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CBI Northern Ireland Annual Energy Forum - Energy: A customer viewpoint


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Energy a customer viewpoint - Graham Whitehurst, director, Michelin NI

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CBI Northern Ireland Annual Energy Forum - Energy: A customer viewpoint

  1. 1. Energy A customer viewpoint Graham Whitehurst Director, Michelin NI
  2. 2. Ballymena Celebrating 40 years of Truck Tyre Production in NI
  3. 3. Michelin Ballymena <ul><li>1.4 Million Truck Tyres per year </li></ul><ul><ul><li>More than is sold in the whole UK & Ireland </li></ul></ul><ul><li>1100 people </li></ul><ul><ul><li>Working 357 days/yr, 24/7, 12 hour shifts </li></ul></ul><ul><li>Tyre process is very energy intensive </li></ul><ul><ul><li>Consumes approx 200 GWh / annum </li></ul></ul>
  4. 4. Major Energy User in NI £9 Million Energy Bill in 2009 ! Electricity Gas
  5. 5. Ballymena had the highest Energy Costs in the Michelin Group in 2008 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 N.Ireland Italy Germany Spain GB France Romania Michelin European Country Utility Costs Comparison € /MWh
  6. 6. Energy has become the 2 nd largest cost after payroll (Excluding Raw Materials)
  7. 7. Michelin Energy Strategy <ul><li>Utility Supply </li></ul><ul><ul><li>Choice of Utility </li></ul></ul><ul><ul><li>Purchasing Strategy </li></ul></ul><ul><ul><li>Long-term , including renewables </li></ul></ul><ul><li>Efficiency of Energy Use </li></ul>
  8. 8. <ul><li>Utility Choice : Gas or Fuel Oil ? </li></ul>‘ Dual Fuel’ Boilers since 2005 Natural Gas or HFO ? -25% £ Savings / yr -29% less CO2 / yr
  9. 9. 2. Utility Purchasing Strategy: Gas <ul><li>Historically, Fixed Price Contract </li></ul><ul><ul><li>Low Risk, Budgets fixed, </li></ul></ul><ul><ul><li>You know what you have to pay </li></ul></ul><ul><ul><li>but are you paying too much ? </li></ul></ul><ul><li>Now Flexible Contract </li></ul><ul><ul><li>Market Pricing reviewed daily </li></ul></ul><ul><ul><li>Purchase Decisions made daily/wkly </li></ul></ul>
  10. 10. <ul><li>Purchasing Strategy: Electricity </li></ul><ul><li>Pre-SEM, little or no effective competition </li></ul><ul><li>Large customer presents it’s own problems - ‘maybe too big to take on’ </li></ul><ul><li>Welcome the potential for new players to the market, but timing critical, and SEM must deliver </li></ul>
  11. 11. <ul><li>Long-term Strategy: Wind-Turbines </li></ul>Dundee Factory, Scotland Project Progress Wind –Turbines <ul><li>9% Electricity from 2 Wind-Turbines </li></ul><ul><li>3 rd Party Supplier selected </li></ul><ul><li>Legal Contracts in place </li></ul><ul><li>30 Year Lease, 15 Year initial PPA </li></ul><ul><li>Joint Planning Phase now to be engaged </li></ul><ul><li>Community & Council Lobbying </li></ul><ul><li>Project started in 2006 </li></ul><ul><li>Installation envisaged 2010 earliest </li></ul>
  12. 12. <ul><li>Long-Term Strategy: CHP </li></ul>Project Progress Onsite CHP <ul><li>Potential to supply 60% electricity </li></ul><ul><li>Site offers a high Thermal Load, suited to onsite CHP Applications </li></ul><ul><li>3 Preliminary Opportunity Studies now received for 3rd Party Funded Projects </li></ul><ul><li>External Consultant engaged to review the Offers and assist in Supplier decision </li></ul><ul><li>Installation could be as early as 2010 </li></ul>
  13. 13. <ul><li>Efficiency of Energy Use </li></ul><ul><li>To improve our energy efficiency we adopt three approaches:- </li></ul><ul><li>Capital Investment Projects </li></ul><ul><li>Best Practice maintenance </li></ul><ul><li>Education of the workforce </li></ul>
  14. 14. <ul><li>£2 Million Energy savings since 2002 </li></ul><ul><li>£1.2 Million Capital Investment </li></ul><ul><ul><li>17 Electrical projects </li></ul></ul><ul><ul><li>9 Thermal projects </li></ul></ul><ul><ul><li>4 Water projects </li></ul></ul>Efficiency – Capital Investment
  15. 15. <ul><li>Identification of capital projects </li></ul><ul><ul><li>-> Action projects which reduce the ‘fixed’ energy load </li></ul></ul><ul><ul><li>-> Generally work on at least a 2 year payback </li></ul></ul><ul><ul><li>-> Prepare projects to have ‘on the shelf’ in case additional finance becomes available </li></ul></ul><ul><li>Study support from external consultancy, </li></ul><ul><li>via Carbon Trust </li></ul>Energy Projects – Breakthrough Ideas
  16. 16. Energy Projects completed <ul><li>Variable Speed Drives </li></ul><ul><li>Insulation replacement </li></ul><ul><li>Lighting optimisation </li></ul><ul><li>Vent steam recovery </li></ul><ul><li>Compressor control optimisation </li></ul>
  17. 17. <ul><li>Steam Trap Checking </li></ul><ul><li>Steam Leaks Repair </li></ul><ul><li>Tableaux Controls Set-Up </li></ul><ul><li>Air Leaks Management ** </li></ul>Efficiency - Best Practise Maintenance
  18. 18. Background Historical Leakage rate > 40% (2 compressors) High Compressor running Costs No common approach across Site Worsening Trend on Factory Air Consumption Efficiency – Air Leaks Management
  19. 19. <ul><li>‘’ Right Tools for the Job’’ </li></ul><ul><ul><li>Ultrasonic leak detectors </li></ul></ul><ul><ul><li>Training of users </li></ul></ul><ul><ul><li>Tagging of leaks </li></ul></ul><ul><ul><li>Balanced scorecard monitor </li></ul></ul><ul><ul><li>Over 3000 leaks recorded & repaired to date </li></ul></ul><ul><ul><li>Leakage Rate July ‘08 reduced to 26% </li></ul></ul><ul><ul><li>Generated £37K annual savings </li></ul></ul>Efficiency – Air Leaks Management
  20. 20. <ul><li>Energy Awareness Campaigns </li></ul><ul><li>Monthly Factory Intranet Updates </li></ul><ul><li>Factory TV Energy Information </li></ul><ul><li>Information Boards @ Factory Gate </li></ul><ul><li>Team Meeting Energy Communications </li></ul><ul><li>Energy Checklists for Shutdowns developed </li></ul><ul><li>Energy improvement Ideas from the Workforce </li></ul><ul><li>Future Initiatives </li></ul><ul><li>Energy Spoke in each production team </li></ul><ul><li>Energy Promotional Week </li></ul><ul><li>Carbon Trust supported Interactive Staff Training Workshops </li></ul>Efficiency – Education of Workforce
  21. 21. <ul><li>METERING </li></ul><ul><li>Electricity </li></ul><ul><li>Air </li></ul><ul><li>Steam </li></ul><ul><li>Water </li></ul><ul><li>ENERGY TRACKING & ACCOUNTABILITY </li></ul><ul><li>Energy Monitor of Key Utilities by Workshop </li></ul><ul><li>Driven by a Factory Energy Improvement Team </li></ul>Efficiency – Education of Workforce
  22. 22. Efficiency Results: 10% improvement since 2005
  23. 23. Impact of Energy Strategy - Costs
  24. 24. Impact of Energy Strategy - Costs -25%
  25. 25. Impact of Energy Strategy - Costs Wind-Turbines & CHP Installed -12%
  26. 26. How can Government help ? <ul><li>The SEM needs to deliver on End-Customer Savings, arising from an Effective Market. Mechanisms need to be in place to encourage both Generators & Suppliers to enter the Market to allow effective Competition, and drive down Costs. </li></ul><ul><li>Recent PSO Reduction from the Energy Regulator was very encouraging, and has had a major impact on the 2009 Energy Bill. Lobbying by CBI must continue on behalf of all Users. </li></ul><ul><li>Further support needed on Government Assisted Investment Schemes, particularly for Companies seen to be actively reducing Energy Consumption and moving to renewable energy </li></ul>
  27. 27. Energy: Michelin Conclusion <ul><li>External Factors influencing Energy Costs, are outside the control of Industrial Sites. </li></ul><ul><li>However, the use of Energy within a Site and the development of strategies to diversify energy supply and purchasing can and should be MANAGED. </li></ul>
  28. 28. Thank you for your attention Any questions?