Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
WHITE PAPER SERIES – VOLUME I
LEAN ENERGY
A Framework for Achieving Continuous Increase in
Industrial Energy Productivity
This is one of a series of whi...
INTRODUCTION ................................................................................................................
ZF ENERGY DEVELOPMENT WHITE PAPER

INTRODUCTION
‘Lean’ is a word often used in modern manufacturing. It’s used mainly as a...
Lean Energy

tiny amount of energy? How does lean energy bring economic benefits to American
industry? Given the doom-lade...
ZF ENERGY DEVELOPMENT WHITE PAPER

words, someone else has already combusted or converted some other form of raw
energy in...
Lean Energy

THE LEAN ENERGY EVOLUTION
Lean energy is a discipline that seeks to (1) reduce energy cost and, (2) drive ene...
ZF ENERGY DEVELOPMENT WHITE PAPER

point of consumption. Other conversion output, such as heat and sound, are lost
forever...
Lean Energy

Now, energy change is simply a transient state of matter, it doesn’t hang around.
Energy seeks diffusion and ...
ZF ENERGY DEVELOPMENT WHITE PAPER

JIT Conversion
We’ve demonstrated that JIT conversion promises reduced conversion losse...
Lean Energy
Therefore, energy efficiency
describes the measure of cycle
time reduction, while energy
productivity tells us...
ZF ENERGY DEVELOPMENT WHITE PAPER

Bibliography
Bureau of Labor Statistics. (2013, August 26). Multifactor Productivity Ho...
Upcoming SlideShare
Loading in …5
×

Lean Energy: A Framework for Achieving Continuous Increase in Industrial Energy Productivity

469 views

Published on

“Lean” is a word often used in modern manufacturing. What does lean do for us? Can we experience something similar to lean manufacturing with energy?

As Amory Lovins put it, “We have nothing to lose but our waste.”

In this first of a series of white papers we will discuss lean energy, how it works, and what it means to your industrial business.

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Lean Energy: A Framework for Achieving Continuous Increase in Industrial Energy Productivity

  1. 1. WHITE PAPER SERIES – VOLUME I
  2. 2. LEAN ENERGY A Framework for Achieving Continuous Increase in Industrial Energy Productivity This is one of a series of white papers on Lean Energy. Download the other papers in the series from http://www.z-fed.com/zf-energy-whitepapers ZF Energy Development LLC is an energy management firm specializing in providing a low cost energy supply for industrial users. Copyright © 2013 ZF Energy Development LLC. All rights reserved. This document and translations of it may be copied and furnished to others, and derivative works that comment on or otherwise explain it or assist in its implementation may be prepared, copied, published, and distributed, in whole or in part, without restriction of any kind, provided that the above copyright notice and this section are included on all such copies and derivative works. However, this document itself may not be modified in any way, including by removing the copyright notice or references to ZF Energy Development LLC or Z-FED, without the permission of the copyright owners. This document and the information contained herein is provided on an "AS IS" basis and ZFED DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY THAT THE USE OF THE INFORMATION HEREIN WILL NOT INFRINGE ANY OWNERSHIP RIGHTS OR ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Published 2013 by ZF Energy Development, LLC. Any comments relating to material contained in this document may be submitted to ZFED, 57 West Avenue, Wayne PA 19087, or by email to info@z-fed.com. Page 2 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.
  3. 3. INTRODUCTION ...............................................................................................................4 THE LEAN ENERGY IDEA .....................................................................................................5 THE LEAN ENERGY EVOLUTION ............................................................................................7 Lean Principles ............................................................................................................................. 7 JIT Conversion ............................................................................................................................ 10 BIBLIOGRAPHY .............................................................................................................. 12 © 2013 ZF Energy Development LLC. All Rights Reserved. Page 3 of 12
  4. 4. ZF ENERGY DEVELOPMENT WHITE PAPER INTRODUCTION ‘Lean’ is a word often used in modern manufacturing. It’s used mainly as a contrast word. Whereas prior methods were ‘fat’, i.e., there was a lot of material volume in production processes, ‘lean’ trades volume for speed. By moving material faster, there is less of it in the system. Since, ‘lean’ has come to mean doing more with less in general. 120 100 80 60 40 What does ‘lean’ do for us? Most of the modern product flow is the result of this thinking, and perworker productivity is now Figure 1, Economic Output per Labor Hour 1948-2011; 2005=100, Source: five times what it was in (Bureau of Labor Statistics, 2013) 1950. One may dispute the details, but the facts are this: lean manufacturing made the world we are in today. In fact, it has been so successful that it is not inconceivable that there will be a time when only 0.5% or less of the population will make everything we use. 20 0 50 19 53 19 19 56 59 19 6 19 2 65 19 68 19 71 19 74 19 19 77 80 19 8 19 3 86 19 89 19 92 19 95 19 19 98 01 20 0 20 4 07 20 10 20 Can we experience something similar with energy? Is there an analogous concept - lean energy – that would give us a similar revolution where everything we use requires only a 67% thermal and mechanical loss 10% transmission loss 4% lighting 10% fans Energy input into power plant 30% oven inefficiency 100# 33# 29.7# 28.5# 25.6# 18# Energy applied to value added process Figure 2, In most cases 18% or less of the total energy input for an industrial process actually creates value Page 4 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.
  5. 5. Lean Energy tiny amount of energy? How does lean energy bring economic benefits to American industry? Given the doom-laden predictions for man-made climate change, is there a possibility that lean energy might save the world? As Amory Lovins put it, “We have nothing to lose but our waste”. In this first of a series of white papers we will discuss Lean Energy, how it works, and what it means to your industrial business. THE LEAN ENERGY IDEA Natural Gas Supply Chain A widget manufacturer requires that their widgets are baked in an oven for five minutes as an intermediate manufacturing step. The baking oven has three energy inputs: a natural gas burner, a conveyor motor, and a blower. The conveyor motor and blower use a combined 20 Amperes at 480 Volts, or 9.6 kW. The burner is a 0.5 mmBTU/h system, or 146.5 kW. Electrical Supply Chain Lean energy is simple, but not easy. The underlying idea follows the thinking of a justin-time (JIT) material supply: needed energy is made available just at the time and place when it is needed to create value. Not earlier, not later. To understand what this means, let’s take a look at an example. Fuel Supply Combustion ∞ Thermal Energy ∞ Other Energy Grid Consumption by motors Consumption by burner In a conventional model, the widget Time Conversion Cycle Time manufacturer buys gas and electricity from a Figure 3, Energy Supply Chain for the curing oven of widget commodity supplier, plus a distributor that manufacturer delivers the commodity to the factory. From there, pipes and wires are run to the oven. The electricity is purchased on the retail market, and the source of that Motor Moving Conveyor electricity is a mix, depending on Electrical whatever generation fuel mix is Generation Motor online at any given moment of time. Fuel Supply Moving Air Gas Combustion Hot Air © 2013 ZF Energy Development LLC. All Rights Reserved. They key difference between natural gas and electricity is that electricity is a value added product. In other Page 5 of 12
  6. 6. ZF ENERGY DEVELOPMENT WHITE PAPER words, someone else has already combusted or converted some other form of raw energy into electricity. For the oven, natural gas is not the value-added product, it is the heat that does the baking, and that is derived – converted – by combusting the gas. The first law of thermodynamics asserts that energy can only be converted, or transferred, not created or destroyed, so therefore the naming of ‘generators’ is a physics misnomer. The oven burner converts gas to heat, and the generators on the grid convert fuel to electricity. The overall system input for the widget manufacturer is a variety of fuels. Total The problem with this Thermal Total Gas Electrical Electricity Losses (kW) Losses (kW) Total kW system is that it is wasteful. Input 183.1 27.3 210.4 20% 36.6 The conversion efficiencies Burner Conversion Loss Generation Combustion Loss 60% 16.4 along both the thermal and Transmission Loss 8% 1.3 Delivered 146.5 9.6 156.1 electrical value chains are Total System Losses 26% such that the total 156 kW oven input requires at best 210 kW of input. In addition, the applied energy (exergy) is less than 156 kW. The conveyor and blower motors are conversion devices just the same, with their own losses: conveyor friction, motor losses, oven thermal losses, etc., actually bring the direct applied energy to much less than 156 kW. In summary, lean energy is about eliminating waste and lowering cost. To understand how to apply this, we will focus on two things: How can we structure it such that Input ≈ Delivered. Put another way: Consumed Energy – Applied Energy ⟶ 0 And how can we maximize energy productivity, i.e., Pe = The remainder of this White Paper series will be dedicated to taking various perspectives on these two underlying relationships. Page 6 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.
  7. 7. Lean Energy THE LEAN ENERGY EVOLUTION Lean energy is a discipline that seeks to (1) reduce energy cost and, (2) drive energy waste toward an achievable minimum (or, maximize exergy (Gundersen, 2011)). The idea emerges from lean management in general, or the principles of just-in-time supply that came from the Toyota Production System (Womack, Jones, & Roos, 1990). All of these ideas have the same underlying kernel idea: the most efficient possible use of capital in industrial processes. The Toyota Production System itself was borne in part from the teachings of W. Edwards Deming. Lean energy centers on conversion cycle time, which is the time between acquired and applied energy (sometimes called exergy). The less time between these two events, the lower energy losses, the less capital invested in energy operations. Like lean management in general, this simple idea has a plethora of sometimes nonobvious implications. Lean Principles The lean manufacturing movement arose from a lack of capital, particularly the money needed to finance large inventories. Taiichi Ohno and Shigeo Shingo determined in the 1960s that make-to-inventory was a drag on profits. In order to add value at minimal expense, they devised a system that Energy Kaizen accelerated the material flow through a Conversion Cycle Reduction factory to such speed that substantial Standard Demand inventory could not accrue. It sounds odd, Standard Standard Load Load Flow Interval but that is the net effect of a JIT, make-toEconomic Dispatch order system. The secret to its spectacular efficiency is in the cycle time reduction of Figure 4, Lean Energy Framework every step that adds value to material. Therefore, speed and inventory are inversely proportional to each other: as speed increases, inventory decreases. Reduce cycle time to 0, and costs and capital required for inventory management disappear. Albert Einstein showed us that mass and energy are the same thing, separated by a constant. Does the energy analogy hold? If we decrease manufacturing cycles times, does energy consumption decrease? Imagine a manufacturing process that consumes energy in making a product. Energy is drawn from its source, typically the ground, and conveyed to a generation plant. There the energy is converted, and the electrical energy output is transmitted via the grid to a © 2013 ZF Energy Development LLC. All Rights Reserved. Page 7 of 12
  8. 8. ZF ENERGY DEVELOPMENT WHITE PAPER point of consumption. Other conversion output, such as heat and sound, are lost forever. Let’s consider total energy consumed from a fuel supply. Over time, this amount simply accumulates, and we can represent this abstractly as a cumulative line, as shown in Figure . This graph represents the manufacturing process input. The output of that process we’ll call ‘Applied Energy’, culminating in a product that is sold or creates value. It contains all the cumulative energy input consumed by the manufacturing process. Figure 5 So we can show the Cumulative Applied Energy as offset from the Cumulative Consumed Energy by some amount of time (Figure ). The energy consumed at time t’ is converted into revenue at time t”. We’ll call that the Conversion Cycle Time. This includes the conveyance of fuels to conversion to the point of use. Figure 6 Page 8 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.
  9. 9. Lean Energy Now, energy change is simply a transient state of matter, it doesn’t hang around. Energy seeks diffusion and moves quickly. And, as it is converted, energy is rejected. This means that less energy is applied than is consumed, as is described by the laws of thermodynamics. That means the energy Consumed at time t’ is immediately applied at t as well. Therefore, the difference between the Consumed curve and the Applied curve at t’ is the Conversion Loss. One can see that, indeed, Conversion Cycle Time is proportional to Conversion Loss. If we bring the blue and red lines closer together by reducing Conversion Cycle Time, Conversion Losses decrease. Figure 8 A student of the laws of thermodynamics might conclude that if the slope, or rate of change, of cumulative consumption and application is the same, then no losses would occur. Since losses are a fact, the two curves cannot have the same slope. Converting a fuel supply at the very moment that the resulting energy can be applied to a paid order can similarly reduce Conversion Cycle Time. If combustion is brought close to the value added process, both heat and electrical output are used, therefore reducing conversion losses (the inventory analogy). Therefore, JIT conversion – energy delivery that occurs just in time at the value added process – is at the core idea of lean energy in manufacturing. © 2013 ZF Energy Development LLC. All Rights Reserved. Page 9 of 12
  10. 10. ZF ENERGY DEVELOPMENT WHITE PAPER JIT Conversion We’ve demonstrated that JIT conversion promises reduced conversion losses. An electric motor, of course, does exactly that. High HP Motors are more than 90% efficient, and produces kinetic energy in fractions of a second. Getting that electricity to the motor--not so much. JIT conversion principles have to apply to the system as a whole: the entire process between stable input fuel and value added. Conversion steps along the way produce energy in more usable forms for purposes of conveyance, such as electricity, so the efficiency of each step is critical. And each step along the way consumes capital, so the total capital application governs the feasibility of the system. We apply this principle in two ways – how efficient are the conversion devices in the supply chain, and how productive is the process, i.e., what is the overall value-added energy cost of the system? Efficiency Productivity Conveyor Motor What is the lowest consumption method to move product through the curing process? Blower Motor What is the lower consumption method to apply heated air to product surface Thermal What is the lowest consumption method to heat air? How can I lower the cost of energy conversion? The distinction between efficiency and productivity is important to an industrial company or manufacturer. The goal of lean energy is cost minimization. We could lower demand to the outer envelope of technological state-of-art, but the choice of fuel, for example, may make a significant cost difference at identical demand rates. Furthermore, demand improvements typically require capital investments, and the returns on such investments are compared against a current performance baseline. As changes in supply logistics shape that performance baseline, investments in demand reductions take on a different ROI. Page 10 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.
  11. 11. Lean Energy Therefore, energy efficiency describes the measure of cycle time reduction, while energy productivity tells us about the effort required to attain such reduction. In practical terms, the real world, we must consider both. ROI % Energy Productivity Investments Energy Efficiency Investments 0 Investment $ Figure 9, Relative Economic Elasticities of Productivity and Efficiency Investments © 2013 ZF Energy Development LLC. All Rights Reserved. Page 11 of 12
  12. 12. ZF ENERGY DEVELOPMENT WHITE PAPER Bibliography Bureau of Labor Statistics. (2013, August 26). Multifactor Productivity Home Page. Retrieved August 26, 2013 from US Department of Labor, Bureau of Labor Stastics: http://www.bls.gov/mfp/ Gundersen, T. (2011). The Concept of Exergy and Energy Quality. Trondheim: Norwegian University of Science and Technology. Lovins, A. (2011). Reinventing Fire. White River Junction, Vermont, USA: Chelsea Green Publishing. McKinsey Global Institute. (2012). Manufacturing the future: The next era of global growth and innovation . Seoul, San Francisco, London: McKinsey Operations Practice. Womack, J., Jones, D., & Roos, D. (1990). The Machine That Changed The World. New York, NY: Harper Perennial. Page 12 of 12 © 2013 ZF Energy Development LLC. All Rights Reserved.

×