Energy efficiency audits often generate good efficiency optimization recommendations, but these are rarely developed into a form that allows practical implementation. The actual investment is clouded in many uncertainties that require clarification, even if the optimization potential is known. In many cases the next step in optimization projects is developing a concept, or in the best case scenario, a preliminary design.
In Finland there is a long tradition of energy efficiency operations and most companies have conducted at least some kind of energy analysis of their operations. This is a good starting point, but in order to achieve real savings the efficiency measures need to be put in place.
In optimal cases, the measures are related to operational technicalities. In such cases savings can be accrued immediately, for example, by changing a process run method or altering building management system settings. In several cases, optimization requires investment, which can become a bottleneck in energy efficiency work.
Results from the 2015 annual report of energy efficiency contracts in Finland indicate that a large part of optimization measures are classified as “under consideration”. In energy intensive industries, for example, 72% of the optimization measures are classified as such. From a savings perspective this amounts to 63% of savings, which is the equivalent of € 271 million a year (see Table 1). It is noteworthy that the heating and fuel savings measures “under consideration”, are significantly larger than electricity savings measures. Similar trends can be seen in other business area reports.
Energy efficiency measures easily find their way to the bottom of in-tray paper stacks
Why is it that even good optimization measures gather dust at the bottom of in-trays? One reason is obviously related to the profitability of the optimization ideas. In many industrial companies, energy efficiency investments compete directly with other investments where the payback demands can even be as tight as one or two years. The price of energy naturally also affects profitability; at current electricity prices it may be difficult to achieve profitable optimization measures.
The foremost goal is to produce reliable information about the technical implementation of an investment, the costs associated, and its profitability.
Another factor that probably slows the implementation of optimization measures is the fact that investments cannot be directly implemented based on optimization recommendations. In many cases, more detailed analysis, planning and the evaluation of effects on other operations are required before a final investment decision can be made. This phase is often a bottleneck, but this does not have to be the case.
Concept and preliminary design to unclog bottlenecks
Typically, preliminary design is started after an audit. This approach is good if the optimization investment is a clear entity and the different implementation models were thoroughly investigated during the audit. In preliminary design, matters related to the dimensioning of measures are clarified, which leads to more precise investment requirements and cost levels. The changes required to existing systems and new connections are also defined more accurately in flow diagrams, device layouts and lists. This enables the company to get a more comprehensive view of the extent of the measures and their effects on other systems or processes. Possible changes to automation and other control systems are also specified.
Usually, the ideas behind the suggested measures are refined and their profitability calculated with more precision. The operational costs of devices, maintenance, and operability throughout the entire life cycle should be analyzed in sufficient detail to ensure that the energy savings delivered by investment provide ROI for as long as possible.
During preliminary design, offers can be sought from device suppliers for comparison purposes. After preliminary design, the measures are ready for decision-making and possible detail design. If there are many implementation models for the optimization measures, however, concept design may be the right choice to make headway.
In energy efficiency concept design, different implementation alternatives are analyzed, including their profitability in view of the offers received, as well as their effect on other operations. When the measures introduced affect larger systems or processes, their operation needs to be checked to ensure that they deliver energy efficiency benefits as required. Typically, a concept design delivers the following:
- More precise analysis and measurements
- Possible adjustment to energy balance taking the effect of different alternatives on the whole operation into consideration
- Cost and profitability comparisons of different alternatives
- System operation description
- Dimensioning of energy technology for main devices
- Cost estimate based on budgeted offers
- Flow diagrams
- Preliminary layout and device positioning
- Review of safety and environmental considerations
- Final report and preliminary project plan, time schedule
- Clarification of energy subsidy matters and presentation of procedure
The concept design content is naturally defined on a case-by-case basis according to the particular features and scope of the target. A concept design works best, for example, in cases where different alternatives for heating, heat recovery processes or industrial air-conditioning development are being considered. A concept design can also focus on a process device (e.g. a furnace or drier) environment, where different suppliers’ solutions are compared and their functionality checked as part of overall operations.
How are energy efficiency concepts and preliminary designs implemented?
Concept design implementation can be divided into three main parts:
- Field work
- Dimensioning and design
- Cooperation between different stakeholders
Design work always requires sufficiently detailed initial data and field observations. In some cases, audit measurements need to be supplemented and/or expanded on. In order to evaluate device positioning, the feasibility of piping and labour costs, it is important to check distances and device positioning to a sufficient extent. Even though it may seem that this increases the workload, it will result in further savings in the workload of the next phase and possible implementation.
Different experts are consulted in the design and dimensioning phase. The extent to which such experts are required depends on the comprehensiveness and quality of existing documentation and observations.
Successful cooperation between different stakeholders is a very important part of concept design and preliminary design. Good communication is needed when the project goals are defined to ensure that the customer’s goals are communicated well to the engineering organization. It is also important that information about audit observations is transferred effectively to support design. It is especially important for designers to communicate effectively with device and solution suppliers so that offers received are based on the correct initial data and can be used for comparison. Fluent communication with authorities and regulatory institutions also goes a long way to smoothing the subsidy application process.
The foremost goal of concept and preliminary designs is to produce reliable information for decision making about the technical implementation of an investment, the costs associated, and its profitability.
Efficient use of energy subsidies
In energy efficiency optimization investments, it should be remembered that subsidies are available only when certain conditions are met. When applying for subsidies in Finland, the following factors and conditions should be taken into consideration. These factors differ naturally from country to country:
- The subsidy is dependent on a direct payback period of three to seven years
- The subsidy can be a deciding factor in project implementation
- Subsidies are not granted for revamps or repairs, unless the energy efficiency improvement part can be separated from the rest of the investment
- The energy efficiency optimization solution needs to be described in sufficient detail
- It is important to note the labor costs of design and implementation in overall costs
- Control automation often plays an important role in energy efficiency investments
- The subsidy application must be made before the investment decision is taken
The subsidy is a maximum of 20% for traditional projects and a maximum of 40% for new technology projects. It is easy to forget certain aspects of subsidies, even though companies may have extensive experience in this regard. Firstly, subsidies can also be granted for the procurement of production processes and devices, if they have an energy efficiency effect. This opens the door to new possibilities, as subsidy applications have traditionally focused, for example, on heat recovery optimization and process modifications in auxiliary systems.
Secondly, subsidies are allocated for the entire investment, starting from design work all the way through to start-up and personnel training. Investment verification measurements can also be included in the investment and, as such, are covered by the subsidy. Energy subsidies should be applied for in good time, to ensure that all project elements are included.
Applying for subsidies is an essential part of the design process, albeit a concept design or a preliminary design.
By developing concept or preliminary designs based on energy efficiency measures identified in audits, we can aid companies to better evaluate the operational benefits and costs. Armed with this information they are able to make informed decisions regarding investment implementation. This enables companies to improve their energy efficiency with profitable measures, which have life cycles that are as long as possible.