May/June 2001
Issue Focus: The Volatile Energy Market
This page presents all the articles in the May/June 2001 issue of Energy Matters, the BestPractices quarterly of the U.S. Department of Energy's Industrial Technologies Program.
In This Issue
- California Cement Plant Battles Electricity Interruptions with Its Own Cogeneration Plant
- OIT Assists Industries Hard Hit by Volatile Energy Market
- A to Z of Restructuring Terms
- New Roadmap for Process Heating Technology Identifies Priority R&D Goals
- Steam Workshops Offer Relief from High Energy Bills
- Efficient Pump System Performance Begins with Life Cycle Cost Analysis
California Cement Plant Battles Electricity Interruptions with Its Own Cogeneration Plant
California's energy crisis has hit the state's businesses hard, especially those in energy-intensive industries. But Gary Thornberry, environmental/service manager at California Portland Cement Company's (CPCC) Colton Cement Plant, says his company has a plan to combat power interruptions. This plan includes reactivating a mothballed coal-fired cogeneration plant that the company built back in the early 1980s, and reactivating two boilers that use waste heat from cement kilns.
The Colton Cement Plant has an interruptible power contract with its electricity provider, Southern California Edison Company. Thornberry says that power interruptions have caused multiple problems at the Colton plant, including wasted raw materials and unusually low inventories.
The Colton plant normally produces 750,000 tons of cement per year. The company was founded in 1891 and has provided cement for Arizona's State Capitol, the Los Angeles Colosseum, and the new Disney California Adventure theme park, among many others.
The plant, which under ordinary circumstances would run 24 hours per day and 7 days per week, typically requires 14 MW of electrical power, but has peak loads as high as 20 MW. Rotary kilns heat a mixture containing calcium, silica, iron, and aluminum to nearly 2800ºF. Heating up the kilns often takes 8 to 12 hours, so when the power is interrupted, the kilns start to cool and a significant amount of energy is wasted. Furthermore, the cooling and heating cycles caused by the interruptions can result in expansion and contraction of the kilns and associated equipment, which shortens equipment life.
So CPCC's management has decided to take its cogeneration plant, powered by a fluidized bed coal-fired boiler, out of mothballs. The cogeneration plant exists because, in the early 1980s, electricity costs were projected to rise considerably. At that time, CPCC built the cogeneration plant to combat the higher electricity prices. However, once the plant was built in 1985, Southern California Edison offered electricity at a cost low enough to convince CPCC to deactivate and keep the cogeneration plant in reserve. CPCC plans to have the coal-fired plant up and running in late June of 2001. At the same time, CPCC hopes to reactivate two waste heat boilers that produce 5 to 6 MW of power. The boilers use waste heat from the cement kilns.
Burning coal does produce emissions, but, Thornberry says, "The low operating temperature keeps the NOx down, and the limestone injection system controls the SOx emissions. We are also in the process of installing an ammonia injection system to further reduce NOx emissions."
The cogeneration plant is expected to provide 20 MW of power—enough to meet the plant's peak loads and more than enough on a daily basis. CPCC plans to sell unused power, though a buyer has not been determined. At this point, Thornberry says, it hasn't been decided if CPCC will stay on the grid after the cogeneration plant is operating. Regardless, like many industrial sites in the region, CPCC must now seriously consider which power alternatives will ensure smooth and efficient operations.
OIT Assists Industries Hard Hit by Volatile Energy Market
The high cost of energy is taking a toll on U.S. industry—but industry is fighting back, and OIT and BestPractices are helping. Here we present some brief observations of how three industries have been affected by, and are coping with, the volatile energy market. Plus, we provide examples of how OIT has helped companies in those industries improve energy efficiency and productivity, thus giving participants a competitive advantage. Your company might similarly benefit from OIT and BestPractices assistance. Read on to learn more.
Aluminum Industry
Energy accounts for at least one-third of the cost of primary aluminum construction. It's no surprise then, that the aluminum industry has been one of the hardest hit by high energy prices and shortages, especially in the Pacific Northwest. California's demand for power and the Pacific Northwest's low water levels in hydroelectric project reservoirs have severely stressed the region's power supply, escalating prices to record levels. Robin King, vice president of public affairs at the Aluminum Association, says that of the 10 aluminum plants in the Northwest, only two are still operating, and minimally at that.
In the mean time, BestPractices has continued to work with the aluminum industry, offering tools to improve plant energy efficiency, enhance environmental performance, and increase productivity.
OIT, for example, has worked in partnership with Alcoa on a demonstration project at an aluminum extrusion plant in Lafayette, Indiana. Alcoa had already implemented a strategy that included improvements to the compressed air system, furnace tuning and repair, pump optimization, and improved heat recovery. Encouraged by OIT, Alcoa performed a plant-wide energy efficiency assessment that identified eight areas for further analysis. These included energy- and cost-saving opportunities associated with high-pressure extrusion press pumps, an extrusion unit's billet heaters, an ingot plant water re-circulation system, a compressed air system, plant lighting, plant steam boilers, melting furnaces, and energy monitoring. By addressing these issues, Alcoa is expecting to see annual savings of $1.9 million from an initial capital investment of $2.3 million, with a payback period of 1.2 years.
Read about the Alcoa case study and others on the BestPractices Web site.
Forest Products Industry
High energy prices have also dealt the forest products industry some severe blows. Mill closings have plagued the Northwest, and energy prices have been a significant factor, according to Bill Nicholson, chair of the Energy Council, American Forest Paper Association (AF&PA) and director of Corporate Energy and Environmental Services for Potlatch Corporation. However, he says, the forest products industry can generate some of its own electricity. In fact, there are some forest product companies that sell electricity to the grid. Potlatch, Nicholson says, is one of those.
Potlatch owns two facilities with small hydroelectric dams in Minnesota, and cogeneration plants in Idaho, Minnesota, and Arkansas. These power-producing facilities comply with the Public Utility Regulatory Policy Act (PURPA). "Those mills have a tremendous advantage," Nicholson says.
Nicholson further states that there is an extraordinary amount of interest in the black liquor gasification process. DOE-funded research and development in this area is focusing on advanced methods of processing spent pulping liquor from pulp mills into gas for use as an energy source. For more information on black liquor boiler projects, see fact sheets posted on the OIT Forest Products R&D Portfolio page at http://www.eere.energy.gov/industry/forest/.
As with the aluminum industry, OIT has been working with forest products companies to help reduce energy use, improve productivity, and boost the bottom line. An example is the demonstration project at Boise Cascade pulp and paper mill in International Falls, Minnesota. Boise Cascade and OIT are partners in the project, which began with a cost-shared plant assessment that led to implementation of four projects and two process modifications. These include conserving mill water, rerouting turbine room steam trap condensate, using foul condensate heat for demineralized water makeup to hotwells, and modifying selected processes to decrease effluent flow and energy consumption.
These projects and modifications are expected to remove 45.6 MMBtu per hour from the effluent, exceeding the reduction target of 35 MMBtu per hour. In addition, it is expected that the mill will reduce steam use by 28,100 pounds per hour and effluent flow by 2.2 million gallons per day (an 8% reduction in total flow). To learn more about the Boise Cascade Mill energy assessment and other assessments, visit the BestPractices Web site at www.oit.doe.gov/bestpractices/explore_library.
Boise Cascade's International Falls Mill has a tradition of identifying and implementing energy projects that improve process efficiency and reduce environmental impact. Over the last 5 years, the mill has identified and completed a number of energy projects in addition to those identified in the recent assessment. Three of the larger projects include bleach plant effluent heat exchangers, non-contact water recycling, and contaminated condensate heat exchangers. The reward has been savings of 91 MMBtu per hour with an approximate value of $3.4 million per year.
Chemicals Industry
Though the volatile energy market has not had as great an impact on other industries, many are still feeling constraints from high energy prices. Jeff Hackworth, energy manager for the Rohm and Haas chemical plant in Deer Park, Texas, says that high natural gas prices have cut into his company's profit margins. Yet, because Rohm and Haas began a serious energy-saving program in 1997, Hackworth says the company has received "tremendous benefits."
Part of that energy program included a project in which Rohm and Haas partnered with OIT and four other companies to do a plant-wide assessment for energy efficiency at the Deer Park facility. The team has identified more than 125 projects, more than 40% of which have been completed over the last 3 years, and additional projects are being evaluated.
Examples of energy-saving activities include a steam system leak and trap assessment, a compressed gas leak audit, an air compressor and dryer audit, a motor systems assessment, an infrared thermography audit, and more. The findings from these audits and assessments have led to modifications and improvements with dramatic impacts. Results have included a 17% energy reduction per pound of chemical produced and a 10% decrease in energy consumption, despite a 7.7% increase in production. Overall, on an annual basis, the plant has reduced energy use by 3.25 trillion Btu, reduced NOX emissions by 800 tons, reduced CO2 emissions by 51,350 tons, and saved $15 million. And they're not stopping there. "The higher energy costs are driving us to be more aggressive with energy efficiency progress," Hackworth says. "We'd like to reduce energy use by an additional 5% to 7% or more by 2004." For more information on the OIT/Rohm and Haas project see page 10 of OIT's Plant Profiles: Industrial Energy Management in Action brochure (PDF 844 KB). Download Adobe Reader
Get Involved
The technologies, processes, and equipment utilized in the preceding examples can be used in similar circumstances in many industries. There is vast potential for replicating the energy savings, cost reductions, and productivity improvements that have been demonstrated in these and other projects that OIT and BestPractices have supported. Don't miss out on these benefits for you and your company. Find out about best energy management practices, including the adoption of new, efficient technologies, by logging on to the BestPractices Web site. You can read more about the projects discussed in this article by accessing the Plant Profiles brochure (PDF 844 KB). Download Adobe Reader
A to Z of Restructuring Terms
With all the talk of restructuring and energy issues, there are many technical terms flying about. Here is a short glossary that may help you understand how restructuring may affect your facility. Sources are listed below and include Web site addresses for more complete glossaries and information.
Average Cost—The revenue requirement of a utility divided by the utility's sales. Average cost typically includes the costs of existing power plants, transmission, and distribution lines, and other facilities used by a utility to serve its customers. It also includes operating and maintenance, tax, and fuel expenses.
Avoided Cost—The cost the utility would incur but for the existence of an independent generator or other energy service option.
Buy Through—An agreement between utility and customer to import power when the customer's service would otherwise be interrupted.
Direct Access—A key feature of the restructuring process. Direct access is the opportunity for consumers to bypass their local utility, the generator of their electricity, and purchase electricity from the generator of their choice.
Distributed Generation—A distributed generation system involves small amounts of generation located on a utility's distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines.
Futures Market—Arrangement through a contract for the delivery of a commodity at a future time and at a price specified at the time of purchase. The price is based on an auction or market basis. A standardized, exchange-traded, and government regulated hedging mechanism.
Independent System Operator (ISO)—A neutral and independent organization with no financial interest in generating facilities that administers the operation and use of the transmission system.
Independent Power Producer (IPP)—Any entity not regulated by the government as a public utility that owns or operates an electricity generating facility and offers electric power for sale to utilities and/or the public (also known as Non-Utility Generator).
Marginal Cost—In the utility context, the cost to the utility of providing the next (marginal) kilowatt-hour of electricity, irrespective of sunk costs.
Net Metering—Allows the electric meters of customers with generating facilities to turn backwards when the generators are producing energy in excess of the customers' demand, enabling customers to use their own generation to offset their consumption over a billing period.
PURPA—The Public Utility Regulatory Policy Act of 1978. Among other things, this federal legislation requires utilities to buy electric power from private "qualifying facilities," at an avoided cost rate. This avoided cost rate is equivalent to what it would have otherwise cost the utility to generate or purchase that power themselves. Utilities must further provide customers who choose to self-generate a reasonably priced back-up supply of electricity.
Restructuring—The reconfiguration of the vertically integrated electric utility. Restructuring usually refers to separation of the various utility functions into individually operated and owned entities.
Retail Competition—A system under which more than one electric provider can sell to retail customers, and retail customers are allowed to buy from more than one provider.
Spot Markets—Any of a number of venues in which purchases and sales, as of electricity, are made by a large number of buyers and sellers, with new transactions being made continuously or at very frequent intervals.
Unbundling—Disaggregating electric utility service into its basic components and offering each component separately for sale with separate rates for each component. For example, generation, transmission, and distribution could be unbundled and offered as discrete services.
Vertical Integration—An arrangement whereby the same company owns all the different aspects of making, selling, and delivering a product or service. In the electric industry, it refers to the common arrangement whereby a utility owns generating plants, transmission systems, and distribution lines to provide all aspects of electric service.
Definitions have been excerpted and adapted from The Glossary of Electric Utility Restructuring Terms: 1996 from the National Council on Competition and the Electric Industry; The Consumer's Glossary of Electric Utility Restructuring Terms, AARP's Public Policy Institute; and the Green Power Network Web site at http://www.eere.energy.gov/greenpower/.
New Roadmap for Process Heating Technology Identifies Priority R&D Goals
Process heating technologies supply heat to nearly all manufacturing processes. Because they consume 17% of U.S. industrial energy, process heating technologies represent a significant opportunity to improve industrial productivity and energy efficiency. Advanced technologies and operating processes have the potential to reduce process heating energy consumption by 5% to 25% over the next decade. The process heating community, led by the Industrial Heating Equipment Association and OIT, presents Roadmap for Process Heating Technology: Priority Research and Development Goals and Near-Term, Non-Research Goals to Improve Industrial Process Heating—a comprehensive plan for meeting industrial process heating needs now and in the future.
To learn more about the plan to achieve technological and process improvements in process heating, download the roadmap from the BestPractices Web site (PDF 580 KB). Download Adobe Reader. You can also review the Process Heating Supplement, which appeared in the November/December 2000 issue of Energy Matters (PDF 343 KB).
Steam Workshops Offer Relief from High Energy Bills
Steam plants took a pounding from high energy bills last winter. Like many other steam plant managers, you might be seeking ways to tune up your operation using the latest energy efficiency measures. OIT's BestPractices can help.
BestPractices Steam program offers workshops specifically designed for energy managers. These workshops, organized in cooperation with the Alliance to Save Energy, utility companies, and trade associations, are venues for managers to gain knowledge about the technical, personnel, and financial aspects of efficient plant operations. Program tools, such as tip sheets, case studies, diagnostic software, and information about training and financial assistance, help managers identify opportunities for improvement.
Steam workshops are held at locations across the country. Check the BestPractices training calendar for upcoming workshops in your area. The workshops are offered at no or low cost.
Take part in discussions and presentations on:
- The total-system approach to steam efficiency
- Financial benefits or outcomes of implementing efficiency
- An overview of steam reference materials (technical, managerial, and financial)
- Energy efficiency success stories
In addition, regional experts add technical discussions on topics, such as steam traps, water treatment, and combustion controls.
If you are an industry professional interested in giving an informational (non-commercial) presentation or case study at one of the workshops, please contact Christopher Russell of the Alliance to Save Energy at crussell@ase.org.
Efficient Pump System Performance Begins with Life Cycle Cost Analysis
Pumping systems account for nearly 20% of the world's energy demand and, in some industrial operations, account for 20% to 50% of energy costs. However, because pumps function as a component of larger systems, companies may overlook opportunities to save energy and money and improve pump system performance.
Life Cycle Cost (LCC) analysis is a management tool that can help companies minimize waste and maximize energy efficiency for many types of systems, including pumping systems. The Hydraulic Institute and Europump, in cooperation with DOE, have developed Pump Life Cycle Costs: A Guide to LCC Analysis for Pumping Systems, Executive Summary. This overview document offers highlights of a larger report that assists plant owners and operators in applying the LCC methodology to pumping systems.
The summary emphasizes the need to consider pump system costs that accrue over a lifetime of operation, not just the initial costs of installation or replacement. By understanding all of the components that figure into the cost of ownership, companies can dramatically reduce energy, operational, and maintenance costs.
Learn more about how you can apply LCC methods to pumping systems by downloading the summary from the BestPractices Web site.
NOTICE: This online publication was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.