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Refinery energy efficiency

and environmental goals
Cheaper fuels do not always reduce costs, say the authors, and an alternative is
cogeneration. It is argued that fuel saving programmes and cogeneration, applied
worldwide, could reduce world fuel consumption by some 26 million tons a year
Zoran Milosevic and Wade Cowart
KBC Process Technology

tringent environmental limits to be 35–40°C. Thus, revamping a pre- key process parameters affecting energy
being imposed on the quality of heat train in the 1980s allowed three consumption, such as actual feed quali-
fuels that refineries can burn is times more energy savings than in the ty, conversion and fractionation perfor-
increasing the cost of refinery marginal 1990s. The economics of installing fur- mance. Based on more than 100
fuels, which prompts an additional nace air preheaters is just as illustrative refineries that have been energy-sur-
incentive to save energy. One way to of the reduced energy saving incentives; veyed, KBC believes that an energy per-
mitigate the effect of this increased pric- these projects offered two-year simple formance of 100 per cent BT is
ing is the adoption of cogeneration paybacks in the 1980s, versus about achievable in a grassroots unit built
which, through the resultant fuel sav- four-year paybacks in the late 1990s. today. Such a unit has an economically
ings, also significantly reduces CO2 and Subsequently, refineries that were justifiable level of energy efficiency and
other greenhouse gas emissions. designed or revamped in the 1980s tend is supported by a highly efficient steam
An examination of the cost effective- to occupy high positions in the energy and power system.
ness of cogeneration in improving ener- efficiency league tables today, while Many European and American
gy efficiency and reducing stationary most refineries that missed the period of refineries achieve BT indices better (less)
source emissions includes understand- favourable revamp economics of the than 150 per cent. This means that even
ing how environmental constraints and 1980s remain relatively inefficient. a first quartile pace-setter consumes 50
fuel costs improve the viability of ener- Less attractive economics was not the per cent more energy than an optimised
gy conservation (Encon) projects, as only reason for the reduced energy con- refinery designed and built today. The
well as the environmental improve- servation activity in the last decade. industry BT average is about 195 per
ments that can result. New fuels specifications and new pro- cent. Thus, it can be said that the refin-
In the 1960s, energy conservation cessing requirements forced refineries to ery industry as a whole is 95 per cent
was a relatively simple economic issue. invest scarce resources into upgrading energy inefficient. The reasons usually
Refinery energy-efficiency was decided processing technology, rather than cited for this condition are as follows:
primarily in the design phase, by improving the efficiency of utilities. — Units were designed when the cost of
applying trade-off criteria of the day Today, however, environmental con- energy was low
and by optimising between energy and cerns may reverse these trends, making — Phased expansion – new units were
investment costs of heat and power energy-saving investments more attrac- built stand-alone and not heat-integrated
recovery equipment. However, refinery tive as fuels become more expensive. with older units
design guidelines changed as fuel — Utility systems were seldom modi-
prices increased following the two oil Energy efficiency fied/optimised when onsite expansions
shocks in the 1970s and more energy- The refining industry as a whole can be were made
efficient designs replaced older, less classified as energy inefficient. The — Capital savings – units were designed
efficient designs. worldwide average refinery energy con- for minimum investment cost
Then, as the period of variable eco- sumption is about 95 per cent higher — Refineries rely on power import and
nomics and depressed margins followed than KBC’s best practice target. There- have low inhouse power generation
in the 1990s, it became increasingly dif- fore, as the starting energy efficiency of efficiency.
ficult to justify energy conservation pro- the average refinery is relatively low, it Hand-in-hand with the refinery’s rel-
jects. New technologies that matured in follows that the scope for improvement ative energy inefficiency goes an equally
the 1980s, such as the industrial gas tur- should be high. inefficient environmental performance.
bine and pinch technology, made signif- Refinery energy performance can be The average energy performance of 195
icant impacts but had a relatively short assessed in terms of the ‘best technolo- per cent BT means that, on average,
period of undisputed economic invest- gy’ (BT) index of the site. This index is refineries consume 95 per cent more fuel
ment attractiveness due to changing the ratio of the refinery total energy than would be the optimum today, and
fuel and power prices and alternative consumption (including fuels, FCC consequently they emit 95 per cent
investment pressures. coke, and power import) to the sum of more CO2. In decades past, before the
For example, preheat trains were BT energy consumption allowances current, more stringent, environmental
designed for approach temperatures of (standards) for each process unit and for limits and fuel quality specifications
about 60°C in the 1960s. This optimum the off-sites. were introduced, this could have also
then decreased to about 20°C in the The BT standards have been devel- meant up to 95 per cent more sulphur
1970s and early 1980s. This decrease oped by fundamental analysis and emission. Directionally, reduced energy
offered large scope for improvement. design studies on individual process consumption results in reduced air emis-
Today, the optimum approach is likely units. They take into consideration the sions. However, there is another link

w w w. e p t q . c o m

between refinery energy and environ-

mental performances. Namely, air emis-
sion regulations may, and in some European energy surveys
countries already do, limit the total site 350
fuel consumption. If this is the case, the Before optimisation
refinery expansion potential and its
300 After optimisation
future depends on the ability to reduce
the fuel consumption of existing units.
This circle gives further incentives to
save energy and reduce emissions.

BT, %
Project justification
On a worldwide basis, the average 100
potential for energy efficiency improve-
ments has been found to be about 30 50
per cent. For example, the combined
chart (Figure 1) shows the results of 0
energy surveys (European refineries)
with both the “before optimisation” and
the “after optimisation” BT indices. The
“after optimisation” indices are found Figure 1 European refineries, showing scope for improvement
by calculating the fuel savings from
implementing all economically justifi- (again conservative) of the total oil pro- application of cogeneration to preheat
able energy conservation projects identi- cessed, it follows that the total world crude oil, or exhaust into refinery crude
fied at each individual site. refinery fuel consumption is around 125 oil furnaces, is also common. Therefore
The graph shows improvement poten- million t/year and that they produce the cogeneration potential is higher. To
tial varying between 10 per cent and 4 265 Million t/year of CO2. A 13 per cent fully realise this potential, power gener-
per cent. This wide variation results from reduction would save 17 million t/year ated on site must be exported.
different energy pricing at different sites of fuel, and reduce world CO2 emission To conclude, pure refinery fuel saving
and from the different economic criteria by 35 million t/year (a 0.14 per cent programmes and cogeneration, if
as to what payback is considered accept- reduction). applied worldwide, would reduce the
able. The average improvement poten- Further to this reduction is the effect world fuel consumption by about 26
tial (European refineries) is calculated at of cogeneration. For the purpose of the million t/year, which is 21 per cent of
30 per cent. As there is very little differ- present analysis, KBC estimated that the total fuel that refineries worldwide
ence between the efficiency distribution world refineries consume around 70 currently consume. This seems to com-
curves of European and worldwide million megawatt-hours per year pare well with previous estimates.
refineries, it can be concluded that 30 (MWh/year) of electrical power. A fur- The results of another study showed
per cent may also be the worldwide sav- ther assumption is that this power that the average energy efficiency
ing potential (if the European saving would, on the margin, be generated at improvement potential of refineries in
potential is applied worldwide, it is prob- an efficiency of 35 per cent (meaning the European Union compared to best
ably conservative). that the last MWh is produced in con- practice is 15 per cent, while Jean-Paul
KBC methodology is profit improve- densing steam cycle). Vettier, Europia’s president and vice
ment-driven and based on cost. There- Upgrading 70 million MWh/year of president, refining, of TotalFinaElf,
fore, the 30 per cent improvement the condensing cycle to a 75 per cent asserted that, based on Solomon sur-
previously claimed represents the ener- efficient cogeneration cycle would save veys, European refineries had improved
gy cost saving potential. Part of this 10 million t/year of fuel (assumed oil). their energy efficiency by 1 per cent
would be a result of fuel savings, direc- This reduction in consumed fuel would each year for the past 10 years. Saving
tionally proportional to the cost savings. result in 21 million t/year of avoided 21 per cent of the total refinery fuel
However, a large part of it is the energy CO2 emissions. would reduce CO2 emissions by 55 mil-
cost reduction effect of cogeneration, The cogeneration benefit estimate is lion t/year (about 0.2 per cent of world’s
which is not proportional to refinery conservative. It assumes that refineries CO2 emission from fossil fuels).
fuel saving but rather represents the dif- only cogenerate power to meet their The savings previously described are
ference between the costs of in-house own demand. This would, however, use economically justifiable from a purely
generated power and purchased power. only a fraction of the available heat energy cost reduction point of view.
It is estimated that of the 30 per cent sink. In cogeneration calculations, it is This is something that refineries have an
cost savings, 17 per cent is attributable usually assumed that the heat sink con- incentive to do, regardless of environ-
to cogeneration and 13 per cent to refin- sists of steam consumers, but additional mental or any other issues. However,
ery fuel savings. Therefore, the conclu-
sion is that on the average, excluding
Global figures
cogeneration, refineries worldwide
should be able to economically justify
projects that could save about 13 per World 2001 crude oil production: 64 million bpd
cent of their fuel energy. 3150 million t/year
To put this into a CO2 reduction per- World refinery fuel consumption, estimated by KBC at: 4% of total oil
spective, consider Table 1. World oil pro- 125 million t/year
duction in 2001 was reported from World refinery CO2 emission, calculated from above: 265 million t/year
various sources to be over 63.5 million World fossil fuels CO2 emission: 25 000 million t/year
bpd. If it is assumed that on the average
refineries consume (or burn) 4 per cent Table 1


there may be other incentives:

— Certain energy projects may offer
some quantifiable yield and capacity
benefits, while some offer (not so quan- GT power
tifiable) strategic advantages Fuel HP boiler
— Marginal fuel cost increases with Fuel Powert1 Steam turbines
environmental constraints, causing T-1
some rejected energy projects to become
Gas Steam to
economically viable.
turbine T-2 Powert2 process
With these incentives in mind, it
would not be unrealistic to say that per- Steam to
haps 25 per cent reduction may be the Gas turbine process
T-3 Powert3
overall industry’s energy conservation exhaust heat
target. is captured Steam to

Cond. return
by HRSG to
Marginal fuel cost produce steam
The economic justifiability of an energy Make-up
conservation project is directly related
to the cost of fuel. Therefore, rigorous
marginal fuel costing is used in these
energy studies. It is obvious that the
environmental constraints push towards Figure 2 Combined cycle CHP: gas turbine, HRSG and steam turbines
burning cleaner fuels. What may not be
so obvious is that these constraints may fuel oil cost is 2708–2560 = $148/t refineries today, the most common com-
also increase the cost of refinery ($21/bbl). Any additional fuel consump- ponents of an efficient cogeneration sys-
marginal fuel beyond the value of the tion will effectively be valued at this tem have been identified as:
most expensive fuel that is available. price. Thus, even though the refinery — The industrial gas turbine
This paradox is easily explained. For marginal fuel is still fuel oil, its cost is — Heat recovery steam generators
simplicity, only sulphur emission con- likely to be higher than that of the low (HRSG)
straints and their effect on marginal fuel sulphur fuel oil. — Back pressure and condensing steam
price will be considered. These real marginal fuel costs must be turbines.
The majority of world refineries still considered when evaluating energy con- A configuration (Figure 2) comprised
burn fuel oil as the marginal fuel. In the servation projects as, clearly, they pro- of these components is said to be a com-
absence of a sulphur emission limit, the vide additional incentive to save fuel. In bined cycle cogeneration unit, or true
marginal fuel is likely to be the relative- particular, one would like to reduce the CHP, and is highly efficient (efficiency
ly cheap high sulphur fuel oil (HSFO). incurred cost associated with the high of >80 per cent). The CHP shown in Fig-
When a sulphur emission limit is intro- cost marginal fuel. In the presence of a ure 2 generates power in a topping
duced, the refinery will inevitably start favourable economic climate, cogenera- cycle, which means that the power is
mixing HSFO with a more expensive tion is one way to realise this fuel reduc- generated prior to the delivery of ther-
low sulphur material, eg low sulphur tion and associated cost savings. mal energy to process.
fuel oil (LSFO), attempting to maximise Cogeneration, as mentioned above, can The gas turbine burns natural gas to
the use of HSFO within the limits of the also substantially reduce CO2 and other produce electricity (today’s gas turbines
permitted sulphur emission level. greenhouse gas emissions. have efficiency >34 per cent) and expels
However, when the total sulphur oxygen-rich hot exhaust to the HRSG.
limit is reached, any additional Cogeneration benefits The HRSG then recovers the heat from
(marginal) fuel must not contain any Combined heat and power (CHP), or the exhaust to make steam and may
sulphur. Thus, as the refinery increases cogeneration, is comprised of not one even fire additional fuel to enhance
its fuel consumption, it will have to technology but several combined tech- steam production. The portion of this
burn greater amounts of LSFO. As a nologies, which, when employed steam that may be deemed superheated
result, the “sulphur parity” cost of the together, generate electricity and heat is then let down through a steam turbine
marginal LSFO/HSFO mixed fuel energy in a single integrated system. In (T-1) to the highest-pressure header.
becomes higher than the cost of LSFO Further steam turbines (T-2, T-3) bal-
alone, and therefore higher than the Sulphur emissions compared ance steam and produce power across
cost of the refinery’s highest cost fuel. the remaining lower pressure headers.
To illustrate this effect, consider the Thus, one can see that the heat liberat-
following base case where a refinery is Base case ed by the burned fuel in the gas turbine
operating at or just below the sulphur FO consumption 20t/h t/h %S is effectively recovered by equipment
emission limit, and the corresponding LSFO 10 1% placed downstream of the gas turbine.
‘new case’ where the fuel requirement is HSFO 10 3.50% This high degree of heat recovery is the
increased by a marginal 1t/h (Table 2). Total 20 2.25% reason for the high overall efficiencies
If the additional fuel requirement is S emission 0.45 t/h of CHP units.
1t/h, HSFO consumption will have to be The configuration illustrates that heat
New case
reduced by 0.4t/h and LSFO increased normally wasted in conventional power
FO consumption 21t/h
by 1.4t/h. If LSFO is priced at $139/t generation is recovered as useful energy
LSFO 11.4 1%
($20/bbl) and HSFO at $117/t in a CHP. This recovered energy is used
HSFO 9.6 3.50%
($16.5/bbl), the fuel cost in the base case Total 21 2.14% to satisfy an existing thermal (steam)
is $2560/h and in the new case it is S emission 0.45 t/h demand, thus avoiding losses that
$2708/h. would otherwise be incurred from sepa-
The resulting marginal “zero sulphur” Table 2 rate or conventional power generation.


The refinery thermal demand, or heat

sink availability, is the key to refinery Grid losses and
cogeneration success. Because conven- generation losses
tional power producers lack this avail- (96) Losses
able heat sink to recover useful heat,
electricity generation efficiency has
remained stagnant at approximately 32 Power station Grid
per cent for much of the past 30 years. fuel (132)
The end result of CHP applications is Electricity 35 Electricity CHP
that a greater amount of the available 189 units total CHP
energy from natural resources can be system
Boiler fuel Boiler Heat Heat fuel
extracted. This increased fuel efficiency 50
translates directly into reduced emis- (57) 100 units total
sions of greenhouse gases (GHG) and Losses
other pollutants. Furthermore, reduced (8)
fuel consumption allows the refinery to
avoid the increased marginal fuel costs Conventional generation
associated with the sulphur emission (separate steam and power) Combined heat and power
To illustrate in greater detail the eco-
nomic and environmental benefits asso- Figure 3 Energy flows in CHP system vs conventional power and steam generation
ciated with CHP, consider the following
comparison (Figure 3) between conven- about 14 per cent of Europe’s power, and ing schemes. The economic indicator
tional power generation and CHP based this fraction is projected to increase to for cogeneration viability as a function
upon an actual cogeneration facility 30 per cent by 2010. The Netherlands of power and fuel pricing is the price
recently evaluated. In the conventional expects that over 60 per cent of its equivalent efficiency (PEE) of generating
generation, separate heat and power power will be co-generated by 2010. power. By definition, this is the ratio of
production requires 189 fuel units (heat- Similarly, since the introduction of fuel to power price or:
ing value basis) to generate 35 units of the 1978 Public Utility Regulatory Pol-
Cost of marginal fuel ($/MMBtu)
electricity and 50 units of heat. Genera- icy Act (PURPA) and the 1978 Nation- PEE = ————————————— *100(%)
Cost of marginal power ($/MMBtu)
tion losses and grid transmission losses al Energy Act (NEA) in the USA, power
consume 96 units of fuel input. supplied by cogeneration has grown Clearly, as the PEE increases, the cost
However, the combined heat and from zero to 12 per cent of entire US of marginal fuel increases relative to the
power unit produces the same quantity installed power generation capacity, cost of marginal power. This is, in fact,
of electricity and heat (35 and 50 units, supplying about 10 per cent of US what happens when fuel oil and fuel gas
respectively) with a total fuel input of electric power. emission regulations are introduced. A
100 units, which is 53 per cent less fuel Despite the 1978 legislation (PURPA) graph of PEE as a function of fuel and
than is consumed in the conventional adopted to foster power deregulation power prices for the US industrial sector
generation scheme. Directionally, this and subsequent CHP investment in the from 1967–2001 is shown in Figure 4
means, in this case, 53 per cent less CO2 USA and similar CHP promotion mea- (for convenience and to enable easy cal-
is produced. sures taken worldwide, economic incen- culation of the PEE, all prices, including
tives did not remain entirely favourable electricity, are shown as $/MMBtu). Data
Cogeneration trends for wide-spread cogeneration imple- from the USA is utilised because it offers
Historically, the widespread use of mentation during the time from 1978 to a more consistent pricing than from the
cogeneration has been limited. This is the present. To illustrate this point, KBC diverse European countries, but the
somewhat surprising considering the has often utilised an indicator of opti- result is essentially the same.
obvious advantages the technology mal power purchasing vs. fuel purchas- Figure 4 captures the effect of fuel and
offers. In the not too distant past,
cogeneration adoption has been cur-
tailed by a variety of factors, including
Nominal prices paid by US industrial
organisational, fiscal, legislative and sector for Btu 1967–2001
thermodynamic. 16.00 40
As an example of organisational and PEE %
14.00 Electric power 35
thermodynamic constraints, consider
electric utilities; regulated electric utili- 12.00 Heavy fuel oil 30
ties initially showed resistance to the Fuel gas
10.00 25

PEE, %

purchase of cogenerated power pro-

duced in refineries and other industrial 8.00 20
entities. Nonetheless, despite cogenera-
tion’s high efficiency, they were unable 6.00 15
to utilise the technology themselves 4.00 10
due to their inherent lack of heat sink
availability. 2.00 5
Significant change came with the
0.00 0
deregulation of the power sector, which

19 9

19 3

19 7
19 9

19 3
19 5
19 7

19 1

19 5
20 7




occurred first in Europe. This deregula-







tion made Europe the world leader in Period 1 Period 2 Period 3 Period 4
cogeneration. Combined heat and
power (CHP) units currently supply Figure 4 PEE vs price of power and fuel oil/fuel gas


Year 2000 dollars/MMBtu Year 2000 cents/KWh

History Projections History Projections
Oil 10
3 Natural gas
6 Average price
2 (nominal cents)
Coal 1.7
1 2
Nuclear 1970 2020
0 0
1990 1995 2000 2005 2010 2015 2020 1970 1980 1990 2000 2010 2020

Figure 5 Projected fuel prices to electricity generators, Figure 6 Projected average retail US electricity prices,
2000–2020 2000–2020

power price changes upon PEE and, in during this time due to its relative new- been increasingly implemented.
turn, the PEE gives an indication of ness. Instead, cogeneration had to be However, there is substantial cogenera-
cogeneration investment viability as a considered again in terms of condens- tion opportunity left to be realised.
function of fuel and power price. To ing steam turbines.
illustrate this point, the period consid- With a purchased power PEE of 29 per Barriers
ered in the figure can be broken into cent, it was cheaper to buy electricity The barriers to cogeneration implemen-
four distinct eras: than to produce it in condensing tur- tation are not based entirely upon fuel
— 1967 to 1973 bines with 25 per cent efficiency. Thus, and power pricing. Other factors have
— 1973 to 1985 the energy-aware managers embarking hindered cogeneration expansion in the
— 1985 to 1986 on fuel saving programmes of this peri- recent past. These factors are:
— 1988 to 2001. od did not see inhouse power produc- — Complicated cogeneration permitting
In 1967, when the power price was tion as an attractive cost saving systems that are complex, time-consum-
$2.93/MMBtu ($0.01/KWh) and the nat- measure. Therefore, the main wave of ing and varied
ural gas price $0.32/MMBtu, the PEE was refinery energy conservation — Regulations that do not account accu-
11 per cent. Thus, since the fuel price (1973–1985) eluded inhouse power gen- rately for the overall system efficiency
was so low, any refinery device that eration and large scale cogeneration. of CHP, or do not adequately credit dis-
could generate power from fuel at an From 1985 to 1996, power prices and placed emissions and grid losses
efficiency higher than 11 per cent was fuel prices dropped initially and then — Difficult and frequently prohibitive
profitable to run, and the produced remained fairly stable, causing the PEE interconnection arrangements with
power could replace purchased power to remain stable as well, in the range of utilities
demand. However, the only technology 18.4 to 21.2 per cent. This time frame — Depreciation schedules that do not
available to small industrial power pro- also saw the advent of the highly effi- reflect the true life of CHP assets.
ducers (refineries) at the time was the cient, small industrial gas turbine, However, steps are being taken to mit-
steam turbine. which when combined with heat recov- igate or reduce the effect of most of
A small amount of power could be ery equipment and existing steam tur- these disincentives. Thus, fuel and
produced in an efficient back pressure bine technology, yielded thermal power pricing will continue to be an
cycle (say 80 per cent efficiency), but the efficiencies of 75–80 per cent. influential factor in determining cogen-
majority of the power could only be This new technology could substan- eration viability. Rigorous marginal fuel
generated in the condensing cycle tially reduce fuel cost and carbon emis- and power pricing, as utilised in current
(about 25 per cent efficient). Thus, there sions, but it required high investment cogeneration feasibility studies, will
was not much incentive to invest in and came in times of depressed margins, remain key. In fact, as the other barriers
order to move from 11 per cent of pur- severe competition, and clean fuels fall away, it will become one of the pri-
chased power PEE to 25 per cent effi- specifications that drove the invest- mary operators in determining cogener-
cient inhouse generation, and the power ments away from energy conservation. ation viability.
was relatively inexpensive anyway. Thus, very few refineries installed With this in mind, it is worthwhile to
From 1973 to 1985, fuel gas/fuel oil cogeneration schemes. consider what the future holds for the
prices rose as did power prices. Fuel During the past few years (1998 to the expansion of cogeneration capacity.
prices increased more, however, as a present), the PEE has climbed to 35–40
percentage of their original 1973 value per cent – its highest level yet in the Fuel and power pricing
than did power prices. Thus, the PEE USA. Even though this reduced the Given the certainty of the influence of
increased dramatically to a local maxi- cogeneration attractiveness again, it still fuel and power pricing upon the eco-
mum of 29 per cent in 1985. This situa- remains viable, yielding thermal effi- nomics of cogeneration viability now
tion would have been ideal for ciencies exceeding 80 per cent. Further- and in the future, it is important to
cogeneration as we know it today (high more, as the cogeneration opportunity consider fuel and power price projec-
efficiency gas turbine exhausting to has become more recognised in terms of tions. From the previous analysis, it
heat recovery equipment with efficien- both cost reduction and the environ- can be determined that at the current
cy >80 per cent), but unfortunately the mental effect, and margins have PEE of 35–40 per cent, cogeneration
gas turbine did not gain widespread use improved, cogeneration schemes have remains viable, since it operates in its


most efficient form at efficiencies value is a reduction from the current — Steam/power: 54 per cent
greater than 80 per cent. But what if PEE PEE values of 35–40 per cent and the — Other: 21 per cent
increases to the point where cogenera- result of this analysis is that cogenera- It appears from this brief analysis that
tion is not an attractive investment? For tion, or combined heat and power, hav- more than half of the energy saving
instance, if the PEE were to increase in ing efficiencies greater than 80 per cent benefits is to be found in the improve-
the future to 70 per cent, this would cer- (and expected higher efficiencies in the ments of the steam and power systems.
tainly limit cogen viability. This is future) will increase in economic viabil- The benefits shown in Table 3 are based
because the capital costs and mainte- ity based upon fuel and power prices on cost. Therefore, they are not neces-
nance costs of cogeneration are high and during the course of the next 20 years. sarily directly related to energy savings,
will make power purchased at a PEE of but rather to energy cost reduction. The
70 per cent effectively cheaper than Energy conservation projects optimisation of the fuel systems illus-
power produced in an 80 per cent effi- Clearly, it appears that the energy con- trates the difference; burning cheaper
cient CHP unit. servation in refineries remains an area fuels does not save “energy” but reduces
According to data supplied by the where profit improvement benefits are to fuel cost.
most recent US Department of Energy be sought, thereby resulting in negative However, the process and
(DOE) Annual Energy Outlook (2002 CO2 emission avoidance cost. All sites are steam/power system energy improve-
with projections to 2020), the price of different, and it is difficult to generalise ments are more or less directly associat-
power is anticipated to remain relatively as to where the energy savings can be ed with fuel savings (either in the
constant through 2020, while the price made. Table 3 shows the results of some refinery or in a utility plant when
of fuel gas is expected to increase. This is recent, selected energy studies, indicating cogeneration is concerned). When only
in-line with the previous consideration the benefits that were identified. The these are considered, it appears that
of increasing marginal fuel costs based examples are chosen to give a good steam and power system improvements
upon increasingly stringent emission overview of European/Asian refineries. account on the average for about two-
constraints. The identified non/minor-investment thirds of the energy saving potential in a
The effect of the DOE-predicted benefits ranged from US$0.04 to refinery.
increase in fuel costs (fuel gas and fuel US$0.15/barrel of crude processed, while These systems tend to be the focal
oil) will be to drive the PEE up. The the total benefits including the justifi- points of energy efficiency programmes
question will be how high will it go. able capital investment projects, range and hence should play an important
Using Figures 5 and 6, the PEE value in between US$0.05 and US$0.30/barrel. role in any refinery environmental per-
2020 can be guessed. If it exceeds 70 per The benefits can be further split into formance and improvement study.
cent, then one might say cogeneration three main areas:
expansion will be threatened. — Process units energy improvement Energy best practices
According to the DOE projections (heat integrations, process optimisa- Clearly, the identified pace setter
shown previously, the year 2000 based tions, furnace upgrades and direct pro- refineries do something better than the
fuel price in 2020 will be approximately cess energy savings) average ones. One part of this “better”
$4.00 per million Btu. In nominal dol- — Steam/power system improvements performance is energy-efficient designs,
lars (nominal dollars should be used as (optimisation of steam/power system, and a smaller part is due to the adopted
decisions will be made in 2020 based on maximisation of the efficiency of power and implemented best practices. An effi-
“dollars of the day”), this equates to a generation, and cogeneration) cient preheat train is the example of the
2020 fuel price of $10.00 per million — Other energy savings (optimisation of former, while vigorous furnace excess air
Btu. The power price, again in nominal fuel systems, reducing flaring, minimis- control programme is of the latter.
dollars, is anticipated to increase to ing hydrogen loss to fuel, etc). While improving the original ineffi-
approximately 11.3 cents per KWh or, From Table 3, the weighted average cient designs may be costly and often
equivalently, $33.00 per million Btu. percentages of savings in each of the uneconomic, the introduction of best
Thus, the year 2020 PEE will be areas are calculated as: practices may require minor investment
approximately 30 per cent. This PEE — Process units: 26 per cent only (such as instrumentation and

Results of recent energy studies, indicating benefits

Encon potential Encon potential Benefits by areas

Throughput $million/year US cents/bbl $million/year
Location Bbl/day Non/minor Non/minor Process Steam Other (fuels,
Investment Projects Total investment Projects Total units & power flare etc)

Southern Europe 140 000 5.0 9.2 14.2 9.8 18.2 28.0 0.4 10.8 2.74
Scandinavia 200 000 2.8 4.2 7.0 3.9 5.8 9.7 3.15 3.22 0.65
Far East 100,000 5.2 0 5.2 14.3 0.0 14.3 0.5 1.63 3.1
Southern Europe 130 000 3.6 0.45 4.0 7.6 1.0 8.6 0.57 2.7 0.77
Japan 225 000 6.7 1 7.7 8.2 1.2 9.4 1.5 4.3 1.9
Japan 103 000 1.85 0 1.9 5.0 0.0 5.0 0.42 1.3 0.13
Eastern Europe 238 000 13.0 0 13.0 15.1 0.0 15.1 6.1 5.3 1.6
Central Europe 137 000 3.4 0.7 4.1 7.0 1.4 8.4 0.70 1.9 1.5
Central Europe 112 000 1.5 0.4 1.9 3.7 1.1 4.8 1.06 0.22 0.6
UK 105 000 5.6 6.3 11.85 14.7 16.6 31.2 2.5 7.3 2.05
Middle East 130 000 2.95 2.7 5.65 6.3 5.7 12.0 0.25 4.9 0.5

Table 3


monitoring tools), and many procedural the use of real time marginal fuel price
and organisational changes. While the calculations as input to steam and
organisational structure of pace setter power price calculations and operating
refineries may differ, where energy effi- strategies. There would be a real time
ciency is concerned, they usually have monitoring of the fuel balance includ-
the following in common: ing all gaseous and liquid fuels (with an
— Organisation and ownership overall closure >97 per cent). Flare loss-
— Steam and power system es are monitored as part of the refinery
— Fuel system strategy fuel balance and also reported in terms
— Fired heaters of revenue loss. As for the steam sys-
— Preheat trains. tem, the flow meters are zero and range
Within the organisation and owner- checked. The analysers are calibrated
ship structure, a full-time energy man- routinely.
ager is in place with well-defined For fired heater energy efficiency,
responsibilities and authority to make furnace draught and excess-air use are
decisions that influence the energy set at their targets. Burner set-up checks
costs. Energy performance is reported and cleaning are carried out routinely.
to management and actions are fol- The operators routinely search and
lowed-up. The energy performance is repair the air leaks, and they are all
not only reported as energy consump- trained in effective heater operation.
tion, but also as financial loss versus Real time furnace efficiency calcula-
the target energy efficiency. tions are displayed live and reported
The staff is aware of site energy tar- monthly, and deviations from the tar-
gets and improvement plans and gets are reported as revenue loss. The
involved in the efficiency improvement analysers are calibrated routinely.
process. Weekly meetings are held to The preheat trains are modelled and
review energy performance of units to monitored routinely to optimise any
maintain operator’s focus and to gain flow splits and to monitor exchanger
feedback. Regular energy training pro- fouling. The model is used to optimise
grammes take place, and periodical the cleaning cycle. The fractionation
energy studies are carried out to identi- effects are considered when setting the
fy the opportunities and develop the optimum pumparound duties and
implementation plan. flows.
Within the steam and power system,
real time steam and power price calcu- Future interest
lations are used to set the operation tar- Pure refinery fuel saving programmes
gets for maintaining the optimum and cogeneration, if applied world-
steam and power balance, including wide, could reduce the world fuel con-
power generation, turbine/motor sumption by about 26 million t/year,
switches, load shedding, and reactive which is 21 per cent of the total fuel
power control. Procedures and targets that refineries worldwide currently con-
are set to maintain the lowest cost sume. Saving 21 per cent of the total
steam generation, distribution, and refinery fuel would reduce CO2 emis-
backup. sions by 55 million t/year (about 0.2
A real time refinery steam balance is per cent of world’s CO2 emission from
created (closure >97 per cent), includ- fossil fuels).
ing condensate recovery. A real time
refinery power balance is produced This article is based on a paper presented at
detailing refinery import/export and the ERTC Environmental Conference, Lon-
consumption/production breakdown. don, 8–10 April 2002.
Boilers are operated according to proce-
dures and targets that include optimum
blowdown, excess air, draught, soot Zoran Milosevic is a senior staff
blowing frequency, burner set up and consultant with KBC Process Technology,
cleaning. Houston, Texas, USA, specialising in
Large process turbines, turbo alterna- energy optimisation and profit
tors, gas turbines and engines have real improvement in oil refineries. He holds an
time efficiency monitoring. The opti- MS degree in chemial engineering from
mum load and cleaning frequency is Lehigh University, Bethlehem,
determined as part of this monitoring Pennsylvania, USA, and a PhD from the
activity. In terms of maintenance, side- University of Novi Sad, Yugoslavia.
wide reviews of steam leaks, steam traps Wade W Cowart is an energy services
performance and condensate recovery consultant for KBC Advanced Technologies
are conducted regularly, resulting in a at Houston, and specialises in
repair schedule to track progress and to cogeneration, pinch analysis, and energy
prioritise the repairs. To maintain an efficiency in refineries. He holds a BS
accurate steam balance, the flow meters degree in chemical engineering and
are zero and range checked routinely. mathematics from Louisiana State
The fuel system strategy incorporates University.