The company wants to evaluate the potential of using Combined Heat and Power (CHP) and Photo Voltaic (PVT) for energy and for possible return selling onto grid. Manufacturing is a highly competitive enterprise and even small changes in cost savings are helpful. Cost savings is one reason and the impetus to become environmentally responsible and sustainable is a second reason. The pressure to integrate alternative energies is very high right now due to new regulations at all levels; locally, nationally, and internationally. The Irish government and the EU are offering incentives that can help meet some of the costs; for which we are looking to utilise for the proposals outlined in this report.
Figure 1 Current Energy Usage
1.2 Purpose of Report
The report was carried out in order to put together 1) an energy policy and 2) a future economic energy strategy for the DT712 Manufacturing Ltd. The two actions are necessary because the energy saving strategy is now well organized and needs structure. Energy efficiency has improved recently but the company wants to set up a process for continual energy efficiency improvement
1.2.1 Energy Focus of Study
Present company focus is on exploring the following topics.
‘ Procurement of energy,
‘ Sources of their energy requirement, and
‘ Improve and/or modify the energy usage to reduce costs
1.2.2 Achieving continued security of supply in the long term
Good planning is the key to ensuring continued supply into the long term. A management strategy that has worked for other companies is to adopt alternative energy strategies, reduce greenhouse gasses and increase performance by adopting Lean manufacturing strategies. The three steps are a lot of change at one time so the adoptions of new techniques for energy production, pollution reduction and Lean manufacturing can be adopted slowly and carefully. Planning ahead and including all stakeholders in discussions or at least adopting transparency, each layer of new activities will be more sturdy and durable.
The Irish government offers a tax relief program with incentives to use alternative energies. The program requires professional installation. (IEA, 2015) The Wind and PV Solar
‘ Eligibility for 486B tax relief
‘ EU Carbon Offsets
‘ Costs for outside experts to unravel the paperwork to receive grants, incentives and to learn fee amounts such as VAT.
‘ Monitor prices for CHP equipment
‘ Monitor prices for PV cells and systems, the prices are continuing to decrease and are predicted to fall to $0.50/PV cell by 2017.
‘ Contact distributors in Sheffield UK for solar system design suggestions and take bids on the PV cells and the system from the distributors. Sheffield is leading the way for new methods of applying PV solar cells in order to cut costs (Sheffield, 2014)
‘ Evaluate where the CHP equipment will be located and if movement of other equipment will be necessary or construction for expansion will be necessary.
1.4 Alternative Energy Technologies
A CHP unit is a heat engine that generates power in the form of electricity and excess heat. The Combined Cooling, Heat and Power (CCHP) are also known as tri-generation because both heat and cooling as well as electricity is generated. The power to run the unit can be fuel combustion or solar energy from a solar heat collector. CHP and CCHP are sustainable techniques; power generation is efficient because the fuel is consumed in a thermodynamically efficient process. No waste heat is generated because waste heat is considered thermal energy, and it is energy that can be use where the factory needs thermal energy.
Figure 2 Diagram displaying how energy saving is achieved using CHP compared to the separate production of heat and centralised electricity.
1.4.2 Disadvantages to CHP
Disadvantages to installing CHP are listed below. (Siegal, 2012)
‘ The market and the incentive frameworks are not coordinated. The difference between natural gas prices and electricity prices can weaken the risk / return profile of CHP plants when compared to traditional methods.
‘ Electricity and fuel (Oil and natural gas) prices are volatile making CHP a higher risk venture.
‘ CHP is not yet recognized as a strategy that is important to meeting the goals of Climate Change policies.
‘ Not a energy source but more a means of extending existing energy sources (IEA, 2015)
‘ No motivation for developing a heat transmission infrastructure.
‘ Support mechanisms from government regulatory bodies are not well-developed.
1.4.3 Ideas for Energy Efficiency Improvement Activities
‘ In the winter the heat demand can be met with some increased boiler capacity.
‘ excess power could be looked at for selling back to the grid at times of low usage from the CHP system
‘ Excess heat can be captured from the CHP system using a steam turbine to input heat back into the manufacturing process or to heat space such as the manufacturing floor or offices
The prices of PV cells are falling and the cost is less than nuclear power for energy at this time. The prices are expected to continue to decrease, but even more attractive is Sheffield development for spray-on solar cells (Sheffield, 2014). The new technique is expected to reduce the cost of solar electricity. A new material called Perovskite makes spray-on cells possible. The material is a good choice based on its features of high efficiency and low materials cost. Peroskvite has a 19 percent efficiency that compares to 10 percent for organic solar cells and 25 percent for silicon cells. The faster application of spray-on can encompass some cost savings, too. High efficiency solar cells are designed to concentrate the solar energy and demonstrate efficiencies of about 40 percent or even more; efficiency of solar cells continues to increase while costs continue to decrease (Bett, 2009). (Jacoby, 2014)
The advantages of PV or Perovskite solar cells includes the abundant source of the sun’s energy and the fact that of all the alternative power energies, solar demonstrates the highest power density (Smil, 2006). The future security of the company will be well-served by installing a PV installation because the structures need very little maintenance, and the system last for a century or longer (D. Chianese, 2010). No operating costs are accrued by solar.
1.6 2020 Targets
The Irish government under the European Union commissions Energy and Climate package needs to reduce non ETS(Emissions Trading) greenhouse gas emissions by 20% of 2005 levels by 2020 (EPA, Ireland’s Greenhouse Gas Emission Projections, 2013). CHP energy consumption and heat imports for companies participating do not have to give up their emissions allowances due to air pollution infractions (IEA, 2015). CHP in Ireland is mainly used in commercial locations such as hospitals and hotel industries (IEA, 2015) . The EU Directive 2004/008EC Promotion of Cogeneration and the UK has a policy for Good Quality CHP which serves as a good guideline. GQCHP is based on a useful heat demand in regulates the method for calculating the CHP primary energy savings. Requirements as follows:
‘ That GQCHP Schemes with a total installed capacity of <1 MWe provide > 0% primary energy savings compared with the Directive’s harmonized reference values for separate production of heat and electricity;
‘ That GQCHP Schemes with a total installed capacity of >1MWe provide >10%primary energy savings; and
‘ That GQCHP Schemes with a total installed capacity of >25MWe have an overall efficiency of at least 70% (based on Net Calorific Value)’ (IEA, 2015).
1.7 Energy Assessments
The steps that need to be implemented to carry out energy assessments are presented in the EPA Toolkit (EPA, Lean Toolkit, 2015).The following five steps are the major assessment strategies that must be carried out to make careful planning possible. Good assessments will allow the optimum design for the company.
‘ Assess the use of energy on the floor of the factory and note the efficient use of energy and more importantly wasteful activities like running machines when not in use, lighting portions of the manufacturing floor when not in use and appropriate loads for motors.
‘ An energy audit can be carried out as a way to observe how energy end uses and energy efficiency are working together or at odds. The energy audit is an opportunity to identify energy waste and correct the problem. Meters for measuring the amount of energy used are suggested by the EPA to raise awareness of energy use and aid in identifying waste.
‘ Value stream mapping is a tool that recognizes energy as a value steam. The technique is good for making improvements and for planning for the future.
‘ Lean Sigma Six strategies can be used to identify and correct energy waste.
1.8 Justification of the economic strategy
Adopting alternative energy methods at this time is highly advantageous, because of the EU drive for sustainability, tax incentives and possible penalties further ahead. The Irish government has green energy tax incentives which would include both solar and CHP as well as other strategies like wind. CHP and solar energy work well together.
The amount of energy can be used for the energy power that the factory needs, the excess heat can be used as thermal heat and CHP also has the capability to offer cooling during the summer months.
Money will need to be spent but the decisions on where to spend the money need to be wisely chosen. For example, the incentives that are offered by the EU and Ireland are complicated and change as laws and directives are modified to refine them or make additions; therefore, it must be considered important to spend money on an consultancy to unravel the information to find the most advantageous incentives for the company to use.
Although in this document it lists some obstacles to installing CHP now, the obstacles are regulatory and do not necessarily effect the company to a great a degree as to the positive impact of the cost savings possible.
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