Energy Benchmarking of Dutch Refineries. VNPI Summary Report

Transcription

1 Energy Benchmarking of Dutch Refineries VNPI Summary Report The Netherlands Petroleum Industry Association May 2008 Reference: KBC PROCESS TECHNOLOGY LIMITED

2 KBC Process Technology Limited 2007 All rights reserved Proprietary Information By accepting this document, the recipient confirms that all information contained herein will be kept confidential, and this information will not be disclosed to third parties without the prior written agreement of KBC Process Technology Limited. KBC Process Technology Limited Registered in England: No KBC House Hersham Road Walton on Thames Surrey KT12 1RZ United Kingdom T +44 (0) F +44 (0) KBC PROCESS TECHNOLOGY LIMITED VNPI

3 Contents 1.0 Introduction Energy saving Targets for Refineries General Remarks 1 Where are the Inefficiencies? 4 Where are the Benefits Found? 4 Non-investment benefits 5 Cost versus Energy Savings 5 How Much Cost and Energy can Realistically be Saved? 5 Can Higher Energy Savings be Achieved? Dutch Refineries Energy performance 6 Problem Approach Gap Closing Study 6 Dutch Refineries Energy Efficiency 7 Scope for Improvement Summary 8 Can Higher Levels of Savings be Achieved? Attachment: Introduction to KBC Best Technology System Best Technology Process Configuration BT Correlations Using the Correlations to Assess Refinery Efficiency 12 KBC PROCESS TECHNOLOGY LIMITED VNPI

4 1.0 Introduction As part of an energy improvement initiative instigated by the Dutch Government, VNPI (The Netherlands Petroleum Industry Association) has asked KBC to carry out studies at five Dutch refineries to assess their energy efficiency and the potential for improvement. All five Dutch refineries subscribed to this project, although with different scopes of work given to KBC to execute. The table below summarises the scope of KBC studies carried out at each refinery. Refinery BP Esso KPE Shell Approach (KBC Study Scope) Benchmarking, Gap Analysis, Steam&Power system model and analysis, Pinch analysis, an assessment of saving opportunities based on preliminary process analysis and Gap Analysis Benchmark, Review of in-house ideas. Savings estimated by Esso. Extensive list of in-house identified projects. As BP Benchmark, Review of in-house ideas. Savings potential estimated form KBC s past experience. Shell yet to complete a comprehensive in-house study to identify projects and savings Base Case Period February nd half typical winter and summer periods 2006 Total As BP March 2006 Of the five Dutch refineries, three subscribed to a comprehensive study by KBC, and two relied on their own work. Although the methods of the assessment of the saving potential have been slightly different for each site, KBC are confident that the results and the conclusions presented here are reliable and can provide an objective source of information needed by any Authority to assess how much energy saving can be economically achieved. This is further elaborated later in this report. 2.0 Energy saving Targets for Refineries General Remarks In the world of increasing competitive and environmental pressures, there can be conflicting demands and expectations from various parties. Although they all, from owners and shareholders, through to the regulatory bodies and activists groups, want to see a reduction in energy consumption and an increase in energy efficiency, their interests differ and are often in conflict. The shareholders and the refinery management are concerned with reducing the energy COST, whilst using an optimal amount of energy to maximise the product yields. On the other KBC PROCESS TECHNOLOGY LIMITED 1 VNPI

5 hand, the governments, their regulatory bodies, the environmentalists and various other groups want to see an improvement in energy efficiency that would result in a reduction of CO2 emission. The difference is marked: Refiners try to use the right amount of energy to maximise their profits, but would like to minimise the cost of that energy. They will therefore, alongside other (energy saving) measures, also try to accomplish something along the following lines: switch from more expensive to cheaper fuels, build cogeneration plants to reduce power import, maximise LPG recovery, and operate as close to the environmental limits as possible. These measures help them to reduce the operating cost, but none of them reduces the energy consumption of a refinery in fact cogeneration necessarily increases the local energy consumption and local emissions. Historically, many refineries have been designed and built at the time when the energy costs were relatively low. As the result, the energy efficiency was not a primary design criterion, the way it would be today. The average energy efficiency of a European refinery is today about 180% when measured against a practical benchmark such as KBC s Best Technology index. This means that an average refinery consumes 80% more energy than KBC s reference refinery. KBC Best Technology Method As the benchmarking methodology, KBC use their own technique; known as the Best Technology method. It compares the actual energy consumption of a refinery with the consumption of the best available, economically justifiable, energy efficient refinery configuration, comprising the same process units, and with the same feed quality and the yield patterns as the actual refinery. KBC believe that if they design a refinery today, with all upto-date, energy efficient and economically justifiable technologies built in, it will have a BT efficiency of 100%. Note: It is generally not possible to improve an existing refinery to achieve 100% BT performance! This high efficiency is only achievable in a grass roots design. The methodology is described in more detail in Attachment 1 of this report. However, the relevant question here is what can be done, and how much energy saving can be practically achieved. There are two ways to reduce the energy consumption: to some extent it can be reduced by non/low investment measures, such as optimisation and good housekeeping. However, in order to make significant reductions, investment is required - energy can be saved, but at a cost. These investments follow the law of diminishing returns subsequent projects will have poorer and poorer financial returns. The first m 2 of additional surface area installed in a preheat train would have an excellent payback. Subsequent additions will have longer and longer payback times. How far a refiner will want to go in pushing the energy saving initiative is therefore an economic issue, and not only an environmental issue. KBC have been involved in numerous energy studies at refineries world-wide. The graph in Fig. 1 shows randomly the results of about 60 of those studies. For each refinery surveyed, its initial BT index is shown together with the BT index achievable after all the identified and recommended energy conservation project for that site are implemented. KBC PROCESS TECHNOLOGY LIMITED 2 VNPI

6 BT Efficiency, % Before Optimisation After Optimisation Efficiency Sequence Fig. 1 KBC Studies: Results for 60 refineries world-wide It is remarkable how different the refineries are with respect to their energy performance: the BT indices range from 120% to 300%. It is also remarkable how different they are in terms of achievable improvements: in some cases, improvements of 80 points are possible, and in some cases not more than 20. Why some sites are more efficient than others can also be discussed at length, but for the purpose of this study we will turn our attention to the latter difference: why one can save more than the other? How much the energy consumption of a refining site can be reduced depends on three main factors: 1. The process configuration, and where the inefficiencies are some configurations lend themselves well to improvement, while others do not. It is easier to justify a preheat train revamp in a large crude unit, than it is in two or three smaller units of the same total capacity. A steam system designed with high-pressure boilers (60 bar) and cascading steam header pressures can be significantly improved by addition of backpressure turbines, while one with 15 bar boilers and a single pressure level does not offer much scope. Limited plot space may be restricting where exchangers, waste heat boilers, FCC turbo-expanders, etc., are to be added to existing units, while safety becomes an important factor in high-pressure units. 2. The local cost of energy and the environmental cost obviously where energy is purchased at high cost (most of Europe, USA, Japan) more investment projects can be economically justified than where energy is relatively inexpensive (such as power in Scandinavia and South Africa, fuel in the Middle East, etc.). 3. Investment policy some refiners differentiate and give preference to energy projects, and allow longer payback periods (slower returns) for those, while others do not. The logic of the preference is that an energy saving project, when implemented, sits there and makes money, while the benefits from a yield-related revamps depend on price differentials and on market price fluctuations of different products. Energy projects can therefore be considered more robust in terms of their returns. KBC PROCESS TECHNOLOGY LIMITED 3 VNPI

7 Two conclusions can be drawn from the graph in Fig. 1: While BT performance can be achieved in grass-roots designs, it is very difficult (if at all possible) to bring an existing refinery to a 100% BT performance via retrofits. Most refineries can be economically improved to achieve a BT index below %. Just as an observation considering that existing refineries cannot be improved to 100% BT level - it follows that it is very important to get the things right (efficient) in the design phase. Where are the Inefficiencies? The inefficiencies in refinery energy performance relate to following major areas: Process configuration o Furnaces o Heat Integration Steam and Power system Distribution of Benefits (European refineries) Other 20% Process 25% The inefficiencies in the above four areas typically account for about 90% of the identified performance gap. This means that in a 180%-BT refinery, for example, the above four areas would be responsible for ~ 70 points of the gap out of 80 points of total gap between the actual and the Best Technology refinery performance. Fig. 2 Steam&Power 55% Distribution of Benefits In most refineries worldwide (with exception of some US refineries featuring simple steam systems) the largest gap is usually found in the efficiency of the Steam&Power system. It is logical to assume that the largest benefits should be achieved by improving that system. This indeed is true, as will be discussed below. Where are the Benefits Found? All sites are different, and there is hardly a typical refinery. However, from many (>200) energy improvement studies that KBC has carried at European refineries over the past 25 years, it can be concluded that the distribution of the potential benefits tends to be as is shown in Fig. 2. On average, more than 50% of the potential benefits is usually found in Steam&Power systems. This is in line with what was said above regarding the distribution of the inefficiencies. Many of the potential improvements that are found in Steam&Power systems are related to cogeneration. If a refinery already has a co-generation system installed, then the benefits from improvements in this area may be smaller. It is expected that, on average, about 25% of the total improvements would be achieved by various retrofits of process units. This includes process modifications (e.g. installation of a hot separator in a hydrotreater), furnace improvement (e.g. addition of an air preheater), and KBC PROCESS TECHNOLOGY LIMITED 4 VNPI

8 improved heat integration (e.g. revamping and adding heat exchangers to feed preheat train in crude distillation units). The remaining ~ 20% of the benefits are found in other areas. These include projects such as the optimisation of the fuel system, LPG recovery, flare system, reduction of losses (e.g. improved insulation), etc. Non-investment benefits Some of the benefits shown above can be achieved by non- or low- investment measures (e.g. process optimisation, reflux rate reduction, steam system optimisation, fuel system optimisation, furnace excess air control). Application of energy management systems, with careful monitoring of the energy KPIs (key performance indicators), falls into this category, as do regular energy walkabouts and good housekeeping/maintenance practices. It is expected that, on average, non-investment benefits may amount to about 25% of the total benefits achievable. Cost versus Energy Savings It should be noted that the benefits quoted above have been calculated as cost saving benefits. They include projects such as improved LPG recovery, or using cheaper cutterstock for the internal fuel oil viscosity adjustment. To a refiner, cogeneration can also appear as a cost reduction project. It increases local fuel consumption and reduces power consumption. Overall, it increases the local energy consumption. Globally, however, cogeneration is an energy-saving project, as well as a costsaving one. How Much Cost and Energy can Realistically be Saved? On average, KBC expect that a European refinery should be able to save 30% of its total fuel and power cost by implementing a systematic, site-wide energy cost reduction programme, with projects that have a simple payback of < 4 years. However, it should immediately be brought to the attention that the opportunities in Dutch refineries are going to be much lower, because they are already in a good state of energy efficiency, as will be explained later in this report. And finally, just to re-emphasise: the 30% quoted above is the reduction in refinery energy cost (i.e. saving), resulting from improvement in energy efficiency, cogeneration and burning cheaper fuels. In terms of actual energy (GJ) saving, that results form improved energy efficiency, KBC conclude that on average about 12-14% should be realistically achievable. Note that this excludes cogeneration. Cogeneration does not save energy in a refinery. It increases the energy consumption of a site, and increases the local emissions. However, it reduces energy consumption elsewhere (in a power plant). The net effect is positive, i.e. the fuel usage and the emissions would be reduced globally. This is because cogeneration within a process plant is more energy efficient than power generation in a stand-alone power plant. KBC PROCESS TECHNOLOGY LIMITED 5 VNPI

9 On average, KBC estimate that an additional ~ 7% of refinery total fuel consumption would be saved with cogeneration and let it be said again: this reduction will not be achieved locally at the refinery, but globally (elsewhere). Can Higher Energy Savings be Achieved? Some national authorities may be more ambitious than others, and may set higher energy saving targets than what has been quoted above as realistically and economically achievable. It is to be noted that the above calculation of the average achievable benefits was based on projects that offer simple paybacks of up to 5 years (as calculated at one particular time, assuming energy and construction costs of the time). Of course, if less economical projects (and longer payback periods) are accepted, more energy could be saved. In KBC s experience, it is difficult to expect a market-driven refiner to make such low return investments, as there would always be other, non-energy related projects (such as various process improvements) that offer more favourable returns. As expected, more and more energy can be saved, but at a higher and higher investment cost relative to the benefits. How far to go? Clearly, the decision to push for projects that are beyond what is economical, is a sensitive (if not political) issue, and the choice of a combination of regulatory and stimulatory measures that enable the refiner to meet the energy/environmental targets while retaining their competitive edge, will need to be carefully identified by individual governments. It will be a fine balancing act between maintaining the competitiveness and vigour of the refining and petrochemical industries on the one hand, and reducing their emissions on the other. 3.0 Dutch Refineries Energy performance Problem Approach Gap Closing Study In an ideal situation, the potential to save energy would be assessed by conducting a comprehensive Energy Study, including the so-called gap closing projects. This means that in addition to the identification of economically justifiable projects, the Road Map of projects would include all projects that close the gap between the existing refinery and the Best Technology one, no matter how uneconomical these projects may be. Such a comprehensive study would involve: Benchmarking the energy efficiency Gap Analysis of energy efficiency to quantify the areas of inefficiency Pinch Studies (heat integration studies) on major process units Modelling of the Steam&Power system and optimisation of the system Detailed Process Reviews to find energy-saving opportunities KBC PROCESS TECHNOLOGY LIMITED 6 VNPI

10 Development of project ideas and confirmation of these ideas with the refinery Conceptual design of the recommended solution Calculation of costs, benefits and return on investment Development of a RoadMap of projects a logical sequence of projects leading to improved energy efficiency (observing the inevitable project interactions) Development of Gap Closing Projects Armed with the results of such a study, the refinery management would be able to readily develop an 8-10 year plan, showing how much improvement is possible: first with minor/low investment, and then via short payback projects (i.e. with a simple payback of < 1 year), followed by those with paybacks of 2-3 years, and finally by those with paybacks of < 5 years. The study could also define a separate RoadMap of uneconomical projects to show how the total gap can be closed and at what cost. It can be argued that this approach would enable the refiner to clearly demonstrate to the owners, or to the authorities, the ultimately achievable energy efficiency improvements (i.e. the improvements achievable with projects satisfying their own established economic (ROI) criteria) and the required budget to effect this, and also the path for further improvements that can be made if low-return projects are adequately subsidised. For VNPI, the approach described above and the corresponding scope of work could not be adopted by KBC, due to the ambitious time limit imposed on Dutch industry. What was completed are five studies using a mix of approaches, as indicated in the introduction to this report. One can question the relevance of the results so obtained, and it is proper that KBC s comments are given here: KBC maintain that the study results pertaining to the achievable savings are quite reliable and robust, especially in the cases of BP, KPE and Total refineries. The study may lack convincing results in the extent of the savings that could be made beyond what is economical. Simply stated, KBC data bases and experience do not cover such areas in much depth. Gap closing is very much refinery dependent, and subject to detailed analysis - these gap closing projects are best identified on a refinery-by-refinery basis. Dutch Refineries Energy Efficiency Dutch refineries vary in capacity and complexity. The individual BT indices were calculated for all five refineries. The findings of these studies are documented in the individual reports prepared by KBC for each refinery. As these indices are of confidential nature, KBC here shows a dimensionless chart (Fig. 3). All five, however, are within the upper half of world (and European) refineries. The weighted average efficiency is in the top of the 2 nd Quartile, as shown in Fig. 4. KBC PROCESS TECHNOLOGY LIMITED 7 VNPI

11 Refinery Site BT Average European Refinery BT 180 % Dutch Refineries Average BT 168 % BT Index (%) th > 200% 3rd % 2nd % 1st < 160% 0 Fig. 4 Average BT Index of Five Dutch Refineries Scope for Improvement Summary The scope for improvement, identified by individual KBC studies, varies from 10% to 26% of the Base Case energy consumption of each refinery (Fig. 5). The weighted average is 13%. To restate: KBC estimate that these savings can be achieved by projects that have simple paybacks of less than ~ 5 years. % on Base Case Energy Dutch Refineries - Saving Potential Site Fig. 5 Potential for Improvement Distribution KBC PROCESS TECHNOLOGY LIMITED 8 VNPI

12 Can Higher Levels of Savings be Achieved? KBC believe that, if all five refineries implement projects identified during these screening studies, the energy consumption, and hence the CO2 emission, will reduce by 13% on average. Some of the five refineries will achieve less than that, while others can achieve more. This is detailed in the individual refinery reports. Note: 100% BT is achievable when designing a new refinery. It is, generally, not achievable by retrofitting an existing plant. The 13% potential energy savings is the result of increased energy efficiency. It can also be expressed as 0.8% percent annual reduction in energy consumption and CO2 emissions over the next 15 years. Taking into account the relatively high initial energy efficiency of Dutch refineries, KBC propose that the presented potential energy savings (13% average) are quite realistic and quite high indeed, and estimate that it would be difficult to achieve higher levels of savings with projects that most refiners would consider economically viable. If 13% energy savings are achieved by the five Dutch refineries, the final weighted average BT index for the five sites would be 147% BT (Fig. 7), which would be an excellent performance, approaching the performance of some new, modern and world s most efficient refineries. KBC do not expect that improvement by retrofit leading to a much lower BT index than 140% is practically achievable. However, a question may still be asked what can be done and at what cost, if higher levels of savings are required. Refinery Site BT European Average Achievable Improvement BT Index (%) th > 200% 3rd % 2nd % 1st < 160% 0 Fig. 7 Current and Future average BT Indices of Dutch Refineries KBC PROCESS TECHNOLOGY LIMITED 9 VNPI

13 Following facts may be taken into account when considering possible improvements above the 13% level: Cogeneration is either already implemented, or is included in the 13% overall savings estimate for those refineries that are not co-generators, with the exception of one refinery, where the actual configuration prevents cogeneration. It is possible to push the extent of heat integration to a certain degree by allowing lower temperature approach in individual exchangers (this would make the addition of incremental surface area less and less economical, resulting in projects that pay back within more than 5 years). It may be possible to improve furnace efficiencies a little, by implementing expensive projects. Steam and power systems, that usually offer most of the saving potential, have been fairly well optimised in the present studies. o One aspect, however, that has not been investigated here is regional heat integration sharing heat between companies, including district heating schemes. However, some 10 years ago, Linnhoff March (now part of KBC) carried out a heat sharing project involving over 100 companies in the Euorpoort-Botlek-Pernis industrial areas of Rotterdam. Economic projects were identified (capital costs done by Stork Comprimo) that would recover and share about 160 MW of heat between companies. Both Esso and Shell were key participants in this project. o But note: It is a common misconception that utilisation of low-temperature heat can offer significant potential for energy optimisation. While some low grade heat can find a useful user, there is a clear thermodynamic reason for refineries to unavoidably have an excess of such low grade heat - heat that has to be wasted. With the exception of Shell and Esso, KBC investigated process modification options and included them in the calculations. Steam and heat losses have been addressed in the studies. Other than the above areas, there remains relatively little that can be done within the limits of conventional refining technology and experience. It should be noted that KBC are not aware of new, break-through, technologies (outside the academic domain), that could make a dramatic improvement in the energy efficiency of refineries. In fact, most of the projects and ideas generated by the present (or similar) studies represent the ones that have been known to refiners, consultants and designers for quite some time and that are now proving worthwhile and viable in today s economic environment. KBC PROCESS TECHNOLOGY LIMITED 10 VNPI

14 4.0 Attachment: Introduction to KBC Best Technology System The BT methodology is here explained with reference to oil refineries, but KBC use the same approach when benchmarking the petrochemical units, including ethylene and aromatics plants. Experience shows that the ability to benchmark and monitor energy efficiency is essential for successful implementation of an energy efficiency improvement program. A system is needed to enable calculating and expressing refinery energy efficiency as a single number so that performances of different refineries can be compared. Obviously, fuel consumption as a percentage on crude input is not an accurate parameter, because the more complex refineries are expected to consume more fuel than the simple ones. Fuel consumption expressed as percentage of the crude input is a function of both the energy efficiency and refinery complexity. KBC have developed a method encapsulated in their Best Technology system. It is used to calculate and compare the energy efficiency of refineries of different configuration, capacity and yield performance, and produce consistent and reliable results in these comparisons. In general terms, benchmarking cannot be classified as an exact science. Its results are almost invariably open to interpretation and discussion. However, KBC believe that BT methodology provides a reliable energy benchmarking tool, which has several advantages over other systems that may be in use today: It sets energy targets in terns of best available technology, and not by comparison with the industry; This is an advantage in a situation as we have with refining industry today: the whole industry can be classified as relatively inefficient; being firs quartile performer does not mean that further improvements are not possible; It compares refineries and process units with what can really be achieved; BT has best technology configuration behind it - this can be used to point out differences in process configurations between the actual and the efficient unit; It accounts for power import in economic terms, thus assessing real incentive for cogeneration; It provides basis for the Gap Analysis whereby areas of inefficiency can be identified and their contribution quantified. KBC PROCESS TECHNOLOGY LIMITED 11 VNPI

15 4.1 Best Technology Process Configuration During the development stage of their BT methodology, KBC produced energy-optimised process flowsheets of practically all refinery processes. These configurations became KBC s Best Technology Unit Configurations. These best designs feature all economically justifiable up-to-date technologies and concepts of energy efficiency such as: preheat trains designed for an optimised minimum network approach temperature (for example 20 C for crude units) all furnaces at 92% efficiency yield efficient operation efficient utility systems all power generated internally at 80% efficiency, etc. 4.2 BT Correlations Once the models of Best Technology configurations were developed, the next step was to vary one or several of the most important energy influencing variables for each process, and to investigate how they affect the energy consumptions of these Best Technology units. As the result of these investigations, KBC determined which parameters most affect the energy consumption of a process. The throughput is an obvious variable, but there are, of course, additional ones. For some units it was found that there is just one additional parameter (vol. % bottoms on crude for crude units, for example), and for some process units there would be several (such as severity of operation, feed quality, H2 consumption, etc.) 4.3 Using the Correlations to Assess Refinery Efficiency By using the energy correlations as described above, KBC can calculate the target (Best Technology) energy consumption for each of the client s actual processes and of the whole refinery. These are referred to as BT energy allowances. The allowances take into account the actual process throughput, feed quality, yields etc. The targets are then compared with the actual energy consumption of each process unit. The total energy consumption of a process or a refinery (including fuels, steam at all pressure levels and electric power) and the energy allowances are all expressed as single numbers, i.e. as tons of Fuel Oil Equivalent per hour (FOET/h). All energy streams, i.e. fuels, steam and power are converted into FOET/h using KBC s Energy Valuation methodology. The sum of the individual process allowances is equal to the refinery BT allowance, which when compared with the actual refinery energy consumption gives the refinery energy efficiency index. The index is expressed as %BT. Therefore, if for example, a BT number is 180%, it means that the actual refinery consumes 80% more energy than a Best Technology one (assuming they have the same throughput, configuration, feed quality and the yield pattern). Existing refineries rarely approach the Best Technology target, and it would normally not be economical to try to bring them down to 100%BT. However, KBC believe that the Best KBC PROCESS TECHNOLOGY LIMITED 12 VNPI

16 Technology energy performance is achievable and economically justifiable when designing new grass-roots plants. The figure below shows the results of about 180 KBC energy surveys world-wide. It can be seen that across the industry, the BT efficiencies of refineries before optimisation are on the average between 180 and 190% BT, which indicates a relatively low standards of energy performance for the industry as a whole. A similar analysis carried out on petrochemical plants would show that the average efficiency is more likely to be in the 130% BT region. Refinery Site BT BT Index (%) These refinery surveys showed that there was considerable saving potential even at the most efficient sites. It can be therefore argued that statistical benchmarking methods may be misleading. If the energy efficiency standard of the whole industry is relatively low, then being in the first quartile of a League Table does not necessarily mean that the refinery is energy efficient, and that no further, economically justifiable improvement is possible. Some of the reasons why the energy efficiency of the refining industry is relatively low are: Process units were designed when the energy cost was low, resulting in sub-optimal heat recovery schemes and use of low energy efficiency equipment; Phased expansion - new units were built as stand-alone, not heat integrated with the others; Utility systems seldom modified/optimised when on-site expansions were made; Capital saving - units were designed for minimum investment; Rely on power import, while their own power generation is low efficient. KBC energy surveys showed a wide range of improvement potential, from 20 points on the BT scale, up to 80 or more. However, the achievable total benefits are very site-specific, and will depend on the actual configuration, the physical constraints, the local energy costs, the environmental factors and, of course, the refiner s investment policy. All these factors KBC PROCESS TECHNOLOGY LIMITED 13 VNPI

17 combined will determine how many and which of the potentially viable, investment-related energy saving projects would be finally recommended for implementation. KBC PROCESS TECHNOLOGY LIMITED 14 VNPI