Energy Mgmt Case study - Kumana, Chemical News, Nov 2010

CORPORATE ENERGY MANAGEMENT PROGRAMS: A CASE STUDY Jimmy D Kumana, MS ChE Kumana & Associates, Houston, Texas Tel 281-437-5906, [email protected] ABSTRACT This paper identiies the critical elements of a successful energy management program for energy-intensive process industries. It describes the organizational structure, strategies employed, resources required, and results achieved at a national oil company in a middle-eastern country, drawing upon the author’s extensive experience. It also describes some of the challenges encountered, both expected and unexpected, especially with respect to non-technical issues such as culture change, knowledge sharing, human resources, project inancing, and politics. The paper provides valuable insights into how to organize and successfully execute a comprehensive energy management program for large bureaucratic corporations with multiple plants and that should be of interest to corporate energy managers and government energy policy makers. INTRODUCTION Back in the mid-1970s, in the aftermath of the irst “oil shock”, energy eficiency irst entered the public consciousness as the consequent high inlation severely eroded the purchasing power of the average family in oil-importing nations. However, once some modicum of 38 z chemical news november 2010 price stability was restored, and the economies adjusted to higher oil prices, energy concerns receded into the background once again. After just over three decades, energy supply security and costs have recently returned into the limelight, with international oil and gas prices more than doubling from mid-2007 to mid-2008. As high prices begin to adversely impact corporate bottom lines, especially for energy-intensive industries such as oil & gas, chemicals, and pulp/paper, “energy conservation” has once again begun to attract the attention of company management and government policy makers. Unfortunately there is no magic quick-ix to this situation. Successful energy conservation (or more appropriately, energy optimization) is a long-term effort. Success requires a genuine and sustained strategic commitment, not just passing concern, ad hoc measures, or lip-service. An energy program undertaken with the primary objective of boosting the company’s public image is doomed to failure. On the positive side, the past three decades have seen signiicant innovation in the eficient conversion and use of energy. Many new products, design techniques, and operating practices have been developed both in academia and industry that offer the potential to signiicantly slash the energy intensity of virtually all manufacturing processes, reducing the carbon footprint (ie. greenhouse gas emissions) of their end-products in the bargain. There is now an established body of literature that documents the methods and beneits of what could be called “conventional” technical approaches that address the more obvious areas for improvement: a) Insulation of equipment and piping b) Steam-trap management – proper selection, monitoring, and maintenance c) Compressed air management –leak detection and repair, pressure optimization d) Boiler/furnace eficiency improvement, via excess air control, burner modiications, leakage reduction, etc. e) Multiple effect evaporation – well-known in pulp/paper but less well in other industries f) Heat pumps (thermal and mechanical) g) Preventive maintenance of rotating machinery (pumps, compressors, steam turbines) based on condition and b) c) d) e) f) g) compressors, turbines, boilers, furnaces, heat exchangers, etc – for the same service or application) Monitoring fouling rates in critical heat exchangers, and optimum cleaning schedules Floating-discharge-pressure compressor control Multi-variable control (MVC) Optimal control of CHP systems – see item 2d below Optimum driver selection for rotating machinery (ixedspeed motors, multi-speed motors, motors with VFDs, steam turbines, gas turbines) Monitoring & Targeting, including development of equipment EPIs and overall process/product/plant energy KPIs. Data collection and quality is a critical issue. To capture truly signiicant savings, on the order of 15-50%, advanced process optimization techniques developed over the past 20 years, and encompassing both design and operational best practices, must be employed eficiency monitoring Motor replacement – right-sizing, high-eficiency motors HVAC upgrades – better controls High-eficiency lights and lighting management Power factor correction New types of equipment design, eg. dryers, low-P ilters, etc. The vast majority of industrial energy programs that have been undertaken over the past 25 years have focused on the foregoing tools and techniques. While these are undoubtedly good measures to take, in most cases the cumulative savings potential is limited to a relatively meager 5-10% of the base-case energy intensity. h) i) j) k) l) MODERN CORPORATE ENERGY PROGRAMS To capture truly signiicant savings, on the order of 15-50%, advanced process optimization techniques developed over the past 20 years, and encompassing both design and operational best practices, must be employed: 1. OPERATIONAl OPTIMIzATION a) Optimum load management (for series/parallel networks of multiple equipment – pumps, 2. DESIGN OPTIMIzATION a) Identifying relatively minor process modiications, such as small adjustments in operating pressure or temperature of critical reactions and separations (eg. distillation, evaporation) that could have a major impact on the energy targets for the process b) Optimum design of heat exchanger network (HEN) structures, using Pinch Analysis combined with mathematical programming (MILP, Genetic Algorithms, etc) c) Identifying the optimum combination of site utilities (cogeneration type, steam pressure levels, hot oil loops, refrigeration levels and refrigerant selection, etc) that will result in the lowest operating cost, using Pinch Analysis d) Optimum design of the Combined Heat and Power (CHP) system structure, including cogeneration. This is done using simulation models based on the results of item 2c. A key element is introducing new degrees of freedom to support items 1e and 1f above. e) Evaluation of Adjustable Speed Drive applications – whether VFDs for existing motors, or replacement with a steam turbine drive. chemical news november 2010 z 39 Probably the most signiicant development of the past 30 years since the irst oil shock has been Pinch Analysis. It burst onto the scene in the late 1970s, and captured the imagination of the international chemical engineering community with its elegant synthesis of thermodynamic rigor and graphical techniques to solve the hitherto intractable “structural optimization” problem, using simple heuristics. Imperial Chemical Industries (UK) and Union Carbide Corp (USA) were the early pioneers. By the mid 1980s, a torrent of literature on new advances and industrial success stories was pouring out, both from the universities and from industry. Many companies jumped on to the new bandwagon, attempting to develop in-house expertise, but most of them found success elusive. Gradually, but not surprisingly, Pinch Analysis developed an undeserved reputation for being just another passing fad that had been oversold by unscrupulous consultants posing as experts and seeking only a quick buck. Although it is undeniable that some of the “copycat” consultants were indeed under-qualiied, it is instructive to dispassionately examine the whole range of reasons why some companies achieved such spectacular success while others failed so miserably. From over 20 years of experience in the energy business, both as a buyer and seller, the evidence is clear that most of the failures can be attributed to the following critical mistakes on the part of senior management: z Believing that just because Pinch Analysis is easy to understand at a theoretical level, it would be equally easy to apply at a practical level. Attending a oneweek course on the subject does not instantaneously transform the student into an expert; it takes at least 2-3 projects worth of experience to use the software and apply the methodology correctly. z Failure to become suficiently knowledgeable to develop a suitable corporate energy strategy, and select the right consultants. z Expecting that identiication of energy optimization opportunities would automatically result in project implementation. z Focusing on only the supply side (eg. boilers, turbines, motors) rather than taking an integrated approach that includes the demand side (process energy consumption eficiency). z Underestimating the vital importance of reliable data and a supportive organizational infrastructure. z Starving their corporate energy teams of the required resources in terms of adequate authority, stafing, budget, and time to do the job properly. Good technology, while necessary, is not suficient to ensure success. It must be supported by a comprehensive organization-wide program that removes institutional barriers related to entrenched legal, inancial, and bureaucratic practices. 40 z chemical news november 2010 PINCh ANAlYSIS - BASIC CONCEPTS All chemical manufacturing processes require energy in the form of heat and power. Power is consumed both for shaftwork and for cooling. The individual process heating duties can be combined into a single “cold composite curve” drawn on a temperature-enthalpy (T-H) diagram; it represents the enthalpy demand proile of the process. Similarly, all the cooling duties can be combined into a single “hot composite curve”, which represents the enthalpy availability proile of the process. When both curves are plotted on the same T-H diagram, they show the opportunity for heat recovery as well as the minimum net heating and cooling requirements. The point of closest approach, where available temperature driving forces between hot and cold streams are at a minimum, is called the process pinch. It separates the overall process into two distinct thermal domains: (a) a net heat sink above the pinch temperature, meaning that hot utility must be supplied, and (b) a net heat source below the pinch temperature, meaning that cooling must be provided. The temperature difference between hot and cold streams at the pinch is called the Minimum Approach Temperature (MAT). For each value of MAT, there are corresponding values of minimum heating and cooling requirements (Qh)min and (Qc)min. These are the energy targets. CASE STUDY – NATIONAl OIl & GAS COMPANY Composite Curves (a) without heat recovery (b) with heat recovery In order to achieve the targets, the HEN design must satisfy three criteria: 1. No hot utilities used below the pinch temperature 2. No cold utilities used above the pinch temperature 3. No heat transfer from hot streams above the pinch to cold streams below the pinch From these fundamental rules, it is possible to derive a number of useful design guidelines. For example: z Heat engines must not cross the pinch, i.e., the supply and exhaust temperatures should both be either entirely above or entirely below the process pinch temperature. z Heat pumps must be placed across the pinch, i.e., the supply temperature must be below the pinch, and the exhaust temperature must be above the pinch. z Distillation and evaporation operations must not cross the pinch. These and other corollary rules and guidelines help the engineer to design the process for maximum overall eficiency, achieving the optimum balance between capital costs, energy consumption, operating lexibility, and environmental emissions. This government-controlled NOC is one of the largest oil and gas producers in the world. The Company owns (wholly or partially) more than 20 large Gas-Oil Separation Plants (GOSPs), about a dozen oil reineries across three continents, half a dozen gas-processing plants, and two condensate fractionation plants. From a standing start in 2001, the Company reduced its energy intensity by 25% within six short years (Figure 1) and was on track to reaching 40% reduction by the end of 2008. How did it manage to achieve such spectacular success despite an economic environment of low energy costs ($1-2 per MMBtu for gas and 3-4 c/kwh for purchased power), high capital costs (about 1.3-1.5 times US Gulf Coast), and an accounting system that did not even include fuel and power as line-item operating costs? FigUrE 1: CorporATE EnErgY inTEnSiTY inDEx It all started in 1997, when one of the Company’s engineers attended an energy conference and came to the realization that their corporate policies and practices were based on incorrect assumptions that urgently needed to be revamped in light of a changing economic chemical news november 2010 z 41 environment (Figure 2). With support from a far-sighted Vice President, he obtained approval for an internal company-wide survey to compile actual fuel and power consumption data. Even at the low values assigned to energy by the accounting department the total cost proved to be staggering, approaching a billion US dollars per year. When this hitherto unreported information was brought to the attention of senior management, they committed the required internal manpower and budget to conduct a more comprehensive and detailed study by a team of specialized energy/management consultants. manpower needs through the use of external consultants. A new Energy Systems Unit (ESU) was established at corporate engineering, with funding approval for 9-12 fulltime engineers to help develop and implement the EMSC’s strategic plan. FigUrE 4: EMSC orgAnizATionAl STrUCTUrE FigUrE 2: ExTErnAl EnvironMEnTAl ForCES The 8-month study (1998-99) included veriication of energy consumption data, an estimate of economically feasible savings potential based on quick week-long audits of 12 representative facilities, and an assessment of company policies and practices that should be instituted or modiied to ensure success. The Company’s senior management understood, accepted and supported virtually all of the consulting team’s recommendations. A corporate energy policy was promulgated in 2000 (Figure 3). An Energy Management Steering Committee (EMSC) was formed, with representation at the plantmanager level, to oversee the program (Figure 4). They decided to develop core in-house expertise to manage the program and to supplement short-term peaks in FigUrE 3: CorporATE EnErgY poliCY 42 z chemical news november 2010 The EMSC’s 10-year goal (publicized companywide) was to reduce corporate energy intensity by 50% compared to the year-2000 baseline, and rolling 5-year plans to achieve this target. The results as displayed in Figure 1 are a testament to the success of the program. The projected reduction in energy intensity index was 40% by the end of 2008, from projects that had already been identiied and approved by the end of 2006. Additional projects scheduled for completion in 2009-10 should comfortably enable meeting the original target of 50% reduction in energy intensity. The EMSC’s strategy was simple but comprehensive, including a blend of technical, organizational and cultural factors: 1. Optimize facility design and operation through deployment of industry-accepted best practices and economically-sound leading edge technologies Energy optimization of existing facilities (retroit) Energy optimization of new plant designs 2. Build a supportive organizational infra-structure 3. Promote transparency and accountability through development and deployment of energy KPIs and EPIs 4. Develop in-house technical expertise supplemented by outsourcing as needed Energy Optimization of Existing Facilities (retroit basis) was a critical irst step in establishing credibility for the technical approach, and demonstrating that the targets set by EMSC were indeed realistic and achievable. To start with the Energy Systems Unit was staffed by one energy experienced energy consultant recruited from the US and four engineer-trainees. The irst few energy optimization studies were conducted exclusively by this in-house team, principally as a means to gain experience and build in-house technical expertise. As the workload grew, additional engineers were transferred in to ESU from other parts of the company, and a second US-trained energy specialist with Pinch Analysis experience was recruited. This multi-year effort helped to foster close working relationships and build trust between the plant engineers and the corporate staff. When the workload began to exceed the in-house capacity, some of the detailed energy studies were outsourced to qualiied consulting irms from the US, UK and India. One of the key requirements for successful outsourcing is that the buyer should be able to specify the proper scope of work, be able to judge consultant qualiications and capabilities correctly, and to negotiate a fair price. It took 2-3 years for the trainees to develop the skills to become sophisticated buyers, viz. to understand data requirements, and know what to expect in terms of quality of work, schedule, and cost. They were able to redirect the consultants’ work if they felt the project was on the wrong track, and could make contractual workscope changes on the ly. They knew when to allow more time or money and when to not. Unless the buyer is knowledgeable, or engages a trustworthy consultant, outsourcing can easily turn into a disastrous experience. Between 15-20 retroit studies were carried out over 9 years by ESU. During this period, more than100 Company engineers, mostly from the plants, were put through 1-2 week training courses in energy optimization that included both technical and management issues. Of these, those who showed interest and promise were given Pinch Analysis to address the less obvious optimization opportunities. The actual overall implementation rate (in terms of dollars) was 54%. However, the energy KPIs showed unambiguously that there was a huge variation in performance among the 21 business units, with some having implementation rates over 90%, while others were below 5%. Clearly there was a problem with acceptance of the technical solutions, which was identiied as a high priority concern. In 2007, the Company initiated an extensive internal survey to determine the root causes for poor implementation rates, and to identify the key predictors of success. Two success criteria stood out: z Having high level support (viz. from the Plant Managers and business unit VPs) for energy projects z Empowerment of plant engineers, by providing adequate resources to the energy teams in terms of qualiied manpower, training, and budgets that would enable them to prepare credible well-documented capital budget requests to corporate engineering Strictly speaking, if capital and energy prices are Unless the buyer is knowledgeable, or engages a trustworthy consultant, outsourcing can easily turn into a disastrous experience. further training via 1-2 year internship programs where they each participated in conducting two or three retroit energy optimization studies. They then returned to their respective facilities as leaders of newly established plant energy teams. The results achieved speak for themselves. From 2001 through 2006 a total of 380 project ideas were identiied, with net energy savings potential of 148 MBD (oil equivalent) and CO2 emissions reduction of 50,300 TPD. Of these, projects worth 90 MBDoe savings passed the company’s hurdle rates for implementation. More than 50% of the project ideas, mostly falling into the “conventional” category, came from the plant energy teams themselves, with technical support from corporate engineering only as needed. The corporate energy group focused on more advanced techniques such as rational and consistent with thermodynamic principles, they will change at approximately the same rate as longterm inlation, and so the optimum design structure for the process plant should remain stable. Nevertheless, it is good practice to review and update the optimum design for every plant whenever there is a signiicant revision of capital and energy costs, particularly during times of economic volatility. Energy Optimization of New Plants. Once the credibility of the technical approach had been established through retroit studies, ESU turned its attention to new projects being planned for construction by the company – both new process units at existing sites, and greenield sites – to try and build energy eficiency into the design from the start. While the concept makes eminent sense in principle, the team encountered unexpected hurdles chemical news november 2010 z 43 rooted in established company practices. Historically, the Company had never developed process designs internally; rather the policy was to rely on technology licensors and EPC contractors to provide them. Further, design/build responsibility rested entirely with the Company’s project management organization, where the path to promotion was through just two performance measures (a) beating the schedule and (b) completing construction under budget. No consideration was ever given to optimizing lifecycle costs. Energy consumption, therefore, did not even enter into the equation. The entire organizational culture was heavily biased towards tried-and-true technologies (which necessarily implies out-dated) and towards sacriicing energy eficiency in order to minimize initial capital cost. There were even instances of EPC contractors being pressured to simply re-use old design drawings from other projects in other countries, without so much as changing the title blocks!! Not surprisingly, all attempts by ESU to introduce modern energy-eficient design practices met with determined resistance, on the grounds that they might extend the design schedule or increase capital costs. Despite providing many real-life examples where energy optimization led to shortened schedules as well as lower capital costs, it took three years of lobbying with key inluential people just to gain grudging acceptance of the idea that the correct way to optimize a design was on the basis of Life-Cycle costs, not irst cost. Once this was accomplished, though, it paved the way for introducing the concept of optimizing process and utility designs for site-speciic conditions, with energy costs included among the economic parameters. Ultimately, the requirement for an integrated process-CHP energy optimization study during the FEED stage was accepted as an internationally recognized value-improving practice, and written into the company standards. Building a Supportive Organizational Infrastructure. These activities generally fall into the categories of awareness, training, knowledge management, and standards/procedures: z Annual company-wide “Energy-Awareness” events including technical exchange of successes and failures, vendor exhibits, etc. z Quarterly energy newsletter, distributed both in print and electronically z Regularly scheduled 3-10 day training courses on various aspects of energy optimization and management, offered several times a year z Preparation of around a dozen Best Practice Manuals for equipment/process design as well as operations z Corporate memberships in international energy research consortia and benchmarking organizations, eg. the PIRC at the University of Manchester, the Reining Best Practices consortium, Solomon Associates (for reinery operations), and IPA (project execution) 44 z chemical news november 2010 z Creation of a virtual Community-of-Practice for knowledge sharing, via the company intra-net z Revision of company equipment standards to relect current best practices with respect to energy-eficiency z Revision of company engineering and construction standards/procedures to require energy optimization of any new plants that are to be built z Development of a standardized simulation-based procedure for computing site-speciic average and marginal prices of intermediate utilities such as steam (at various pressure levels), boiler feed water, hot-oil circuits, cooling water, refrigeration, and cogenerated electric power. Promoting Transparency and Accountability. When the idea of energy KPIs was initially broached within the company, it found no audience, as it was not considered to be common industry practice during the early years of the program. In fact, when the energy team surveyed the industry, we could not ind a single company who were using such KPIs. Even high-priced management consultants we spoke to had very limited experience in this area. Almost overnight, though, it seemed that the situation changed dramatically, with all the top international management consulting irms promoting the virtues of company-wide KPIs for a wide range of critical company performance metrics for the corporate “dashboard”. One of them was retained by senior management in 2005 to develop such a dashboard. They became ESU’s ally in jointly developing a corporate Energy Eficiency Index for the new dashboard. It put everyone in the middle echelons of company management on notice that the energy eficiency of their business units was going to be on the radar-screen from that point onwards. Despite their clear potential to introduce transparency and accountability, KPIs in general can be problematic to implement in practice. The mathematical formulation of KPIs must keep in mind the ultimate objective(s). In our case we had multiple applications in mind. One was to monitor progress towards the EMSC goal by keeping tabs on overall plant and corporate energy intensity. Another was to provide a diagnostic tool to help plant engineers troubleshoot problems and identify areas for improvement – both regarding process eficiency and equipment eficiency. One example of a process problem might be steady deterioration in the inlet temperature to a crude oil distillation column, which would suggest gradual HX fouling in the preheat train, and the need for cleaning. If on the other hand there was a sudden drop, it might suggest a HX tube rupture. A third (future) objective was to provide guidance in making dispatching decisions – ie. what the product mix should be at each manufacturing plant. Each application requires a different formulation for the energy KPI, which we called EPIs for short. We classiied them into four categories – product EPIs for dispatching (to be used by the planning staff), equipment EPIs for condition monitoring and preventive maintenance (to be used by the operators and engineers), process EPIs for troubleshooting (to be used by plant engineers), and overall plant EPIs for reporting (for use by senior management). While process and equipment EPIs are relatively easy to formulate, product EPIs are not. For example – how should the energy cost of a distillation column that is separating two saleable products be allocated between them? A common irst reaction is to prorate costs on the basis of either value or volume, but both can lead to absurd conclusions. The only logically consistent way that gave sensible answers was to do the allocation on a value-added basis. This created a new problem – computing transfer prices for each stream within a process unit. After several months of trial and error, we succeeded in developing a procedure that gave reasonable and meaningful results. Formulating an overall corporate energy intensity index also proved to be a challenge, as our goal was to measure the effectiveness of the energy program itself – ie. How Another was to provide a diagnostic tool to help plant engineers troubleshoot problems and identify areas for improvement – both regarding process eficiency and equipment eficiency. much difference did it make compared to doing business as usual? This was in fact the single global metric that was initially proposed to management (with the management consultant’s approval) for use on the corporate dashboard, and is shown in Figure 1. The consultant independently developed an alternative simpliied formulation that was designed speciically for commercial benchmarking only. Data availability and quality turned out to be two other dificult issues. When plants are designed by EPC contractors, they rarely include instrumentation to measure all the parameters that are needed to compute KPIs. So there was a need for considerable additional instrumentation such as temperature and pressure gages (which are relatively cheap) and low meters (which are not). Then there is the cost of programming all the equations and testing the system for bugs, adding graphing/display capability, and designing report formats for printing. But that was the easy part. The real challenge lay in reconciling discrepancies in the metered mass and energy balances. For that the team turned to a small high-tech Belgian software company that we felt was the world leader in on-line data reconciliation techniques. Two ield trials lasting nearly two years overall were conducted – one at an oil reinery and one at a gas processing plant – which made clear that it took a very high level of technical skill to get reliable results, and that chemical news november 2010 z 45 long-term technical support from the vendor would be required before our engineers would be suficiently trained to take over. The original proposal was to purchase a 20plant license of the software, but given our concern about the vendor’s ability to provide long-term technical support, the project was put on hold until a satisfactory solution could be found. Despite these dificulties, the foregoing problems are not intractable, and can be solved given enough time, talent and budgets. The most dificult problem of all turned out to be nontechnical: getting agreement from all facility managers on a set of common metrics and a common GUI. Expect to encounter various delaying tactics by powerful vested interests who may feel threatened by increased transparency. The principal hurdle, in short, is likely to be political, for which there is no easy solution. Determining the right level of in-house technical expertise and management capability is the inal strategic decision. It is not necessary to do all the work in-house, but it is absolutely essential that the corporate energy group should have suficient expertise to effectively outsource the work to outside consultants. For those companies who do not have suficiently high energy bills to justify maintaining a fully staffed energy unit, one option might be to appoint a single full-time energy “guru”, reporting directly to a VP, and then to retain a trusted energy management consultant to help select and supervise other consultants, EPC contractors and ESCOs. Various options for accelerating the implementation rate for energy projects were considered that included heretofore revolutionary ideas such as: z Establishing a separate capital budget for energy projects, similar to what had already proven successful for environmental compliance projects. z Empowering VPs to sign contracts with Energy Service Companies (ESCOs) for shared savings contracts, as a mechanism to effectively bypass the internal competition for limited capital funds with higher-priority safety, environmental, or capacity projects. z Changing the mission of the EMSC from being an advisory to an executive committee, with company-wide responsibility for implementing energy projects. z Streamlining company procedures and practices to ensure that the Operating plants, Engineering Services, Environmental Dept, Corporate Planning, Finance, 46 z chemical news november 2010 Human Resources, and Law Dept all operate in alignment towards the common objective. z Linking selected plant energy KPIs to overall performance evaluation and compensation of key employees/positions. These are not easy things to accomplish in an organization with tens of thousands of direct employees and contractors on the payroll, but they have to be done. As an example, bullet item two above has internal organizational implications that had to be cleared with the Law and Human Resources departments. In addition there were dificult technical issues with respect to measurement and veriication of savings, legal issues with respect to dispute resolution with the ESCO, and insurance/security issues if the ESCO is a foreign company whose employees must be given access to company plant sites. Similarly, bullet item four requires breaking down long-established boundaries and building trust between rival organizations that may have had a prior history of internal power struggles and mutual suspicion. The criteria for economic evaluation of energy projects may have to be revised to include concepts such as capital cost offsets, environmental credits, and risk-adjusted hurdle rates. And last but not least, the technical career path has to be made suficiently attractive to retain competent engineering talent by providing them with a viable alternative to the management track. CONClUSIONS AND RECOMMENTATIONS One solution does not it all, but the experience of others can provide useful insights. The key elements for a successful energy program can be summarized as follows: 1. Unwavering and sustained support of top management, demonstrated by formal policy statements, making energy at least as important as safety and environmental issues in the organizational structure, and allocating adequate manpower and budgets. 2. Selecting the right technical approach, including a mix of conventional and advanced technologies for design/ operating practices. 3. Ensuring that there is a clear plan and mechanism for effective implementation of projects identiied through energy studies – whether via internal funding or ESCOs. 4. Creating a culture of transparency and accountability by instituting a system of EPIs and energy KPIs for performance monitoring (preferably linked to compensation). 5. Building a supportive organization infrastructure in terms of awareness and internal communication programs, making energy management an attractive career path, personnel development and training, rational pricing procedure for intermediate utilities, proper project evaluation procedures, and recognition/ removal of bureaucratic hurdles. It may sound daunting, but it is well worth doing. The results prove it. ABBREVIATIONS Abbreviation Description AIChE ASD bpd CHP EPC EPI EPRI American Institute of Chemical Engineers, NY Adjustable Speed Drive Barrels per day Combined Heat and Power Engineering, Procurement and Construction Energy Performance Index Electric Power Research Institute, Palo Alto, California ESCO Energy Services Company FEED Front-End Engineering Design GUI Graphical User Interface GW Gigawatts (= 106 kilowatts) HEN Heat Exchanger Network HVAC Heating, Ventilating and Air-Conditioning HX Heat Exchanger IPA Independent Project Analysis Inc, Ashburn, Va K Thousand (as preix) KPI Key Performance Indicator MBD (oe) Thousand barrels per day (oil equivalent) MILP Mixed Integer Linear Programming, a mathematical technique for optimizing resource allocation MM Million (as preix) NPRA National Petrochemical and Reiners Association, Washington DC PIRC Process Integration Research Consortium, Manchester, UK scfd Standard cubic feet per day (of gas) TPD Tons per day VFD Variable Frequency Drive (subset of ASD) REFERENCES 1. J D Kumana and Ali H Al-Qahtani, “Optimization of Process Topology Using Pinch Analysis”, Proc of First International Symposium on Exergy, Energy and Environment, Izmir, Turkey (July 13-17, 2003). 2. J D Kumana and Majid M Al-Gwaiz, “Pricing Steam and Power from Cogeneration Systems using a Rational Allocation Procedure”, Proc of 26th Industrial Energy Technology Conference, Houston, Tx (April 2004). 3. J D Kumana and Ahmed S Aseeri, “Electrical Power Savings in Pump and Compressor Networks via Load Management”, Proc of 27th Industrial Energy Technology Conference, New Orleans, La (May 2005). 4. J D Kumana and Khalid D Al-Usail, “Energy Performance Indices as a Process Diagnostic Tool”, presented at Process Performance Monitoring and Data Analysis Symposium, Manama, Bahrain (Nov 7–8, 2006). 5. J D Kumana, Ali H Al-Qahtani, and Abdullah Y Al-Juhani, “Energy Optimization Experience at Yanbu Reinery”, paper 655a, presented at AIChE Annual Meeting, San Francisco, Ca (Nov 12-17, 2006). 6. J D Kumana, Ali H Al-Qahtani, and Faiz H Al-Farsi, “Power Savings via Load Management at Rabigh Reinery”, presented at 2nd Saudi Arabian Energy Conservation Forum, Dammam (Nov 28-29, 2006). 7. G T Polley and J. D. Kumana, “Energy Saving Retroit of an FCC Plant”, paper AM-07-30 presented at NPRA annual meeting, San Antonio, Tx (Mar 18-20, 2007) 8. J D Kumana, “Success Factors for a Corporate Energy Program”, presented at 29th Industrial Energy Technology Conference, New Orleans, La (May 9-10, 2007). This article was reprinted, in part, from the November and December 2008 issues of Insulation Outlook magazine with permission from the National Insulation Association. Copyright 2008. All rights reserved. Mr. Kumana holds a masters degree in chemical engineering from the University of Cincinnati. He has been professionally active in Energy Optimization and management for over 20 years with both operating companies and consulting irms. Before that he spent 15 years in process design with several EPC companies catering to the oil/gas/chemical, food/ beverage, and pulp/paper industries. Through his company he has provided consulting services to blue-chip international clients including Amoco (BP), Union Carbide (Dow), Dupont, Enron, General Motors, IBM, Maharashtra Sugar, Mitsubishi Heavy Industries, Monsanto (Solutia), SASOL, SABIC, Saudi Aramco, as well as to the US Dept of Energy, Canadian ministry of Natural Resources, EPRI, and IFC (World Bank Group). He is a member of AIChE, and has authored or co-authored over 65 technical papers and book chapters. chemical news november 2010 z 47