Interview

'Energy Management has Always Made Business Sense'

Posted on 29 January, 2010 | Tags:

More and more chemical industries are going in for energy audits as the industry is getting aware of the fact that they any reduction in energy bill directly benefits the bottom line. Energy management has always made business sense. Dr. Naushad Forbes, Director, Forbes Marshall shares his views in an exclusive interview with CEW

-Dr. Naushad Forbes 

Energy conservation has become vital for the industries than what it started as a something good to do. How do the energy losses affect the company's profit margins?
Indeed! Ten years ago, it was something good to do. The better companies had focused programmes on energy conservation and achieved a lot. However the great bulk of industry did very little. The imperative for energy conservation has changed radically since, primarily due to three things that have changed. First, our industrial landscape has changed dramatically. Today, one has to be internationally competitive to even be in business. So the pressure for cost cutting has never been greater!
Second, fuel prices have been very volatile over the last three years, with oil prices today being 100 percent higher and coal prices over 50 % higher. So, what took one year to payback three years ago, today takes just 6 - 8 months! And third, our better energy conservation suppliers have re-thought how they do business and today approach the market very differently. In our own organization, Forbes Marshall, we have always sold on the basis of paybacks.
Markets today are pretty stabilized, where the selling price of the products and raw material costs is quite well defined. Additionally within the cost heads of manufacturing the salaries of the personnel are also fixed.  Thus the only avenue to reduce manufacturing costs and better the bottom line is by reducing energy bills. Any reduction in energy bill directly benefits the bottom line.

What is the potential for fuel energy savings in the chemical process industries in India? How can the energy be conserved and reused in the processes?
Through our many energy audits across Chemical & Pharmaceutical plants we find that typical savings in most plants easily exceed 15%. These savings are distributed across the steam and condensate loop (the average potential for savings in each area is illustrated).
With savings possible in each area of the steam system it is imperative to adopt a holistic approach to ensure you realize the true potential for savings.
As far as reusing energy is concerned, depending on the plant, several avenues exist:
The most basic would be to return condensate and utilize flash steam to raise the feedwater temperature. Heat recovery from boiler blowdown has yielded savings across several industries. Recovering heat from contaminated fluids before draining them Recovering low pressure flash steam to an pressure using a thermocompressor Waste heat recovery boilers, where ever possible, reduce energy consumption.
These are but a few areas. Additionally while working with plants we come up with customized schemes to reuse energy locally.

Steam energy has ever since been in use right from the time first boiler was invented. How have boiler efficiencies been increased over years?
There has not been a significant improvement in the rated efficiencies of the boiler over the last decade. However, operating efficiencies are seeing an improvement and this is because boiler operations, which were hitherto going unnoticed, are now being closely monitored. Online boiler efficiency monitoring systems have made it possible to record and monitor boiler losses in real time and take corrective action to ensure optimal efficiency.

Forbes Marshall has collected and displayed some of the very old pieces and displayed them alongside the state of the art products that are used now in Forbes Marshall Museum. Please throw some light on innovations and new state of the art technologies developed by your organization and their application in the process industries.
The oldest product on display is an Ogden Condensate Return Pump that we made in 1963, and which was used by Century Textiles in Bombay from 1963 to 2006 - without missing a stroke in over 40 years of perfect operation. Our newest product is a Wireless Steam Trap Monitoring system, which monitors steam trap performance online and transmits data remotely to a central point.

Please throw some light on economics of energy conservation? What is the very basic step to start with for energy conservation?
We believe that the average well-managed plant in our country can save between 10 and 25 percent of its steam fuel bill. That adds up to several thousand crores of savings annually. In 2003 and 2006 we did a study in association with CII, to benchmark fuel consumption across similar plants in several sectors. During this study we identified a potential of energy savings worth Rs.6000 crores annually across industrial sectors in process steam alone.
Energy Management has always made business sense. It aligns perfectly with every plant's goal for higher profitability, controlled production costs, Competitiveness vis-à-vis competition, higher asset utilization (better productivity) and lower rejections. Everyone stands to gain from better performance across these parameters, the owner/management, the shareholders and the operations personnel. Yet while these issues form the core fundamentals of competitive dynamics and the company's survival, energy management is often in reality much talked about but much less practiced due to pressures on production and lack of awareness.
Realizing these savings often means knowing where to start. The first step in this direction is identifying the total potential in the plant and prioritizing actions based on criticality of each area. Correct implementation of energy conservation schemes ensures maximum savings achievement. A number of technological advancements in steam systems today enable efficient running of plant and minimization of losses. The use of appropriate diagnostics can help in understanding plant consumption patterns to ensure timely actions are taken to sustain savings.
 
Forbes Marshall conducts energy audits. What are the basic problems that your teams come across that if taken care of can help reduce the energy costs to a measurable extent. 

• Variations in plant operating conditions are a common occurrence especially in chemical and pharmaceutical plants due to variations in the number of equipment operating at any given time. These variations lead to changes in steam consumption and hence boiler loading. In many cases the steam consumption falls to below 50% of boiler capacity. These variations significantly impact the efficiency of the steam system.
• Across chemical and pharmaceutical plants audited by us we have found that process equipment actually consume much more steam than the theoretical load for the equipment. This excess steam consumption in equipment occurs due to improper trap selection & by-pass kept open (60 percent cases), Supply steam pressure variations (10 percent of the cases), Temperature overshoot (3 percent cases), Air venting provision  manual (30 percent cases) and Steam flow control manual (50 percent cases)
• The Condensate Recovery Factor across chemical and pharmaceutical plants varies from 0 - 60 % and is generally low primarily due to the fear of contaminated condensate. Condensate suspected to be contaminated is usually drained. This practice of draining condensate is especially prevalent in case of Multi-utility reactors.
  Across most plants we have found that it is possible to recover this condensate through a correctly engineered condensate recovery system, which ensures automatic detection of contamination and draining only condensate that is contaminated.

How popular are energy audits within the process industries? Are there any regulatory bodies that monitor these audits and also if there are any incentives that are offered to the companies for the same.
Energy Audits are slowly and steadily gaining popularity across process industries. With steadily growing fuel prices and increased awareness on energy efficiency plant personnel are internally motivated to undergo an energy audit. Multi plant organizations are now-a-days going in for audit across all their plants with the intention of bridging the gap between their own best plant and at the same time bettering their best plant performance.
The substantial savings that the plants make by implementing the recommendations of the audit report itself acts as a huge incentive. Beside various industry bodies also constitute awards for efforts on energy conservation.

Are energy efficiency solutions an expensive option for developing nations like India? Are the interests of India's industrial growth and energy efficiency in tandem with each other?
Energy solutions range from the small things you can do today (that don't need any investment) to large equipment.  But the common factor is that all help save expensive energy and reduce cost. At the firm level, industrial growth and energy efficiency are not mutually exclusive. Energy efficiency helps improve competitiveness, which is essential for survival and growth. On a more macro level, improving energy security and reducing dependence is what all nations work towards.

Indian process industry comprises of small, mid sized and big players. How can investments in taking measures towards energy conservation ensure short-term benefits and long term returns on investments especially for the small and mid sized players?
The immediate benefit that small and mid sized players stand to gain is a cut in their fuel bill. These savings are reflected in reduced bills month after month. While power cuts are here to stay at least in the short term, the long-term return on investment ensures improved competitiveness.  Most medium and large industries have installed generators and captive power plants. Our own company, a leader in innovative solutions, provides services and products aimed at thermal energy conservation and efficiency. 

What are the initiatives taken by Forbes Marshall towards improving Energy Efficiency?
Through thousands of installations of our products and our services, our company has been helping companies across geographical locations, both national and international; improve their energy efficiency from this morning to sixty years ago.  We have improved benchmarks in specific fuel consumption across industry sectors such as, paper, textiles, brewery, tyres and solvent extraction. 

What are the financial benefits of energy efficiency to the Indian economy and industry? What initiatives should be taken by the Government bodies to make energy efficiency practices a mandate rather than choice?
We estimate that more than Rs. 6000 crores can be saved by Industry through steam energy conservation alone. This is a huge saving. I do not believe any incentive from the Government is required to invest in energy conservation equipment, which has paybacks of four months. This makes economic sense on its own. Companies can save energy, cut fuel bills and improve efficiencies and while doing so, reduce their impact on the environment and be responsible citizens.