Energy cost optimization through atypical grid utilization

The entire energy-intensive production industry in Germany is increasingly facing the challenge of reducing its energy costs and at the same time improving the sustainability of its processes. A promising approach to reach these goals is to shift peak electrical energy consumption outside the general peak load time windows (so called atypical grid utilization). A successful implementation of this approach can save steel companies up to seven-digit amounts in energy costs, especially on the electric steel making route, by having a (significant) part of the grid fees reimbursed retroactively.

The following example (see also Figure 1) illustrates the shifting of peak loads outside the so-called High Load Time Window (HLTW) for a typical electric steel producer. The upper load profile in Figure 1 shows an electricity consumption chart for a day, which typically peaks when the energy-intense operations are running at full power. Assuming an operation that is not paying attention to peak load windows, there are two random power peaks, one of which is within the HLTW between 8:30 a.m. and 7:30 p.m. For the calculation of the grid charges, the maximum of 51 MW therefore applies. If the company can shift the load outside the HLTW, e.g. by running the electric arc furnace (EAF) at reduced power during the hours inside the HLTW, by shifting to a higher proportion of chemical energy and/or by producing a modified product portfolio, it can avoid power peaks in a targeted manner. To illustrate this, the lower load profile has been optimized with respect to the HLTW: Outside the HLTW, the furnace runs under full load and power, while inside the HLTW less power is deliberately consumed. The calculation of individual grid charges is now based on 43 MW instead of 51 MW, which corresponds to relative savings of 15% of the total costs. With an assumed annual consumption of 300 GWh, € 1.5 million would thus be reimbursed retroactively.

How can companies benefit from atypical grid utilization?
Bronk & Company has developed a structured approach to identifying the potential of atypical grid usage, evaluating it from a business perspective and implementing it with appropriate planning processes and tools. Figure 2 illustrates this approach.

Starting point for analysis and business case assessment:
The B&C benchmarking database provides initial information for the identification of relevant levers in the form of resource groups or workshops on site, also depending on the type of company. For example, our data for stainless steel production via the EAF route shows that the steel mill is the largest energy consumer of the plant with a share of around 70-80% (see Figure 3). Consequently, this is also where the greatest leverage occurs. Depending on the degree of vertical integration, market segment and product portfolio, the largest electricity consumers in metal-producing companies can be distributed differently across the plant in terms of their base and peak loads.

At the same time, our customer would collect resource-specific data. Ideally, an existing ISO 50001 report or the measuring systems that were set up to collect data for certification purpose can already be used here. This combination of analyses forms the basis for an initial rough estimate of potential savings: Based on the identified consumption of the main units, B&C prepares an indicative assessment of the possible savings in close coordination with the customer’s operations and planning departments.

Joint development and evaluation of measures:
Together with the customer’s experts, we analyze for each relevant resource the technical restrictions that define the framework for improvement measures. For each major power-consuming operation, possible technical and planning measures are examined to reduce, shift or stretch the power consumption. At the same time, the impact of the identified measures on process duration, product quality as well as adherence to delivery dates and other critical parameters is evaluated. After this feasibility and effectiveness check, a detailed assessment of the savings potential is conducted.

Securing savings by proactively steering and controlling the production:
To realize the identified savings and to secure their sustainability, targeted measures are necessary at various long- and short-term planning and control levels:

    • Forecast based planning (budget process / S&OP): Capacity constraints for relevant time windows in the fiscal year must already be considered at the early planning phases, typically referred to as sales and operations planning (S&OP).
    • Order-related planning (MPS / scheduling): As soon as order data and production routes are available, a detailed load forecast is possible. The planner can then steer order promising and production planning and sequencing through specific KPIs to achieve the targets for electricity consumption.
    • Shop Floor Control: The necessary measurement and control instruments as well as control processes must be established for the identified main electricity consumers.

This optimization of planning and control processes in operations planning also benefits companies in preparation for cost-efficient operations in the future, taking into account the expected changes in the electricity market.

Holistic consulting and operational support:
B&C offers comprehensive advice on all aspects of atypical grid utilization with strong partners at our side as needed. From the application to the planning and operational implementation, we support our customers comprehensively and ensure that the full savings potential is efficiently leveraged today and secured in the long term for the future.

For more information on our range of services to support transformation processes and performance optimization by using the possibilities of data-driven analysis and decision support, please contact us at info@bronk-company.com. 

Your contacts:

Dr. Pascal Lutter,
Senior Manager

Marc Hartmann,
Senior Partner

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