This is the third in a four part series about educating your peers about the importance of energy.
In the second part of this series, "Train Your Operators on Energy Efficiency," I said the two most important parts of running an energy efficient unit are designing it properly and operating it well. So it's essential to get your inputs to the project manager early and often.
[pullquote]Project management is the discipline of planning, organizing and managing resources to bring about the successful completion of a specific project. Project management starts when the concept is first conceived. Regardless of whether a project involves a revamp or a grassroots unit, the project manager's job is to complete it on time and on budget. To do this, the project must be conceived and then designed to meet the goals. Energy typically isn't an initial part of project management unless the project is specifically meant to reduce energy costs. However, energy is a variable — so, the energy manager should make sure the project managers understand the importance of energy efficiency and how it affects a project.
My favorite example relates to a process heater. At the time, I was a corporate energy director and had to sign off on every project the company was doing. We had implemented energy codes for our projects. The codes required an energy balance for every project and that plant energy efficiency couldn't decrease after completion of a project. The idea was that if your project made the plant less energy efficient you'd have to do additional work to restore the efficiency. In this case, a project team planned to install a process heater with a 750°F stack. The heater manufacturer gave the project manager the option of not recovering heat to cut the overall cost of the heater. The project manager was trying to save money and decided against installing a heat recovery system. So, I had to have a long talk with the project team about energy management. It was frustrating for them because they had thought the project was ready to go. As it turns out, adding the recovery system reduced steam requirements and the changes to the design paid for themselves while improving the overall efficiency. The return on investment (ROI) of the project also increased.
One way to make it easier on project managers is to provide capital for energy add-ons. Basically, a project is designed "bareboned" and then energy efficiency measures are added. Teaching project managers to think in this fashion gives them greater flexibility and leads to more energy savings. Separating the energy capital also gives management a better sense of energy costs. In addition, in most companies, energy projects have a lower threshold, or return requirement, because the savings are more predictable. Basically, the difference between products and feed can vary and thus pose a larger chance of fluctuation in a project's return — but the cost of energy is always positive and rarely decreases.
Training the project manager to understand the difference between energy projects and other capital projects also leads to management's understanding of energy improvements. Very rarely are any projects done purely because of energy but the energy component can be very important. The two areas that this is most true in are environmental compliance and utility projects.
Environmental compliance projects are those required by law. In most cases, companies like to minimize the cost of these projects because they don't have a monetary investment return. Environmental projects often relate to energy consumption or production. One example would be to add selective catalytic reduction to a heater stack to reduce NOx. Because this offers no return, project management usually would involve minimizing the cost of the system. However, adding an air preheater can make this project a money-maker. If you run a return on investment (ROI) analysis on the whole project, it may not reach the minimum required for your company — but separating the environmental project and then adding the energy project, with the ROI only on the energy project, would make this a clear winner. Such separation also works well for utility projects. By splitting the sustainable and energy savings parts of a project, the energy portion has a better chance of being added.
If you can train your project managers to understand the importance of energy, the different thresholds between energy and other capital projects, and the value of handling energy projects as add-ons, you'll not only be able to trace energy projects better, but also will be better able to defend those projects and convince your plant manager that they're worth doing.
So, the next step is training your plant manager on energy efficiency. That will be the fourth and final part of this series.
Gary Faagau is Chemical Processing's Energy Columnist. You can e-mail him at [email protected].
