Chemical makers play the power game

Chemical manufacturers are using a range of strategies to cope with rising power costs. They are relying more on pooling and cogeneration.

By Mike Spear, editor at large

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Perry Ruthven, managing director of PPM’s Houston operation, explains the attraction of power pools: “As energy costs for chemical manufacturers have soared, company managers are seeking innovative ways to manage energy procurement and lower costs. While traditional aggregation is limited by a ‘one size fits all’ philosophy and rate cross-subsidization, our buying pools offer individual contracts and flexibility. The result is a multi-contract procurement which allows the retail providers to offer the discount of bulk purchasing, while eliminating cross subsidization through the use of customized rates for each contract.”


Software success
Figure 1
Figure 1. DSM’s largest site, at Geleen, The Netherlands, has achieved significant savings by using software to optimize energy costs in real time.

The Texas pool partnership was announced earlier this year and Ruthven says PPM has been gathering information on companies’ power loads since then, with the aim of proposing detailed pooling plans to the firms in the fall. “The potential is large,” he says. “We have received letters of intent so far for 120,000 MWh of conditional loads to pool, and we haven’t yet covered the whole range of possible participants.” This compares with PPM’s first pool of some 140,000 MWh, set up for another industry sector around the time of deregulation.

Sighting on the site
Energy procurement at this level might seem somewhat remote to the engineer at the plant, but what happens on-site can have a huge impact on the financial factors involved in negotiating power rates. The net result of deregulation may well have been greater choice and flexibility of supply, but plants need to have a better understanding and control of their true energy requirements. Or, to invoke the mantra of management consultants across the globe, “what you can’t measure, you can’t manage.”
One of the latest tools for helping plant energy managers in this way is a software program called the Plant Energy Profiler for the Chemical Industry (ChemPEP). Launched in May, ChemPEP was developed as part of the U.S. Dept. of Energy’s Industrial Technologies Program (ITP) by EPRI Solutions, the commercial arm of the Electric Power Research Institute, Palo Alto, Calif., in partnership with the American Institute of Chemical Engineers.

According to Ed Fouche, manager of EPRI’s Process Industries Program and a senior associate with EPRI Solution’s subsidiary Global Energy Partners, Raleigh, N.C., “ChemPEP was designed specifically for the chemical industry to help energy managers determine overall plant energy use, identify major energy-using equipment, review cost distributions and locate areas of improvement. You start with a site-wide energy balance, and then go through a number of steps to establish what improvements can be made to balance loads at the unit operation level.”

Along with two other new software tools for combined heat and power (CHP) applications and chilled water systems, ChemPEP is available as a free-of-charge download from the ITP’s Best Practices website ( practices).

Fouche is finding the industry “generally receptive” to the energy efficiency measures promoted by the ITP. These include the application of advanced control and power technologies to improve electrical reliability and energy efficiency. The program’s current focus is on the petrochemicals sector, with companies such as ChevronTexaco, Shell, BP, ConocoPhilips and Valero involved. “Some companies are much more proactive than others with their energy programs,” Fouche says, “but all of them, to some degree, need valid information to make decisions.”

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