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Apr-2009

Improving energy efficiency

Major opportunities for energy efficiency and reduction of GHG emissions within a refinery/petrochemical complex are identified. Work process methodology for 
capturing these opportunities is proposed

Brendan P Sheehan, Honeywell Process Solutions
Xin (Frank) Zhu, UOP A Honeywell Company
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Article Summary
The European Union Energy Pact contains key targets for the year 2020: a 20% reduction in CO2 emissions (compared with 1990) and 20% renewable energy. The CO2 reduction target will be increased to 30% if a global agreement incorporating other developed nations is reached. However, while results to date have shown some reduction in greenhouse gas (GHG) emissions, it is clear that a lot more effort is required by Member States and the European Community if they are to reach these new targets.

For high energy intensity industries like refineries, a 20% or even a 30% reduction in 11 years seems to be a great challenge, as so far there has been no reduction in emissions for this industry. Future phases of the emissions trading scheme (ETS) may result in the necessity to buy more carbon credits rather than rely on existing allowances. This will put downward pressure on future refinery margins by up to 1–2 $/bbl, depending on the carbon credit price.

However, recent trends of increasing raw material prices have been driving the refining industry towards a more efficient operation and a more effective energy management policy. This will have an additional effect of reducing GHG emissions, which through the ETS will, in turn, serve to make energy efficiency projects more attractive.

Energy management solutions for refining involve a lot more than just modernising utility systems, although for many sites the utilities plant is an area that has often been neglected. A comprehensive solution combines energy and process optimisation and, where appropriate, incorporates the solution into online advanced control and optimisation strategies. Additional components of the solution include heat and power recovery within and across process units, steam and power system optimisation, feedstock selection, energy contract management, as well as the introduction of renewable energy sources such as biofuels.

Honeywell’s experience has shown that a 12–25% energy reduction is achievable by implementing a comprehensive energy management solution, with attractive returns on capital investment.

Trends in energy and 
GHG emissions
Global trends

The global trends and challenges facing industry are well known. Many countries want to increase their energy security, which has encouraged the search for alternative energy sources and been another driver for energy efficiency. But the recognition of global warming has raised environmental regulations and carbon taxes, setting a new trend that will continue to grow during the coming years. This will add to the operating costs of all energy-intensive industries, including refineries and petrochemical companies. Today’s refiners face many challenges that require technology-driven solutions.

EU energy policy
The growth in both population and living standards in the EU Member States since 1990 would, under a normal attitude of “business as usual”, have resulted in significantly increased CO2 emissions by 2020. However, Europe has often been at the forefront of environmental policies and, by signing up to the Kyoto protocol, the EU-15 pledged to reduce GHGs by 8% below 1990 levels by 2012. More recently, in 2007, the expanded EU, now with 27 Member States, ratified a commitment for a 20% reduction in GHG emissions from the 1990 baseline by 2020, and promised to push for an agreement with the US and other developed nations to meet a 30% reduction by the same date. As part of this pact, the EU also committed to producing 20% of its energy via renewable resources by the same deadline.

Recent reports by the European Environment Agency1 suggest that the EU-15 Member States can meet their 2012 Kyoto targets, provided they implement all policies and measures currently planned (although not yet implemented in all cases). By 2005, many countries in the EU were already on their way to meeting their Kyoto commitment, with the EU-15 (committed to the 8% reduction) down 4%, while the EU-27 was down 7.9% below 1990 levels. This was achieved by replacing many coal-fired power stations with natural gas and by reducing the emissions associated with transport.

However, it is widely accepted that many of the easy changes have been adopted and that further reductions will require more commitment. With current policies and measures, the EU-27 is not projected to get any lower by 2020 and in fact will increase slightly due to economic growth, particularly in the newer Member States, and the associated increases in energy consumption.

To meet the new targets, many countries will adopt Kyoto mechanisms like the ETS, where countries can buy carbon credits known as emission reduction units (ERUs) from clean development mechanism projects (CDM) or carbon emission reductions (CERs) from joint implementation (JI) projects. This will help them meet some of their reduction requirements, but other measures will need to be adopted. In the current phase of the ETS, individual countries have carbon allowances that are based on the normal operation of its various industries and, provided each business stays below its cap, no direct impact is felt. If a site exceeds its cap, it has to buy carbon credits to offset the excess carbon emitted during the trading period. After ETS II is complete in 2012, a new ETS phase will begin. Although the conditions for the new trading period have not yet been defined, it is likely that allowances will be dramatically reduced and many more carbon credits will have to be purchased, which will significantly raise the cost of CO2 emissions. At the time of writing, carbon credits in ETS II were trading between 22–25 ?/te.

Many new measures will be needed, including the promotion of electricity from renewable energy sources, cogeneration directives and the use of biofuels. The current contribution of renewable energy is mainly from hydroelectric power and totals about 6.7% of total energy consumption. 

Energy and GHG emissions in refining
So what does all this mean for the refinery and petrochemical industry? Most European refineries currently have sufficient carbon allowances and, in fact, CO2 emissions have been rising due to increased demand for refining products and the need by refiners to process heavier, more sour crude feedstock. However, this situation is unlikely to remain, particularly if allowances are significantly reduced during the next trading scheme. In that case, the cost of CO2 emissions will have to be incorpor-ated into the overall cost of operation.
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