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Solwatt EPC: From Audit to Energy
Performance Contract Solvay Energy Services
Energy savings is key for sustainability
2
Source: EEA
Energy efficiency index of European industry
Source: CEFIC
Greenhouse gas emissions index of European chemicals
Confidential
Executive summary
• Solwatt is a comprehensive programme designed by Solvay to implement an energy management system on large energy-intensive industrial sites.
• Solwatt complies with the EN16247-1&3 norm and most of the ISO50001:2011 norm.
• The review phase follows two streams: - The technical stream, aiming at documenting in an action plan a minimum of 10% savings
through a series of short payback incremental improvements. - The behavioural and management stream, aiming at fostering a lasting culture of energy
management and savings on the site, with a detailed structure of KPIs and KAIs.
• The implementation phase is run as follows: - KPIs and KAIs are put in place by the site. - Improvements requiring no capex (« quick wins ») are put in place by the site. - Improvements requiring capex (« investments ») are put in place jointly with Solvay, who
provides the necessary capital through an operating lease. Savings are then shared between the site and Solvay over a period of five years for each asset.
• The total programme takes five to eight years to be completed, and during that time savings are typically shared 70% for the site and 30% for Solvay.
Confidentiel 3
Agenda
Solwatt in brief
The energy performance contract
Solvay Energy Services
Confidential 4
Solwatt key figures*
5
* at end 2014
70 industrial sites reviewed
2 000 validated short and medium term actions of which
40% already implemented
9 500 days spent on industrial sites
3 200 days of training
25 dedicated engineers, covering all geographical areas
130 M€ of identified yearly gains, of which 45 M€ (1/3) without capex
The sum of all identified Solwatt actions amounts to a yearly reduction of 600 000 tonnes of CO2
The Solwatt team has accumulated 210 years of industrial experience
Confidential
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2 main thrusts
Greenhouse gas emissions Levers: energy efficiency, industrial processes, clean technologies, more renewables in energy production and supply.
Sustainable Portfolio Management (SPM), at the heart of strategy Tool for analyzing the product portfolio and its alignment with the requirements and opportunities of sustainable development.
-40% Reduction of Group carbon emissions intensity by 2025
88% of the portfolio analysed in 2015
Group presentation 2016 25/02/2016
Doing business, being responsible
To reduce your current fuel bill… at constant kms driven
Technological gaps vs. incremental improvements
7
You can buy a new, fuel-efficient car
Reduce gas unit costs
Remodel your car (change tires, improve engine…)
Learn how to drive it better
With you current car, you can :
For industrial operations
Technological breakthroughs • Membrane electrolysis • Low temperature heat recovery
( ex. ANTARES project of PI) …
Sourcing
Equipment
Operations
Incremental improvements on: • Switch fuel • Renegotiate contract • Switch supplier • …
• Replace inefficient pieces of equipment (motors, pumps…)
• Recover energy via heat integration …
• Review operational parameters • Tighten operations management • Change mindsets • …
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A four-step process
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2 to 4 weeks 2 to 4 weeks 0 to 10 weeks
Steerco 1 Steerco 2 Kick off
1 to 2 months
Screening of the current situation
Idea Generation Off phase Idea validation Action plan Follow-up
Step 1 Step 2 Step 3 Step 4
Preparation
Screening of the current situation
Mindset & Behaviors Off phase Definition of
KPIs/KAIs EMS set up Follow-up
Step 1 Step 2 Step 3 Step 4
Behaviour and Management Stream
Technical Stream
Confidential
Key activities:
Final products:
• Diagnostic: identify losses and improvement areas • Idea generation and prioritization: run brainstorming sessions • Idea evaluation: create individual measure cards • Jointly build the new KPIs structure related to energy and propose their integration in the existing structure
• Master plan: define options to meet potential challenges of the current energy system of the plant • Short term implementation actions plan (technical + energy management) with associated financial consequences • KPIs-KAIs structures
Success relies on the involvement of the site
9
1
2
Full support from site Management up to the highest level
3
4
Involvement of the BU (Industrial, Technical & Process Managers,…) for technical and political support (including the allocation of CAPEX for the implementation of Solwatt action plan)
Committed site teams • Availability of site engineers to Solwatt during the project phase • WCM / BPMI involved in the project for EnMS workstream • Participation of operators and shift leaders (during workshops, to answer the
questionnaire, to work on indicators and implement KAIs and quick wins)
Good communication site-wide, before, during and after the project
Confidential
Objective: reduce energy bill by 10% or more
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1 Create transparency
by delivering an objective diagnosis of
the situation to identify energy losses to
focus on
2 Foster creativity of
stakeholders at all levels of the plant and beyond by involving them all in
brainstorming sessions to generate many ideas
to save energy
3 Follow a structured
progressive evaluation process to filter out ideas
based on feasibility and payback and build an action
plan for the plant
Confidential
From idea to asset
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Ideas are generated through brainstorming sessions. The most promising are kept as opportunities
Opportunities are screened through an opportunity matrix and those retained are validated.
After detailed study, opportunities become actions without capex or actions with capex. Actions are validated and sequenced in an action plan.
Required capex is provided by Solvay. Once carried out, an investment becomes an asset.
Confidential
1/3 of savings require no capex
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Split of Savings according to payback M€/y (%)
(34%)
(30%)
no CAPEX
(36%) PB <3y
PB <1y
Cumulated CAPEX
Cum
ulat
ed s
avin
gs
1/3
1/3
1/3
Of savings with PB >1y and <3y
Of savings with PB<1y
Of savings with immediate PB
Illustration: Typical cumulated savings vs. cumulated CAPEX curve
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A transformation project towards sustainable results
13
Rethinking energy indicators (KPIs)
and reporting tools and processes
The project of the site, for the site and by the site
An action plan aiming at creating a culture of energy
efficiency in the plant
The project relies on 3 aspects to transform the
way the plant’s employees see,
consume, manage energy.
This ensures the
continuous efforts of the plant to implement actions and strive for
energy efficiency in their daily job
Confidential
A KPI/KAI structure ensures sustainability of excellence in energy management
14 Confidential
Distance to excellence
Distance to excellence
Site manager
Unit manager (JS)
Production Manager (JF)
Shift leader
Operator
Monthly Weekly Daily Shift Continuous
1
2
KAI tracking 3
KAI tracking 4
KAI 5
Site manager cockpit
T
Time Min.
Target Max.
•3 •2 •1 •3 •2 •1 •3 •2 •1 •3 •2 •1
Target good
Target bad
•3 •2 •1 •3 •2 •1 •3 •2 •1
Weeks
Target
•9 •8 •7 •6 •5 •4 •3 •2 •1
Target bad
•3 •2 •1
Target good
•3 •2 •1 •3 •2 •1 •3 •2 •1 •3 •2 •1 •3 •2 •1 •3 •2 •1
KAIs are put in the hands of operators
KAIfor O2 excess and boiler utilisation rate
function of soda ash load
Illustration: KAI implementation during SOLWATT Torrelavega
Confidential 15
Agenda
SOLWATT in brief
The energy performance contract
Solvay Energy Services
Confidential 16
If you lease a car… instead of buying it
Energy Performance Contracts for faster savings
You can get a better car faster !
A fixed fee for having the car available
A variable fee depending on miles driven
Fuel costs will have no impact on leasing costs
You will pay :
For industrial operations
Actions requiring capex can be implemented faster, with immediate savings. Typical 5-year profit sharing scheme is 70% for the plant and 30%for Solvay.
Fixed fees
Profit sharing
Maintenan- ce and operations
Costs are split between: • Paid over 5 years • Depends on total capex • Asset is amortized and transferred
after 5 years.
• Paid over 5 years • Depends on calculated
savings.
• Operation and maintenance is delegated to plant
• Fee is paid to plant for the service • Exceptional repair is cost of owner.
17 Confidential
Solution
▪ Preheat the condensate at the inlet of CC with the heat of the liquid at the outlet of CC (96°C).
▪ Installation of a new heat exchanger.
Impact
Investment: 100 k€ (+200 k€ for DT) Cost of steam: €15,00/tonne Steam saving: 2,74 tonne/hour Yearly savings: 360 k€ Payback: 0,8 year
Current state
▪ Liquid at the outlet of CC is cooled down with cooling water from 96°C to 35°C.
▪ Condensate at the inlet of CC is warmed up in the CC from 60°C to 96°C. To ensure a
correct energy balance a 2-step
flash tank is required
Confidential
Heat exchanger example
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Electrical motors example
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Solution
▪ Replace 20 motors ▪ Install 5 new motors with VSD ▪ Install 5 VSDs on existing motors ▪ Replace 4 pumps with smaller models
Impact Investment: 560 k€ Cost of electricity: P = €58,00/MWh Savings: (Er - Em) x Tm x P Er is previous hourly consumption Em is new hourly consumption Tm is hours per year Yearly savings: 919 k€ Payback: 0,6 year
Current state
▪ Overall number of motors > 200 - including Pumps, fans, mill and conveyor belt drives
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The profit sharing principle in an energy performance contract
• Capex is provided by Solvay.
• Implementation is jointly managed by the site and Solvay.
• Profit-sharing is based on calculated savings and paid quarterly.
• Asset operation and maintenance is delegated to the site against a fee.
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-1 000
-500
0
500
1 000
1 500
0 1 2 3 4 5 6 7 8 9 10
Client
SES
0%10%20%30%40%50%60%70%80%90%
100%
1 2 3 4 5 6 7 8 9 10
Client
SES
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Business plan
21 Confidential
Parameters Fees StatisticsYearly spend: 15 000 Diagnosis fixed: 75 Actions identified: 165Validated savings: 10% Diagnosis variable: 20% Actions validated: 25Quick wins: 25% Maintenance: 2% o/w with capex: 15Investment need: 1 500 Average capex: 101Corporate tax rate: 30%% electricity 80%SME gains: 3%White certificates: 20%CO2 (€/tonne) 7,00
Client view in '000 Euros0 1 2 3 4 5 6 7 8 9 10
Savings without capex 225 375 375 375 375 375 375 375 375 375Savings with capex 619 1 013 1 125 1 125 1 125 1 125 1 125 1 125 1 125 1 125SME benefits 142 272 405 405 405 405 405 405 405 405Emission savings 9 15 18 18 18 18 18 18 18 18White certificates 77 96 19 0 0 0 0 0 0 0Collateral savings 8 14 15 15 15 15 15 15 15 15Total savings 1 080 1 785 1 957 1 938 1 938 1 938 1 938 1 938 1 938 1 938Rent on assets -118 -205 -225 -225 -225 -107 -20 0 0 0Profit sharing on assets -206 -338 -375 -375 -375 -169 -38 0 0 0Maintenance fees 20 29 30 30 30 18 2 0 0 0Client savings share 775 1 272 1 387 1 368 1 368 1 680 1 882 1 938 1 938 1 938Effective share rate 72% 71% 71% 71% 71% 87% 97% 100% 100% 100%Diagnosis fees -150Recurring Opex -9 -20 -23 -23 -23 -23 -23 -23 -23 -23Client Ebitda increase -150 766 1 251 1 364 1 345 1 345 1 657 1 860 1 915 1 915 1 915Corporate tax 45 -230 -375 -409 -404 -404 -497 -558 -575 -575 -575Cash flow after tax -105 536 876 955 942 942 1 160 1 302 1 341 1 341 1 341
Agenda
SOLWATT in brief
The energy performance contract
Solvay Energy Services
Confidential 22
Confidential 23
sustainable chemistry SOLVAY: Building a new model of
9,940 million net sales
29,400 employees
117 sites
56 countries
15 Major R&I centers
2013 figures
25%
17% Automotive
& aeronautics
11%
Energy & environment
12% Agro, feed
& food
10% Building &construction
6% Electrical & electronics
19% Industrial applications
Consumer goods & healthcare
Solvay Energy Services: Best-in-class integrated energy management
A breakthrough energy efficiency approach
Innovating solutions to finance energy efficiency projects
Transforming access to energy markets
Optimizing & developing energy production
Leverage unmatched track record in CO2 reduction
Developing renewable energies
Confidential 24
€ 800M PURCHASE OF ENERGY FOR THE GROUP
1000MWe OF COGENERATION CAPACITY
14 M CER/ERU PRODUCTION CAPACITY / YEAR
300 EMPLOYEES 13 COUNTRIES
Transforming access to energy markets
• Direct access to energy markets
• Own dispatching unit
• Trading
• Demand management team
• Dispatches 20% of French gas industrial market
25 Confidential
Optimizing and developing energy production on sites
• Solvay Energy Services manages about 1400 MW of electricity production assets in Europe. We maximise the flexibility and reactivity of electricity consumption and production sites.
• 32 turbines in 6 countries : Argentina, Belgium, France, Germany, Italy, Spain
• Design, construction, maintenance and operation of energy assets
• Internalizing outsource assets
• Building new assets when market/subsidies opportunities
• Managing assets in a pool to optimize their value
Enhancing natural hedge
26 Confidential
Innovating solutions to finance energy efficiency projects
• Financing vehicle developed with and
• Small size projects (€ 5 to 50 m), with payback period over 3 years
• Allowing quick deployment
• Accelerating the energy transition
First project at Solvay’s Rare Earth plant in La Rochelle (France) (November 2013)
27 Confidential
Solwatt won the first price in the category “managerial innovation” at the Global Solvay Innovation Awards last Oct 18 2013
SOLVAY ENERGY SERVICES 25 rue de Clichy – 75009 Paris – France www.solvay.com
Pascal Guerin Business Development Director Tel + 33 426 190 125 Mob +33 642 076 512 [email protected]
Laurent Daoud Senior Expert Technology & Energy Efficiency Tel + 33 1 5356 6188 Mob + 33 6 3019 5796 [email protected]
Your contacts
Confidential 28
www.solvay.com
Game changer in Energy & CO2