Recent concerns about energy affordability, security and greenhouse gas emissions have heightened interest on a global scale about the potential for improving energy efficiency and reducing emissions to help address these issues. While the need for energy efficiency is well acknowledged in the corporate world, many companies remain stuck on the energy management sidelines.
The hydrocarbon processing industries are currently operating in a volatile environment of depressed oil prices, alternate feedstock availability, global competitiveness, changing economics and rising energy costs. Currently, the two highest costs of refining oil and petrochemicals are feedstock and energy. So, when refiners talk about energy management, the big questions are often: How do we improve energy efficiency, and how do we measure it in terms meaningful to a refinery? Since energy is the biggest cost for a refinery, every improvement is significant.
Although substantial investments have been made in energy efficiency and cost management over the past five years – including fuel selection, demand forecasting and supply planning, and consumption efficiency and control – frustration persists. The root cause is often the misalignment of objectives between the enterprise and the plant floor. Plans are abundant, but successful execution has not been widely common.
These vastly different worlds present huge variances in performance metrics, incentives, strategic emphasis, organizational structure, work processes, employee skill sets and culture – particularly when it comes to energy management. As energy prices become more volatile, plant operators feel more out of control. With limited access to current energy costs to make more informed decisions, and a lack of plant flexibility to be responsive, operators are not typically equipped to make rapid changes.
It is time to go digital
A holistic, digital and physical energy management strategy executed at scale can translate to improved operational excellence, greater operator agility, a reduction in waste and resource conservation, reduced greenhouse gas emissions, and increased competitiveness. So, what is the process for employing such a strategy? This can be achieved using a three-pronged approach outlined here:
1. Scope and develop a comprehensive energy management strategy.
A thorough energy management approach addresses both consumption efficiency and volatility responsiveness across these five key areas:
- Objectives, performance measurement and incentives: When developing corporate objectives supported by operator incentives, companies must determine the energy cost variables operations require and their incentives to manage energy.
- Planning and scheduling: This aspect considers the cost impact of energy consumption when changing production and maintenance schedules, and ultimately allows for effective planning for variable energy costs, optimizing plant maintenance schedules and collaboration across the enterprise.
- Plant configuration and equipment: With a continued focus on emissions reduction, companies must consider whether the plant is optimized for energy and emissions, whether energy sources and energy sinks are connected, and if energy generation is effectively managed.
- High consumption components and super systems: This involves evaluating the efficiency of process units, the stability and variability of the units and whether any process units are bottlenecked.
- Operational performance discipline: Evaluation of the productivity and agility of employees, as well as the extent to which strategic energy management is embedded into the corporate culture.
2. Implement an online performance solution.
Reducing energy consumption and improving profitability requires industry to use technology to address rising energy costs and decreased margins. This will drive more efficient and flexible production and new product development. Software can be used to model the actual production environment, to then be used to explore new process improvements or energy reduction ideas. This strategy can then lead to reduced energy consumption and improved profitability, meeting emissions targets while driving global competitiveness. An online, digital performance management solution can instantly correct for such factors as price fluctuations, product mix and throughput that play a part in classical energy consumption, resulting in improved operational excellence on a continuous basis.
3. Demonstrate benefits through visualization.
Finally, rolling out a new strategic energy management program is of no value without a methodology to demonstrate the benefits. Measuring energy efficiency requires effective evaluation and visualization, and can provide meaningful, real-time comparisons between actual energy consumption versus target values, as well as a visual look at leading key performance indicators to determine what corrective action can be taken to improve operations. This provides the assurance to stakeholders that programs and projects are achieving expected savings and productivity gains.
Overall, there are several approaches to designing and executing an energy efficiency program. The key to an effective strategy, however, involves gaining executive/leadership buy-in from the start, with meaningful objectives established up front that have been agreed upon through collaboration among the many stakeholders and a full understanding of a company’s energy use.
The digital world is here. Now is the time to embrace virtualization strategies to gain competitive advantage before it becomes the industry norm. Executing a comprehensive energy management strategy by implementing an online performance solution with visualization tools will not only provide immediate savings today, but will help drive operational excellence through continuous energy improvement well into the future. This methodology will allow the hydroprocessing industries to achieve more efficient and flexible production, reduce operating costs and promote a greener global economy.
