Notas de aula energia, Notas de aula de Matérias técnicas

Baixe Notas de aula energia e outras Notas de aula em PDF para Matérias técnicas, somente na Docsity! Lecture Notes Energy Management Carlos Santos Silva Fernanda Margarido September 2020 (V3.0) i FORWARD The objective of these lecture notes is to summarize the main contents of the course Energy Management at Instituto Superior Técnico. The objective is not to replace any fundamental text book on Energy Management, but solely to highlight the main points that are scattered around many textbooks, reports and other important documents on Energy Management. They result mostly from the development of the MOOCs Energy Services (esX) and Economic and Legal Aspects of Energy in Buildings (elbX), from the MOOCS@IST, and from many other indirect contributions of many colleagues that have lectured this course with me over the years: Paulo Ferrão, Tânia Sousa, André Pina, Patrícia Baptista, Diana Neves, Cláudia Sousa Monteiro, Samuel Niza, Francisco Capucha. A particular word of appreciation to Diana Fernandes, that helped me to develop the Economic and Legal Aspects of Energy Services MOOC during 2017 and 2018, and compiled many of the information presented in this lecture notes, including formulas and figures. More recently, to João Araujo, a student from the class of 2019-2020, which gave a detailed feedback to all chapters, which highly improved the text. A final word to Fernanda Margarido, who co-authored chapters 10 and 11, and did a fantastic review of the whole document. Now, I pass the ball to the many students that every year participate enthusiastically in classes to provide feedback, by finding mistakes, inconsistencies, and suggesting ways to improve these notes. Lisbon, September 21sh, 2020 Carlos Santos Silva Energy Management Lecture Notes 1 I. DEFINITIONS Energy Management Lecture Notes 2 1 INTRODUCTION TO ENERGY MANAGEMENT 1.1 Energy management definition Energy management is the body of knowledge (set of concepts and activities) that deals with the use of the energy resources of a system in the most efficient way. This includes designing, implementing and operating the energy generation and energy consumption units within an organization. The main objectives are, by decreasing order of importance: 1. Provide the adequate level of energy services to develop the activities of the organization 2. Minimize energy demand 3. Minimize energy costs 4. Promote local use of energy resources 5. Promote adequate energy use behaviour from the users 1.2 The energy manager The Energy manager is the agent in an organization/company who is responsible for the implementation of energy management. To do this, the list of tasks that need to be performed by the energy manager include: • Setting targets for energy management • Undertake energy audits across an organization • Monitoring energy usage across the organisation • Prepare reports summarising energy usage • Create and deliver training activities for organization collaborators regarding energy consumption • Keep up to date with changes in energy regulation • Keep up to date with industry standard best practice To develop all these tasks, the Energy Manager must develop a large set of skills, including: • Solid background on energy management • Numerical and analytical capacity to develop calculations, estimations, algorithms • Knowledge and experience in Project Management • Knowledge on general IT tools, but also in specialized software • Comfortable in communication, presentation, and coaching activities 1.3 Energy management certification There are several certification organizations for Energy Managers: • Energy Manager Certification, by the Institute of Energy in UK, which provides a two level certification: Level 1 (Certificate in Energy Management Essentials) and Level 2 (Energy Management Professional, which requires 2 years of previous experience and 200 hours of training); • Energy Manager Professional, by the Energy Management Association in US Energy Management Lecture Notes 3 • Certified Practitioners in Energy Management Systems (CP EnMS), by the Institute for Energy Management Professionals in US, which is recognized by the DOE in US • Professional Energy Manager, by Schneider • Professional Energy Manager, by the Institute of Energy Professionals In general, all these certification processes require: • Fundamental knowledge in energy core knowledge (thermodynamics, heat transfer, fuels, and combustion), but also in project management and finance • Energy applications and technologies, like heating and ventilation, air conditioning and refrigeration, building physics and thermal comfort, lighting, compressed air, steam and process heating, and motors and drives • General context knowledge of energy, like energy industry and energy costs, measurement and verification, data testing and analysis, energy and the environment, energy management systems and standards (including ISO 50001), and energy conversion and transport • Other topics, like on-site electricity generation, building management systems, and carbon management 1.4 Fundamental bibliography for energy managers There are many and very good textbooks for energy managers. From those, these are three examples of the most used books: • Energy Management Handbook, 8th Edition, by Steve Doty, Wayne C. Turner • Energy Management Principles, Applications, Benefits, Savings, 2nd Edition, Craig B. Smith, Kelly E. Parmenter, Elsevier • Guide to Energy Management, 8th Edition, Barnley L. et al Energy Management Lecture Notes 6 2.1.5 Energy conversion levels We introduce now four new concepts: the primary energy, final energy, useful energy, and energy service. The breakdown of primary to energy service is very relevant, because in each conversion step some energy is always lost. 2.1.5.1 Primary energy Primary energy is the energy embodied in natural resources which need to be extracted (e.g. oil and coal, but also wind and solar). Therefore, primary energy refers to energy sources as they are found in the nature. 2.1.5.2 Final energy Final energy is the energy available at the consumer level. It results from the transformation of primary energy sources into energy commodities, and in general involve some transformation and/or transportation process (e.g. electricity, gasoline, or LPG). 2.1.5.3 Useful energy Useful energy is the energy that is actually used by the users. It corresponds to the portion of the final energy that is available after the conversion at the end-use technologies. It is, for example, depending on the technology conversion, what electricity becomes (e.g. light, mechanical energy, or heat). 2.1.5.4 Energy service Energy services refer to the activities that the users can perform with the useful energy. For example, light (useful energy), is actually used to read or cook – that is the service. However, this light may be generated by a light bulb using electricity (final energy), or directly by solar radiation (both primary and final). What is really important for the users is the service, and not how it is supplied. Therefore, it is not measured in energy units like Joule (J), but in a certain level of service and the time that it is required. For example, regarding light, in an office we need at least 300 Lux during the period we are working. That is, the required service is 300Lux for 8 hours/day. Other examples include “we need 40 liters of water at 40°C per day for hygiene purposes” and “we need 20°C 24 hours/day inside a building”. 2.1.6 Other definitions 2.1.6.1 Energy supply The energy supply is the energy that is extracted from nature. It includes all the activities that allow the extraction, transportation, and storage of fuels. Usually energy supply refers to primary energy vectors. 2.1.6.2 Energy demand (Energy consumption) The energy demand is the energy that is consumed by a particular system or economic sector. It is the energy required to provide the products and services, and usually refers to final energy vectors. The energy demand may be described by technology (in the case of a building energy system, it could be the energy for HVAC systems, or the energy for lighting) or by economic activity (in the case of a country’s energy system, it could be energy in the industry or the residential sector). 2.1.6.3 Energy conversion Energy conversion describes the conversion process from primary to final (e.g. energy conversion in a power plant or a refinery) or from final to useful (energy conversion in a boiler or a light bulb). Energy Management Lecture Notes 7 2.1.6.4 Energy Losses Energy losses refer to the part of the energy flow that is lost in the conversion process, for example as heat. 2.2 Representation 2.2.1 Reference energy system The reference energy system (RES) is a representation of all the technical activities required to supply various forms of energy to end-use activities. This framework helps to describe an energy system by describing the energy flows, the energy conversion technologies, and the energy outputs. In practice, it is a diagram that represents activities, the technologies, and the energy flows from primary energy supply to final energy use, and eventually (though not as common) useful energy flows and energy services. Figure 2 - Reference energy system representation In the reference energy system in Figure 2, we can observe that on the left side we have the technologies and activities that enable us to collect primary energy (the primary energy supply area), such as oil extraction, coal mining, biomass collection, etc. Then, the second area refers to conversion technologies from primary to final energy supply and its transportation, like electricity generation on power plants or oil refining. In some cases, like biomass or natural gas, the primary energy is consumed directly as a commodity (final energy) and there is no conversion process. We have a second level of technologies which are the end-use technologies, which allow us to change the final energy into a form of useful energy to perform different activities, like heating, mechanical movement, or light. These activities, which are not energy nor technologies, are the energy services. Energy Management Lecture Notes 8 2.2.2 Energy Balance The energy balance is a tabular representation of the energy system that presents in an aggregated way the amounts of energy used in given activities. In a way, as shown in Figure 3, it looks like the reference energy system rotated 90°, with numerical values. Energy balances can be used to describe the use of energy in a country or a building. The thorough analysis of the energy balance can provide us with several pieces of information about how the energy system is designed and how it operates. The energy balance is a table where in the columns we have the energy vectors or products (primary, final, or eventually useful) and in the rows we have the activities on the supply or the demand (or eventually the services). Then, in each cell, we place the amount of energy (primary or final) that was used in each activity (supply, conversion or energy end use). Energy balances are usually used to represent the consumption of countries in a given year. As the aggregated energy values are very high and oil is still the reference energy vector in international markets, energy balances are usually represented in Tonnes-of-oil-equivalent (toe), which is a very large energy unit that represents the amount of energy contained in one tonne of oil. The energy balance allows us to see the relative importance of the different fuels in their contribution to the economy. The energy balance is also the starting point for the construction of various indicators, as well as analyses of energy efficiency. Figure 3 - Typical representation of an energy balance of a country (Source: EIA Global Headline Energy Data, 2017 edition) 2.2.3 Energy Sankey Diagram The Sankey diagram is a graphical representation of the flows in a system, in which the width of the arrows is proportional to the flow quantity. We can think about them as a mixture of the reference energy system and the energy balance. In Figure 4 and Figure 5 we can see two examples: one for Portugal 2016, and another one for the world in 2005, which includes energy services. Energy Management Lecture Notes 11 II. CONTEXT Energy Management Lecture Notes 12 3 ENERGY AROUND THE WORLD This chapter presents an overview of the energy use around the world. 3.1 The word Sankey diagram The world Sankey Diagram of Figure 6 clearly describes the world energy system in 2016. Figure 6 - World energy Sankey diagram in 2016 (Source: IEA, https://www.iea.org/Sankey/#?c=World&s=Balance ) Comparing it with the Sankey diagram presented in Figure 5, we see that over the last decade there were no significant changes in the world energy system. On the demand side, the world energy demand is more or less divided equally into three parts: Transports, Industry and Other uses (this sector refers to Residential, Commercial and Public Services, Agriculture and Forestry, Fishing, and Non-Specified Uses). In the power generation sector, coal and natural gas are still the dominant energy resources. The main difference to 2005 (see Figure 5) is that the use of oil for power generation in 2016 is residual, and renewables, including hydro, surpass the generation of electricity by nuclear. It is also clear that almost the entire transportation sector uses oil products and its derivatives, while Industry has a more diverse energy mix (as it uses coal, gas and electricity). The “Others” use Electricity, Gas and Biomass (especially in developing countries for food preparation). Considering that Residential, Commercial, and Public Services are all developed inside buildings, we can see that most of the “Others” sector is basically describing the energy demand in the Buildings sector. A special note related to Agriculture, Forestry, and Fishing. The energy consumption in these sectors is usually considered very small, in general it has to do with the accounting system used in these economic sectors. The Agriculture activity per se may involve some direct consumption of fuel in machines, but the production of fertilizers is a significant part of the Industry demand. This would not happen if energy statistics were based on energy services, where one of the services would be the Production of Food, and which would include the consumption of energy for fertilizers, plus the consumption of the machines. That is why we can see that in Figure 5 that the service “Sustenance” is partially supplied by the food industry. Energy Management Lecture Notes 13 3.2 Total Primary Energy Supply In Figure 7, we can see that oil and coal are the main energy products and that, over the last decades, their relative weight to the total energy mix has been similar. Coal consumption has increased more than oil consumption, but the only relevant change is the consumption of renewable resources, which, although it still represents a small fraction of the total consumption, has increased significantly. Figure 7 - World primary energy supply evolution (source: BP Statistical review 2017) In 2017, the growth of primary energy consumption averaged 2.2%, compared to 1.2 % in 2016. This was the largest increase to date since 2013, and compares with the 10-year average of 1.7% per year. By fuel type, natural gas accounted for the largest increment in energy consumption, followed by renewables, and then oil. Energy consumption rose by 3.1% in China. China was the market with the largest growth of energy demand, for the 17th consecutive year. 3.3 Final energy demand In Figure 8, the evolution of the final energy demand in the world is presented. The figure shows that oil products are the largest type of final energy consumed in the world, followed by electricity, ahead of gas, coal, and biofuels and waste. Electricity is the type of final energy with whose consumption has experience the largest growth over the last decades, as it grew from less than 10% of the total final energy, to the current eighteen percent. The growth of final energy consumption is smaller than the growth in primary energy, which indicates that the overall efficiency of conversion of the system “world” has actually decreased. Energy Management Lecture Notes 16 4 ENERGY MARKETS AND PRICES In this chapter, we introduce how the different energy supply chains work and the types of markets stemming from these supply chains, in order to understand their influence on the energy prices. 4.1 Energy Supply Chains 4.1.1 Oil and Gas The oil and natural gas supply chains, and the players involved, are very similar (and are often the same). In general, we can divide the supply chain in three blocks, as shown in Figure 11: • Upstream (Exploration & Production) • Midstream (Transportation & Storage) • Downstream (Refining, Petrochemical, & Marketing) Figure 11 - Oil and gas supply chains The main difference between both supply chains is that oil requires a transformation step (the refining of oil products), while gas can be used as it is extracted. In the oil supply chain, the oil is transported in its raw state (crude oil) through different transportation means (pipelines, tankers, trucks and railcars, in many cases all of those) into the core infrastructure, which is the refinery. At the refinery, the crude oil is transformed into oil products (diesel, gasoline, liquefied petroleum gas), and is then transported and distributed by the retailers. It often happens that the refineries are not only located far away from the extraction sites, but also from the consumption sites (for example, some countries that extract oil do not have enough refining capacity, so they export crude oil and import oil products). The natural gas extracted at the well is transported through ships and pipelines. Several compression stations are placed along the pipelines. In case the gas needs to be transported by ship, a Energy Management Lecture Notes 17 transformation step must be included, because gas is transported in the liquid state. Liquefaction stations at the ship departure point and gasification stations at the arrival point are responsible for this transformation. Finally, the gas arrives at the final users, which can be, for example, power plants for electricity or heat production. In both supply chains, it is easy to store both crude oil, oil products, or gas in different points of the supply chain, and so it is easy to match the demand and the supply. Therefore, the costs associated with these fuels be divided as follows: • The cost of the energy raw material (oil, gas, coal) • The costs of conversion (oil refining) and transportation (logistic costs) • The retail margins • Taxes 4.1.2 Electricity In the case of electricity, the suppliers operate the power plants. Then, the electricity is transported through transmission lines at a very high voltage (in order to decrease the losses) by the Transmission System Operator (TSO), and then through distribution lines (at high, medium or low voltage) to the final users (homes, offices and factories) by the Distribution System Operator (DSO). Between power plants, transmission, distribution, and final users, we have substations that are responsible for converting the voltage and connecting the different layers, acting therefore as infrastructures that provide safety and security to the operation of the grid. Finally, the electricity is sold to the customers by retailers (Figure 12). Figure 12 - Electricity supply chain (centralized) There are two main differences between the electricity supply chain and the oil and gas supply chain: • As it is much more difficult to store electricity efficiently (from the technical and economic point of view), the supply and the demand in electricity grids must be matched in real time • The transportation and distribution of electricity must be made in such a way that the voltage variation and frequency variations are very small. Otherwise, the system will get unbalanced, and the supply and demand must be decoupled, originating supply disruptions Energy Management Lecture Notes 18 These characteristics explain why the supply chain in most countries/regions was managed by only one company, and why the systems were centralized. Therefore, the costs associated with electricity can be divided as follows: • The cost of electricity generation (including the raw materials such as oil, gas, and coal, and the power plant operation costs) • The transportation and distribution costs (the use of the TSO and DSO grids, the regulation costs) • The retail margins • Taxes; 4.2 Types of energy markets The market design is a representation of the principles that describe how the market operates. In energy, the two common market designs are (Figure 13): • Monopoly: describes a market where only one company is responsible for the supply chain from the supply to the demand • Liberalized or competitive market: describes a market where there are multiple companies at the different stages of the supply chain (extraction, generation, retail) Figure 13 - Difference between monopoly and liberalized market designs Some energy markets, like coal, have been liberalized for many years, as there are multiple companies in all steps of the supply chain. Other markets, like the oil and gas market, were an oligopoly (when few companies operate as a monopoly) when they were started, but today can be considered as liberalized markets. The electricity market started out as a monopoly, but currently many countries are shifting to liberalized markets. Energy Management Lecture Notes 21 Figure 15 - Energy costs decomposition The energy component includes the costs of extracting the energy, converting it, and commercialising it. In general, they are charged by kWh (or litre, or m3) of consumed energy. The network costs correspond to the costs of transporting the energy through the infrastructure (transmission and distribution), and generally include a part that depends on the energy consumption (kWh). However, it can also depend on the power drawn from the grid (kW), in the case of electricity or gas. It also includes a fixed cost corresponding to the availability of supply. The Taxes and Levies costs correspond to the taxes associated with the consumption of any good (like VAT), but also to levies, which correspond to special payments to the government related to a very specific end. Examples of levies are levies associated with the system operation, such as those associated with specific energy resources (renewables, nuclear, CHP). 4.4.1 Oil and natural gas prices For oil and natural gas prices, the prices vary mostly according to the price of the raw resource, and then the taxes and levies that the governments decide to charge. Regarding the raw materials price, we can see in Figure 16 that the oil price (Brent) varied a lot throughout the represented period. These variations were due to geopolitical events (wars, embargos), and sometimes due to extreme weather events (like hurricanes in the gulf of Mexico), that disrupt the supply. A very interesting fact is that the average price has not evolved (the consumption of oil throughout the world has been stable over the last decades). In terms of gas (Russian gas and NBP), we can see that since 2010 there has been a decoupling between crude oil and natural gas prices (which were historically highly correlated). This has been mostly caused by the exploration of shale gas in US, which has led to an increase in gas availability, but also because gas and oil are not being used anymore for the same uses, and therefore are no longer substitute products. Oil is mostly used for transportation, and gas for heating and electricity generation. Furthermore, gas prices have been slightly decreasing over the last years. Energy Management Lecture Notes 22 Figure 16 - Oil and gas prices evolution in Europe between 2006 and 2016 (Source: IEA) Regarding the impact of taxes on prices, Figure 17 shows the diesel and gasoline prices in Europe, in 2016, for the different countries. It is possible to see that not only the price of the product is very similar between diesel and gasoline, but also between the different countries, with small variations (depending mostly on the refining capacity). However, the final price is very different, owing to the taxes and levies imposed by the governments (which impose final variations of 50% between the different countries). It is also interesting to see that in Europe diesel is less taxed than gasoline. The reason for this is that previously diesel was mostly used by freight transportation and collective transportation. Therefore, this was a way to penalize the use of individual transportation. Figure 17 - Diesel (left) and gasoline (right) prices in different EU countries in March 2018. 4.4.2 Electricity prices In Figure 18, the evolution of the cost of electricity and the weight of the different parts in the costs are represented. From 2008 to 2015, you can see a significant increase of the RES & CHP levies of electricity prices, whose purpose was to support the feed-in-tariff support mechanism of renewable technologies. Energy Management Lecture Notes 23 In a feed-in-tariff scheme, the renewable energy generation agents did not have to participate in the liberalised market since they got a fixed tariff for renewable generation, usually above market prices. This reduced the financial risk of the investors in this project, and it allowed the EU to be the leading region in the world in terms of renewable use in electricity. However, this achievement has been supported by the final users in the form of levies. Figure 18 - Evolution of electricity costs in EU Another example is Levies in Energy Efficiency, which were residual in 2008, but have been gaining importance in the overall taxes and levies of electricity prices. Figure 19 shows the electricity cost for household consumers in the different European Countries in 2015. Here you can see that not only the base energy price is different (depending on how you generate the electricity), but also that the taxes and levies relative weight varies significantly, as well as the VAT. Figure 19 - Electricity prices for households in EU (2016) Energy Management Lecture Notes 26 Therefore, the costs of energy depend on many different factors, and that is why, in general, an energy system, such as a country, or a building, is more robust to energy price variations if the energy mix is more diverse and flexible. 4.6 Dynamic pricing and Intervention in Price Setting Mechanisms The prices of energy may not be fixed, in order to reflect the fact that the production costs vary throughout different periods. This is particularly true for electricity. This is known as dynamic pricing, and can be implemented using different strategies: • Time-of-Use (ToU) • Critical peak pricing • Real Time pricing 4.6.1 Time-of-Use (ToU) Time-of-Use (ToU) is a dynamic pricing application in which fixed time bands are set and the price for each time band reflects the average wholesale price in the time band. Although less common, a high granularity-low dynamics application is possible, where hourly consumption is priced at monthly average prices. 4.6.2 Critical peak pricing Critical peak pricing is a dynamic pricing application in which a higher price is charged in limited periods when the consumption peak at the system level occurs, in an attempt to incentivize users to avoid consuming energy at peak time. 4.6.3 Real time pricing Real-time pricing is a dynamic pricing application in which the price is posted and communicated to the consumer in real time, reflecting the cost of the market in real time. Energy Management Lecture Notes 27 5 REGULATIONS AND STANDARDS In this chapter we introduce the concept of regulation and standards, and describe how policy and legal frameworks in the area of energy management have evolved until today, particularly in Europe. 5.1 Definitions 5.1.1 Regulation Regulation (or regulatory framework) is the set of official documents (laws) developed by a governmental agency that defines a set of rules, usually compulsory, that need to be implemented. Examples of regulation are European directives and the national laws that stem from those in each member state. 5.1.2 Standards Standards are a set of guidelines developed by recognized agencies/organizations that define a set of best practices that should be followed (and therefore are not compulsory). Examples of standards are the ISO50001, which sets the best practices to implement energy management systems in organizations. 5.2 European and National Legal Frameworks The aims set out in the EU treaties are achieved by several types of legal act. While some are binding, others are not. Some apply to all EU countries, others to just a few. The legal basis for the enactment of directives is Article 288 of the Treaty on the Functioning of the European Union (formerly Article 249 TEC), under section 1: “THE LEGAL ACTS OF THE UNION” According to Article 288, “To exercise the Union’s competences, the institutions shall adopt regulations, directives, decisions, recommendations, and opinions”. There are different types of EU legal acts: • A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States • A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods • A decision shall be binding in its entirety. A decision which specifies those to whom it is addressed shall be binding only on them • Recommendations and opinions shall have no binding force We will look now in particular to the process of how directives are implemented in the different member states through national regulation, as described in Figure 21. Energy Management Lecture Notes 28 Figure 21 - Transition from EU directive to Member state regulation Directives are approved, and Member States (MS) have a certain period to transpose these Directives into national Law. Usually there is some freedom for adaptation, since each country has its own realities and system. The objective is that, when the EU states a goal, MS produce the mechanics to fulfil that goal, internally, through their own legal tools. Parliaments can either decide to incorporate all definitions and procedures into a single piece of legislation, or attribute competence and authorization to a certain governmental entity for fulfilling the details. These entities have also the mandate to execute and regulate the application of such regulations. Technical standards can also be incorporated into legislation and acquire a similar strength, because they will be used by enforceable legal pieces of legislation or regulation. A typical example would be: 1. EU sets a Directive to improve EE 2. The country’s Parliament transposes the Directive into national law and mandates a regulatory agency to execute the attributions within this law 3. The regulatory agency writes a regulation that uses as standards an international standard to define what EE means, and how it is measured 5.3 History of regulation 5.3.1 World regulation During the 70s, many organizations started to point out some evidence and acknowledgement of the impacts from the use of fossil fuels in the energy sector and other especially pollutant industries. Consensus began to form in the 1980´s, and in 1988 the United Nations established the Intergovernmental Panel on Climate Change (IPCC) to analyse these impacts in detail. Energy Management Lecture Notes 31 5.3.2.3 Regulation focusing on promoting a decarbonized economy • Energy Performance in Buildings Directive (2002/91/EC,2006/32/EC, 2010/31/EU) • Directive 2009/28/EC, on the promotion of the use of energy from renewable sources (RES) • Directive 2012/27/EC, on energy efficiency • Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009, concerning common rules for the internal market in electricity, and repealing Directive 2003/54/EC • Commission Regulation (EU) 2015/1222, establishing a guideline on capacity allocation and congestion management • Commission Regulation (EU) 2016/1719, establishing a guideline on forward capacity allocation • Commission Regulation (EU) 2016/1447, establishing a network code on requirements for grid connection of high-voltage direct current system and direct current-connected power park modules • Commission Regulation (EU) 2016/631, establishing a network code on requirements for grid connection of generators • Regulation on laying down guidelines relating to the inter-transmission system operator compensation mechanism and a common regulatory approach to transmission charging (838/2010/EU) 5.4 ISO 50001 The International Standard Organization (ISO) is an international organization which includes 160 national standards bodies that has published more than 20000 standards in multiple fields. The “ISO 50001:2011 Energy management systems – Requirements with guidance for use” is a voluntary International Standard developed by ISO to give organizations the guidelines to implement energy management systems (EnMS). In particular, it establishes a framework to manage energy for industrial plants, commercial, institutional, and governmental facilities. The ISO 50001 assists organizations in making better use of their existing energy consuming assets, by: • Creating transparency and facilitating communication on the management of energy resources • Promoting energy management best practices and reinforcing good energy management behaviours • Assisting facilities in evaluating and prioritizing the implementation of new energy-efficient technologies • Providing a framework for promoting energy efficiency throughout the supply chain • Facilitating energy management improvements for greenhouse gas emission reduction projects • Allow integration with other organizational management systems such as environmental, and health and safety As many ISO standards, the ISO50001 relies on four core principles: • Plan, which consists of conducting an energy review and establishing the baseline, energy performance indicators (EnPIs), objectives, targets, and action plans necessary to deliver Energy Management Lecture Notes 32 results in accordance with opportunities to improve energy performance and the organization’s energy policy • Do, which consists of implementing the energy management action plans • Check, which consists of monitoring and measuring processes and the key characteristics of its operations that determine energy performance against the energy policy and objectives, and report the results • Act, which consists of taking actions to continually improve energy performance and the EnMS. Energy Management Lecture Notes 33 6 ENERGY CONTRACTS In this chapter, we introduce the basic concepts related to energy contracts, and provide an overview of the different types of contracts that can be established. 6.1 Contract definition In very simple terms, a contract is an agreement between two or more persons or entities with specific terms (Figure 23), in which there is a promise to do something in return for a valuable benefit. Figure 23 - Contract definition In particular, the existence of a contract requires finding an offer and an acceptance of that offer, a promise to perform, a valuable consideration (which can be a promise or payment in some form), a time or event when performance must be made, the terms and conditions for performance (including fulfilling promises), and an intention to affect legal obligations. Overall, the following elements must be present: • Performance • Payment • Price • Terms and conditions Depending on how the deal is structured, the performance and its payment can be designed differently. It may be based in a single performance (e.g. buy an appliance) and payment, or in several instalments as a recurrent service (e.g. contract of electricity or gas). 6.2 Types of energy contract Figure 24 summarizes the types of energy contracts that can be found: Energy Management Lecture Notes 36 6.2.2.2 Comfort In the Nordic countries (Scandinavia), these contracts settle the provision of the level of comfort or level of service, which is outsourced to the ESCO firm. These contracts will go beyond the provision of energy for the level of comfort and take care of full maintenance, including a healthy indoor environment, aesthetics, etc. 6.2.2.3 Contract Energy Management (CEM) A CEM is a more generic contract that includes not only the provision of energy services, but also other more general energy management features, including the maintenance of the equipment, reporting, training, etc. 6.2.3 Energy Performance Contracts (EPC) An “‘energy performance contracting’ means a contractual arrangement between the beneficiary (client) and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in accordance to a contractually agreed level of energy efficiency improvement, or other agreed energy performance criterion, such as financial savings. Figure 25 - Energy Performance Contract structure In the EPC, there are usually three phases (Figure 25): • The first phase, in which an energy audit is performed, and a set of energy management measures are defined. The ESCO is responsible to implement (procurement, installation) and manage (operate and maintenance) the systems. In this case, it is developed a baseline model – this model describes the energy demand of the installation under different scenarios (for example different weather conditions) before the measures are implemented. This model is used not only to estimate the savings and provide data for the financial analysis, but mostly to define the reference model from which the savings will be calculated. This model should Energy Management Lecture Notes 37 be developed according to the guidelines of measurement and verification protocols like IPMVP • The second phase, when the measures are implemented. The savings, calculated from the difference between the new consumptions and the baseline model (not the old consumption), are shared between the provider (ESCO) and the beneficiary (client) during a certain period (typically around 7 years). The share of the savings is the way the ESCO is compensated from the investment. Depending on the terms, these savings may be guaranteed (the client gets for sure a certain amount of savings) or shared (the client and ESCO share whatever is saved) • After the contract, the client will still benefit from such measures but will save the whole saved energy costs Energy performance contracts are therefore a very good instrument to overcome the two of the main hurdles to implement good energy management programs: • Most organisations (building owners) don´t have the initial capital upfront to invest in Energy Efficiency measures and banks are not specialised in this type of investment (or able to make an offer) • The technical complexity is very high, so even many dedicated energy managers do not have the knowledge to go throughout the whole process, from procurement to managing the projects Energy Management Lecture Notes 38 III. TOOLS Energy Management Lecture Notes 41 This discount rate may represent different factors like inflation, the cost of capital or the risk of the investment. For risk-free investment, it is often considered as the interest rate given by the treasury bonds of central banks at 10 years. The Weighted average cost of capital (WACC) is the most commonly used discount rate. 7.1.4 Cash flows When we are dealing with project evaluation, we can split the money flows between costs and revenues, by nature in the following categories: • Investment (value used to buy an asset required for the project) • Operating (value used to operate the asset required for the project) • Financing (The financing costs are related to how much is it necessary to finance the activities of the project) The cash flow is the net balance between positive and negative money flows in the project and is usually represented by the letter C. Positive cashflows represent gains for the company, while negative cashflows represent losses or expenses to the company. 7.1.4.1 Investment cashflows The investment cashflow describes the use of money to develop the project. Usually, it is a cashflow spent at the beginning of the project and therefore its value does not need to be updated according to the time-of-money principle, and therefore it is usually represented separately from the other cashflows, through the letter I. The investment is always a negative cashflow. In other cases, the investment may be split in different periods, and, in that case, the future investments need to be updated according the discount rate. The way you decide to finance the project, also called the capital structure, plays a central role in financial analysis. You can use an opportunity cost analysis to help you decide how to best capitalise a project. The projects may be financed by: • Equity, which means the company is using its own resources to finance the project. These resources may be the company savings in a bank, or may come from the sale of shares to investors, or even from loans from shareholders • Debt, which means the company will use a loan from a bank. This loan may be a short, medium or long-term loan, usually with different interest rates • A mix of both equity and debt If you use equity, you will use resources that could be used to develop other activities in the company. If you finance your capital through debt, you must pay it back even if you aren’t making any money. And again, money allocated to servicing debt can’t be spent on investing in the business or pursuing other investment opportunities. 7.1.4.2 Operation cashflows The operation cashflows are the flows of money that result from the implementation of the project. They may refer to: Energy Management Lecture Notes 42 • Revenues or savings generated to the company. In this case, the cashflows are positive • Operation costs, like acquisition of resources (human or material) or maintenance costs. In these cases, the cashflows are negative 7.1.4.3 Financial cashflows These are the cashflows associated with the finance of the project. These may refer to • Interest rates of loans, in case the investment was made through debt (and are negative) • Taxes (negative cashflows) or tax abatements (positive cashflows) • Depreciation of the assets (reduction of the actual value of an asset) • Salvage (if you are able to sell assets used in the project to other company, and in that way make a positive cashflow at the end of the project) 7.2 Project evaluation indicators There are three basic indicators that should be computed to evaluate a project and aid in the decision of developing it or not: net present value, internal rate of return and payback period. 7.2.1 Payback Period The easiest metric to evaluate is the payback period, which provides an indication of how much time is required for the investment to “repay” the sum of the original investment. It can be calculated using the following formula: 𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 = 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑁𝑒𝑡 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 (5) The payback can be calculated in a simplified way – where the time value of money is not taken into account - or in a discounted way, where the net cash flows are calculated using the present cost (discounted payback period). If the payback is smaller than the total period of analysis, the project should be done; if it is higher, than it means the cash flows will never be enough to repay the investment. However, this metric does not provide any indication on how much value will be generated by the project, so it should be only used to make a preliminary assessment of the project. 7.2.2 NPV The first indicator to evaluate a project is the Net Present Value (NPV), which basically estimates the value that will be gained at present costs by developing the project. This estimate consists in adding all future net earnings (the cashflows) to the initial investment that is required to execute the project (which is a negative cashflow, usually in year 0). The Net present value (NPV) of a project represents the potential change in an investor’s wealth caused by that project taking into consideration the time value of money. To calculate the net present value, it is necessary to provide the following inputs: • the investment • the cashflows in the successive periods of the project; Energy Management Lecture Notes 43 • the discount rate. The formula to calculate it is given by 𝑁𝑃𝑉(𝑖, 𝑁) = ∑ 𝐶𝑡 (1 + 𝑖)𝑡 𝑁 𝑡=0 = −𝐼𝑜 + ∑ 𝐶𝑡 (1 + 𝑖)𝑡 𝑁 𝑡=1 (6) where Ct are the cashflows in year t. Remember that the investment I is a negative cashflow in year t=0. The NPV can have three different results: positive, null or negative (Table 2). Table 2 - How to interpret the NPV value NPV RESULT DECISION NPV>0 The investment would add value The project may be accepted NPV<0 Theinvestment would subtract value The project should be rejected NPV=0 The investment would neither add or subtract value We should be indifferent in the decision whether to accept or reject the project. This project adds no monetary value. Decision should be based on other criteria, e.g., strategic positioning or other factors not explicitly included in the calculation. In case of mutually exclusive projects (i.e. competing projects), accept the project with higher NPV. If the cash flows are even (i.e. the cash flows are equal for all different periods), the present value can be easily calculated by using the following formula: 𝑁𝑃𝑉(𝑖, 𝑛) = 𝐶 × ( 1 − (1 + 𝑖)−𝑛 𝑖 ) − 𝐼𝑜 (7) where C is the constant cashflow. The advantages of using the NPV are: • it accounts for the time value of money which makes it a sounder approach than other investment appraisal techniques which do not discount future cash flows such payback period • Net present value is even better than some other discounted cash flows techniques such as IRR. In situations where IRR and NPV give conflicting decisions, NPV decision should be preferred The disadvantages are: Energy Management Lecture Notes 46 In the end, the balance between the investment, and the sales from power plant minus the expenses in operating and financing will generate enough cash flows not only to payback the investment in 3 years, but also to generate additional earnings. Now, of course, this depends on the considered interest rate. One important aspect of project evaluation is to look to the evolution of cash flows and not only to the result (NPV, IRR or Payback Period). The reason is that the NPV, IRR and Payback Period are aggregated indicators, and even if they are all positive, they may be hiding some aspects that may compromise the project. It is important to observe if in one of the periods there is the risk that the generated cashflows are not enough to cover the negative cashflows. This would represent a situation (even if it occurs in only one year) where, in practice, the company would not be able to cover the expenses, and therefore it would be necessary to ask for an additional loan, or use other financial resources from the company. Energy Management Lecture Notes 47 8 ENERGY AUDIT 8.1 Objective An energy audit is a process to perform the detailed analysis of the energy use in a certain equipment, activity, installation, building, or campus. The objective is to characterize in detail where, when and how the energy is used, in order to identify and develop solutions to improve the energy management by increasing the efficiency in the demand and/or supply. These measures can span from installing or replacing an equipment, to changing how a process in done (for example, the order or the period of the day when it is done), or even by promoting user behaviour changes. 8.2 Activities An energy audit involves, to a less or greater detail, all the following activities • Quantify the uses and the costs of all energy vectors, through the analysis of energy bills from previous years • Identify and characterize the main energy systems in the facility, by characterizing the main end-uses, and evaluating the main systems technologies (lighting, HVAC, HW) • Analyse the envelope features regarding the thermal performance • Verify the status of the energy generation and distribution equipment's, like boilers, chillers, co-generation, etc. • Monitoring and control of energy uses • Develop a baseline model to estimate and validate potential savings • Identify main energy efficiency measures • Develop an implementation plan, called the Energy Management Plan or the Action Plan, which is a strategy to increase the energy efficiency of the facility. This plan describes the solutions, efficiency objectives to be achieved, and the implementation plan 8.3 Energy audit protocol Energy audits usually follow a protocol that consists of six main steps: • Preparing and planning • Facility inspection • Field work • Data analysis • Energy audit reporting • Energy action plan 8.3.1 Preparation and planning The main objective of this phase is to collect data regarding the energy use of the system that is being audited. This may include collecting energy bills (3 or more years if available), collect data regarding building envelope from building description (blueprints, bill of materials, etc.), inventory and characteristics of the main equipments. It is also important to collect additional info, like the organization functional chart, weather data, electric, lighting and mechanical systems, energy policy documents describing the vision and objectives of the company (if there are no such documents, the Energy Management Lecture Notes 48 Energy Plan should develop them), and, most importantly, the contacts of the maintenance and energy managers and teams. The main objective of this phase is to get acquainted with the installation, perform a preliminary data analysis, and find any awkward result, which can be used to identify specific systems and operations that need to be analysed in detail. This phase should include a preliminary visit, together with the facility manager, to see how the facility operates. This visit should be used to collect missing data (if required), observe the building envelope and the systems and eventually to identify energy management measures that could create immediate savings. 8.3.2 Facility inspection The objective of this phase is to perform a detailed analysis of the installation by collecting additional data that is missing from the first analysis, including the development of an energy consumption baseline (which should consider normalized climate data), the development of an energy balance of the system, an identification of the energy services, the drawing of reference energy systems schemes and a characterization of the equipment's performance. With the collected data and the characterization of the facility, this phase is used to prepare the field work (next phase), in particular by identifying the list of equipment that will be measured, the list of equipment that needs to be used for measurement, the measuring procedure (one point measure, long data collection), and eventually prepare some interviews to complete information. 8.3.3 Field work The field work phase is used to complete the collection of data process. It usually involves the following activities: • Measure energy consumption of main sectors/equipment, like hot water, heating and ventilation • Verify electric installations and other main systems, in particular to assess the lack of maintenance • Continuous monitoring of main consumption points of energy to obtain load diagrams. This can involve one-point measures, one-day or one-week campaigns Complementary measurements to collect more information can be done, including • Measuring oom temperatures and illuminance • Characterization of the schedule of the main equipments (through interviews, or direct observations) • Characterization of the envelope in detail, and how users interact with it (again, through interviews or observations) • Characterization of utilization patterns 8.3.4 Data analysis The data analysis phase is the most important, since it is when the disaggregation of energy consumption by energy services is done, the detailed energy balance is completed, the detailed load diagrams (daily, weekly and if possible annual evolution) are developed, and from these the energy indicators and specific consumptions are evaluated. Energy Management Lecture Notes 51 • IPMVP Volume III: provides greater detail on M&V methods associated with new building construction, and with renewable energy systems added to existing facilities 9.3 IPMPV principle After implementing energy management measures, the energy savings cannot be directly measured, because savings represent the absence of energy consumption. Instead, the IPMVP suggests that savings are determined by comparing measured consumption or demand before and after implementation of a program, making suitable adjustments for changes in conditions. The comparison of before and after energy consumption or demand should be made on a consistent basis, using the following general M&V equation: Savings = (Baseline Period Energy – Reporting Period Energy) ± Adjustments (10) As previously explained in section 6.2.3, it requires the development of a model that represents the consumption before implementing the energy management measures, which will be used to estimate how the facility would consume if the measures had not been implemented. It is with this predicted value that we will compare the current consumption, and not with the energy consumption before the measures implementation. The fundamental concept introduced by the IPMVP is the adjustments concept, which means that the model has to take into consideration the factors that influence the demand. Figure 28 clearly explains the importance of the M&V protocol. After implemented the energy management measure (called EMC for energy measure conservation in IPMVP), the demand of the facility decreased initially but then increased. What happened was that the facility increased the production. Even so, had the measures not been implemented, the total consumption would have been much higher. Figure 28 - IPMVP principle (Source: evo-world.org) Energy Management Lecture Notes 52 10 LIFE CYCLE ASSESSMENT (LCA) Life Cycle Assessment (LCA) is a multi-step procedure for compiling and examining the inputs and outputs of materials and energy, and the associated potential environmental aspects, directly resulting from the functioning of products, processes or services through their life cycle. Furthermore, the results of the inventory and impact phases in relation to the objectives of the study will be interpreted. The life cycle is constituted by consecutive and interlinked stages of a product or service system, from the extraction of raw materials, the processing, manufacturing, and fabrication of the product, the transportation or distribution of the product, the usage by the consumer, and the disposal or recovery of the product after its useful life (Figure 29). The process is naturally iterative, as the quality and completeness of information, along with its probability, are constantly being tested. Figure 29 - Example of a schematic representation of a Life Cycle Assessment Electric Vehicles are a good example of the insights provided by this methodology. It is true that the use of these vehicles has very low environmental impacts, like green-house-gas emissions. However, their manufacturing process has at least as much impact as the conventional vehicles, and their disposal has more impacts, since the recycling of batteries is a complex process. Therefore, one of the policy recommendations that may arise from the application of LCA to electric vehicles is the need to define processes to recycle batteries. The advantages of LCA are: • It provides a holistic view, enabling the assessment of global and regional environmental impacts • It adds objectivity to impact assessment • It provides information for improvements, communication, etc. As any methodology, it has its limitations, since: • It is based on simplified models of a complex reality • It depends on the definition of the scope • Its implementation depends significantly on the data availability • It could be time consuming, depending on the scope and objectives Energy Management Lecture Notes 53 LCA involves analyses of production systems and provides evaluations of all upstream and downstream energy inputs and various environmental emissions. There are four phases in the LCA study (a fifth one can also be considered) (Figure 30): Figure 30 - Life cycle assessment framework. 1. Goal and Scope Definition – in which the product(s) or service(s) to be assessed are defined, the functional unit is chosen, and the required level of detail is defined 2. Inventory Analysis (also known as LCI - life cycle inventory) – in which extractions and emissions, the energy and raw materials used, emissions to the atmosphere, water and land, are quantified for each process, then combined in the process flow chart and related to the functional basis 3. Impact Assessment (also known as LCIA - life cycle impact assessment) – in which the effects of the resource use and emissions generated are grouped and quantified into a limited number of impact categories which may then be weighted for importance 4. Interpretation - in which the results are reported in the most informative way possible and the need and opportunities to reduce the impact of the product(s) or service(s) on the environment are systematically evaluated 5. Improvement – in which the system is modified in some way to reduce or ameliorate the observed environmental impact. As said previously, this phase is optional. Data used in LCA should be consistent, quality assured, and reflect actual industrial process chains. Methodologies should reflect a best consensus based on current practice. LCA is used in decision making as a tool to improve product design, for example when choosing materials, selecting technologies, specifying design criteria, and when considering recycling. LCA allows for the benchmarking of product system options, and can therefore be used in decision making regarding purchases, technology investments, innovation systems, etc. The main benefit of LCA is that it provides a single tool that is able to provide insights into upstream and downstream trade-offs associated with environmental pressures, human health, and the consumption of resources. These macro-scale insights complement other social, economic, and environmental assessments. LCA should not be used to compare environmental impacts of totally different products and does not replace local dependency assessments (e.g. Environmental Impact Assessment). Energy Management Lecture Notes 56 10.2 Inventory Analysis In this phase, the data describing the system is collected and converted to a standard format to provide a description of the physical characteristics of the system of interest (Figure 32). The inventory describes the flows between the system and the environment for a certain (product) system. Inventory flows include inputs of water, energy and raw materials, and releases to air, land, and water (Figure 33). To develop the inventory, a flow model of the technical system is constructed using data on inputs and outputs. The input and output data needed for the construction of the model are collected for all activities within the system boundary, including from the supply chain. Figure 32 - Flow chart of an industrial process - typical anodising line. Figure 33 - Life cycle assessment terminology (according to ISO 14040:2006). Energy Management Lecture Notes 57 Data must be related to the functional unit defined in the goal and scope definition. Two types of data may be used: • Primary data, which is data that is specific to the product or service studied (generally collected in the form of a questionnaire which is sent to manufacturers and suppliers) • Secondary data, which is generic data that is representative of the product or service studied (in the form of environmental datasets available for transport, waste treatment, etc. Primary and secondary data can then be combined to create an inventory. 10.2.1 Allocation methods Most industrial processes yield more than one product and they recycle intermediate or discarded products as raw materials. For example, a cow can generate milk, leather and meat. In these cases, it is necessary to allocate the impacts to each product. The difficulty comes regarding which part of the original inputs (for example the water and food eaten by the cow) is allocated to each product. As this can change significantly the results, allocation should always be avoided. This can be done by splitting the process in such a way that it can be described as two separate processes, where each has a single output. Another option is to expand the system boundaries to allow the inventory of alternative processes that can produce the same product (Figure 34). Figure 34 – System boundary expansion example on how to avoid allocation. Often, this is not possible, and allocation needs to be done. In that case, there should be allocation based on the following order: Physical properties (e.g. mass) Economic properties Number of subsequent uses of the recycled material Energy Management Lecture Notes 58 Nonetheless, the two main options for allocation methods are (Figure 35): • Physical allocation - Use of physical causality (mass allocation, but energy could be also applied, e.g. incineration – electricity and heat). If not possible • Use other relationships – For example, economic allocation Figure 35 - Physical and Economic Allocation example. How is the economic allocation done? • Market value of the scrap material or recycled material in relation to market value of primary material • Ratio between waste (Product system 1 to recycling) or secondary material (recycling to Product system 2) prices, in relation with their sum. Who drives the market? However, note that prices can fluctuate significantly (which interferes with the analysis), and economic values are not always easy to obtain. 10.3 Impact Assessment In this phase, the physical flows are translated into potential environmental impacts. It consists in the following steps: • Selection of the impact categories and best available models for their quantification. This is generally related to the selection of the environmental models used to promote the characterization of the environmental impacts • Identification of the environmental interventions that contribute to a given impact category • Quantification of the contribution of the environmental interventions to a given impact category • Normalization of the results of the previous phases, using reference values • Aggregation of the different impacts to reduce the number of the impact categories in the final result 10.3.1 Classification The results must be assigned to impact categories. For example, CH4 or CO2 could be assigned to an impact category called “Climate change”. It is possible to assign emissions to more than one impact category at the same time, for example, SO2 is simultaneously responsible for an impact on “Acidification” as well as in “Human health” or “Respiratory diseases”. Energy Management Lecture Notes 61 Figure 37 - Example of a characterization table. 10.3.3 Normalization Normalization is a procedure needed to show to what extent an impact category has a significant contribution to the overall environmental problem. This is done by dividing the impact category indicators by a “Normal” value. There are different ways to determine the “Normal” value. The most common procedure is to determine the impact category indicators for a region during a year and, if desired, divide this result by the number of inhabitants in that area. Normalization serves two purposes: 1. Impact categories that contribute only a very small amount compared to other impact categories can be left out of consideration, thus reducing the number of issues that need to be evaluated 2. The normalized results show the order of magnitude of the environmental problems generated by the products life cycle, compared to the total environmental loads in Europe Figure 38 shows the normalized characterization factors for the previous example of a light bulb. Energy Management Lecture Notes 62 Figure 38 - Example of Normalization Table. Considering the case of methane, the steps for doing an analysis of its impact assessment are exemplified on Figure 39. Figure 39 - Impact Assessment steps example. 10.4 Interpretation In this phase, the results are evaluated and interpreted in the context of their significance, uncertainty, etc. LCA must be used for decision making by primary drivers for: • Learning more about the environmental performance of products and services • Minimizing production costs • Minimizing environmental and human health damage Energy Management Lecture Notes 63 • Understanding trade-offs between multiple impact categories and product phases 10.5 Improvements After performing these 4 phases the system should be modified in some way to reduce or ameliorate the observed environmental impacts. Energy Management Lecture Notes 66 Figure 41 - Example of a system with one process 11.3.2 Specific energy consumption of the process Each process is described by a Specific Consumption (CE) of energy and materials, which is a measure of energy consumed per unit mass of production. In the case of process A, in Figure 41, the specific energy is given by: 𝑪𝑬𝑨 = Energy consumption of operation A Useful Production of operation A = 𝑬𝑨 𝒎𝟑 [𝑘𝐽/𝑘𝑔] (11) 11.3.3 Specific energy consumption of the product 11.3.3.1 Specific Consumption of Production The specific energy consumption of a product is given by the energy required to produce the product, which includes both the energy used by the process itself and the energy used in the previous processes of the materials that are being used at the current product (embed energy). In the case of material 1 (m1), in Figure 41, the specific energy is given by: 𝑪𝑬𝟏 = Energy consumption in previous operations Mass of 1 = 𝑬𝟏 𝒎𝟏 [𝑘𝐽/𝑘𝑔] (12) *Note that, (like in the case depicted in Figure 41), if the material inputs (m1 and m2) come from outside the system border, it is only possible to calculate it’s specific energy consumption if it is supplied enough information regarding the energy that was used to create that material input up to that point. Product 3 includes materials 1 and 2, and hence it is necessary to consider the energy used to produce those inputs. Therefore, the specific consumption of product 3 is: CE𝟑 = 𝐸𝐴 𝑚3 + 𝑚1 + 𝑚2 𝑚3 ( 𝑚1 𝑚1 + 𝑚2 𝐸1 𝑚1 + 𝑚2 𝑚1 + 𝑚2 𝐸2 𝑚2 ) = CE𝑨 + 𝑺𝑨(𝒇𝟏 CE𝟏 + 𝒇𝟐 CE𝟐) (13) where SA is the residues formation factor, f1 and f2 are mass proportions of the product and CE1 and CE2 are the specific energy consumption of products 1 and 2, the results being in [𝑘𝐽/𝑘𝑔 ]. Operation Am2 m3 mR EA Materials lnput Production Energy consumption Residues m1 Energy Management Lecture Notes 67 11.3.3.2 Residues formation factor For the same example, the residue formation factor is given by: 𝑆𝐴 = Materials input of A Production of A = 𝑚1 + 𝑚2 𝑚3 (𝑆𝐴 ≥ 1) (14) which is 1 in case there is no residues and higher than 1 when there are residues. Remember that based on the mass balance MR=M1+M2-M3 11.3.3.3 Mass Proportion The mass proportion is given by the following formula. 𝑓# = Material input # Total materials input (15) Then for the case depicted in Figure 41 the mass proportions of the inputs in Operation A are: 𝑓1 = 𝑚1 𝑚1 + 𝑚2 , 𝑓2= m2 m1+m2 , (𝑓𝑖 < 1 𝑎𝑛𝑑 ∑ 𝑓𝑖 𝑖 = 1) (16) 11.3.3.4 In a nutshell An overview of a specific consumption of production is depicted on Figure 42. Figure 42 - Specific Consumption of Production Overview. (17) 11.3.4 Connections of processes The systems may be combinations of different types of connections between processes. In general, we have three types of connections that can be found: Operation Am2 m3 mR EA Materials lnput Production Energy consumption Residues m1 Energy Management Lecture Notes 68 • Sequential processes; Sequential processes are computed in the same way the previous consumptions were calculated, that is, the energy consumption of a product is given by the sum of direct energy used to produce it, and the indirect energy that was used in that past to produce its inputs in a chain (Figure 43). Figure 43 - Example of Sequential processes. 𝑪𝑬𝟏 = 𝐶𝐸1 (𝑂𝑢𝑡𝑠𝑖𝑑𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑦𝑠𝑡𝑒𝑚 𝑏𝑜𝑟𝑑𝑒𝑟) 𝑪𝑬𝟐 = 𝐶𝐸𝐴 + 𝑆𝐴 × 𝐶𝐸1 𝑪𝑬𝟑 = 𝐶𝐸𝐵 + 𝑆𝐵 × 𝐶𝐸2 𝑪𝑬𝟒 = 𝐶𝐸𝐶 + 𝑆𝐶 × 𝐶𝐸3 or 𝑪𝑬𝟒 = CE𝐶 + 𝑆𝐶(CE𝐵 + 𝑆𝐵(CE𝐴 + 𝑆𝐴CE1)) (18) • Divergent processes; Knowing that the energy consumption of a product is given by the sum of the direct energy used to produce it and the indirect energy that was used in that past to produce its inputs, if two separate products come from the same source then their specific energy consumption will be equal (Figure 44). Figure 44 - Example of a divergent process. 𝑪𝑬𝟏 = 𝐶𝐸1 (𝑂𝑢𝑡𝑠𝑖𝑑𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑦𝑠𝑡𝑒𝑚 𝑏𝑜𝑟𝑑𝑒𝑟) 𝑪𝑬𝟐 = 𝐶𝐸𝐴 + 𝑆𝐴 × 𝐶𝐸1 𝑪𝑬𝟑 = 𝐶𝐸𝐴 + 𝑆𝐴 × 𝐶𝐸1 = 𝑪𝑬_𝟐 (19) • Converging processes. Energy Management Lecture Notes 71 Finally, the specific energy consumption of material 3 is given by 𝑪𝑬𝟑 = 𝐶𝐸𝐴 + 𝑆𝐴 × (𝑓1× × 𝐶𝐸1 + 𝑓2× × 𝐶𝐸2) + 𝑆 𝐴𝑇 𝑇 × 𝐶𝐸𝑇 𝑇 (24) Note that the specific energy consumption of the residue (CER) and the outputs of the Treatment operation (CE4) will continue to be considered as null, again due to the fact that this extra consumption is counted as part of the total energy required to create the useful output (m3). CE3 must consider all the energy that was consumed to manufacture Product 3 (m3), thus including the extra energy that was (unintentionally) used to create the residue (mR), and also the energy used to treat that same residue. 11.3.6 Specific energy consumption of Recovery Processes (Recycling, Re-use, etc…) Figure 47 - Example of a system with a transforming operation (A), Residue Treatment (T) and Recycling Operation (T). Consider the case depicted in Figure 47. Like the previous examples, the energy consumption directly related to non-useful outputs (mR and m3 in this case) should be considered null and included in the consumption of the useful output (m2). However, if a recycling process is introduced in the system, it will create a new useful output (in this case m4). Operation A will then have two material inputs instead of one: one from Raw Materials from outside of the system boundary (m1), and another from the Recycling Operation (m4) within the system boundary (such as seen in Figure 47). Note that recycling procedures can be outsourced. In that case, it can be considered to be and out of the system boundary. A direct consequence of recycling is that the amount of Raw Material (m1) required will reduce as there will be another material source. But how about the Energy Consumption? The Recycling Operation receives input originated from waste flows whose energy consumption is considered null. Therefore, the specific energy consumption of the material output (m4) will only consider the Energy Consumption of the Recycling Operation itself: 𝑪𝑬𝟒 = 𝐶𝐸𝑅 + 𝑆𝑅 × 𝐶𝐸3 𝑪𝑬𝟑 = 0 (𝑏𝑦 𝑐𝑜𝑛𝑣𝑒𝑛𝑡𝑖𝑜𝑛) 𝑪𝑬𝟒 = 𝐶𝐸𝑅 CE𝟐 = CEA + S𝐴(f1CE1 + f4CE4) + S𝐴 𝑇CET T (25) Energy Management Lecture Notes 72 11.4 Example Presented in Figure 48, is an example of the representation of an industrial system with 6 processes. Figure 48 - Example of an industrial system 1. How to calculate Mass Flows? (with the mass flow of the final product provided). 𝑅𝑒𝑠𝑖𝑑𝑢𝑒 𝐹𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 𝐹𝑎𝑐𝑡𝑜𝑟: 𝑆 ≥ 1 = 𝐼𝑛𝑝𝑢𝑡 𝑖𝑛 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑈𝑠𝑒𝑓𝑢𝑙 𝑂𝑢𝑡𝑝𝑢𝑡 = 𝑆 𝑇 + 1 𝑅𝑒𝑠𝑖𝑑𝑢𝑒 𝑇𝑜 𝑏𝑒 𝑇𝑟𝑒𝑎𝑡𝑒𝑑 𝐹𝑎𝑐𝑡𝑜𝑟: 𝑆𝑇 < 1 = 𝑅𝑒𝑠𝑖𝑑𝑢𝑒 𝑡ℎ𝑎𝑡 𝑐𝑜𝑚𝑒𝑠 𝑓𝑟𝑜𝑚 𝑡ℎ𝑒 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑈𝑠𝑒𝑓𝑢𝑙 𝑂𝑢𝑡𝑢𝑝𝑢𝑡 𝑓𝑟𝑜𝑚 𝑡ℎ𝑎𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑆𝐷 > 1 = 𝑚4 + 𝑚5 𝑚6 = (𝑆𝐷 𝑇 + 1) 𝑆𝐷 𝑇 = 𝑚7 𝑚6 = (𝑆𝐷 − 1) (𝒎𝟒 + 𝒎𝟓) = 𝒎𝟔 × 𝑺𝑫 𝒎𝟕 = (𝑺𝑫 − 𝟏) × 𝒎𝟔 = 𝑺𝑫 𝑻 × 𝒎𝟔 𝑀𝑎𝑠𝑠 𝐹𝑙𝑜𝑤 𝑃𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑜𝑛𝑠: 𝑓𝑥 ≤ 1 = 𝐼𝑛𝑝𝑢𝑡 𝑓𝑟𝑜𝑚 𝑓𝑙𝑜𝑤 𝑥 𝑆𝑢𝑚 𝑜𝑓 𝑎𝑙𝑙 𝐼𝑛𝑝𝑢𝑡𝑠 , ∑ 𝑓 = 1 𝑓4 = 𝑚4 𝑚4 + 𝑚5 (=) 𝒎𝟒 = (𝒎𝟒 + 𝒎𝟓) × 𝒇𝟒 𝑓5 = 𝑚5 𝑚4 + 𝑚5 (=) 𝒎𝟓 = (𝒎𝟒 + 𝒎𝟓) × 𝒇𝟓 𝑓4 + 𝑓5 = 1 𝑆𝐶 = 1 = 𝑚3 𝑚5 (=) 𝒎𝟑 = 𝒎𝟓 𝑆𝐵 > 1 = 𝑚2 𝑚4 (=) 𝒎𝟐 = 𝒎𝟒 × 𝑺𝑩 (=) 𝑹𝑩 = (𝟏 − 𝑺𝑩) × 𝒎𝟒 𝑓1 = 𝑚1 𝑚1 + 𝑚9 (=) 𝒎𝟏 = (𝒎𝟏 + 𝒎𝟗) × 𝒇𝟏 𝑓9 = 𝑚9 𝑚1 + 𝑚9 (=) 𝒎𝟗 = (𝒎𝟏 + 𝒎𝟗) × 𝒇𝟗 𝑓1 + 𝑓9 = 1 𝑆𝑅 = 1 = 𝑚9 𝑚8 (=) 𝒎𝟗 = 𝒎𝟖 𝐴𝑙𝑙 𝑡𝑟𝑒𝑎𝑡𝑒𝑑 𝑅𝑒𝑠𝑖𝑑𝑢𝑒 𝑔𝑜𝑒𝑠 𝑡𝑜 𝑅𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔, 𝒎𝟖 = 𝒎𝟕 Hint: If the diagram shows a residue flow, S>1. If not stated otherwise, consider it to be 1. Energy Management Lecture Notes 73 2. Calculate Operation Specific Energy Consumption (CE) 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝐸𝑛𝑒𝑟𝑔𝑦 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 = 𝐸𝑛𝑒𝑟𝑔𝑦 𝐶𝑜𝑛𝑠𝑢𝑚𝑒𝑑 𝐵𝑦 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑈𝑠𝑒𝑓𝑢𝑙 𝑂𝑢𝑡𝑝𝑢𝑡 𝑓𝑟𝑜𝑚 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑇𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡 𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝐸𝑛𝑒𝑟𝑔𝑦 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 = 𝐸𝑛𝑒𝑟𝑔𝑦 𝐶𝑜𝑛𝑠𝑢𝑚𝑒𝑑 𝐵𝑦 𝑇𝑟𝑒𝑎𝑡𝑚𝑒𝑛𝑡 𝐼𝑛𝑝𝑢𝑡 𝑜𝑓 𝑟𝑒𝑠𝑖𝑑𝑢𝑒 𝑡𝑜 𝑏𝑒 𝑡𝑟𝑒𝑎𝑡𝑒𝑑 Energy consumed per operation is supplied by the available data. Nevertheless, usually it must be converted to a single unit (usually either in Joules or kg-ton of Primary Energy). One must pay attention to the magnitude of the units and convert if needed! 𝐶𝐸𝐴 = 𝐸𝐴 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚2 + 𝑚3 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛 𝐶𝐸𝐵 = 𝐸𝐵 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚4 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛 𝐶𝐸𝐶 = 𝐸𝐶 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚5 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛 𝐶𝐸𝐷 = 𝐸𝐷 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚6 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛 𝐶𝐸𝑇 𝑇 = 𝐸𝑇 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚7 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛 𝐶𝐸𝑅 = 𝐸𝑅 × 𝑐𝑜𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑐𝑜𝑒𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑚9 × 𝑀𝑎𝑔𝑛𝑖𝑡𝑢𝑑𝑒 𝐶𝑜𝑟𝑟𝑒𝑐𝑡𝑖𝑜𝑛