Waste Energy Recovery in Industry Energy Conference and Exhibition May 6, 2008 Hosted by: DTE Energy Engineering Society of Detroit Bruce A. McKenna Natural Gas Consumption by End –Use (Excludes Electric Power Usage) Natural Gas Usage by User ( Million Cubic Feet) 8,000,000 Residential 6,000,000 Commercial 4,000,000 2,000,000 Industrial 0 2002 2003 2004 2005 2006 2007 Year Source: EIA/DOE Natural Gas Prices Natural Gas Prices by User Dollars per 1000 Cubic Feet $15.00 Residential $10.00 Commercial $5.00 Industrial $0.00 2002 2003 2004 2005 2006 2007 Year Source: EIA/DOE What happened to Energy Conservation ? Between 1970 and 2008 we went past GO and conservation directly to Alternate Energy Sources ! % Usage by End-User Commercial 21% Industrial 46% Residential 33% Residential Commercial Industrial Source : EIA/ DOE Share of Total Cost of Gas Consumption by End-User Industrial, 34.50% Residential, 42.50% Commercial, 23.30% Residential Commercial Industrial Source : EIA /DOE Who really pays ? Industry... Uses 46% and pays 34% share of direct cost. Energy expense becomes part of price to Commercial. Commercial … Uses 21% and pays 23% share of direct cost. Energy expense becomes part of cost to consumer. Residential… Uses 33% and pays 43% share of direct cost. PLUS the amount passed on by Industry and Commercial Energy Policy Act of 2005 Includes: Tax credits for Consumers. Tax credits home builders. Tax credits for appliance manufacturers. Tax deductions for commercial buildings. Grants and subsidies to manufacturers of alternate energy source equipment Waste heat recovery constraints Cost of energy cyclic perception. Capacity utilization. Need for improved education with regard to application engineering Escalating cost of materials for equipment. Typical budget preference for procurement of manufacturing equipment vs. heat recovery equipment. Management reliance on simple payback vs. extended Return on Investment after payback. Insufficient focus on current usage compared to Alternate Sources. Lack of a comprehensive and strategic Energy Policy by State and Federal Government. Lack of Tax Credit or incentives for industrial heat recovery equipment. Total focus on alternative energy and lack of priority to reduce current consumption of current energy available. From the Roadmap for Process Heating Technology - IHEA 2001 IHEA – USDOE- OIT Barriers for heat recovery systems Inability to capture/recover low-temperature heat with existing heat exchanger technology. ( ?????? ) Inability to cost effectively capture very high temperature exhaust heat. ( no mention of moderate or high temperature) Readily available and comparatively inexpensive supply of natural gas in North America reduces return on investment of recovery systems. (US Average for Industry was $ 5.24 /1000 CF in 2001) Source: IHEA-USDOE-OIT Roadmap 2001 Temperature Gradients High Grade > 1200 F Medium Grade > 500 F Low Grade < 500 F Waste Heat Recovery Natural Gas Fired Processes: Industries: Ovens Metals Dryers Automotive Tenters Textile Furnaces Plastics Kilns Paper Thermal Oxidizers Food Catalytic Oxidizers Pharmaceutical Spray Dryers Air Pollution Control Chemical Waste Heat Recovery Applications: Process to same process Maximizes heat recovery , hour for hour. Process to another process Limits heat recovery to operating schedule of either process Process to comfort heating Limits heat recovery to heating season Pre-Heat combustion Air Optimizes recovery for furnaces and kilns on flue recovery Limits recovery resulting from typically larger oven, dryer exhaust volumes to use on lower combustion air volume requirements. Basic Steps Identify waste heat sources. Determine operating schedule of process. Determine flow rates and temperatures and value. Identify potential uses for recovered heat. Order of economic viability: Return to same process. Use for another process. Use or for comfort heat. Identify installation requirements. Obtain equipment and installation estimates. Prepare economic justification. Fully support the opportunity Waste heat recovery example: Process to Process Oven exhaust to oven make up air Example: Coated paper dryer operating at 250 F Operating schedule of 1 shift – 2000 hours/year 2 shifts – 4000 hours/ year 3 shifts – 6000 hours/ year Average annual temperature – 50 F Cost of Energy - $9.67 / 1000 Cubic Feet Waste heat savings estimate: Oven Exhaust 5000 SCFM @ 250 F Oven Make-Up 4000 SCFM@ 50 F average ambient. Heat exchanger – counter flow plate type / Air to Air Assume acceptable pressure drops under 2” either stream Exhaust air 5000 SCFM @ 250F Outlet @ 146 F PD – 1.5” w.c. Oven Make-up 4000 SCFM @ 50F Outlet @ 180 F PD - 1.0” w.c. MMBTUH Recovered - 0.561 Cost of NG - $ 9.67 /1000 CF Annual Savings: @ 5000 SCFM Exhaust @ 10,000 SCFM Exhaust 2000 Hours $ 10,850 2000 Hours $ 21,854 4000 Hours $ 21,699 4000 Hours $ 43,708 6000 Hours $ 32,549 6000 Hours $ 65,563 Low Temperature Recovery – 250F Source: Exothermics, Inc Moderate Temperature Recovery - 600 F Source : Exothermics, Inc Moderate Temperature Recovery – 900F Source: Exothermics, Inc. Waste heat recovery Process to Process Example Annual Savings vs. Temperature 5000 SCFM $250,000 $200,000 2000 hrs. $150,000 4000 hrs. $100,000 6000 hrs. $50,000 $0 250F 600F 900F 1200F Exhaust Temperature Decisions, Decisions…. GOT MONEY ? Choice # 1 Invest in Production equipment only Pro – Make more product Con- Make more product using more energy No continued annual savings Choice # 2 Invest in Heat recovery equipment Pro- Make same volume less costly Continued annual savings Con- Same Volume Choice #3 Invest in Production equipment w/ heat recovery Pro- Make more product with less energy Continued annual energy savings Con – more capital required Typical Payback Vs. Extended Savings Simple Payback Extended Return Investing @ 20% Example: 250 F Oven Exhaust for Oven Make Up Operating 3000 Hrs per year. Heat recovery of 561,000 BTUH with gas at $9.67 / 1000 CF. Hourly savings of $5.42 /hr. Annual Savings of $ 16,260 Installed Cost of $ 21,680 Payback – 16 months VS Investing $21,680 with an objective of 20% Return / Year However : Year 1 - $16,260 Year 1 = $26,016 Year 2 - $16,260 Year 2 = $31,219 Year 3 - $16,260 Year 3 = $37,463 Year 4 - $16,260 Year 4 = $44,955 Year 5 - $16,260 Year 5 = $53,947 $81,300 $53,947 Even at 2000 Hrs and payback of 24 Months – Extended 5 year is $ 52,250 PLUS Margin Improvement and Improved Competitive Position SO ? Applications are in abundance… Significant energy is being wasted… Cost of everything is and has been increasing… Heat recovery equipment is available… Proper investment yields extended returns… Energy technical assistance is available… Energy recovery improves operating margins… Lower operating cost enhances competitive position in your industry… IF NOT NOW !...WHEN? “If” we are serious about Energy Conservation… Enhanced perception by consumers as to who really pays “THE” energy bill. Consumer pressure on congress to pursue a “current needs” Energy Policy to provide incentives and pressure on industry to conserve energy. Including Energy Tax and Energy Recovery Offsets or Credits for Industry Management needs to look beyond short term swings in energy costs and plan for long term value of heat recovery Heat Recovery Truisms… Relocation or closing of plants is not energy conservation. Lower capacity utilization is not energy conservation. Cost of materials to manufacture heat recovery equipment will not go down. Cost of labor to manufacture heat recovery equipment will not go down. Cost to install heat recovery equipment will not go down. Congress does not act fast nor intelligently. Simple payback is not the answer. Relying on the consumer to pay the bill is not conservation. IF NOT NOW !...WHEN ?