How to improve the energy efficiency of a manufacturing company?

Fluctuating energy prices, unpredictable global events and the European Green Deal are having an increased effect on the daily life of every business, and it is especially true in the case of manufacturing companies whose production processes account for a large part of the energy consumption.

The Elektrum Energy Efficiency Centre webinar that took place on the 27^th of April focused on how the current electricity prices are formed and on how to increase the energy efficiency of companies, with experts explaining the available technological solutions for improving the energy efficiency of production processes, the ways for businesses to reduce the energy consumption and environmental impact in collaboration with scientists and other businesses, and the support available for the entrepreneurs. 

What affects the energy market?

The price of electricity is closely linked to the situation on the energy market as a whole. To a great extent, it is affected by changes in the prices of other energy sources, since electricity is generated using not only renewable sources, but also fossil fuels. In light of this, Oļegs Rukšāns, the Senior Trading Analyst at Latvenergo AS, presented his overview of the situation in the natural gas market.

The expert explained that from January 2021 to May 2022 the natural gas price increased from 16.24 euros per megawatt hour to 103.33 euros per megawatt hour. The price changes are the result of a number of events: high demand for natural gas in Asia and low supply volumes to Europe, lower generation of renewable energy, reduced utilisation of natural gas storage in Europe and, without a doubt, Russia’s invasion of Ukraine. At times when natural gas prices reach their peak, the generation of electricity from natural gas becomes unprofitable. There are quite a few coal-fired power stations in Europe; however, the price of coal has also risen significantly, from USD 66.96 per tonne in January 2021 to USD 303.13 per tonne in May 2022. These changes were driven by a sharp rise in demand in China, disruptions in coal supplies from Colombia, Russia, India and Australia, the embargo imposed by the EU on coal from Russia, as well as the fact that short-term coal supply options have been exhausted. Crude oil prices have also tripled during this period, from USD 43.98 per barrel to USD 112.46 per barrel, due to the global economic situation and future concerns.

Energy price changes inevitably affected the price of Latvia's electricity futures contracts. If in January 2021 it was 47.9 euros per megawatt, then by May 2022 it had reached 191.81 euros per megawatt hour.

Collaboration with scientists comes in useful

“It makes no sense to first buy a button and then look for a coat to match it,” explains Dagnija Blumberga from the RTU Institute of Environmental Protection and Heating Systems. By this she means that a logical and reasonable energy usage system should be created first, allowing one to make production as efficient as possible. And this area is where scientists can help by offering innovation.

There are three possible forms of cooperation. The first is the direct transfer of knowledge, for example by learning at different levels to not consume more energy than is really necessary. In addition, this can help reduce energy consumption by up to 20%. A reduction of 5-10% is possible even without any investments. The second form is the commercialisation of innovation.

RTU scientists, for example, have patented a system for utilising the residues of a central heating system that are not used directly in production. A licence for the production of thermal packaging from forestry residues has been sold. Documentation is currently being prepared to allow the commercialisation of a fog machine for the purification of flue gas after pellet and other low-capacity biomass boilers, which allows heat as well as water to be recovered from flue gas. The licence for the fog machine is to be auctioned. With the phasing out of natural gas, such a device will be needed to meet the environmental requirements and to reduce particulate emissions. And these are only some of the projects.

The third form is third-party funding for innovation. An agreement on the contribution by RTU scientists is signed, scientists analyse the processes and eco-efficiency at a company and propose solutions to reduce the consumption of resources. The company then implements the recommendations of the scientists.

Energy analysis. What does it bring to the company?

Lauris Džeriņš, Customer Offers Development Manager at Latvenergo AS, presented the electricity consumption habit analysis opportunities offered by the elektrum.lv site. Reasonable business decisions are always based on accurate and timely data. The new Energy Analytics tool allows for reviewing and comparing the electricity consumption of all facilities of the companies you manage, creating customised reports that help understand where the energy is used and how, recognise trends and forecast future consumption and costs.

Consumption data is available by facilities, months, days, hours and by groups of facilities. There are filtering and bookmarking options, for example, consumption graphs with consumption comparison by facility, multiple contracts and company groups in one graph, an unlimited number of objects to compare, the ability to create your own report templates and to download them in .xls format.

The new tool can be found by logging in to the portal elektrum.lv site in the Smart Meter Consumption Report sub-section of the My Reports section.

Where to look for financial support to increase the energy efficiency of a business?

This question was answered by Arnis Dzalbs, expert of the Energy Efficiency Unit of the state development finance institution ALTUM.

For ALTUM, improving energy efficiency means, for example, replacing obsolete manual boilers with new and automatic ones that work much more efficiently, resulting in significant savings in the long run. Replacement of manual woodworking process with automated equipment, obtaining savings on electricity, wages, repair and maintenance expenses and fuel costs. Upgrading a vegetable greenhouse by renewing the film and LED light modules. Partial transition to LED luminaires in municipalities, introduction of solar panels in businesses, upgrading of the production buildings by switching to LED, installing insulation and replacing heating systems and other similar activities.

The funding from ALTUM is available in four major blocks:

1. energy efficiency (equipment upgrades; recovery; heating),
2. renewable energy (solar; wind; cogeneration; biomass),
3. green buildings (reconstruction; new buildings),
4. sustainable transport (electricity; biogas; sharing as a service).

The key conditions for ALTUM loans offered for energy efficiency and sustainability of businesses are loan amounts up to 5 million euros per project and up to 90% of the total project amount; however, this depends on many aspects. The term is from 5 to 15 years, there are friendly interest rates for renewable energy generation and reduced collateral requirements. The loan is available if the business participates in other support programmes. Funds obtained to implement the idea can be used to purchase used equipment.

ALTUM also offers loans to energy service businesses that provide energy services to others, such as suppliers of heating, ventilation or lighting services. In these cases, the loan amount is up to 5 million euros and up to 90% of the total project amount as well, and there is an opportunity to create a client portfolio. The cash flow serves as the collateral and ALTUM specialists are there to support the project implementation.

It is planned that from June 2022, grants for energy efficiency research will be available, covering up to 85% of the research costs. A simplified application process, development of energy audits of companies' existing infrastructure and preparation of feasibility studies for future improvements are also planned.

How to use reactive power compensation systems?

Miķelis Caunītis, member of the Board of Energolukss SIA, explained that one of the ways of saving electricity is installing reactive power compensation systems. They reduce the “useless” current in the user's power lines and in other components of the power supply system. This, in turn, allows for installing smaller power equipment (transformers, switchgear, cables with smaller cross-section), reduces the voltage drop in power lines and losses in cables and other power supply system components, the heat-induced ageing of power supply system elements is reduced, improves voltage quality and reduces current and voltage distortions.

Reactive energy is generated by electric motors, transformers, especially when not operating at the rated power, air conditioning and refrigeration equipment, pumps, fluorescent and LED lighting, IT infrastructure. Feeding this power into the grid costs four times more than the power consumed. Measurements are needed to understand what needs to be compensated. In any case, industrial consumers must first pay attention to their bills that reflect the reactive power received or transferred.

Analysis and application of energy data

RTU associate professor and member of the board of Intellify SIA, Andris Krūmiņš, explained the digitisation and efficient management of company resources.

Mr Krūmiņš emphasised that the system offered by Intellify allows one to quickly identify and eliminate energy consumption discrepancies.

“Intellify is a platform created in Latvia that offers a complete overview of all processes taking place in the building by connecting meters of all consumed resources, climate and process sensor data. The platform itself analyses the data and provides information if anything “suspicious” that requires attention is taking place,” Andris Krūmiņš explains.

The monitoring system helps effectively reduce wasteful energy consumption. More than 40% of the energy generated is consumed in buildings. Most of it is consumed by heating, ventilation and air conditioning equipment. Lighting equipment consumes approximately 16% of energy. In industrial buildings, many consumers do not have any feedback on the compliance of consumption with the loads. In addition, it is much easier to save energy in public buildings than in production facilities.

The data to be analysed is sent to a secure server for analysis and can be accessed by the data owner. Consumption data is stored on an FTP server hosted by the client or offered by Intellify. It is possible to create independent reports for technical staff or customised reports.

All materials of this webinar are freely available at elektrum.lv sadaļā Seminar Archive.