
181
Electricity generation and
supply
Heat generation and distribution
Compressed air
Electrical devices
Ventilation and air-conditioning
Lighting
94
Production processes
123
© GIZ Ukraine 2020, outline machinery
18
What are the relevant areas of cost
savings in machinery?
Thenextchartindicatespotentialyearlycost
savingsachievedwhenimplementingEEMs.
Due to that energy costs being directly
related to energy consumption and places
in which the most energy losses are
sustained,therankingisledbyventilation
Figure 8. What are the relevant areas
of energy cost savings in machinery?
581
156
129
686
462
200
321
and air-conditioning (686 T UAH/year)
followed by boiler plants and the heat
distribution (581), and lighting (462). Next
electricity generation and supply (321),
production processes (200), and
compressed air production (156) with
electricmotorstakingthelastplace(129).
© GIZ Ukraine 2020, outline machinery
Electricity generation and
supply
Heat generation and distribution
Compressed air
Electrical devices
Ventilation and air-conditioning
Lighting
Production processes
19
What are the investment opportunities
for implementing proposed energy
saving measures?
Figure 9 presents the potential
investment opportunities for EEMs within
the energy audit for each consumer
subgroup.
Ventilation and air conditioning lead by
the figure of total required investments
(2,600 T UAH); it is followed by boiler
house and heat distribution (1,306),
production processes (1,199), lighting
(1,145), compressed air (302), electricity
generation and supply (186), and electric
motors (172).
Figure 9. What are the investment opportunities for implementing proposed
energy saving measures?
1306
302
172
2600
1145
1199
186
© GIZ Ukraine 2020, outline machinery
Electricity generation and
supply
Heat generation and distribution
Compressed air
Electrical devices
Ventilation and air-conditioning
Lighting
Production processes
Human-induced warming reached
approximately 1°C (likely between
0.8°C and 1.2°C) above pre-indus-
trial levels in 2017, increasing at
0.2°C (likely between 0.1°C and
0.3°C) per decade (high confi-
dence).1
Global warming has brought
about possibly irreversible
alterations to Earth's geologi-
cal, biological and ecological
systems. These changes have
led to the emergence of large-
scale environmental hazards
to human health, such as
extreme weather, ozone deple-
tion, increased danger of wild-
land fires, loss of biodiversity,
stresses to food-producing
systems, and the global spread
of infectious diseases. In addi-
tion, climate changes are
estimated to cause over
150,000 deaths annually.2
20
How can your industry contribute to mitigating climate change?
The implementation of energy
efficiency measures will strengthen
your competitiveness as it reduces
your operational costs. In the same
breath, it addresses another, all over-
laying and pressing challenge: Climate
change.
The rise in global average tem-
perature is attributed to an increase in
greenhouse gas emissions. There is a
link between global temperatures,
greenhouse gas concentrations –
especially CO2
– and its emission due
to the use of fossil energy sources in
industries.
1. Global Warming of 1.5 ºC, IPCC, March 2020,
https://www.ipcc.ch/sr15/
2. Effects of global warming on humans, Wikipedia,
March 2020,
https://en.wikipedia.org/wiki/Effects_of_global_w
arming_on_humans
© GIZ Ukraine 2020, outline machinery
21
How can your industry contribute to mitigating climate change?
Figure 10, Emission reductions of tCO2
eq/year, implementing energy saving-measures
recommended in the energy audit report
Figure 10 shows the potential tCO2
eq
reduction if the proposed energy-saving
measures were implemented in a typical
machinery plant.
85
85
43
88
165
51
113
The most significant potentials to reduce
CO2
eq emission are realized through the
implementation of EEMs in the lighting (165
tCO2
eq/year),electricitygenerationand
supply(113),ventilationand air conditioning
(88), boiler house and heat distribution,
also compressed air (85), production
processes (51), and electric motors (43).
© GIZ Ukraine 2020, outline machinery
Electricity generation and
supply
Heat generation and distribution
Compressed air
Electrical devices
Ventilation and air-conditioning
Lighting
Production processes
Relevant energy efficiency measures
Every industrial machinery plant is
unique and requires tailored
approaches to improve its energy
efficiency. Nevertheless, the assess-
ment of the 18 machine-building
plants revealed clear patterns in
regard to promising improvements.
The most relevant energy-saving mea-
sures in terms of investment opportu-
nities, energy savings, cost savings,
payback period, and savings of tCO2
eq
are depicted in Table 2.
22
© GIZ Ukraine 2020, outline machinery
23
© GIZ Ukraine 2020, outline machinery
Table 2
Сapital
expenditures
thousand UAH
Savings
thousand UAH
Energy savings
MWh average
Simple payback
period years
Savings
tCO2
eq*
Optimisation of boiler
operation
171 82.5 46.4 2.3 12.9
Optimisation of compressed
air system 82,0 65.7 24.7 3.0 22.5
Installation of frequency
control devices 184 165.0 65.0 1.1 59.3
Thermal modernisation
of buildings 3070 589.6 538.4 15.0 20.0
Modernization of the
lighting system 1307 520.8 235.6 4.8 185.1
Modernisation of
furnaces 1414 138.6 75.0 8.5 25.3
Typical EEMs in machinery
* Emission factor per 1 MWh of electricity - 0.912 tCO2
eq; per 1 MWh of natural gas - 0.202 tCO2
eq; per 1 MWh of coal- 0.354 tCO2
eq.
https://publications.jrc.ec.europa.eu/repository/bitstream/JRC90405/part%20ii%20ru%20new%20pubsy%20.pdf
Table 3. Energy efficiency measures developed in the framework of energy audits, stratified by cost payback period
24
As it is seen from Table 3, a large
proportion of proposed investment
opportunities have a short payback
period.
of the energy savings can be
reached by implementing
energy-saving measures with
a simple cost recovery period
below 2 years
61 %
< 2 years
2 to 5 years
> 5 years
Number of EEMs
Simple Payback
period
Energy Savings
MWh/year
Share of Energy
savings
Emission reduction
tCO2
eq
3-4 1190 61% 580
1-2 415 21% 138
1-2 345 18% 129
© GIZ Ukraine 2020, outline machinery
In a typical machinery plant, the imple-
mentation of up to two energy-saving
measures, with each investment cost-
ing below 60,000 UAH would contribute
to 5.2 % of the energy savings. Up to
two measures with investment costing
from 60,000 UAH to 300,000 UAH each
would bring a potential saving of 6.5 %
while up to four measures with invest-
ment cost of more than 300,000 UAH
each could save 88.3 % of the energy
consumed.
Table 4. Energy-saving measures
developed in the context of
cost-based energy audits
25
© GIZ Ukraine 2020, outline machinery
EEM with investment cost <60,000 UAH
EEM with investment cost from 60,000 – 300,000 UAH
EEM with investment cost >300,000 UAH
Number of
EEMs
Energy
Savings
MWh/year
Share
Energy
savings
Emission
reduction
tCO2
eq
EEM 1-2 102 5.2% 63.5
Electricity 1-2 68 3.5% 59.7
Natural Gas 0-1 13 0.7% 3.4
Wood, coal 0-1 21 1.1% 0.5
EEM 1-2 126 6.5% 97.4
Electricity 1-2 105 5.4% 88.9
Natural Gas 0-1 14 0.7% 2.9
Wood, coal 0-1 7 0.4% 5.6
EEM 3-4 1,722 88.3% 685
Electricity 1-2 696 35.7% 514
Natural Gas 1-2 954 48.9% 142
Wood, coal 0-1 72 3.7% 28.9
Or in other words, what measures have
the greatest impact leading to the
highest reduction of greenhouse gas
emissions in relation to the specific
investment?
Installation of frequency-controlled
devices leads the bulk chart (322 g
CO2
eq/year and UAH invested); it is
followed by compressed air system
optimisation (275), lighting system
modernisation (142), optimisation of
boiler operation (75), furnace moderni-
sation (18), and thermal modernisation
of buildings (7).
What is the CO2
eq reduction/investment
ratio through the implementation of EEMs?
26
Figure 11. reduction emission grams of CO2
eq/year and invested UAH
Optimisation of boiler operation 75
Optimisation of compressed air
system 275
Installation of frequency
control devices 322
Thermal modernisation of
buildings 7
Modernization of the lighting
system 142
Modernisation of furnaces 18
© GIZ Ukraine 2020, outline machinery
Energy consumption, potential savings
The figure above shows the proportions among
energy consumption, and the potential savings if the
proposedenergy-savingmeasureswereimplement-
ed.
Forbetterdetail,thediagramhasbeensplitdepend-
ing on energy consumption per plant from 0.3 to 9.6
GWh/year and from 29.7 to 62.7 GWh/year. The total
energyconsumption(3.8GWh/yearinaverage)is
27
Typical consumption, GWh/year Saving through implementation of
suggested measures, GWh/year
Potential savings, GWh/year
Figure 12. What are typical consumptions,
potential savings, and savings through the
implementation of suggested measures?
© GIZ Ukraine 2020, outline machinery
1 2 1 2
3 4 5 6 7 8 9 10 11 12 13 14 15 16 Average
presented with exclusion of two enterprises that are
the biggest consumers. Lower values indicate the
total saving potential (1.6 GWh/year in average); one
figure further down indicates the energy saving
volume achievable by implementing the saving
measuressuggestedinenergyaudits(0,6GWh/year
inaverage).
1.8
8.1
2.2
9.6
1.3
2.8
8.6
0.4
5.4
2.2
1.4
7.2
6.6
1.3
1.9
0.5
3.8 29.7
62.7
0.5
0.6 0.6 0.8 0.7
1.36
0.7
0.3
2.0
0.8 0.8
2.0 2.1
0.1
2.2
1.5
0.4
2.3
0.3
0.7
0.2
1.6
7.4
18.8
5.6
0.09
1.8
0.2 0.3
0.7
0.1 0.12 0.04
0.6
11.3
6
0.9
3.4
Examples of EnPIs are energy
consumption per time, energy con-
sumption per unit of production, and
multi-variable models.
The values presented in Figure 13
should be understood as a rough
reference, not directly comparable due
to the different product range, product
mix, and production processes of each
industry. But they can serve as stimu-
lus for companies` managers to
develop their own specific set of EnPIs.
How much energy is used to process metal?
28
To address this question, we will
have to introduce a few terms that
might be new to you.
According to the ISO 50001 standard,
“energy performance is the measur-
able result related to energy efficien-
cy, energy use, and energy consump-
tion.” The energy management sys-
tem performance can be measured
using Key Performance Indicators
(EnPIs). “Energy performance indica-
tor is a quantitative value or measure
of energy performance, as defined by
theorganization.”Itisimportanttoset
appropriate EnPIs for monitoring and
measuring the energy performance
because they show how well the
system is functioning.
© GIZ Ukraine 2020, outline machinery
How much energy is used to process metal?
The next Figure 13 indicates the energy consumption per UAH 1,000-worth of sold products (1) as well as the energy consumption per 1
kg of processed metal and auxiliary materials (2).
Figure 13. Energy consumption in kWh
per production of UAH 1,000-worth of
products sold (1) and kWh per 1 kg of
processed metal (2) in the machinery
(2018)
29
1 2 3 4 1 2 3 4 5 6 7
In 2018, the specific energy consumption of the four machine-building plants in kWh
per 1,000 UAH-worth products sold ranged from 37 to 337 kWh/1,000 UAH. For seven
other enterprises, the specific energy consumption indicator was identified in kWh
per 1 kg products sold and had the value range between 2.1 to 41.8. It was not possible
to determine energy efficiency indicators for the seven machine-building enterprises
in absence of a clear-cut structure of energy costs and production.
100
200
300
400
0
10
20
30
40
50
0
336
56 45
2,1
21,1
5,9
8,1
29,8
41,8
25,2
37
© GIZ Ukraine 2020, outline machinery
(1) (2)
Take away messages
30
- The total annual energy consump-
tionofthe18assessedmachine-build-
ing plants in 2018 ranged from 0.4 to
62.7 GWh with the average value of 3.8
GWh.
- The machine-building
industry highly depends on
electricity as its energy
source, which makes for 50.4
% of the consumption with
natural gas trailing consider-
ablybehindwith19.9%.Wood
and coal account for 29.7 %.
- The respective electricity
consumers are: technological metal
processing equipment – 41.3 %, ther-
mal treatment – 18.2 %, compressors
– 15.5 %, other consumers - 25 %.
- While the average price per MWh
electricity steadily increased from
2,100 UAH in 2016 to 2,460 UAH in
2019, the price for natural gas
dropped from 1,220 UAH in 2018 to
690 UAH in 2019.
- A typical machine building
plant spent in 2018 11.9 million UAH
(80.5 % of the energy costs) on
electricity, 1.41 million UAH (9.5 %)
on natural gas, 1.18 million UAH (8
%) on wood and 0.3 million UAH (2
% energy costs) on coal .
- Relevant consumer groups for
potential savings are: ventilation
and air-conditioning (488 MWh/-
year) followed by boiler house and
heat distribution (458), lighting (181),
electricity generation and supply
(123), production processes (94) and
compressed air system (93). The
electric drives occupy the last place
(48).
- 85.5% of the energy
consumption can be associ-
ated with the production
processes. The heating
systemsandhotwatersupply
about8.2%andtheremaining
6.3%accountedaslosses.
- The main consumers of
natural gas, wood and
coal are heating and hot
water supply (60.6 %), coat-
ing rooms (11 %), thermal
furnaces (7.2 %) and other
unspecified consumers
(incl. losses) (6.7 %).
29.7%
19.9%
50.4%
85.5%
8.2%
6.3%
© GIZ Ukraine 2020, outline machinery
11%
60.6%
80.5 9.5 8 2
7.2%
6.7%
%
33 31 12 6 6
8 3
%
31
Potentialyearlycostssavingsachiev-
able with implementation of EEMs
suggested in the energy audits are:
ventilation and air-conditioning (686 T
UAH/year), then boiler house and heat
distributionsystem(581)andlighting(462).
Further down are electricity generation
and supply (321), production processes
(200), compressed air system (156), and
electricdrives(129)inthelastplace.
Significant potentials to reduce
tCO2
eq emission can be achieved
through the implementation of energy
efficiency measures in the group of
lighting (165 tCO2
eq/year), electricity
generation and supply (113), ventilation
and air-conditioning (88), boiler house
and heat distribution systems and
compressed air system (85), production
processes(51),andelectricdrives(43).
61% of energy savings can
be reached by implementing
energy-saving measures with
a payback period of less than
2 years.
In 2018, the specific energy
consumption of the four machinery
plants in kWh per 1,000 UAH-worth
products sold ranged from 37 to 337
kWh/1,000UAH.Forsevenotherenter-
prises, the specific energy consump-
tion indicator was identified in kWh
per 1 kg products sold and had the
valuerangebetween2.1to41.8.
Inatypicalmachineryplant,theimple-
mentation of up to two energy saving
measures with the investment cost of
less than 60,000 UAH each would
contributeto5.2%ofthetotalpossible
energy savings. Up to two measures
with investment cost from 60,000 UAH
to 300,000 UAH each would give a
potentialsavingof6.5%, and up to four
measures with investment cost of more
than 300,000 UAH each would save
88.3%oftheenergyconsumed.
Promising energy saving measures
are: installation of frequency-controlled
devices (costs recovered in 1.1 year),
optimisation of boilers (2.3) and optimis-
ationofcompressedairsystem(3.0).
27 23 18 13 8 6 5
61%
The ventilation and air condition-
ing group leads in the amount of
required investments with 2,600 UAH;
it is followed by boiler house and heat
distribution system (1,306), production
processes (1,199), lighting (1,145), com-
pressed air system (302), electricity
generation and supply (186), and elec-
trical drivess (172).
© GIZ Ukraine 2020, outline machinery
%
38 19 17 17 4 3 2
%
26 18 14 13 8
13 7
%
88.3 6.5 5.2
%
A small selection of energy-saving actions
1 Utilisation of thermal effluents from
compressor equipment.
2 Compressed air management
practices.
3 More efficient air compressor plant
including variable speed drive units.
4 Surveying of compressed air
systems to identify and eliminate
leaks.
5 High-efficiency lighting
applications – the installation of
T5 fluorescent high-frequency
(or LED) systems in the
production areas.
6 Occupancy control of lights in
lower use areas such as offices,
meeting rooms, storage and
rooms within the plant.
7
Energy performance monitoring
and targeting programs.
8 Improved insulation of the main
production equipment (like
quenching furnaces).
9 Space heating control
improvements – office wet systems
temperature compensation and
boiler optimization; process area
convector heater advanced controls
for convection heaters in the
production areas.
10 Using variable speed drive (VSD).
11 Improved insulation of heat
distribution lines.
12 Energy saving and energy efficiency
awareness-raising campaigns for
the staff and other stakeholders.
13 Thermal insulation of premises and
workshops.
14 Modernisation of heating systems.

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Machinery_en

  • 1. How much energy is used to process metal? Lessons learned from 18 energy audits in Ukrainian machinery
  • 2. Published by: Advisory Services for Energy Efficiency in Companies Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ) Registered offices: 16b Antonovycha St., 01004, Kyiv, Ukraine Т.: +380 44 594 07 60 https://www.giz.de/ukraine-ua Overall Project Management: Ricardo Külheim Concept and text: Stefan Landauer Data analysis: Pavlo Pertko - ENERGOMANAGEMENT PRO LLC With contribution by: Svitlana Chebotaryova, Alina Rekrutiak, Hanna Bodnar, Anatolii Cherniavskiy Design: Kateryna Yashyna Image credits: https://www.shutterstock.com/ GIZ is responsible for the content of this publication. © GIZ 2020 2 © GIZ Ukraine 2020, outline machinery
  • 3. 3 Contents What is this handout about? GIZ work in Ukraine What is the Advisory Services for Energy Efficiency in Companies project? Challenging economic environment and its impact on energy efficiency What sources of energy are used and in which quantity? Energy use in the machinery What subsections of the production consume the most energy? How much money is spent on energy in industrial machinery plants? What are energy efficiency measures and where is the largest savings potential? Relevant energy efficiency measures What is the CO2eq reduction/investment ratio through the implementation of energy efficiency measures? Energy consumption, potential savings How much energy is used to process metal? Take away messages 04 05 06 09 10 12 14 15 16 22 26 27 28 30 © GIZ Ukraine 2020, outline machinery
  • 4. 4 What is this handout about? Dearreader, The machinery is the driving force behind the economy of any country. As Ukraine is no exclusion, the development of machin- eryenterprisesisofsuperiorpriorityforthe economicgrowthofournation. However, do you know exactly how much energy is needed to process 1 kg of metal and other materials to manufacture engineeringproducts?Howmuchmoneyis spent on the energy needed to produce a certain part? Are you aware which produc- tion areas, relevant energy-saving poten- tials are waiting to be discovered, and how cost-reducing energy saving measures with rapid returns can protect the environ- mentandyourwallet? This short outline provides insight into the energyconsumption,energycosts,energy- saving potential, specific energy-saving measures and the greenhouse gas impact ofmachine-buildingindustriesinUkraine.It reports the results of a series of energy audits, provided by the Deutsche Gesellschaft für International Zusam- menarbeit (GIZ) GmbH and demonstrates the impact of GIZ projects currently being implemented within the energy efficiency andclimatesectorinUkraine. Therefore, the content of this short report willbeofinteresttoCEOs,companyowners, managers and investors in the Ukrainian machine-building industry. Relevant to all stakeholders, this outline is not targeted at energy efficiency experts only; hence, the use of technical jargon has been minimized, and complex technical issues simplified. © GIZ Ukraine 2020, outline machinery
  • 5. 5 The Deutsche Gesellschaft für Interna- tionale Zusammenarbeit (GIZ) GmbH is a German development agency. Active in 120 countries around the world, GIZ is a provider of international cooperation services for sustainable development and international education work and strives towards a more sustainable future. GIZ has over 50 years of experi- ence in a wide variety of areas, includ- ing economic development and employment, energy, environment, peace and security. GIZ diverse exper- tise is in high demand around the globe and it continues to collaborate with the German Government, European Union institutions, the United Nations, the private sector, and governments of other countries. GIZ collaborates with businesses, NGOs, and research institu- GIZ work in Ukraine tions, fostering interaction between development policy and other policy fields and areas of activity. The German Federal Ministry for Economic Coopera- tion and Development (BMZ) is GIZ main commissioning party. GIZ has been assisting Ukraine since 1993 in its transition to a democratic state based on the rule of law. Current- ly, 352 national and 52 international employees and 6 development workers are working in the office and on projects. Located in Kyiv, the country office opened in 2009. Ukrainian-German cooperation cur- rently focuses on good governance, energy efficiency, and sustainable economic development. © GIZ Ukraine 2020, outline machinery
  • 6. 6 Economics is the principal driver for industry and, subsequently, the largest incentive for increasing energy efficiency is to lower total operating costs. Fortunately, there are numerous opportunities for increasing efficiency in small- to medium-sized companies. Studies have shown that up to 35% of energy consumption within the entire Ukrainian industry could be reduced in the near term throughcost-effectiveefficiencymeasures. The Federal Ministry for Economic Cooperation and Development of Germany (BMZ) pledged its support for the Ministry for Development of Economy, Trade and Agriculture of Ukraine (MDETA) and has since imple- What is the Advisory Services for Energy Efficiency in Companies project? mented a range of measures to bolster means for improving energy efficiency. One of them is the project Advisory Services for Energy Efficiency in Companies that GIZ has been implementing since 2017, on behalf of the German Government. The project provides direct technical support to Ukrainian industries, which includes conducting energy audits and developing pilot projects, which are specifically tailored to the needs of local industries. The results of these energy audits enable Ukrainian industries to develop technically and economically sound energy efficiency investment measures. SinceOctober2018,ateamofnationaland international certified energy auditors has assessed the level of energy efficiency of 65 industries according to ISO standard 50002, Part 2. This audit phase was completed in July 2019, with a focus on industrial sectors such as bakeries, dairy production, and non-metallic building materials. As a result, 20 companies were selected to be audited for investment gradeaccordingtoISO50002type3,which was concluded in March 2020. were audited according to ISO standard 50002 65 industries © GIZ Ukraine 2020, outline machinery
  • 7. 7 The current outline is a byproduct of these activities, taking advantage of assessing 18 industrial machinery plants, and identifying their energy use patterns to determine promising energy-saving measures. The outline reveals typical consumption profiles as a first approximation, which contributes to a better understanding of energy efficiency in the Ukrainian industrial sectors. In turn, this also provides greater comparability amongst sectors. Subsequently, this document has the potential to stimulate and encourage decision-makers to put energy efficiency into practice. © GIZ Ukraine 2020, outline machinery
  • 8. 8 What is an energy audit according ISO 50002? What is an investment-grade audit? Owners or managers of industrial parks and factories are not always aware of the possibilities for energy efficiency improvements. Conducting an energy audit is the first step to investigate the opportunities for energy savings, priori- tizing projects, tracking progress, and making system adjustments after investments. ISO 50002 specifies the process require- ments for carrying out a comprehen- sive energy audit. It is applicable to all types of establishments and organiza- tions, and all forms of energy and energy use. This standard also specifies the principles of carrying out energy audits, requirements for the common processes during energy audits. An investment-grade audit is the most detailed energy audit. It analyzes the financial aspects of energy savings and the return on investment from potential changes or upgrades. A building opera- tor typically uses the investment-grade audit as a budgeting tool when planning facility upgrades. © GIZ Ukraine 2020, outline machinery
  • 9. 9 Machineryisoneoftheleadingindustries:its share in the Ukrainian industry structure is about7.3%.Overthepasttenyears,itsshare peaked in 2012, when it amounted to 10.32%, and reached its low point in 2016 (6.1%)1 . Ukrainehasenormousopportunitiesforthe development of agricultural machinery and the provision of food and processing companies with modern equipment. 2011–2017 witnessed an increase in the production of electrical equipment, motor vehicles,electronicandopticalproducts. At the same time, the dynamics in terms of the main types of products indicate the irregularity of contracts and instability of production. The industry also encounters challengesassociatedwiththedeterioration offixedassets. Challenging economic environment and its impact on energy efficiency The low level of energy efficiency of the equipment and suboptimal use of produc- tion capacities significantly reduce the profitabilityofproduction. As a result, the number of large and medi- um-sized machine-building enterprises in Ukraineisdeclining. Thus,from2010to2018,thenumberoflarge enterprisesdecreasedby52%(from52to25 companies), and medium-sized - by 20% (from 921 to 757). Instead, the number of small enterprises increased by 4.7% (from 5,765to5,941)1 . Improvingthecompetitivenessinthisindus- try requires the energy modernization of Ukrainian enterprises: the introduction of new technologies and the implementation ofenergyefficiencymeasures. © GIZ Ukraine 2020, outline machinery 1. Official site of the State Statistics Service. URL: http://www.ukrstat.gov.ua
  • 10. 10 Carbon dioxide (CO2 ) is a colorless gas formed during the combustion of any material containing carbon and important greenhouse gas. Carbon dioxide equivalent CO2 eq is a measure used to compare the emis- sions from various greenhouse gases based upon their global warming potential. For example, the global warming potential for methane over 100 years is 21. This means that emissions of one metric ton of methane equivalent to emis- sions of 21 metric tons of carbon dioxide. What sources of energy are used and in which quantity? The 18 assessed industries consumed between 0.4 and 62.7 GWh of energy in 2018. The inclusion of both large industries and smaller Ukrainian machine-building plants in the audit- ing process accounts for the striking difference between the smallest and largest value. The enterprises can be split into two groups by their energy consumption levels, the one consuming from 0.4 to 9.6 GWh a year, and two enterprises that were consuming 29.7 and 62.7 GWh/year respectively. The annual average repre- sented by the last bar to the right (see Figure1onthenextpage)makes3.8GWh and has been calculated without taking into account the two enterprises with considerable consumption levels. © GIZ Ukraine 2020, outline machinery
  • 11. 7 35.2 27.6 17,4 6,6 11 Figure 1. Electricity, natural gas, wood, and coal con- sumption by each production facility in GWh and emis- sions in thousands of tCO2 eq in 2018 Gigawatt hours, abbreviated as GWh, is a unit of energy repre- senting one billion (1 000 000 000) watt-hours and is equivalent to one million kilowatt-hours. Electricity GWh/year Wood and coal GWh/year Natural gas GWh/year Emissions in thousands tCO2 eq/year Total consumption GWh/year As seen in Figure 1, each bar stands for an individual machinery plant, revealing its specific annual consumption of electricity (blue) and natural gas (red), wood, and coal (yellow) in GWh in 2018. The total energy consumption (black) and carbon dioxide emission in thousands of tons of carbon dioxide is highlighted in green. 1 16.9 12.8 29.7 15.1 2 0.7 1.1 1.8 1.1 3 3.9 4.2 8.1 4.6 4 0.1 0.3 1.8 2.2 1.8 5 3.4 6.2 9.6 6.3 6 1.1 0.2 1.3 62.7 0.6 32.3 8 0.8 2.0 2.8 2.0 9 2.3 6.3 8.6 6.2 10 0.4 0.4 0.3 11 1.9 3.5 5.4 3.6 12 0.8 1.4 2.2 1.5 13 0.5 0.9 1.4 0.9 14 1.1 6.1 7.2 5.8 15 0.5 1.2 4.9 6.6 5.1 16 1.3 1.3 1.2 17 0.4 1.5 1.9 1.4 18 0.3 0.2 0.5 0.3 Average 1.0 0.2 2.6 3.8 2.7 What sources of energy are used and in which quantity? © GIZ Ukraine 2020, outline machinery
  • 12. 12 The next pie chart reveals the share of the main energy sources - electricity, natural gas, wood, and coal in 2018. Figure 2 shows that the machine-building industry is highly dependent on electricity (50.4 %) with natural gas trailing well behind (19.9%). This is due to a consider- able reduction of its consumption in the productionprocesses,e.g.,forquenching, melting, or drying of varnish and paint Figure 2. Shares of electricity, natural gas, wood, and coal in 2018 Energy use in the machinery materials. Other natural gas consuming processes are heating, hot water supply for business needs, etc. Wood and coal are predominantly used for heating and hot water supply purposes and generally account for 29.7 % of total consumption. © GIZ Ukraine 2020, outline machinery Electricity consumption Natural gas consumption Wood consumption Coal consumption 50.4% 1.4% 28.3% 19.9%
  • 13. 13 Energy use in the machinery Figure 3. Energy consumption in 2018 shares among production processes, infrastructure, and losses Energy losses occur throughout the energy supply and distribution system. Energy is lost in power generation and steam systems, both off-site at the utility and on-site within the plant boundary, due to equipment inefficiency and mechanical and thermal limita- tions. Energy is lost in distribution and transmission systems carry- ing energy to the plant and within the plant boundaries. Losses also occur in energy conversion sys- tems (e.g. heat exchangers, pro- cess heaters, pumps, motors) where efficiencies are thermally or mechanically limited by materi- als of construction and equipment design. Figure 3 indicates how much energy is consumed by a typical machine-build- ing plant for production, heating and hot water supply purposes. As expected, 85.5% of the energy is consumed by the production processes with the heating and hot water supply systems using about 8.2%, and the remaining 6.3% are lost. © GIZ Ukraine 2020, outline machinery Energy consumption for heating and hot water supply (HWS) Energy consumption in production processes Energy losses 8.2% 85.5% 6.3%
  • 14. 14 What subsections of the production consume the most energy? © GIZ Ukraine 2020, outline machinery 0 AsitisshowninFigure4,theaverageelectric- ityconsumptionoftheproductionequipment duringmetalprocessingstandsat41.3%while thermal processing takes 18.2 %, compres- sors consume 15.5% and the remaining 25% areused by other consumers. Themaximum and minimum electricity consumption values are included in numeric format. It should be notedsome production equipmenthad tobe included under ‘other consumers’ as it was not possible to separate it due to the lack of technicalmeteringsystems.Electricitylosses havebeenincludedhere,too. Figure 5 shows the main groups of consum- ers of natural gas and other fuels used mostly for heating and hot water supply as well as for production purposes (thermal furnaces, drying chambers, etc.). The group Otherconsumersincludesthecategories Figure 4. What are the relevant users of electricity? Figure 5. What are the relevant users of natural gas, wood, and coal? Total consumption of electricity /natural gas, wood, and coal (average) Minimum values Maximum values 25% 50% 75% 100% 11.4% 7.2% 6.3% 28% 5% 11% 100% 75.1% 60.6% 12.7% 6.7% 3.7% Thermal furnaces Drying cameras Others Heating 0 20% 40% 60% 80% 60.2% 41.3% 25.7% 32.2% 7.2% 18.2% 22% 15.5% 8.1% 30% 25% 19% Metal processing Heat treatment of metal Compres- sors Other that could not be specified, plus losses. The average consumption for heating and hot watersupplyaccountsfor75.1%drying cameras - 11%, thermal furnaces consume 7.2%, and other unspecified consumers (includinglosses)accountfor6.7%.
  • 15. 15 How much money is spent on energy in industrial machinery plants? Energy costs depend upon the amount of energy consumed, whilst the prevailing energy price scale and fixed costs for the supplyinstallationaresubjecttofluctuations over time. Typical purchasing prices on electricity and natural gas per consumed MWh for the years 2016 to 2019 are highlightedinTable1.Whileforelectricitythe average price per MWh had increased from 2100UAHin2016steadilyto2460UAHin2019, the price for natural gas dropped in 2018 Figure 6. Purchase costs for electricity, natural gas, wood, and coal in 2018 in the machinery industry from1220UAHto690UAHin2019. Figure 6 shows the total and the share between costs spent on electricity, natural gas, wood,andcoalbyatypicalplantin2018. That year 11.9 million UAH (80.5 % of the energy costs) were spent on electricity, 1.41 million UAH (9.5 % of the energy costs) were used to pay for natural gas, 1.18 million UAH (8%oftheenergy costs)werepaidforwood and0.3millionUAH(2%oftheenergycosts) werepaidforcoal. Table 1. Costs of energy from 2016 to 2019 in UAH/MWh * The price of natural gas has been reduced due to amendments by the Cabinet of Ministers of Ukraine # 2931 . © GIZ Ukraine 2020, outline machinery Purchase price of electricity Purchase price of natural gas Purchase price of wood Purchase price of coal 80.5% (11,90 million UAH) 9.5% (1,41 million UAH) 2% (0.3 million UAH) 8% (1,18 million UAH) Electricity Year Natural gas 2100 2016 690 2180 2017 1030 2460 2018 1220 2460 2019 690* Wood and coal 750 800 896 893 1.https://zakon.rada.gov.ua/laws/show/485-2019-%D0%BF.
  • 16. 16 What are energy-efficiency measures and where is the largest savings potential? Energy Efficiency Measures (EEMs) are energy-using appliance, equip- ment, control system, or practice whose implementation results in reduced energy use while main- taining a comparable or higher level of service. EEMs decrease the amount of energy needed to pro- vide the same level of comfort or utility (e.g. a heating or cooling system that provides the same comfort with less fuel or electricity; a boiler of comparable size and features that uses less gas). To manage the diversity of potential EEMs, we classified them into the following subgroups of consumers: 2 1 Heat generation and distribution 3 Compressed air 4 Electrical devices 5 Ventilation and air-conditioning 6 Lighting 7 Production processes © GIZ Ukraine 2020, outline machinery Electricity generation and supply
  • 17. 17 What are the potential annual energy savings? Figure 7. What are the relevant areas of energy savings in machinery plants? The following figure shows potential annual energysavingsinMWharrangedindifferent groups of consumers as an average of the 18assessedplants. The most relevant consumer groups in regardtopotentialsavingsareledbyventila- tion and air-conditioning (488 MWh/year) followed by boiler house and heat distribu- tion(458),lighting(181),electricitygeneration and supply (123), production processes (94), andcompressedairproduction(93).Electric motorsrankthelast(48). 458 93 48 488 181 Electricity generation and supply Heat generation and distribution Compressed air Electrical devices Ventilation and air-conditioning Lighting 94 Production processes 123 © GIZ Ukraine 2020, outline machinery
  • 18. 18 What are the relevant areas of cost savings in machinery? Thenextchartindicatespotentialyearlycost savingsachievedwhenimplementingEEMs. Due to that energy costs being directly related to energy consumption and places in which the most energy losses are sustained,therankingisledbyventilation Figure 8. What are the relevant areas of energy cost savings in machinery? 581 156 129 686 462 200 321 and air-conditioning (686 T UAH/year) followed by boiler plants and the heat distribution (581), and lighting (462). Next electricity generation and supply (321), production processes (200), and compressed air production (156) with electricmotorstakingthelastplace(129). © GIZ Ukraine 2020, outline machinery Electricity generation and supply Heat generation and distribution Compressed air Electrical devices Ventilation and air-conditioning Lighting Production processes
  • 19. 19 What are the investment opportunities for implementing proposed energy saving measures? Figure 9 presents the potential investment opportunities for EEMs within the energy audit for each consumer subgroup. Ventilation and air conditioning lead by the figure of total required investments (2,600 T UAH); it is followed by boiler house and heat distribution (1,306), production processes (1,199), lighting (1,145), compressed air (302), electricity generation and supply (186), and electric motors (172). Figure 9. What are the investment opportunities for implementing proposed energy saving measures? 1306 302 172 2600 1145 1199 186 © GIZ Ukraine 2020, outline machinery Electricity generation and supply Heat generation and distribution Compressed air Electrical devices Ventilation and air-conditioning Lighting Production processes
  • 20. Human-induced warming reached approximately 1°C (likely between 0.8°C and 1.2°C) above pre-indus- trial levels in 2017, increasing at 0.2°C (likely between 0.1°C and 0.3°C) per decade (high confi- dence).1 Global warming has brought about possibly irreversible alterations to Earth's geologi- cal, biological and ecological systems. These changes have led to the emergence of large- scale environmental hazards to human health, such as extreme weather, ozone deple- tion, increased danger of wild- land fires, loss of biodiversity, stresses to food-producing systems, and the global spread of infectious diseases. In addi- tion, climate changes are estimated to cause over 150,000 deaths annually.2 20 How can your industry contribute to mitigating climate change? The implementation of energy efficiency measures will strengthen your competitiveness as it reduces your operational costs. In the same breath, it addresses another, all over- laying and pressing challenge: Climate change. The rise in global average tem- perature is attributed to an increase in greenhouse gas emissions. There is a link between global temperatures, greenhouse gas concentrations – especially CO2 – and its emission due to the use of fossil energy sources in industries. 1. Global Warming of 1.5 ºC, IPCC, March 2020, https://www.ipcc.ch/sr15/ 2. Effects of global warming on humans, Wikipedia, March 2020, https://en.wikipedia.org/wiki/Effects_of_global_w arming_on_humans © GIZ Ukraine 2020, outline machinery
  • 21. 21 How can your industry contribute to mitigating climate change? Figure 10, Emission reductions of tCO2 eq/year, implementing energy saving-measures recommended in the energy audit report Figure 10 shows the potential tCO2 eq reduction if the proposed energy-saving measures were implemented in a typical machinery plant. 85 85 43 88 165 51 113 The most significant potentials to reduce CO2 eq emission are realized through the implementation of EEMs in the lighting (165 tCO2 eq/year),electricitygenerationand supply(113),ventilationand air conditioning (88), boiler house and heat distribution, also compressed air (85), production processes (51), and electric motors (43). © GIZ Ukraine 2020, outline machinery Electricity generation and supply Heat generation and distribution Compressed air Electrical devices Ventilation and air-conditioning Lighting Production processes
  • 22. Relevant energy efficiency measures Every industrial machinery plant is unique and requires tailored approaches to improve its energy efficiency. Nevertheless, the assess- ment of the 18 machine-building plants revealed clear patterns in regard to promising improvements. The most relevant energy-saving mea- sures in terms of investment opportu- nities, energy savings, cost savings, payback period, and savings of tCO2 eq are depicted in Table 2. 22 © GIZ Ukraine 2020, outline machinery
  • 23. 23 © GIZ Ukraine 2020, outline machinery Table 2 Сapital expenditures thousand UAH Savings thousand UAH Energy savings MWh average Simple payback period years Savings tCO2 eq* Optimisation of boiler operation 171 82.5 46.4 2.3 12.9 Optimisation of compressed air system 82,0 65.7 24.7 3.0 22.5 Installation of frequency control devices 184 165.0 65.0 1.1 59.3 Thermal modernisation of buildings 3070 589.6 538.4 15.0 20.0 Modernization of the lighting system 1307 520.8 235.6 4.8 185.1 Modernisation of furnaces 1414 138.6 75.0 8.5 25.3 Typical EEMs in machinery * Emission factor per 1 MWh of electricity - 0.912 tCO2 eq; per 1 MWh of natural gas - 0.202 tCO2 eq; per 1 MWh of coal- 0.354 tCO2 eq. https://publications.jrc.ec.europa.eu/repository/bitstream/JRC90405/part%20ii%20ru%20new%20pubsy%20.pdf
  • 24. Table 3. Energy efficiency measures developed in the framework of energy audits, stratified by cost payback period 24 As it is seen from Table 3, a large proportion of proposed investment opportunities have a short payback period. of the energy savings can be reached by implementing energy-saving measures with a simple cost recovery period below 2 years 61 % < 2 years 2 to 5 years > 5 years Number of EEMs Simple Payback period Energy Savings MWh/year Share of Energy savings Emission reduction tCO2 eq 3-4 1190 61% 580 1-2 415 21% 138 1-2 345 18% 129 © GIZ Ukraine 2020, outline machinery
  • 25. In a typical machinery plant, the imple- mentation of up to two energy-saving measures, with each investment cost- ing below 60,000 UAH would contribute to 5.2 % of the energy savings. Up to two measures with investment costing from 60,000 UAH to 300,000 UAH each would bring a potential saving of 6.5 % while up to four measures with invest- ment cost of more than 300,000 UAH each could save 88.3 % of the energy consumed. Table 4. Energy-saving measures developed in the context of cost-based energy audits 25 © GIZ Ukraine 2020, outline machinery EEM with investment cost <60,000 UAH EEM with investment cost from 60,000 – 300,000 UAH EEM with investment cost >300,000 UAH Number of EEMs Energy Savings MWh/year Share Energy savings Emission reduction tCO2 eq EEM 1-2 102 5.2% 63.5 Electricity 1-2 68 3.5% 59.7 Natural Gas 0-1 13 0.7% 3.4 Wood, coal 0-1 21 1.1% 0.5 EEM 1-2 126 6.5% 97.4 Electricity 1-2 105 5.4% 88.9 Natural Gas 0-1 14 0.7% 2.9 Wood, coal 0-1 7 0.4% 5.6 EEM 3-4 1,722 88.3% 685 Electricity 1-2 696 35.7% 514 Natural Gas 1-2 954 48.9% 142 Wood, coal 0-1 72 3.7% 28.9
  • 26. Or in other words, what measures have the greatest impact leading to the highest reduction of greenhouse gas emissions in relation to the specific investment? Installation of frequency-controlled devices leads the bulk chart (322 g CO2 eq/year and UAH invested); it is followed by compressed air system optimisation (275), lighting system modernisation (142), optimisation of boiler operation (75), furnace moderni- sation (18), and thermal modernisation of buildings (7). What is the CO2 eq reduction/investment ratio through the implementation of EEMs? 26 Figure 11. reduction emission grams of CO2 eq/year and invested UAH Optimisation of boiler operation 75 Optimisation of compressed air system 275 Installation of frequency control devices 322 Thermal modernisation of buildings 7 Modernization of the lighting system 142 Modernisation of furnaces 18 © GIZ Ukraine 2020, outline machinery
  • 27. Energy consumption, potential savings The figure above shows the proportions among energy consumption, and the potential savings if the proposedenergy-savingmeasureswereimplement- ed. Forbetterdetail,thediagramhasbeensplitdepend- ing on energy consumption per plant from 0.3 to 9.6 GWh/year and from 29.7 to 62.7 GWh/year. The total energyconsumption(3.8GWh/yearinaverage)is 27 Typical consumption, GWh/year Saving through implementation of suggested measures, GWh/year Potential savings, GWh/year Figure 12. What are typical consumptions, potential savings, and savings through the implementation of suggested measures? © GIZ Ukraine 2020, outline machinery 1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Average presented with exclusion of two enterprises that are the biggest consumers. Lower values indicate the total saving potential (1.6 GWh/year in average); one figure further down indicates the energy saving volume achievable by implementing the saving measuressuggestedinenergyaudits(0,6GWh/year inaverage). 1.8 8.1 2.2 9.6 1.3 2.8 8.6 0.4 5.4 2.2 1.4 7.2 6.6 1.3 1.9 0.5 3.8 29.7 62.7 0.5 0.6 0.6 0.8 0.7 1.36 0.7 0.3 2.0 0.8 0.8 2.0 2.1 0.1 2.2 1.5 0.4 2.3 0.3 0.7 0.2 1.6 7.4 18.8 5.6 0.09 1.8 0.2 0.3 0.7 0.1 0.12 0.04 0.6 11.3 6 0.9 3.4
  • 28. Examples of EnPIs are energy consumption per time, energy con- sumption per unit of production, and multi-variable models. The values presented in Figure 13 should be understood as a rough reference, not directly comparable due to the different product range, product mix, and production processes of each industry. But they can serve as stimu- lus for companies` managers to develop their own specific set of EnPIs. How much energy is used to process metal? 28 To address this question, we will have to introduce a few terms that might be new to you. According to the ISO 50001 standard, “energy performance is the measur- able result related to energy efficien- cy, energy use, and energy consump- tion.” The energy management sys- tem performance can be measured using Key Performance Indicators (EnPIs). “Energy performance indica- tor is a quantitative value or measure of energy performance, as defined by theorganization.”Itisimportanttoset appropriate EnPIs for monitoring and measuring the energy performance because they show how well the system is functioning. © GIZ Ukraine 2020, outline machinery
  • 29. How much energy is used to process metal? The next Figure 13 indicates the energy consumption per UAH 1,000-worth of sold products (1) as well as the energy consumption per 1 kg of processed metal and auxiliary materials (2). Figure 13. Energy consumption in kWh per production of UAH 1,000-worth of products sold (1) and kWh per 1 kg of processed metal (2) in the machinery (2018) 29 1 2 3 4 1 2 3 4 5 6 7 In 2018, the specific energy consumption of the four machine-building plants in kWh per 1,000 UAH-worth products sold ranged from 37 to 337 kWh/1,000 UAH. For seven other enterprises, the specific energy consumption indicator was identified in kWh per 1 kg products sold and had the value range between 2.1 to 41.8. It was not possible to determine energy efficiency indicators for the seven machine-building enterprises in absence of a clear-cut structure of energy costs and production. 100 200 300 400 0 10 20 30 40 50 0 336 56 45 2,1 21,1 5,9 8,1 29,8 41,8 25,2 37 © GIZ Ukraine 2020, outline machinery (1) (2)
  • 30. Take away messages 30 - The total annual energy consump- tionofthe18assessedmachine-build- ing plants in 2018 ranged from 0.4 to 62.7 GWh with the average value of 3.8 GWh. - The machine-building industry highly depends on electricity as its energy source, which makes for 50.4 % of the consumption with natural gas trailing consider- ablybehindwith19.9%.Wood and coal account for 29.7 %. - The respective electricity consumers are: technological metal processing equipment – 41.3 %, ther- mal treatment – 18.2 %, compressors – 15.5 %, other consumers - 25 %. - While the average price per MWh electricity steadily increased from 2,100 UAH in 2016 to 2,460 UAH in 2019, the price for natural gas dropped from 1,220 UAH in 2018 to 690 UAH in 2019. - A typical machine building plant spent in 2018 11.9 million UAH (80.5 % of the energy costs) on electricity, 1.41 million UAH (9.5 %) on natural gas, 1.18 million UAH (8 %) on wood and 0.3 million UAH (2 % energy costs) on coal . - Relevant consumer groups for potential savings are: ventilation and air-conditioning (488 MWh/- year) followed by boiler house and heat distribution (458), lighting (181), electricity generation and supply (123), production processes (94) and compressed air system (93). The electric drives occupy the last place (48). - 85.5% of the energy consumption can be associ- ated with the production processes. The heating systemsandhotwatersupply about8.2%andtheremaining 6.3%accountedaslosses. - The main consumers of natural gas, wood and coal are heating and hot water supply (60.6 %), coat- ing rooms (11 %), thermal furnaces (7.2 %) and other unspecified consumers (incl. losses) (6.7 %). 29.7% 19.9% 50.4% 85.5% 8.2% 6.3% © GIZ Ukraine 2020, outline machinery 11% 60.6% 80.5 9.5 8 2 7.2% 6.7% % 33 31 12 6 6 8 3 %
  • 31. 31 Potentialyearlycostssavingsachiev- able with implementation of EEMs suggested in the energy audits are: ventilation and air-conditioning (686 T UAH/year), then boiler house and heat distributionsystem(581)andlighting(462). Further down are electricity generation and supply (321), production processes (200), compressed air system (156), and electricdrives(129)inthelastplace. Significant potentials to reduce tCO2 eq emission can be achieved through the implementation of energy efficiency measures in the group of lighting (165 tCO2 eq/year), electricity generation and supply (113), ventilation and air-conditioning (88), boiler house and heat distribution systems and compressed air system (85), production processes(51),andelectricdrives(43). 61% of energy savings can be reached by implementing energy-saving measures with a payback period of less than 2 years. In 2018, the specific energy consumption of the four machinery plants in kWh per 1,000 UAH-worth products sold ranged from 37 to 337 kWh/1,000UAH.Forsevenotherenter- prises, the specific energy consump- tion indicator was identified in kWh per 1 kg products sold and had the valuerangebetween2.1to41.8. Inatypicalmachineryplant,theimple- mentation of up to two energy saving measures with the investment cost of less than 60,000 UAH each would contributeto5.2%ofthetotalpossible energy savings. Up to two measures with investment cost from 60,000 UAH to 300,000 UAH each would give a potentialsavingof6.5%, and up to four measures with investment cost of more than 300,000 UAH each would save 88.3%oftheenergyconsumed. Promising energy saving measures are: installation of frequency-controlled devices (costs recovered in 1.1 year), optimisation of boilers (2.3) and optimis- ationofcompressedairsystem(3.0). 27 23 18 13 8 6 5 61% The ventilation and air condition- ing group leads in the amount of required investments with 2,600 UAH; it is followed by boiler house and heat distribution system (1,306), production processes (1,199), lighting (1,145), com- pressed air system (302), electricity generation and supply (186), and elec- trical drivess (172). © GIZ Ukraine 2020, outline machinery % 38 19 17 17 4 3 2 % 26 18 14 13 8 13 7 % 88.3 6.5 5.2 %
  • 32. A small selection of energy-saving actions 1 Utilisation of thermal effluents from compressor equipment. 2 Compressed air management practices. 3 More efficient air compressor plant including variable speed drive units. 4 Surveying of compressed air systems to identify and eliminate leaks. 5 High-efficiency lighting applications – the installation of T5 fluorescent high-frequency (or LED) systems in the production areas. 6 Occupancy control of lights in lower use areas such as offices, meeting rooms, storage and rooms within the plant. 7 Energy performance monitoring and targeting programs. 8 Improved insulation of the main production equipment (like quenching furnaces). 9 Space heating control improvements – office wet systems temperature compensation and boiler optimization; process area convector heater advanced controls for convection heaters in the production areas. 10 Using variable speed drive (VSD). 11 Improved insulation of heat distribution lines. 12 Energy saving and energy efficiency awareness-raising campaigns for the staff and other stakeholders. 13 Thermal insulation of premises and workshops. 14 Modernisation of heating systems.