Energy efficiency key to gaining a competitive edge

Paul Boughton

The European process industries have made great progress in recent years to improve energy efficiency however energy still represents one of their largest managed costs. Jurg Zollinger reports.

A focus on improved energy performance has once again become an essential part of maintaining a competitive edge – it is now vital to contain the impact of energy price increases and to manage the cost and compliance issues associated with CO2 capping and trading.

Worldwide energy demand will continue to rise faster than supply and will put upward pressure on energy prices. In addition in 2008 the second phase of the EU ETS will significantly increase the cost of carbon emissions (and the value of carbon credits).

Producers who act now to improve their emissions position will insulate themselves from future carbon market volatility whilst creating new opportunities to profit from an increasingly carbon driven economy.

Energy management is often reactive, failing to capture the substantial bottom-line benefits that can be achieved from a structured, strategic approach to energy cost reduction. To maximise the return from energy management in both the short and long term, a clear strategy is required that will consider operational costs and savings as well as optimising the return on capital investment.

A structured, comprehensive and rigorous approach to energy and carbon management will reduce energy related operating costs, create opportunities for improved profitability from carbon credits and will maximise the return on capital invested in utility infrastructure.

Typically a strategic energy improvement program would proceed stepwise. Firstly by identifying and quantifying the potential for improvement across the corporation as a whole, then identifying and qualifying specific improvement opportunities and finally implementing, monitoring and sustaining the improvement.

Benchmarking and gap analysis

Benchmarking should be applied across all sites so that corporate energy reduction efforts can be focused most effectively for the organisation as whole. Many conventional approaches to benchmarking have shortcomings as they only compare relative performance.

To obtain a clear understanding of what is achievable it is necessary to benchmark against the equivalent best technology performance and best operating practices and to apply gap analysis to identify and quantify specific areas for improvement.

The spread of energy saving opportunities varies from site to site but typically you would expect to find around 50percent of the savings are zero to low cost improvements in equipment and utility system operation, around 40percent of the savings come from capital investment and around 10percent from improved energy management. It is necessary to assess the potential to reduce energy costs and emissions by considering changes in the process itself, heat recovery within the process, maintenance of equipment, efficiency of rotating equipment and the efficiency of utility generation and consumption.

A comprehensive energy review needs to address all these areas and requires the application of a wide range of technologies. Typical techniques and technologies that would be applied include process modelling, process integration or pinch analysis, total site analysis, and utility simulation.

The correct application of these techniques enables a structured approach to cost effectively:

  • Quantify targets for energy reduction.
  • Identify practical projects to minimise operating costs.
  • Minimise capital expenditure for new or retrofit investments.
  •  Determine the optimum interaction between the processes and the site utility system.

Individual projects are then combined to create a long term investment RoadMap for each site, accommodating known changes in site usage and offering a clear picture of the optimum investment choices.

Specific energy reduction projects can be ranked according to economic viability both on a site by site basis and across the corporation as a whole so that investment choices can be targeted to deliver maximum savings.

Sustaining the benefit

Energy performance monitoring is key to ensuring that the benefits identified in a strategic energy review are realised and sustained in the longer term. To ensure successful long term energy performance it is necessary to implement an energy management system. This should track key performance indicators at management, engineering and operational levels to track progress towards identified targets and to guide long term continuous improvement.

Often the largest opportunity for reducing energy related operating costs lies in the way the steam and power system is operated.

Fuel and power prices, process demands and equipment availability are constantly changing and the least cost operational configuration is rarely obvious. It is increasingly common for sites operating complex utility systems to employ real utility system optimisation tools which will automatically identify least cost operation.


Economic and political factors will ensure that energy efficiency remains a key competitive driver for many years to come. Although much has already been done by industry in Europe much still remains to be done. Opportunities to profit from improved energy performance have never been greater – rising energy costs are improving the payback from energy efficiency projects and the introduction of carbon trading provides a new opportunity for companies to sell credits accumulated as a result of efficiency improvements.

Jurg Zollinger is Business Development Manager with KBC Process Technology Ltd – Linnhoff March Energy Services Division – Northwich, Cheshire, UK.


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