How to reduce the company's energy consumption? Solutions, quality, experience.

In order to meet the European Union's (EU) climate neutrality targets, energy efficiency must be improved by 32.5% by 2030 compared to 2007. But these numbers are not just numbers - they are concern for our planet and at the same time concern for ourselves. It is an opportunity not only to live greener, but also to save less by paying less for energy, using modern technology and smart solutions. You can find out what solutions are possible in this area and how to really reduce energy consumption in the free webinar “How to optimise the company's energy consumption?” organised by the Elektrum Energy Efficiency Centre on 28 April.

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What does energy efficiency mean exactly? Which sectors consume the most energy and can this be reduced? Kristaps Ločmelis, Regulatory Affairs Director of Latvenergo AS, provided answers to these questions.

He explained that the EU has defined the priority of the Green Deal - to reduce the dependence of economic growth on energy consumption.

“Energy efficiency is the reduction of energy consumption while ensuring the same level of production or quality of service and living standards. Increasing energy efficiency is a key goal for the EU, as it helps to combat energy waste,” said Kristaps Ločmelis.

Industry and construction are by no means the largest consumers of energy resources in Latvia. In comparison, on average, industry consumes 1/3 of the world's energy and the EU consumes 1/4 of all energy. In Latvia, the largest energy consumption is in the transport sector, followed by household consumption, and only then in industry and construction, the commercial and public sectors. On the other hand, the least energy resources - only 5% - are spent in agriculture, forestry and fisheries combined. In turn, 90% of the energy consumed in industry is consumed by the wood, non-metallic minerals and food industries.

“Latvia is strongly dominated by three industrial sectors, where the wood industry alone consumes 12% of the country's energy consumption. Unfortunately, the dominant industries perform worse than the EU average. We consume at least twice as much energy to produce the same added value as the EU. However, industrial energy audits in Latvia show a relatively lower potential for energy efficiency. The potential for savings of up to 10% of consumption has been identified. Also, energy efficiency does not reduce CO₂ levels in all industries equally,” says Kristaps Ločmelis.

 

THE SPECIFIC SITUATION NEEDS TO BE CLARIFIED

It is not possible to do without performing an energy audit in order to find out what the current situation is and what should be done in the near and distant future. This process is possible both for the company as a whole and for each system individually, taking into account the processes taking place within it. Agris Kamenders, Doctor of Energy Engineering, explained how best to prepare for an energy audit and how to analyse the data obtained. For example, during a company's energy audit, a balance is drawn up between energy consumption and energy costs. Then it will be determined what resources, how much and how they are consumed. An analysis of energy data will also be carried out to determine where and how much savings can be made.

The next steps - what measures should be taken to achieve these savings, and what the costs and benefits will be. In turn, when analysing individual systems, measurements and system performance tests are performed, for example, for boilers, steam systems, motors, pumps, etc. in accordance with certain standards or procedures agreed by both parties. Various alternatives are also being analysed to find solutions that will make the system more economical and efficient.

“When analysing the current situation and the necessary investments, their payback time must also be taken into account. It is worth starting with the monitoring of existing systems, the selection of energy tariffs, the assessment of connection capacity and the prevention of obvious leaks. This can save up to 5% and the investment will pay for itself in about a year. It is then possible to evaluate boiler control options, lighting, reactive power compensation equipment. This can save up to 10% and the investment will pay for itself in about two years. Another step is simple modifications and heat recovery, for example from compressors, dryers, using recuperation and other heat recovery or storage equipment. This can save up to 20%, but the payback period will be around six years.

The integration of new technologies and processes can save up to 30%, but the payback period will increase to nine years. The biggest savings - about 35% - will come from the renovation of new production lines and premises, but the funds spent on these purposes will pay off within 12 years,” explains Agris Kamenders.

 

SUPPORT FROM THE STATE

Of course, companies do not always have enough working capital to make the necessary investments. Gatis Silovs from the Ministry of Economics informed about the available support instruments for increasing energy efficiency.

For example, the state has provided loans with a capital discount to increase the energy efficiency. Such loans are intended for energy audits (to support 530 projects), introduction of renewable energy technologies (320 projects), energy efficiency improvement measures in non-residential buildings (133 projects), purchase of energy efficient equipment (133 projects), purchase of sustainable new transport (183 projects supporting purchase of 1269 zero emission vehicles) and a number of other energy efficiency measures.

 

HELP WITH MONEY AND ADVICE

Arnis Dzalbs from Development Financial Institution “Altum” AS also confirmed that energy efficiency pays off.

The expert explained that the most important conditions for Altum loans to increase energy efficiency are the amount of available financing up to 2.85 million euros per project and up to 90% of the total project amount. The term of the loan is from 5 to 15 years. The economy, in turn, has to cover the loan payment. Cash flow in the company is important, so collateral requirements are reduced. The loan can be cumulated with other support programmes and used equipment can also be financed.

Loans are also available to energy service companies that offer energy-efficient solutions to others as a service. The amount of this loan can also reach up to 2.85 million euros and up to 90% of the total project amount. It has to be possible to build a customer portfolio and the cash flow serves as collateral for the loan. Support from Altum specialists is available for project implementation, as well as a grant for energy efficiency research where needed. Altum can cover up to 85% of the research costs. The grant can also be used to develop energy audits of companies' existing infrastructure and to prepare feasibility studies for future improvements.

 

TOO MUCH CAPACITY - WASTED RESOURCES

Today, the energy sector is at the beginning of a big change, as the needs of customers, including the understanding of efficient electricity connection, are changing. Jurģis Vinniņš, the senior customer connection manager of Sadales tīkls AS, explained the simple principles that should be followed when choosing an electricity connection. At one time, a connection with low consumption was considered efficient, but now the most suitable connection for the customer, which is digitally monitored and used wisely, is considered efficient.

The specialist found that when choosing electricity connection capacity, customers often want a significant reserve of capacity, without specifically analysing whether such capacity will be needed at some point. Choosing the right capacity will result in lower connection costs, a return on investment and, most importantly, lower monthly payments.

“From 1 July 2021, a new approach to charging for connection installation and load shedding will be introduced, by applying an amperage charge. It will be applied, when installing up to 400 volts with a connection capacity of up to 100 amperes in a low-voltage network. It is important that the plot of land where the connection is to be made should be located no further than 50 metres from the elements of the low voltage line of Sadales tīkls - line, cable distribution, transformer point. The connection costs will consist of the cost of building one load unit (ampere) and the connection costs. In addition, the costs will be the same throughout Latvia.

A digital ampere payment card will also be available from 1 July this year. Anyone interested will be able to find out if the planned connection qualifies for the new order.

The new procedure will allow everyone to quickly and easily calculate costs in the e-environment, and the principles of cost formation will become more understandable. In about 50% of cases, the fee for connection installation will decrease, thus the situation will become more favourable for business development. From 1 July, no eligible costs will be charged for the installation of any new connection or increase of load - a fee for the system operator's previous investments in existing electrical installations.

On the other hand, owners of large connections, i.e., over 100 amperes, have the opportunity to recover the costs of installing the connection within five years by using the connection capacity efficiently, as Sadales tīkls can apply discounts in the case of appropriate consumption. This system has been in operation since 2012 and used in 2015, with 30% of cases recovered in full or in part, with a total recovery of more than 4 million euros. The reasons why it did not work for everyone - too much initial capacity was chosen, tariffs were not evaluated, consumption was not monitored, the action was passive,” explains Jurģis Vinniņš.

 

The webinar also provided information on the commonalities and differences between the ISO 50001 energy management system and the mandatory energy audit, as well as an opportunity to hear expert feedback on reactive capacity compensation solutions and requirements for electric motor energy efficiency level, and on the nuances of energy-efficient compressors. Viktors Novikovs, a representative of the company Maxima, shared the story of experience in implementing the monitoring of energy consumption, while Vitālijs Račinsks revealed the energy efficiency challenges Latvia State Radio and Television Centre faced during the pandemic.