Heat Recovery, Energy Efficiency and Carbon Reduction Commitment - Transcript
It’s probably fair to say that very few of our customers who are cooling things down aren’t heating something else up first. When you think about it, why would people do cooling? They’re not doing it just for the fun of it, so somebody else is doing the heating.
The pressures that our customers are facing are wide and varied. If you think that rising energy costs is enough to make you think differently, the government then comes along and put another layer of trouble on top of it. And the one that makes up the first part of the presentation is the Carbon Reduction Commitment. If you’ve not heard of the Carbon Reduction Commitment you’re extremely lucky, because that probably means that your company was either exempt or didn’t have to register for it. But it’s not actually something that applies to every business, it’s only businesses over a certain size. To put it into context, and I’m not sure of the accuracy of this – somebody told me not so long ago that for a large supermarket, the impact of the Carbon Reduction Commitment plus rising energy costs will wipe out their profit within five years. Now that’s quite a sobering thought, really. These supermarkets are currently making huge amounts of profit, but rising energy costs and the Carbon Reduction Commitment – which is basically another tax to encourage people to be more energy efficient – will eventually wipe it out.
So, what are we going to do about it? Well, first of all, we will talk a bit about the CRC, and then we’ll talk a little bit about low hanging fruit, an expression that everybody’s familiar with. Sometimes we even find that the fruit is fully ripened and lying on the ground, but nobody’s picking it up.
CRC is mandatory for certain businesses, and it’s entirely derived from energy efficiency. It’s basically for large businesses in the UK that have a 6000 megawatt hours per year energy consumption. If you run your plant for 4000 hours a year, then this roughly equates to about 1500 kilowatts of electricity. So if your energy bill is more than 1500 kilowatts, your company is probably in this. The companies were registered for three or four years and weren’t actually having to do anything. Last year was the first year where the finance director of your business had to get the chequebook out and write a cheque to Her Majesty’s government and pay back.
Now, it started off on a tapered basis and was probably only £50,000 a year for fairly large businesses, but that will rise. There are also lots of complexities where you can start losing some of the exemptions on some of the other tax rebates that are happening, if you don't meet your year end targets. So, it’s a big deal for the companies that are in there.
It also includes your gas footprint, which is a really bizarre situation – you’re in it because of your electricity bill, but by saving on your gas bill you can ease the pressure on it, because ultimately what they’re trying to do is drive carbon consumption down. Now, whether you believe the global warming thing or not, it doesn’t matter a bit. Brussels and the British government have signed up for reducing the target and their biggest lever is price. Either price on tax, or price on the cost of energy in itself. We won’t get away from it whether we agree with it or not. If we start finding icebergs growing back at a greater rate than the legal system is going to reduce fast enough, we’ve got this imperative to reduce our carbon footprint.
Low hanging fruit actually could be quite significant. You could be saving large chunks of energy, perhaps totalling 50% of your running costs. I visited a chocolate factory recently that’s got a $6m electricity bill, and frankly some of the stuff I saw was absolutely mindblowing. They had heat pumps running, feeding through chillers, and the chillers weren’t even in operation anymore. Seventy kilowatts of drive motor just running.
There are buildings that are getting out of touch with what’s actually happening, and eventually their systems will override the entire building. Really try and keep tabs on all these different parts and bring it all back together, but fundamentally, if you delegate the performance of your building, you can’t abdicate from it. You can’t just hand it over to an expert and not be interested in it. Please don’t think that low hanging fruit is going to get you out of jail. Take a look at the video on tinyurl.com/lowhangingstar. It’s provides quite an insight into the areas where the energy comes from.
There’s maybe some new areas, perhaps, where we could do distilling. Drying is an area where heating and cooling is a large part of the demand. People are probably heating something up and then cooling it back down again. Most factories have goods delivered at one temperature – be it butter or chicken or whatever the product is for food manufacturing – and then it cools down. Even factories where you bring in ambient goods and they’re leaving frozen – a fish factory, for example – the chances are there’s quite large heating demands on that site for washing and so on. The joining up of the cooling and heating bit is part of what we’re going to be talking about.
There’s 79 billion litres of Ethanol produced around the world and it boils at 74 degrees, yet we usually steam it at 15 degrees. Maybe there are some thoughts in there that distilling could be done better with heat recovery.
Plan it, monitor it, and then act. That’s not a bad philosophy, and it’s certainly better than burying your head in the sand. Basically they’ll be saying, let’s have some low hanging fruit, let’s use some existing data, and low hanging fruit might get you to 10% of your total energy bill. Now, that seems quite good. The plan will take about three months and monitoring will take another three months before you’ve got any data that’s of any significant benefit – because probably there’s some sort of ambient function going on since winter is colder than summer – and then there would be another three months of implementing these things. And really... 10% and it’s taking nearly a year, does that feel like a winning plan? It doesn’t to me. Your energy bill – never mind the carbon footprint, but the pounds per month – will have risen more than you’ve saved.
So, thinking differently – some great guys, over the years, have been talking about thinking differently and are obviously held up in high regard. Einstein, is famously – along with these guys – quoted as issuing the first statement about the definition of insanity. What is the definition of insanity? There’s some really interesting stuff on the website under tinyurl.com/definitionofinsanity.
I didn’t write this stuff down, but really the definition of insanity is repeating the same mistakes and expecting different results. That sounds like a really highbrow philosophy, but I think it is true. We have to go about it differently.
So, what does that mean when we go back to our plan? Well, the first step you have to do is go on and re-commission the plant. As the question earlier was saying, does the plant drift from what it was originally intended to do? Absolutely. There is not a facility in the country that is operating as good as it was the day it went in. Things go adrift, particularly if there’s a light touch to maintenance and so on. You have to get in amongst it and get the numbers down. It would be quite easy to save the 10 or 20% doing that, but the most important thing is – that’s not the end of it. That’s the first step. The second step is establishing monitoring. I doubt there’s many facilities in the country that have enough data gathering to deliver the future of total energy. They monitor a little bit around the edges, so they might monitor the gas bill. Do they monitor how much heat is being used in hot water systems at each and every individual location around the building? No, they don’t. So how can you possibly know that you use that quantity of heat in that area? If you don’t measure it, you can’t manage it.
And the last bit is – what is this plan going to be? Well, I think the first thing we have to do is aim for some immediate gains. We have to gain some good grace with our chiefs – they’re the ones that are ultimately going to be spending the money for the bigger plan – so getting quick wins is really important. It’s also an iterative process in establishing the monitoring. And let’s be honest, it’s a bit of a moving target. If you think that you’re going to gather all the data and then jump in and start acting, life isn’t like that. Things change around all the time. It could take four years of data before you have the perfect understanding of your process, and your process is probably changing over that time. Really, it’s about thinking big. It’s about data and more data. Data is absolutely everything in this.
Go in knowing that you want to be finding out the total energy consumption of the building, and then maybe you can do something. And set ambitious targets – why couldn’t we reduce the energy consumption of a facility by 40%? I’ve seen factories where that has been really quite easy to do. If you don’t aim for it, you’ll miss it. There’s a great quote from an ice hockey player, a guy called Wayne Gretzky, that really strikes me – “you’ll miss 100% of the shots you don’t take”. That sounds like my son’s football team. In fairness, they’re more like 100% of the shots they do take, but if you don’t try it, you’ll certainly fail. That’s a truism.
Here is a short video of what total energy meant to this chocolate factory that we were working with. There’s some sort of production going on, a heating process heating it up, and then there’s a cooling process. That is chocolate making – it’s really, in that sense, quite simple. We’ve started saying “why do you do that?” Why do you need so many kilowatts? We’re heating things up in this factory by burning gas – in their case it was coal, which is even worse than gas – and then we’re cooling things down. And what we said was, if we capture the waste heat and deliver it back into the heating process – and of course there’s no perfect situation, a lot of processes must be steamed at 130 degrees – but when you start getting into it and measuring the quantity of heat during what time of day, you start realising that steam has actually been overused over the years. If you have to transport kilowatts of heat across a reasonable distance, then steam is quite good. But the reality is, we quite often use steam at fairly low temperatures. The brewing industry, for example, has a lot of pasteurisation at only 60 degrees. And yet, they’ll be burning gas.
If you throw energy away, it’s gone. If you capture it and re-use it, you can offset that against your original energy bill. And the savings are quite startling.
They have quite a lot of data on site, I wouldn’t say it was perfect but it was certainly better than typically what’s seen. There’s a very strong background to the work that we do with them, which is natural refrigeration using ammonia. Basically, they see that company after company, time after time have put in a gas and then it’s been phased out, then put in a different gas and that one has been phased out. The plant lasts 25 years if you’re still allowed to use it – if you stop being allowed to use it after 15 then you’ve got a 10 year old plant, or a 15 year old plant with 10 years life in it. Surely that’s a bit of a short-sighted approach.
Nestle totally demands to still be in business in 25 years, so they’re laying it out. Lots of analysis was done in advance – they did gas fire, boilers, combined heat and power. They did bore holes for heat and storing energy and then retaking it back at certain times a year. But after a lot of analysis, they discovered that the best option was a qualitative score that “migration to a thermal coupling” – as they called it – gave them the best benefit. We also had a strong look at that 4.5 megawatt heat demand, and in fact we only need 3 megawatts of cooling from the site. They’re recovering 2.5 megawatts of heat if they want that, and it saves them a considerable amount.
It’s quite embarrassing when you make someone a promise and then you get it wrong. In this case, we made them a promise that they wouldn’t use too much extra electricity by heat recovery. It’s good science that if you throw away heat at 40 degrees versus recovering it at 60 degrees, you should expect energy consumption to go up. We promised them that it wouldn’t go up too much – but in actual fact, we had underestimated how bad the kit they had originally was, and now the energy consumption’s gone down by about 15% over the same period.
This was the plant which was installed originally, and it’s a classic chiller plant. It’s R22, which was one of the imperatives for swapping it out, but at the same time, it really wasn’t terribly good when it was new. It hadn't been very well looked after. What we installed was some heat rejection here. The key thing is though – we only reject heat if we can’t use it. It’s far better to not run the fans and keep the heat inside the processor. It’s really what’s saving them.
We relooked at the Glycol facility and tuned that around a little bit as well. They’ve got two circuits of hot water. The first is an open circuit where they’re heating from 12 degrees to 60 degrees, and the second is a closed loop where it’s going from about 40 degrees to 60 degrees. You’ll notice here, if you’re sharp-eyed, that they’re actually heating some of the water to 90 degrees. We could have done that with a heat pump since we can now get up to about 90 degrees, but in this case it made more sense just to do 12 degrees to 60 degrees, and 60 degrees to 90 degrees using high efficiency gas boilers. Really just having that total energy approach. You’ll see the difference here in the integrated plant where we’re focusing on the energy for cooling, with some incremental heating cost versus three different ways of energy for cooling, energy for the closed loop heating and energy for the CIP heating. We combined it as much as we possibly could. Just by doing that, it was about £750 a day energy saving. It was a 39% reduction in power over the same fifteen week period just by switching out over the old plant and capturing the waste heat. It’s quite significant.
Now, thinking back to the philosophy – if you like – of how to go about doing this. The subsequent chocolate factory we looked at – we were talking about small wins, medium wins and large wins. You can see just by the number of bubbles here that it’s taking longer and longer just to do the bigger wins. Disappointingly, we gave them the quote which suggested they could save a million pounds a year for spending £500,000 and didn’t hear from the guy for six months. We contacted him, we tried to get in touch, and other stuff was going on that was more important than saving a million pounds off his energy bill. What we laid out was two different ways of doing it – the typical way of doing the project with a tender and an audit, feasibility, studied design agreement, purchase spec... I mean, the clock is ticking all the way down here and ultimately getting from July all the way through to January for the commissioning. No energy savings from this point here really, other than the odd quick win.
If we compress all this, then we can shorten the total project by about six months, which probably pays for the project. All this concern about capital cost and investment – the harder and the faster that you get into it, then the smaller the investment. It really is about focusing on this bit here, but almost in another dimension of thinking about the heat as well as the cooling.
These are probably two simpler case studies that make it a little bit easier just to set the boundary of the business that Star has been looking at. The first is a district heating plant in Norway. Having thought about heat recovery and realising that for 150 years our industry’s been throwing away waste heat, all of a sudden we get an opportunity to start gathering waste heat. Then the next project came along – these guys are sucking water out of the Fjord at 8 degrees and cooling it down to 4 degrees in a town in Norway and we take that roughly at around 10 megawatts of heat from there. We then add in the electricity to drive the system and deliver 15 megawatts of heating – the district heating – from 60 degrees to 90 degrees.
In a UK context, for example – the Clyde has a capacity of heat that far exceeds what the heating requirements of the city are likely to be in the future if we gather waste heat and use it. So why was that a little bit bizarre for us to be doing this project? Well, these guys are throwing away the cold. I tried several times to get them to install a data centre here and capture the heat from a data centre, rather than cooling down a Fjord and throwing the cool away, but they weren’t having it. They’re very focused on energy, but only their own needs. And that’s the town in Norway.
A new district heating plant is in here taking water out the Fjord, and then a reasonably complicated circuit in the water side. The purpose of mentioning it in the three different phases is that when we look at it altogether, we’ve got three heat pumps operating in series, but lots of areas where we’re gathering heat. Even to the extent of taking the heat from the water cooled motors and putting that back into the system. That’s worth about a percent of the energy performance for them. If we really try to gather heat in every single area of the plant, then we get three times as much heat out of the system as electricity that we put in. This is the key number. On that particular day, we were getting about a 3.18 COP. Slightly off the 90 degrees, so that’s why it’s just above, but certainly three times as much electricity out as in on a normal operating day.
Here’s the summary for the chocolate factory – what we’re doing there is useful cooling at -5 degrees whilst doing water heating at around about 60 degrees, and we get a COP of heating at about 3.39. Now, I have to point out at this point that much of the electricity is already being spent by the cooling guy. So, although I’m talking about total heating and total energy, don’t think that all the energy cost falls on the heating. This guy here – who’s doing the cooling, first of all – he’s paid 75% of that electricity bill anyway and in fact, (because the plant wasn’t terribly good in the first place) the energy bill was paid by the cooling requirements. So they’re effectively getting free heating on that site now for their services at 60 degrees. And there again, you see the two systems. We have four compressors. Two of them are throwing away heat, and two of them are capturing heat whenever possible. That really was the strong driver for Nestle.
As David was saying in a lot more detail, global warming potential is very high. Whether you think that matters to your business or not, it’s up to you – but the really nice thing is, of all those refrigerants there, ammonia is actually the most efficient as well in terms of the operation. This really is a win/win situation. So, whether you’re financially orientated or environmentally, you’re not having to pay a penalty for being slightly better in the environmental perspective.
Why does that leakage matter if that is a concern? Well, thinking back to the district heating plant that we had, they were planning on using R-134a. They would tend to leak about 1% per year from a large system. That’s actually quite good compared to some facilities, so we won’t have to argue whether 1% is too high or too low.
A concern of mine is that we see more people interested in district heating and heat pumps for district heating and we forget about the global warming potential of these plants through using HFCs. A 73 megawatt system that we were looking at in South Korea would have about 50,000 kilos of R-134a in it. That would leak about 500 kilos per year. Apart from the financial cost of about £15 a kilo – which I think has doubled in the last four or five years, so that is about £30,000 per year, doubling every 2 to 3 years. But the real shocker for me was when I worked out the numbers. That plant, a large facility admittedly, would have the equivalent global warming impact of driving 2.32 million miles in a Volkswagen Golf every year. That’s why I don’t think we’re going to find the legislators backing away from this. They’ve decided HFCs are under pressure. I’ll be really surprised if they don’t get a severe impact on their operation.
The UK’s a little bit interesting as well. District heating isn’t everybody’s interest, but the government are now incentivising the use of river water. The Clyde with the Armadillo, and so on – each of these buildings, instead of burning gas, could be taking heat out of this river. As the technology, the COP, and the energy efficiency gets better and better, then there will be significant savings. The government are also incentivising this from all the renewable heat incentive schemes I’ve seen and people talk about solar panels and biomass – this seems to be as good as any of them. And really what we’re saying is, that you can almost get to the point where you can heat the building for free because the incentives are good enough if you’re taking heat out the river.
So, there’s just a couple of snippets about how life is different with the way Star are looking forward in the future. But really I think what we’re going to see over the coming decades is this approach to total energy. A recent study done in London by Buro Happold showed that there’s enough waste heat in London, if harnessed by heat pumps, to heat all of London. If we’re going to come down to any significant difference, it’s probably that we’re going to see people realising that burning fossil fuels (or any type of fuel) just to heat our buildings at 21 degrees is a slightly outdated way of doing things. We’ve been fascinated by it since we were cavemen, but we don’t live in caves anymore.