A methodology to identify, quantify and verify the cost benefits of energy and process improvements on a ferro-metal production plant
Martins, Guillaume Jacobus
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South Africa has an energy intensive economy with a high dependency on local mining and base metal industries. Furnace plants, which form part of the metal industry, are energy intensive as a result of the actual melting processes which require a great amount of energy. The high electricity and energy usage translates into high operating costs for these plants which in turn reduces the profitability of the plants. South Africa's ferrochrome industry supplies about 60% of the world's ferrochrome demand and holds around 80% of the world's chrome reserves. This makes South Africa one of the key ferrochrome producers in the world. There is however a need to reduce the cost of production of these plants to ensure competitiveness and profitability within the world market. This dissertation starts by providing an introduction to the problem and then defining the objective and scope of the study. The need for a methodology to identify, quantify and verify energy and process improvement opportunities in Ferro-metal production plants is highlighted. This need exists because there is a lack of adequate methods for an integrated approach. Three main barriers to energy projects were identified in this study, namely: institutional, technological and financial barriers. The opportunities for energy management and process improvements are investigated, including opportunities to overcome the barriers identified in the study. A methodology, which is developed to incorporate both increased production and energy efficiency scenarios, is then provided. The methodology is firstly aimed at identifying possible opportunities and then quantifying them in terms of financial benefits for the plant. This is necessary to establish whether it will be worth while to explore the opportunities further. Benchmarking is also included in the methodology as this helps to track the performance of the plant over time. A process was developed to enable accurate measurement and verification of energy related projects in order to evaluate the effectiveness or success of implemented projects. This process is necessary to enhance the credibility of energy related projects by providing an accurate and transparent evaluation of the project's performance. This in turn provides the stakeholders with invaluable information regarding their investments in energy projects. The developed methodology was applied to a case study of a Ferro-metal production plant in order to evaluate the methodology. The case study revealed that the methodology can successfully identify and quantify potential opportunities. The no-cost and low-cost opportunities identified, showed a maximum possible annual saving of up to R925,500 depending on the specific options implemented. Load control opportunities in peak periods revealed an estimated annual cost saving of up to R3,767,400 per year. A possible estimated annual energy consumption saving worth R22,629,900 was identified by a Cusum analysis. This analysis was also used to examine the benefit of a production gain instead of energy efficiency which showed a possible increase in production of 60,300 tomes per year. The measurement and verification process was then used to determine the impact that an upgrade of a furnace, aimed at increasing production, had on the actual performance of the furnace. The verification process showed an increase in production worth over R3million and an energy saving of over Rl million as a direct result of the upgrade. The process showed that the upgrade did indeed achieve a production gain and therefore the upgrade is considered to be a success.
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