10 Strategic Steps to Reducing Your Energy Costs AEE Regional Chapter Meeting February 2, 2005

Transcription

1 10 Strategic Steps to Reducing Your Energy Costs AEE Regional Chapter Meeting February 2, 2005 Presented by: Gary A. Swanson, PE President Energy Management Solutions (612)

2 10 Step Summary 1. Energy Supply 2. Price Risk Management 3. Energy Conservation 4. Minimize Energy Usage 5. Utility Programs 6. Manage Demand 7. Data Management 8. Equipment Purchases 9. Maintenance Programs and Training 10. Utility Infrastructure Costs Energy costs may only be 5% of your total costs but energy cost savings go directly to your bottom line and increase profits 2

3 Energy Components Supply Side Demand Side 3

4 Energy Supply Review Tariffs 23% on incorrect tariffs Can change with operation changes Economic development rates Less then 20% take advantage of the tariffs Maybe able to collect savings from the last year Aggregate Meters Can save customer charge and demand Combined could qualify for large volume tariffs Saved one customer $500,000 by utilizing EDI rate 4

5 Energy Supply Review Bills Xcel changing billing system Large bills are generally hand billed Found $180,000 billing error for one customer Sales Tax Exemption Changes with operational change Recover 3.5 years in MN Saved one customer $138,000 5

6 Energy Supply Procurement Deregulated state (12 active) 2 MW rule in MN Negotiate With Utility Need viable threat Gas bypass Generation Expansion at other site or moving facility 6

7 Energy Supply Self Generate Cogeneration Need good steam or hot water load May be able to generate for $.07/kWh Government organization may be able to provide free audit Wind Generation May be able to generate for $.04/kWh with no capital cost Needs to be installed before 12/31/05 Will not replace current supplier but can supplement more expensive power 7

8 Price Risk Management Hedging is not speculation Provide guaranteed price Meet budget Future pricing of products Lock in profit Speculation is taking a risk in hopes for an unknown reward Not hedging is speculation 8

9 Price Risk Management Many Ways to Hedge Local Utility Marketer Commodity broker (Lowest cost) Physical vs. financial Need Information to Make Educated Decision Need to Evaluate Technicals as Well as Fundamentals Group Volume of Facilities all Over the Country Need to Evaluate all Options to See Which is Right for Your Facility 9

10 Energy Usage Profile Motors Gas Process Compressed Air Lighting HVAC Complete an Energy Assessment 10

11 Energy Conservation Why look at this now? Gas costs have tripled 6 year payback is now 2 years Electric costs have gone up dramatically New technologies are helping reduce payback Corporations are developing conservation programs (CSR) All leading to new opportunities to reduce energy costs 11

12 Energy Conservation Lighting (50%) New high bay fluorescents can save 50% Lighting control Rebates Many projects less than 2 year payback Buying program and recycling (save 10%) Saved $145,000 for one customer and received $125,000 rebate, with a 2 year payback 12

13 Energy Conservation Compressed Air (35-50%) Fix leaks yearly New ASD trim machines Regenerative dryers Lower air pressure Adequate storage Tie units together Saved over $250,000 per year by adding controls to tie four units together and eliminate a 500 HP unit 13

14 Energy Conservation Motors (10%) Premium efficient or Ultra efficient motors Adjustable speed drives Synthetic oil Synchronous belt drives Gear boxes Utility audits and rebates Buying programs (save 15%) One facility had and 10 HP motors that saved over $150,000/yr. 14

15 Energy Conservation HVAC (25%) Energy Management Systems Night set back controls Exhaust fan timers Waste heat recovery Economizer control 15

16 Energy Conservation Refrigeration (20%) Control compressors Synthetic oil Drives on compressors, evaporators and pumps Defrost sensors Saved one customer $148,000/yr. by adding a control system 16

17 Minimize Energy Usage Turn equipment off when not needed Lights off at night Equipment off during breaks and lunch Dust collection system (drives with valves) Control aux. equipment when equipment is off Turn off idling equipment Shift usage Night and lunch walk through useful Saved a customer $54,000 by turning off lights in Mezzanine Saved another customer $120,000 by turning off injection molding grinders 17

18 States With Utility Incentives 18

19 Utility Programs Customers pay into program today Goal is to get more money out then you put in Xcel and Minnegasco have great programs Can get up to a year of energy savings and paybacks down to 2 years Audits One customer received $330,000 rebate for a process improvement 19

20 Manage Demand Can represent 30-50% of your electric bill Everyone has control options (10%) Control strategies depend on your rate structure Control plant load Control with utility signal Voluntary curtailment program Need interval load data Review peaks and minimum load 20

21 Load Profile 21

22 Data Management Review usage Compare to other plants Compare to past usage Helps to identify problems Track Btu per unit produced Track Greenhouse gas savings 22

23 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 $/kwh Cost ($) kwh Electric Reporting Electric Cost Per Month Electric Usage Per Month $84,000 $82,000 $80,000 $78,000 $76,000 $74,000 Aug-02 Oct-02 Dec-02 Feb-03 Month Apr-03 Jun-03 2,000,000 1,500,000 1,000, ,000 0 Aug-02 Oct-02 Dec-02 Feb-03 Month Apr-03 Jun-03 Energy Rate per Month $0.056 $0.054 $0.052 $0.050 $0.048 $0.046 $0.044 $0.042 Month 23

24 kwh/ton Benchmarking Benchmarking - kwh Per Ton Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Month Mar-03 Apr-03 May-03 Jun-03 Jul-03 24

25 Purchase Energy Efficient Equipment Rebates Energy Efficient Options Utility Engineering Studies Utilize Existing Equipment Best Practices New Technologies 25

26 Maintenance Programs and Training Can reduce usage through new equipment but also need to maintain equipment Properly maintained system can save 5% of energy usage Compressed air and steam leak checks (yearly) Steam traps (25% failed in 3 yrs.) Cost $4,000 per trap Boiler tune up twice a year (1-2%) Unfortunately this takes a back seat to running plant 26

27 Maintenance Program and Training Employee training is key to helping identify problems Educate them on costs of leaks Provide incentive program for identifying problems Energy savings translates to higher bonuses 27

28 Minimize New Utility Infrastructure Costs Negotiate with utilities to reduce or eliminate infrastructure costs required for expansions and changes at plants Reduced infrastructure requirements from $3,000,000 to $1,200,000 for one client 28

29 Questions? 29