Oct-2014

Maximising energy efficiency in grassroots designs

A novel approach is required to achieve the full potential for energy 
performance of new plants

Tim Shire, Andrew Hoyle and Mike Rutkowski
KBC Advanced Technologies

Article Summary

Energy is the largest controllable operating cost in refineries and petrochemical plants. In recent years, energy costs have diverged between the US and the rest of the world. In the US, cheap shale gas at $5/million Btu or less has led to a renaissance in the hydrocarbon processing industries.

In China, India and the Middle East, aspirations to grow the industry are now challenged by the resurgence of the US. In regions outside the US, achieving high levels of energy efficiency is now strategically vital to ensure long-term competitiveness.

It has long been known that the energy efficient design of grassroots facilities is more capital efficient than attempting to retrofit existing plants. Therefore, capital projects should be a major focus area for corporations attempting to reduce energy use.

However, fear of additional project costs or delays means the energy efficiency of new plants is often disappointing, with improvement ideas either not identified or not implemented. These missed opportunities stem from the typical approach and timing used for energy optimisation, where the following three obstacles conspire to thwart most energy improvement opportunities:
• Obstacle 1: Incentives
• Obstacle 2: The timing trap
• Obstacle 3: Integration gaps.

This article suggests strategies to overcome these obstacles. The suggested strategies include:
• Setting up the project team structure and incentives 
differently, including an independent energy champion to challenge ‘cut and paste’ designs and make sure that the whole plant is optimised, not just the constituent parts
• Optimising earlier in the project lifecycle to make improvements without causing delay, and using energy optimisation tools and models to speed up decision making, facilitating more rapid conclusions later in the project
• Conducting global, integrated optimisation, such that when capital is spent to reduce energy consumption in one place, capital is saved in the energy delivery system (such as utilities) elsewhere.

We outline how, in practical terms, asset owners can do things differently to allow energy optimisation to take place. Case studies are also presented showing how energy and capital costs can be reduced simultaneously, whilst speeding up design decisions through smart application of the right tools at the right time.

Optimising energy efficiency during the project lifecycle
Challenge 1: Incentives
A project design team has to consider multiple factors when designing plants. Even though an operating company may have corporate commitments to improve energy performance, energy efficiency is typically considered to be less important than other design factors, such as process safety, environmental features, reliability, operability, capital costs and scheduling. In addition, many companies simply do not have enough in-house expertise to optimise energy performance. To produce an energy efficient design, energy optimisation must be started during the conceptual stage of the project when it is possible to make the biggest improvements to the efficiency of the design at minimal cost. In general, a project manager never receives praise for spending more money, even though investment in energy efficiency makes strong economic sense.

Within a typical major capital project team, there are several stakeholders, each playing a different role with a different focus:
• Process licensors are responsible for the performance of their licensed units. Usually, their main focus and performance guarantees are on the process performance. Any performance guarantee on energy is based on figures the licensors themselves provided at the bid stage. Licensors do not generally receive any incentive for energy optimisation once they have been selected
• Engineering procurement construction (EPC) contractors are responsible for timely completion of designs and overall costs. Though EPCs are often tasked with optimising energy, their work is minimised if design changes are avoided, and so they have a strong incentive to block proposed energy optimisation.

• Owners are responsible for the overall project spend and are held accountable for cost and schedule over-runs at front end engineering design (FEED) or EPC. Though owners stand to gain the most from energy efficiency, their project key performance indicators (KPIs) mean that anything requiring re-working, additional engineering or a capital spend must be avoided.

In this environment, with a fear of causing delays and increasing costs, none of the stakeholders has a strong enough incentive to try and make major energy savings. Even when an owner makes energy efficiency a priority, energy is not optimised because the contractor and process licensor are not aligned with the owner. The resulting tendency is to make energy optimisation a ‘check-the-box’ exercise by utilising the energy optimisation philosophy from ‘last time’ rather than an in-depth analysis. More often than not, the end result is moderate energy efficiency performance from features that can be generically applied. The opportunities identified are process unit-specific while synergies between process units and the utility network are often overlooked.

These constraints can be overcome by making the following changes to project methodologies:
• Practising robust licensor selection that accurately values the impact of energy efficiency when compared to other licensor strengths and weaknesses, in addition to process yields and reliability
• Appointing an independent energy optimisation champion to conduct the optimisation and to push all parties to consider improvements at the most appropriate time
• Managing the costs of energy optimisation by:
 ν Making sure budgets and contracts allow for energy optimisation to be carried out at the appropriate times, and ensuring EPCs and licensors are compensated for incorporating the energy saving opportunities where required
 ν Keeping a focus on savings which have no net cost or which allow utility system costs to be reduced (or equipment eliminated). Overall, this means the energy improvements do not increase the project budget.

Challenge 2: The optimisation timing trap
Powerful analytical optimisation techniques such as pinch analysis, total site and utility optimisation require good input data. However, once detailed data are available, it is typically too late to make big changes to the design, and even small changes can affect the schedule and project costs.

This leads to a seemingly intractable dilemma:
• Early optimisation, before FEED begins, offers large benefits, but lack of data means it is difficult to start optimisation, which relies on robust data
• Late optimisation, during FEED, offers smaller benefits, and high costs of making changes with the impact of delays, which means the energy benefits are lost when other project penalties are considered.