June 18, 2016 Thinking Ahead No Comments

R
ecent events in South Africa regarding the cost of energy have highlighted the absolute necessity for energy conservation. Seen against a history of cheap power for the last 50 years, the recent changes have impacted strongly on many companies. I have previously written articles on this topic, as far back as 2006, long before the current Eskom crisis became the focal point of many power intensive operations. The focus then was as it is now, to maximize returns from limited energy resources. At the time the focus for me was on the efficiencies offered by all electric injection moulding machines, and the substantial savings that were being obtained by the companies far sighted enough to invest in those technologies. Ironically Eskom was one of the players interested in the technology at the time as part of their demand side management program. Many opportunities were lost to companies due to lethargic responses toward the adoption of the new technology. The period which followed was somewhat turbulent as it saw the introduction by Eskom of proposals to effectively triple energy costs in the medium term. So it appears that my efforts at the time were in fact not wide enough to address the problem, they should have included all aspects of energy conservation that a company could have effected.

PRESENT DAY
In preparing for today I have looked at things that can be done to an existing facility as well as those things which can be taken into account in designing a new facility. As with most things, every improvement comes with a cost attached. Luckily for me, I am not the one who has to justify these improvements to your respective boards; my job is to just make you aware of the possibilities available. The cost advantages of certain measures will not be immediately apparent, but increased productivity can be linked to increased environmental comfort and for every percentage point increase in efficiency or productivity, the returns for the company are easily calculated. So in considering the costs of some of the possible measures, it may not always be possible to immediately calculate a cost to benefit ratio, for the short term, but as most businesses are in business to last more than the current month or quarter, perhaps a longer term view of some returns on investment in energy conservation may be advisable. Many of the measures possible to reduce energy consumption over the medium to long term are once off expenses, with the payoffs derived from them becoming on-going contributions to the bottom line.

 

NEW PROJECTS

New projects are both the easiest and the most difficult to assess in terms of energy conservation. While it is New projects are both the easiest and the most difficult to assess in terms of energy conservation. While it is relatively easy to design a facility which takes into account every known measure to conserve energy and maintain a pleasant working environment there are other factors which like most things in life, turn a design exercise into an exercise in compromise. Initial costs are in many cases one of the most critical drivers of new projects, very often it is at this stage that the factors which will cause a company’s project to succeed or fail are built into the project. Not enough work is done on calculating the long term costs of not designing all of the possible energy saving measures into a facility. It’s far easier to look at short term recovery rates reliant on projected incomes, based on current pricing models, with perhaps a modest percentage increase per year, than it is to calculate the loss of production due to the poor design of facilities. The omission of many energy saving measures may at the time make the project viable in theory, but in the longer term may become the principal reason for failure.

SUCCESS OR FAILURE FACTORS

Many of the most successful projects I have been involved in have had at their core a high regard for environmental control, which in turn gave them a stability which their competitors lacked, and consequently allowed consistent longevity. This is not to say that these were necessarily energy efficient at the time, they weren’t, but they maintained a tight control on environmental parameters which allowed them to be highly successful. I have also witnessed facilities which removed the environmental controls, causing them to lose their production competitiveness and almost fail commercially in the process. These facilities became plagued by breakdowns provoked by environmental conditions, which the maintenance budget could not support for any length of time. The resultant loss of confidence and the switching to alternative suppliers by their customers damaged the businesses extensively, making them the target of other more successful businesses intent on eliminating competition.

OPTIONS

I believe that historically environmental factors have proved to be able to make or break a company’s efforts at any given project. It is with this perspective that I am here today, I want to explore and discuss with you the many options available to a company or a project designer. Carefully considered, energy efficiency, driven by the smart design of environmental factors, can become the most significant profit centre of a project. Energy saving measures and their impact on costs have been around for as long as I can remember. The only problem is that there has never been as urgent a need as there is right now to make use of the traditional as well as new techniques available to save energy and reduce the impact of traditional environmental factors. Domestically, I’m sure that everyone has heard of roof insulation and geyser blankets, but these are only a small portion of the domestic solution available and their contribution to reduced energy consumption is small compared to the possibilities available. A large Industrial facility has a larger impact on the community than a single residence, yet the trend for many years has been to cut costs as much as possible at the design stage. So in a break with this tradition, let?s look at some of the options available at the design stage and the contributions they can make to productivity and energy saving.

ENVIRONMENTAL FACTORS

One of the most remarkable environmental factors in Gauteng, in my experience is the number of days of sunshine we enjoy every year. Even more remarkable in my opinion is the radical temperature shifts we can see in a 12 hour period, on most typical winter days. Changes of 24 degrees in ambient temperature in a 12 Hour period are the rule, rather than the exception. The influence that this shift has on continuous production machinery has to a large degree been ignored by many companies, perhaps due to operating costs constraints or through lack of environmental analysis. Instead of fighting these factors with high energy consumption solutions, why not see how the natural energy that is causing these radically shifting conditions can be used to the benefit of the company?

THE ROLE OF SOLAR ENERGY

Solar energy by itself cannot make the kind of contribution to energy conservation that most companies would regard as significant in their operations. However solar energy combined with substantial insulation and solar water heating technology would significantly reduce the load on conventional climate control systems as well as water heating systems. The combinations of these two savings, in a factory that runs continuously, and requires heated water, for example for showers, may over the period of several years provide the company with an invisible competitive advantage. If the number of employees requiring showers is in the tens, or hundreds, the advantage can be calculated.

REST OF WORLD LESSONS

Factories in other parts of the world have since the inception of the industrialised era been designed with internal environment controls as the overriding factor in their design. Domestic residences have also been built with similar characteristics long before industrialization. Due to prolonged periods of adverse weather, they have had no choice but to design accordingly. Perhaps as a result of this, their efficiencies have always been superior to the rest of the world, although their costs have been higher when building facilities. We in South Africa are a highly innovative society, and there is absolutely no reason why we can’t adapt many of the Northern Hemisphere techniques to suit our conditions. The innovation for us will come from how we combine our circumstances with available technology and from that evolve new methods of making, working along with our conditions part of our profit margins, instead of relegating environmental control to a cost centre.

OPPORTUNITIES

The area of present day solar water heating has been pursued by many companies as a quick source of income in the domestic market. Relatively little research has been done in the industrial market for Solar Applications. I believe that this area presents substantial opportunities for technology companies to develop sustainable, viable, alternative energy powered solutions that will be in demand by other companies. Not only locally, but also globally. I have touched on a few of these, but the scope is a lot wider in this area than most people think. Energy costs are here to stay, and under the current socio-political conditions will escalate at the rate envisaged by the major players. The South African and global industry is faced with these realities, and in order to survive as commercially viable entities we have to not only confront these issues, but to find ways to profit from them. I have mentioned solar energy and insulation. In isolation both of those solutions are seen as merely additional costs. The payback of individual improvements in these areas is insignificant when taken individually, and not seen to generate short term profits. However, when several energy saving factors? combined contributions are assessed the value may well exceed the sum of the parts. If we were to design a facility that combined only a few of the more accepted features to conserve energy and increase the stability of the processing environment, we would have a scenario that could include, Solar energy, solid insulation, air insulation and a variety of solar powered ancillary devices ranging from ambient temperature control to water treatment.

BULK POWER

In South Africa for the most part, we assume there is a regular supply of reliable power and take it for granted. In many parts of Africa, there is no source of reliable power, and many companies exist, thanks only to their ability to generate their own power. Their operating costs are thus dependent on the cost of mostly diesel fuel used to power the generating sets. The inefficiencies in the generating systems invariably guarantee higher costs than power generated in bulk. The management of the accompanying noise and fumes from engine exhausts also add a cost and environmental component to such energy solutions. This further adds to the argument supporting the development of alternatively powered systems, in support of production and business facilities. In my limited experience outside of regular power supply areas in Africa, the focus is on replacing erratic power supplies with stable ones, and not as one would assume, reducing the reliance on power with alternate means as much as possible, to limit the use of generated power.

FAILURE PRONE AREAS

Typically in Africa companies without the ability to self-sustain their power needs, are faced with increasing interruptions in power supply and are increasingly failure prone. A typical power interruption profile per month in Zimbabwe, for example, could be anything from 20 to 100 hours per month, depending on which area is affected. In South Africa, we have not reached that point yet, and there is active infrastructure expansion taking place. But this comes at current market prices, and the cost of power will be driven by market factors, making the necessity for energy saving designs all the more urgent.

FUTURE RESEARCH

An area where there has almost no research conducted regarding efficient use of resources in industry is the use of water for cooling purposes. I must stress that this is purely in the current environment of the plastics industry. Cooling towers have not evolved to any significant degree, and remain the principal source of cooling for many converters. Their inherent efficiencies are low, and their use of water, which is becoming more scarce and expensive, is high. Ironically a poorly maintained and less efficient cooling tower does use less water, due to its reduced ability to cool the heated water through evaporation. Their continued use leads to other problems, which in turn have a negative impact on production efficiencies by reducing machine reliability. I have purposely not covered the issue of water conservation in plastics and I believe it would warrant a presentation on its own. I would be more than happy to engage with any interested parties on this topic, outside of this presentation. I do regard water management as a critical component of the running of any production facility, but time constraints prevent me from covering all of the topics in one sitting.

AVAILABLE POSSIBILITIES

Today’s presentation has been about designing facilities from scratch and many of the possibilities that are available to a designer and a company to reduce future costs and reliance on traditional energy sources. But many companies have facilities which are already built. What about them? They face the same competitive challenges as the facilities under design, and most instances the established companies are using equipment which from an energy consumption perspective may be outdated. By not addressing the issue of energy efficiency many companies are limiting their profitability. Many of the measures discussed earlier, regarding new installations can be utilized in existing installations, some of the air insulation techniques may require more extensive application design, but their effectiveness will not be reduced by retrofitting them to facilities. Each facility or improvement should be treated as an individual project, and extra care should be taken to ensure the expected returns are achieved. Even marginal improvements at today?s prices and environmental conditions, can become profitable in the near future, due to the rapid, and in most cases unpredictable increases in the cost of traditional energy sources. These increases not only apply to the cost of traditionally generated power, but as mentioned earlier, in the cost of Diesel powered generator sets in use in many countries outside of South Africa.

NEW FACILITIES DESIGN

The design of new facilities can take advantage of a certain degree of hindsight and easier access to research data, to make new facilities as up to date as possible. I see some of the challenges facing companies being the availability of designers who are in tune with current trends, and are able to engage in the design of cutting edge facilities. Companies are faced with paradigm shifts in thinking, where previously energy was plentiful, and making the same mistakes as before with regard to energy saving went relatively unpunished. Today the competitive landscape is far more unforgiving of such errors in planning. Unforced errors in the selection not only of equipment, but of energy consumption can have disastrous consequences. I believe that tech savvy companies will make it their business to have personnel tasked with the continuous monitoring of the effectiveness of their innovation efforts, in all areas of the company.

POSITIVE OUTLOOK

Without extensive research to substantiate claims, it is difficult to say with accuracy that a company can make appreciative profits from incorporating a variety of energy conservation measures in the design of a new facility. It is however quite easy to say that a company cannot ensure that it has taken every precaution to guarantee the success of a particular project, if they have not taken into account the immediate and long term impact of energy conserving and energy efficient design of facilities.

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