Energy Systems and Infrastructure Division Energy Management Systems & Energy System Optimization Methodologies for Industrial Energy Efficiency James New Energy Systems and Infrastructure Division Department of Energy Nigeria Energy Forum 2018 17-18 April 2018 Lagos, Nigeria

Presentation Content Energy Management Systems (EnMS) [in line with ISO 50001] EnMS in Industry Energy System Optimization (ESO) EnMS/ESO Enterprise Results & Case Studies UNIDO’s upcoming Nigeria EnMS/ESO/RECP Project 2

Part I: Energy Management System (EnMS) An Energy Management System (EnMS) [in line with ISO 50001] is a systematic and structured approach to the management of energy use in all its forms (electricity, fuels, heat, etc.) and at all levels of an organization (management, policy, planning, operations, design, procurement and investments). Implementation of EnMS [in line with ISO 50001] requires organizations and their employees to build new knowledge, understanding and skills; it requires willingness to challenge and change established procedures, processes and work behaviors. An EnMS saves energy – and money. An EnMS IS NOT a combination of meters, hardware devices and software to measure and monitor electricity consumption and/or to project and balance electrical power demand. An EnMS IS NOT an “administrative tool”. 3

EnMS in line with ISO 50001 Purpose of EnMS-ISO 50001 “..to enable an organization to follow a systematic approach in achieving continual improvement of energy performance, ..” Scope of EnMS-ISO 50001 It is applicable to organizations of all sizes ISO 50001 targeted to Industry Power sector Commercial & buildings Transport Others facilities equipment personnel systems processes procurement measurement design doc. & report ISO 50001 does NOT prescribe specific performance criteria or targets with respect to energy. 4

EnMS Structure Policy Planning Source: ISO 50001:2011 Energy policy Energy planning Implementation and operation Checking Nonconformities, correction, corrective and preventive action Internal audit of the EnMS Management review Monitoring, measurement and analysis Continual improvement Policy Management Review Implementation & Operation Planning Checking Day to day operations Management participation Yes Management Responsibility Source: UNIDO EnMS Programme 5

UNIDO EnMS Six Key Concepts Policy Management Review Implementation & Operation Planning Checking Day to day operations Management participation Yes Management Responsibility Commitment Roles and Responsibilities Significant Energy Uses (SEUs) Energy Performance Indicators (EnPIs) Opportunity List Operational Control Review Source: UNIDO EnMS Programme 6

kWh EnMS Summary Commit to change Check the results Plan the changes Make the changes Source: W. McLaughlin for UNIDO

Part II: EnMS in Industry 8

BARRIERS to Energy Efficiency in Industry Management focus is on production & volumes, not on EE Lack of information and understanding of own energy performance Lack of adequate skills for identifying, assessing, developing and implementing EE measures and projects Poor or misused monitoring systems and data First costs more important than recurring costs  disconnection between capital and operating budgets Staff behavior and attitude Financing constraints M K F Production, technological, operational and staff changes over time Lack or limited availability of IEE services and product M K F Management/organizational barrier Knowledge/competency barrier Financial barrier 9

Energy Consumption in Industry PEOPLE TECHNOLOGY Operations Best Available Technology Behaviour Leadership EE Investment Competence ENERGY CONSUMPTION Reaction Production Product Mix Weather Analysis DATA DRIVING FACTORS Source: W. McLaughlin for UNIDO

EnMS – Managing and improving 3 pillars kWh ($ + CO2) Source: W. McLaughlin for UNIDO

Better management & low cost initiatives Where are opportunities for improvement? Realizing Savings - 57% - 43% Better management & low cost initiatives Average efficiency Capital investment Best performance Product Costs Resource Savings Source: Adapted from IFC, 2010 12

EnMS - Productive Change & Continual Improvement Top management engage in EE Challenge operations and established practices Build internal technical skills Data and analysis discipline Focus on no/low-cost measures Continual improvement EE INTEGRATED SUSTAINED ENERGY SAVINGS & INVESTMENTS! 13

EnMS Quantitative Achievements Energy savings Energy cost savings Non-energy benefits (water savings, material savings, maintenance costs reduction, etc.) GHG and other pollutants emission reductions Resources for EE Reduced response time to dev. …………………………. Most industrial enterprises that implemented EnMS achieved average annual energy intensity reductions of 2-3% against 1% reduction of business as usual (IRL, NET, DEN, SWE, USA) For companies new to energy management, savings during the first 2 years are 10-20% UNIDO experience: organization-wide energy savings in first 1-2 years range from 4% to 15%, with little or no capital investments 14

EnMS Qualitative Achievements Management focus for energy efficiency Informed decision making Improved control of production operations and energy/power demand Staff competencies development Behavioral/cultural change for energy efficiency and continual performance improvement Continuity of performance through changes of personnel, products and processes Improved quality of production Systematic and structured activities Positive company/corporate image (operational excellence, environmental stewardship, social responsibility, etc.) ………………………….. 15

Part III: Energy Systems Optimization (ESO)

What is an Energy System Generation Distribution End Use Recovery Example of Steam System Source: R. Papar for UNIDO

A Motor System & Applications What we mean by Energy System What are the motors really doing: Compressed-air systems Pumps systems Fans systems Other motors systems Refrigeration systems Other. Mech. movement 30% A Motor System & Applications Fans Compressors 32% Pumps Sources: IEA 2011; De Almeida et alia, 2008; A+B International, 2009 18

Energy System Site Example Typical Compressed-air System Source: W. Perry for UNIDO 19

Moving from Component to a System Approach Component approach involves segregating components and analyzing in isolation System approach involves looking at how the whole group functions together and how changing one can help or impact another The energy savings opportunities from systems are far greater than from individual components 2-5 % efficiency gains for individual components against 15-30% average efficiency gains through system optimization Source: W. Perry for UNIDO 20

Why a System Optimization Approach Industrial operations more variable than commercial or residential Production schedules change Utilities need to follow production yet remain optimized Steam systems and motor driven systems (compressed-air, pumps, fans, etc.) account for over 50% of final manufacturing energy use worldwide Energy savings opportunities from systems are far greater than from individual components 2-5 % efficiency gains for individual components against 15-30% average efficiency gains through system optimization Capital requirement and implementation costs are often lower and with fast payback, often measured in months 21

Part IV: EnMS/ESO Enterprise Results & Case Studies

Example I : Iron and Steel – South Africa COREX DR-Plant Steel shop Mills RHF Arcelormittal Saldanha Works Electricity demand : 160 MW Manpower: 548 permanent employees Sales output: 1,2 million ton HRC/annum Energy Efficiency Achievements 2011 Energy Management System Implemented No. of Projects/Measures 11 Total Capital Investment (USD) 90,000 2011 Gross Financial Savings (USD) 9,076,000 Overall Payback Period (in years) 2011 Energy Savings Norm. (GWh) 79.95 2011 GHG Reductions (tons CO2) 77,000 Adjustments/optimization of production operations, energy systems optimization, fuels switching, etc..... driven by EnMS! 2012 Energy Savings (Norm.) > 100 GWh

Vardar Dolomit improvements 2016 Energy Management System Implemented Example II : Refractory Material – Macedonia Vardar Dolomit Production of fire restistent materials based on sintered dolomite 85 employees 29.3 GWh consumption of oil & mazut in 2015 3.3 GWh consumption of electricity in 2015 EnMS scope in 2016 only electricity Vardar Dolomit improvements 2016 Energy Management System Implemented No. of Measures/Projects 21 Total Capital Investment (EUR) 5,600 Gross Monetary Savings (EUR) 89,655 Overall Payback Period (in years) 0.06 2016 Electricity Savings Nor. (MWh) 248 2016 GHG Reductions (tons CO2) 320.7 19,655€ from electricity savings (7.5%), normalized 70,000 € of power purchase contract savings due to better electricity demand control and forecasting Payback time of EnMS implementation considering all experts and staff costs = 3 months

Example III: Dairy Sector - Moldova Moldova: ‘Reducing Greenhouse Gas Emissions through Improved Energy Efficiency in the Industrial Sector

Part V: UNIDO’s Nigerian EnMS/ESO/RECP Project

Operational in 18 countries UNIDO’s Global EnMS-ESO Programme (June 2017) Operational in 18 countries Planned activities in 10+ countries South Africa Moldova Russia Turkey Ecuador Malaysia Thailand Viet Nam Philippines Indonesia Egypt Iran Ukraine Colombia Macedonia Myanmar India Georgia Projects ongoing Planned activities Other donors Swiss State Secretariat for Economic Affairs UK Department for International Development Government of South Africa Government of Italy Government of Austria 27

UNIDO/GEF: Nigerian Industrial Energy & Resource Efficiency Project Project Objective: To assist Nigerian industry & the Gov. to foster increased energy performance, resource efficiency & cleaner production within industrial sector, thereby increasing industrial competitiveness, employment while reducing transboundary & local pollution. Project Focal Areas: EnMS ESO Resource Efficiency & Cleaner Production (RECP) Project Duration: 2019-2022 Project Beneficiaries: Industrial (& Commercial) Enterprises Engineering Consulting Firms/Experts Relevant Government Ministries & Entities Suitable Training and Technical Assistance Providers

UNIDO/GEF: Nigerian Industrial Energy & Resource Efficiency Project Project Components/Activity Areas: Policy and Regulatory Enhancement/Strengthen – Focusing on the area of data collection & Analysis for better Policy and Regulatory formulation. EnMS/ESO/RECP training: Industrial Enterprises Industrial Engineering Consultancies/ESCOs National Training Providers EnMS/ESO/RECP Technical Assistance Programme to Industrial Enterprises National Banking Institutional Capacity Building National EnMS/ESO/RECP Awareness Strengthening

THANK YOU! For more Information or join our new Nigerian EnMS/ESO/RECP Project, please contact: Mr. James NEW Industrial Development Officer Email: J.New@unido.org Energy Systems and Infrastructure Division Department of Energy, UNIDO Mr. Olubanwo Oluyomi BANJO National Project Officer Email: O.Banjo@unido.org UNIDO Nigeria Regional Office UNIDO