ECONOMIC AND SOCIAL COMMISSION FOR WESTERN ASIA
EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: AN ANALYSIS OF OPTIONS FOR SELECTED ESCWA MEMBER STATES
United Nations
D i s t r . G E N E R A L E / E S C W A / E N R / 2 0 0 1 / 1 4 3 0
O c t o b e r
2 0 0 1 O R I G I N A L :
E N G L I S H
ECONOMIC AND SOCIAL COMMISSION FOR WESTERN ASIA
EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: AN ANALYSIS OF OPTIONS FOR SELECTED ESCWA MEMBER STATES
United Nations New York, 2001
ii The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delineation of its frontiers or boundaries.
Mention of firm names and commercial products does not imply the endorsement of the United Nations.
01-0934
CONTENTS Page
Abbreviations and explanatory notes ...... vii Introduction ...... 1
Chapter
I. THE ESCWA INDUSTRIAL SECTOR, MAIN FEATURES AND ENERGY CONSUMPTION PATTERNS ...... 3
A. The total energy consumption patterns...... 3 B. The manufacturing industries, classification and main features ...... 7 C. The industrial sector’s energy consumption patterns, and the need for efficiency improvement ...... 9
II. PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR ...... 11
A. Potential energy efficiency and conservation technologies...... 11 B. The procedure and criteria for ranking and selecting the priority energy efficiency and conservation options...... 14 C. The selected case studies ...... 18
III. EVALUATION OF THE SELECTED PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR...... 20
A. Evaluation requirements and limitations ...... 20 B. The evaluation approaches for the selected priority options ...... 20
IV. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF EGYPT ...... 27
A. The industrial sector of Egypt: Classification and main features ...... 27 B. The situation of energy and industry in Egypt...... 27 C. Status of activities for improving industrial energy efficiency...... 31 D. Combined heat and power systems, status assessment and evaluation...... 36 E. Waste heat recovery systems, status assessment and evaluation ...... 39 F. Tune-up of boilers and furnaces, status assessment and evaluation ...... 43 G. Constraints and recommendations ...... 45
V. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF LEBANON ...... 47
A. The industrial sector in Lebanon: classification and main features ...... 47 B. The situation of energy and industry in Lebanon ...... 48 C. Status of activities for improving industrial energy efficiency...... 51 D. Combined heat and power systems, status assessment and evaluation...... 53 E. Waste heat recovery systems, status assessment and evaluation ...... 56 F. Tune-up of boilers and furnaces, status assessment and evaluation ...... 56 G. Constraints and recommendations ...... 57
iii CONTENTS (continued)
Page
VI. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF THE SYRIAN ARAB REPUBLIC ...... 58
A. The industrial sector of the Syrian Arab Republic: classification and main features...... 58 B. The situation of energy and industry in the Syrian Arab Republic ...... 59 C. Status of activities for improving industrial energy efficiency ...... 64 D. Combined heat and power systems, status assessment and evaluation ...... 65 E. Waste heat recovery (WHR) systems, status assessment and evaluation...... 67 F. Tune-up of boilers and furnaces, status assessment and evaluation...... 68 G. Constraints and recommendations ...... 68
VII. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ...... 70
A. Summary and main conclusions ...... 70 B. Recommendations ...... 76
References ...... 78
LIST OF TABLES
1. Primary energy consumption in the ESCWA region in 1999 ...... 4 2. Final energy consumption in the ESCWA region by type of fossil fuels and electricity...... 6 3. Main features and economic indicators of the manufacturing industries in selected ESCWA member countries (1999) ...... 8 4...... Electricity consumpti 5. Estimated final energy consumption in the industrial sector ...... 10 6. Industrial energy intensity development for 1995-1998 ...... 10 7. Examples of the identified measures and the potential energy efficiency improvement in selected industries ...... 15 8. General characteristics of the well-proven energy conservation measures...... 16 9. Matrix for the selection of high priority energy conservation measures...... 19 10. Comparison of the characteristics of the CHP technologies...... 22 11. Typical examples of CHP system capital cost estimates ...... 23 12. Primary energy consumption in Egypt ...... 28 13. Development of industrial energy consumption and energy intensity in Egypt ...... 29 14. ECEP/DSM, energy audit results...... 33 15. Installed and estimated potential capacities of CHP in Egyptian industry ...... 37 16. The set of proposed CHP options modules for application in the Egyptian industry ...... 38 17. Evaluation results of the selected CHP modules for energy efficiency application in Egyptian industry ...... 39 18. A Summary of major audited and implemented WHR options in Egyptian industry...... 40
iv 19. Priority ranking of the selected WHR systems for Egyptian industry ...... 41 CONTENTS (continued)
Page
20. Evaluation summary of waste heat recovery options ...... 42 21. Fuel savings and emissions reduction by industrial sectors (Tune-up programme)...... 44 22. Anticipated fuel savings of fuel oil, gas oil and natural gas for the nationwide tune-up programme of boilers and furnaces...... 45 23. Summary of the analysis of nationwide tune-up programme using portable gas analyzers...... 45 24. Main indicators of the Lebanese industrial sub-sectors ...... 48 25. Main indicators of energy situation in Lebanon...... 49 26. Energy consumption by type of fuel in Lebanese industry in 1994...... 50 27. Energy demand forecast in Lebanese industry...... 51 28. A summary of the fuel consumption by sub-sector for the surveyed industrial plants ...... 52 29. CHP potential in Lebanese industry based on actual plants data ...... 54 30. A summary of financial indicators for CHP implementation in Lebanese industry ...... 55 31. Estimated energy savings from the tune-up of boilers using portable gas Analyzer (case of Lebanon)...... 56 32. The main indicators of Syrian industry ...... 58 33. Primary energy consumption in the Syrian Arab Republic...... 59 34. The final energy consumption in the Syrian Arab Republic ...... 60 35. Consumption of electricity and oil derivatives in Syrian industry (public sector)...... 61 36. Energy conservation potential in conserves food plants in Syrian industry (1999) ...... 63 37. Energy conservation potential in the “Syrian Company for Dairy – Damascus” ...... 63 38. Energy conservation potential in Syrian sugar industry (1999) ...... 64 39. Estimated CHP potential in Syrian industry...... 66 40. Application of selected WHR options in Syrian industry ...... 67
LIST OF FIGURES
I. Primary energy consumption in ESCWA region ...... 5 II. Level of energy independency or energy dependency in ESCWA member countries ...... 5 III. The consumption of petroleum products in ESCWA region by fuel type ...... 5 IV. Sectoral distribution of electricity consumption in selected ESCWA Countries in 1999 ...... 6 V. Flow chart for creating CHP database...... 23 VI. Feasibility analysis procedure for CHP module...... 24 VII. The sectoral distribution of the final energy consumption in 1998/99...... 28 VIII. Sectoral distribution of electricity consumption in 1998/99 ...... 29 IX. Final energy consumption in Egyptian industry classified by sub-sectors (1995)...... 29
v X. Energy consumption in Egyptian industry classified by sources ...... 30 CONTENTS (continued)
Page
XI. CHP capacity in Egyptian industry...... 37 XII. Boilers tune-up project, fuel savings and its sectoral distribution...... 43 XIII. Distribution of the number of establishments by type of industry...... 47 XIV. Primary energy consumption by sources in Lebanon...... 49 XV. Sectoral distribution of electricity consumption by the different economic sectors of Lebanon...... 50 XVI. Share of industries in the CHP potential in Lebanon...... 55 XVII. The sectoral distribution of final energy consumption in the Syrian Arab Republic (1999)...... 60 XVIII. The distribution of energy consumption by sub-sectors (1999) ...... 62 XIX. The estimated CHP potential in Syrian industry ...... 66
LIST OF ANNEXES
I. A brief on the development status of the selected priority options for efficient use of energy in the ESCWA industrial sector...... 80 II. A brief on combined heat and power and waste heat recovery demonstration projects in Egypt ...... 90 III. Sample of the financial evaluation of the high priority options for efficient use of energy in the ESCWA industrial sector...... 93
vi ABBREVIATIONS AND EXPLANATORY NOTES
ADF African Development Fund CDE countries with diversified economies CHP combined heat and power CO carbon monoxide CO2 carbon dioxide CRF carbon recovery factor CSC cost of saved carbon CSE cost of saved energy ECEP Energy Conservation and Environment Project EDL Electricité Du Liban (Lebanese Electric Utility) EEAA Egyptian Environmental Affairs Agency EEHC Egyptian Electricity Holding Centre EEI energy efficiency improvement EIA environmental impact assessment EIS Energy Issues Section EMS energy management system ENRED Energy, Natural Resources and Environment Division ESCO’s Energy Service Companies ESCWA Economic and Social Commission for Western Asia GCC Gulf Corporation Council GDP gross domestic products GEF Global Environmental Facility GHG greenhouse gas GOE government of Egypt GWh gegawatt hour HHV higher heating value HRSG heat recovery steam generation IEA International Energy Agency IPCC International Panel on Climate Change IRR internal rate of return ISIC international standard industrial classification ktoe Kilo ton oil equivalent kV Kilovolt KW Kilowatt kWh kilowatt hour LE Egyptian pound (Livre Egyptienne) LHV lower heating value LL Lebanese pound (Livre Libanaise) LM local manufacturing LPG liquid petroleum gas MC member countries MOEW Ministry of Energy and Water of Lebanon MOI Ministry of Industry Mtoe million ton oil equivalent MW megawatt (1000 kw) MWh megawatt hour NG natural gas NOx nitrogen oxide NPV net present value NREA New and Renewable Energy Authority O & M operation & maintenance
vii ABBREVIATIONS AND EXPLANATORY NOTES (continued)
OEP Organization for Energy Planning PAFC phosphoric acid fuel cell PPA power purchase agreement SIPH Solar industrial processes heat SL Syrian lire SNAP support for national action plan SSEECP Supply side efficiency and energy conservation project toe Ton of oil equivalent TWh Tera watt hour UNDP United Nations Development Programme UNEP United Nations Environment Programme USAID United States Agency for International Development WEA World Energy Assessment WHR waste heat recovery
The following symbols have been used in the tables throughout the study:
A dash (--) indicates that the amount is nil or negligible; A hyphen (-) indicates that the item is not applicable.
Bibliographical and other references have, wherever possible, been verified.
viii INTRODUCTION
The recently published World Energy Assessment(1) (WEA) and the scenarios developed by the International Energy Agency (IEA) have indicated that if the 2 per cent annual global growth rate in primary energy demand continues, global energy demand will rise by 50 per cent by 2020 (IEA)(2) and double by 2035, relative to 1998 consumption (WEA). Some developing countries may not be able to afford such changes, which will also result in an increase in greenhouse gas (GHG) emissions and cause other environmental problems.
The amount of additional energy required to provide the energy services needed in the future, will depend on the efficiencies with which the energy is produced, delivered, and used. Improvements in energy efficiency could help reduce financial investment in new energy supply systems.
Today, the global energy efficiency of converting primary energy to useful energy is about one-third, while two thirds are dissipated in the conversion processes. Further significant losses occur when useful energy is used to deliver energy services. Numerous economic opportunities exist for energy efficiency improvement, particularly in the final conversion step from useful energy to energy services.(1)
In 1997, IEA estimated that energy savings of 20 to 30 per cent could be achieved cost-effectively over two to three decades. In some specific sectors, the estimated potential is even bigger. But, large-scale efficiency improvements cannot be obtained either easily or quickly. They can be achieved only with significant investment in improved equipment, buildings and infrastructure, and with persistent attention to energy-consuming behavior. Concerted policy actions to foster investment and attention are needed if this potential is to be released.(2)
The ESCWA region has tremendous fossil energy resources in the form of oil and gas. Nine member countries (MC’s) are among the highest oil exporting countries, and oil revenues continue to play a significant role in their economies. Three countries in the region have limited resources and depend on imported fuels, namely Jordan, Lebanon and Palestine. In 1999, the oil reserves in the ESCWA region were estimated at 589.431 billion barrels, accounting for 57 per cent of the world’s total proven reserves, and the region produced an average of 18.3 million barrels per day in 1998.(3)
In the ESCWA region, the use of energy per capita was estimated at 545 kgoe in 1973 and reached 1558 kgoe in 1999. Although the average is close to the world average, there is a highly diverse situation in the region regarding the energy consumption pattern. The per capita consumption between countries in the region varied in 1999 from about 210 kgoe in Yemen to more than (14,800 kgoe) in Qatar,(4) which is ten times that of the world average.
The decline in real GDP per capita and the simultaneous rapid increase in energy consumption means that the energy content of GDP, or energy intensities, increased in the ESCWA region. The average energy intensity in the region reached 0.522 kgoe/US$ in 1999, accounting for 1.6 times the world average of 0.320 kgoe/US$. On the country level, it varied between 1.32 kgoe/US$ in Bahrain to 0.295 in Oman.(4) This characteristic is attributed to the combination of wasted energy, under-priced electricity in most ESCWA countries, heavy energy intensive industries (metals, petrochemicals, and cement), the growing penetration of consumer durables and vehicles, and the increased level of per capita income.
In light of the above and in connection with its mandate to support the economic and social development of the region, the ESCWA secretariat has directed efforts towards the promotion of efficient and sustainable energy systems in the region.
The programme of work of the ESCWA Energy Issues Section (EIS) in the biennium 1996-1997 included a study published in Arabic on Regional Perspectives for Improving Energy Efficiency in ESCWA Member States (E/ESCWA/ENR/1997/13).(5) The study assessed the status of the energy consumption patterns in the member states and the distribution of energy consumption by the different economic sectors. The study has shown that in 1995, the residential, industrial and transport sectors were the highest end-use energy consumers in the ESCWA region. The same sectors continue to be the major consumers, where the
residential sector came first in GCC countries, while industry is the major consumer in the diversified economy member states. The two sectors each consumed 28 per cent of the petroleum products in 1995, and 52.4 and 24.7 per cent of the generated electricity for residential and industrial sectors respectively.
It is due to the above statistics and the need for the ESCWA energy sector to promote more sustainable consumption patterns, that the EIS work programme for the biennium (2000-2001) included two studies to identify and evaluate the priority options for efficient use of energy in both the building (residential and commercial) and the industrial sectors. The core objectives of each study as relevant to the specific sector are:
1. To identify a priority set of policy measures and/or technological options for energy conservation and efficient use of energy in the specific sector of the selected ESCWA member countries.
2. To assess the application potential for the selected priority options and recommend actions for its realization.
This report “Efficient Use of Energy in the Industrial Sector: An analysis of options for selected ESCWA member countries” presents the outcome of the study. Within the framework of the objectives described above, the study is presented in seven chapters.
Chapters I, II and III overview the main features of the industrial sector in the region and the existing opportunities for energy conservation in the sector. They also identify potential options, rank their priority and evaluate their potential applications in the region. With an emphasis on the industrial sector, chapter I classifies the existing manufacturing industries in the region and overviews the energy consumption patterns of the ESCWA member countries. Chapter II screens the available energy efficiency and conservation technologies that can be used in the ESCWA industrial sector, and sets a criteria for ranking and selecting the high priority options for achieving energy efficiency. The technical background for each option is also documented. Chapter III presents the methodology and procedure for the evaluation of the selected options.
Chapters IV, V and VI present three case studies for selected member countries, namely, (1) the Case of Egypt (chapter IV); (2) the Case of Lebanon (chapter V); and (3) the Case of the Syrian Arab Republic (chapter VI). Each case study presents an overview of the energy situation and the energy consumption patterns in the industrial sector, as well as the areas in need of improvement in energy efficiency in selected member countries. Each case study also presents assessment of application potential and feasibility indicators for the selected priority options in the country.
Chapter VII presents a summary and the main conclusions of the selected priority options, the potential application in each of the selected member countries, and the results of the preliminary techno- economic evaluation of each of these options. The chapter also presents a set of recommended actions needed to promote energy efficiency in the industrial sector of the region.
٢ I. THE ESCWA INDUSTRIAL SECTOR, MAIN FEATURES AND ENERGY CONSUMPTION PATTERNS
The industrial sector is extremely diverse and involves a wide range of activities. The International Standard Industrial Classification (ISIC) has classified industries into three main groups,(6) namely: the extraction of natural resources, conversion into raw materials, and manufacture of finished products. The manufacturing industries are the most important in the ESCWA region. Its share in the 1999 total GDP of the ESCWA region accounted for 11.2 per cent, while in 1990 it was 9.0 per cent.(7) During this period, the Manufacturing Value Added (MVA) has almost doubled reaching 45,270 million US$. It is due to such importance that the present study focuses on identifying the energy efficiency potentials in the manufacturing industries as the major industrial sub-sector in the region.
Since the availability of reliable data on the patterns of energy consumption is essential for the evaluation of energy efficiency potentials, in year 2000, the Energy Issues Section (EIS) of the Energy, Natural Resources and Environment Division (ENRED) designed and distributed a detailed questionnaire to concerned authorities in MC’s. The questionnaire covered: (a) the energy consumption patterns in the industrial sector; and (b) the energy efficiency activities of the industrial sector of the country. The data provided by countries in response was not sufficient to carry out the analysis and evaluation of the potential options for improving energy efficiency. To complement the received data, additional information has been gathered through different sources, such as ESCWA library, the Internet, documents and reports available by EIS-ENRED, as well as direct contact with concerned officials and organizations in several countries, mainly Egypt, Jordan, Kuwait, Lebanon and the Syrian Arab Republic.
Based on the above, this chapter overviews the total energy consumption patterns in ESCWA MC’s, with an emphasis on the industrial sector. Energy consumption patterns and the main economic and efficiency indicators of the sector are the main features discussed.
A. THE TOTAL ENERGY CONSUMPTION PATTERNS
1. The primary energy consumption
Primary energy consumption in the region is mainly dependent on crude oil and natural gas (NG). It has increased from 3369 thousand barrel oil equivalent (kboe) per day in 1990 to about 5000 kboe/day in 1999.(4) Table 1 shows the structure of the primary energy consumption in 1999 by resource, while figure I shows the primary energy consumption trends in the region between 1990-1999, as well as that for GCC countries and countries with diversified economies (CDE). The average growth rate during such period was approximately 4.8 per cent.
In 1999, the total consumption of crude oil in the region reached 141.2 mtoe, accounting for about 15 per cent of the region’s total oil production and about 98.6 mtoe of natural gas, accounting for about 77 per cent of the region’s total production of natural gas. Figure II shows the level of energy independency or energy dependency1 in the ESCWA-MC’s. The majority of MC’s have energy independence, with the exception of Lebanon and Jordan, which are almost completely dependant on imported energy.(7)
2. The final energy consumption
The final energy consumption in the ESCWA-MC’s is dominated by petroleum products, natural gas and generated electricity as shown in table 2. The total final energy consumption in 1999 has reached 123.7 mtoe of petroleum products, 78.6 mtoe of natural gas, and 298.5 TWh of generated electricity. The main features of the consumption growth were as follows:
1 The energy independence is known as the total production over the local consumption, and the dependence is the net imports over the total consumption.
٣ TABLE 1. PRIMARY ENERGY CONSUMPTION IN THE ESCWA REGION IN 1999 (Thousand tons of oil equivalent per year)
Countries Crude oil Natural gas Hydro Coal Total Bahrain 993 7 843 8 836 Egypt1 25 12 3 365 926 42 189 099 799 Iraq 17 6 200 2 482 5 26 557 870 Jordan 5 063 248 - - 5 312 Kuwait 6 950 7 694 - - 14 644 Lebanon 5 608a/ - 150b/ c/ 5 758 Oman 2 135 2 482 - - 4 617 Qatar 1 092 7 198 - - 8 290 Saudi Arabia 49 37 - - 86 870 640 230 Syrian Arab Republic 9 680 3 723 894 5 14 296 United Arab Emirates 13 13 - - 26 508 353 155 Yemen 3 723 - - - 3 723 ESCWA 141 98 6892 931 247 206 572 600 % of total(*) production* 15% 77% - - 24%
Source: Annual Statistical Report 2000 (OAPEC); and (*) Statistical Abstract of the ESCWA Region, 2000. * % = Per cent Consumption/Production. 1 Organization for Energy Planning. Annual report, 1998/1999. a/ Total imported fossil fuel. b/ Estimated as 2.6% of total primary energy and includes wood. c/ Included in a/.
(a) Petroleum products
The consumption of petroleum products in the ESCWA region during the period 1995-1999(4) increased from 111.0 mtoe in 1995 to about 124 mtoe in 1999, with an average growth rate of 2.7 per cent (table 2). Figure III shows the distribution of 1999 petroleum products end-use consumption in the region by various types of fuel. However, such distribution varies among countries in the region where the contribution of LPG, fuel oil and gas/diesel oil, mostly used for heat and power, is relatively higher in Egypt, Saudi Arabia and the Syrian Arab Republic.(4)
(b) Natural gas
The consumption of natural gas has been increased from 78.6 mtoe in 1995 to about 98.6 mtoe in 1999, with an average growth rate of 5.8 per cent (table 2). In 1999, the overall contribution of natural gas in total energy consumption was about 40 per cent. The extension of this contribution is different from one country to another; in Bahrain it reached 89 per cent, in Qatar 87 per cent, in Oman about 54 per cent, in Kuwait 53 per cent, in Saudi Arabia 43 per cent, and to a lesser extent in Egypt (31 per cent), the Syrian Arab Republic (26 per cent) and Iraq (23 per cent)
In the GCC countries, natural gas is mainly used in power generation, large-scale industries, water desalination and as feedstock to produce petrochemical material, polymers and fertilizers.
(c) Electricity
The electrical energy consumption in the ESCWA region increased from around 248 TWh in 1995 to 298.5 TWh in 1999,(7) with an average growth rate 5.0 per cent. The corresponding per capita consumption
٤ has increased from 1,413 kWh to approximately 1,870 kWh. The electricity consumption in the years 1995 and 1999 is shown in table 2. Figure IV shows the sectoral distribution of electricity consumption in some ESCWA countries and in the region.(7,8,9) The cases illustrated show that except Egypt, the residential and commercial sectors come in first place in electricity consumption dominating the industrial sector.
Figure I. Primary energy consumption in ESCWA region
6000 5000
4000 GCC 3000 CDE Total ESCWA 2000 1000 0 1990 1995 1996 1997 1998 1999 Years
Source: Annual Statistical Report, OAPEC, 2000. * CDE = Countries with Diversified Economy GCC = Gulf Cooperation Council
Figure II. Level of energy independency or energy dependency in ESCWA member countries(7) n 12 a m O 10 it uwa K 8 ia Iraq 6 Independency audi Arab S r n ta Qa 4 Yeme UAE ia Syr gypt 2 E Bahrain
0
Dependency -2
rdan 2 o J Lebanon
(4) Figure III. The consumption of petroleum products in the ESCWA region by fuel type
٥ Others 7% Gas/Diesel Oil 33% Fuel Oil 25%
Kerosene 3% LPG Gasoline & 5% Jet Fuel 27%
٦ TABLE 2. FINAL ENERGY CONSUMPTION IN THE ESCWA REGION BY TYPE OF FOSSIL FUELS AND ELECTRICITY (1995-1999)
Petroleum products (ktoe) Natural gas (ktoe) Electricity (GWh) Avg. growth Avg. growth Avg. growth Country 1995 1999 rate (%) 1995 1999 rate (%) 1995 1999 rate (%) Bahrain 910 960 1.4 6 652 7 843 4.2 4 612 5 572 4.4 Egypt(1) 21 240 24 659 5.7 10 081 12 799 2.3 46 338 56 600 5.0 Iraq 13 243 15 363 3.7 4 517 6 200 8.0 29 743 31 563 1.50 Jordan 3 846 4 676 5.0 199 248 5.6 4 778 5 946 5.5 Kuwait 5 856 6 905 4.2 6 006 7 694 6.3 20 266 26 577 7.0 Lebanona/ 4 280 5 333 5.44 5 584 10 818* 17.6 Oman 1 677 2 015 4.6 2 035 2 482 5.0 5 486 6 441 4.0 Qatar 1 075 1 030 -1.0 5 858 7 198 5.2 4 352 8 428 18.0 Saudi Arabia 35 636 36 486 0.6 27 302 37 230 7.9 85 889 100 932 4.1 Syrian Arab Republicb/ 8 960 9 403 1.23 2 929 3 723 6.1 14 661 20 580 8.7 United Arab Emirates 13 233 13 298 0.2 11 467 13 155 6.9 24 987 25 301 10 Yemen 3 224 3 602 2.8 1 589 1 919 5.0 Total 111 659 123 730 2.7 77 046 98 572 5.8 248 285 300 677 5.0
Source: Annual Statistical Report 2000 (OAPEC). a/ Organization for Energy Planning, annual report, 1998/1999. b/ Ministry of Electricity, Syrian Arab Republic. Annual report, 1999/2000. * From country data. Conversion Factor: 1 boe = 0.136 toe.
Figure IV. Sectoral distribution of electricity consumption in Selected ESCWA countries in 1999(7, 8, 9)
Egypt Lebanon 38% 40% 41%
26% 15% 4% 19% 17% Industry Residential&Commercial Industry Residential Other Sectors + Loses Public Buildings Agriculture Government Buildings
Total: 56,600 GWh Total: 10,818 GWh
Kuwait ESCWA 46% 62.0%
28.2% 26% 9.8% 28% Industry Residential&Commercial Others Industry Residential&Commercial Others
Total: 26,577 GWh Total: 300,677 GWh
It can be noticed in the statistics above, that while the total final energy consumption in the ESCWA region has increased by about 4.2 per cent between 1995 to 1999, the different energy resources have
٧ increased with the following average growth rates: petroleum products 2.6 per cent, natural gas 5.8 per cent and electricity 5.0 per cent.
B. THE MANUFACTURING INDUSTRIES, CLASSIFICATION AND MAIN FEATURES*
As stated earlier, it is due to the relative importance of the manufacturing sector in the economy of the ESCWA region that this study will be focused on the manufacturing industries. The following presents the ISIC classification of such industries and their main features in the region.
1. Classification of manufacturing industries(6)
The ISIC classifies manufacturing industries by assigning each major manufacturing group a 2-digit ISIC code as follows: food (31), textiles (32), wood and wood products (33), paper and paper products (34), chemicals and petroleum products (35), non-metallic mineral products except coal and petroleum (36), basic metal industries (37), fabricated metal products and machinery (38), and other manufacturing industries (39). Each major industry group is further divided into 3-digit groups and 4-digit industries. The following is a three-group classification of such industries based on the amount of energy consumed and impact on the economy:
(a) Group 1: High-energy consuming industries
The high-energy consuming industries convert raw material into finished goods primarily by chemical means. Heat is essential to their production and steam provides much of the heat. Natural gas, oil and waste fuels are the largest sources of energy for this group, including: chemical industries (35); petroleum and coal products (35); primary metal industries (37); pulp and paper (34); food industries (31); and stone, clay and glass products (36).
(b) Group 2: High-Value Added and Low-Energy consuming industries
This group produces high value-added (VA) transportation vehicles, industrial machinery, electrical equipment, computers, instruments and miscellaneous equipment. The primary end-uses are the motor- driven physical conversion of materials (cutting, forming, assembly), heat treatment, drying and pounding. Natural gas and electricity are the major energy sources. This group of industries includes: fabricated metal products (38); industrial machinery and equipment (38); computers and electronic equipment (38); transportation equipment (38); and instruments and related products (38).
(c) Group 3: Low-Energy consuming industries
This group is characterized by the least energy consumption and represents a variety of end-use requirements. Motor drive is one of the key end-uses. This group comprises: textile industries (32); tobacco manufacturing (31); printing (34); plastics (35); leather and leather products (32); and Furniture and fixtures (33).
2. Main features of the ESCWA manufacturing industries
In view of the above and based on information collected from MCs regarding the major manufacturing industries in each country, table 3 presents a summary of the ESCWA industrial sectors “manufacturing industries” main features, manufacturing value-added (MVA) and the contribution of the sector in the GDP.(7)
* The term “industrial sector” all through this document, will mean specifically manufacturing industries.
٨ TABLE 3. MAIN FEATURES AND ECONOMIC INDICATORS OF THE MANUFACTURING INDUSTRIES IN SELECTED ESCWA MEMBER COUNTRIES (1999)
Major industries MVA1,2,3 Per cent
Country ISIC Industry Mn. US$ in GDP Main fuel/energy used Features
Bahrain 37 • Aluminum Natural gas, electricity Large-scale, energy intensive and export
35 • Chemicals and petroleum 815 12.3 oriented (Group 1)
• Products
Egypt 32 Natural gas Diversified, comprises of groups of • Textiles 31 • Food Fuel oil consumption categories. High potential of 35 Gas/Diesel oil energy efficiency improvement • Chemicals 13 427 15.1 37 • Basic metals Electricity 36 • Cement and refractories Jordan 35 • Chemicals & fertilizers Fuel oil Small-scale textile plants. Lower 1 381 18.5 32 Diesel/gas oil & Electricity consumption due to export difficulties • Textiles Kuwait 35 • Chemicals and petroleum products Fuel oil, diesel/gas oil NG & Energy intensive (Group 1) • Paper & paper products 3 507 11.8 electricity 34
Lebanon 31 Fuel oil Small unit of food and textile enterprises, • Food 32 • Textiles 1 631 9.8 Diesel/gas oil electricity except cement industry 36 • Cement Oman 35 • Petroleum refineries 670 4.3 Fuel oil & electricity Energy intensive (Group 1) Qatar • Chemicals and petroleum refineries Natural gas Energy intensive, refineries mainly uses 35 • Fertilizers 893 7.3 Fuel oil natural gas Electricity
Saudi Arabia 35 Natural gas World major producer of petrochemicals. • Chemicals 37 • Iron and Steel 13 316 9.6 Fuel oil Energy intensive (Group 1) 36 Electricity • Non-metallic mineral products Syrian Arab Republic 31 • Food, beverage and tobacco Fuel oil A combination of Groups 1 & 3: NG is used 32 Electricity mainly in cement & chemicals industries. • Textiles 1 546 7.3 35 Diesel & Natural gas Advanced textiles • Chemicals United Arab Emirates 35 • Chemicals and petroleum refineries Natural gas Energy intensive (Group 1) Fuel oil & electricity • Aluminum 6 561 12.6 37 • Cement 36
Yemen 35 • Chemicals and petroleum refineries Fuel oil Mainly Group 1 703 10.4 Gas/Diesel oil Electricity
Sources: 1. Statistical Abstract of the ESCWA Region 2000, No. 21. 2. Review of Industry in ESCWA Member Countries, Bulletin No. 2, 1999. 3. Annual Statistical Abstract, 1999, State of Kuwait, Edition 36.
٩
The table shows that the dominant industries in the GCC countries are: chemical and petrochemical industries, non-metallic mineral products and basic metal industries. The contribution of these countries in the total ESCWA MVA was about 57 per cent in 1990.(7) Meanwhile, the table also shows that in countries with diversified economies, the traditional type of manufacturing industries are widespread, namely food and textiles.
C. THE INDUSTRIAL SECTOR’S, ENERGY CONSUMPTION PATTERNS, AND THE NEED FOR EFFICIENCY IMPROVEMENT
The main sources of energy in the ESCWA industrial sector are petroleum products, natural gas and electricity. A previous ESCWA study (5) shows that in 1995, the residential, industrial and transport sectors were the highest end-use energy consumers in the ESCWA region. It also showed that the residential sector comes first in GCC countries, while industry is the main consumer in countries with diversified economies. Both sectors each consumed about 28 per cent of the petroleum products and 52.4 and 24.7 per cent of the generated electricity for residential and industrial sectors respectively.
1. The industrial sector energy consumption patterns
Up-to-date information about electricity consumption in the industrial sector is available for most of the countries; however, its breakdown between the different manufacturing industries is not available. In addition, there is a lack of data on the contribution of petroleum products and natural gas in the sector. However, efforts have been made by concerned authorities in several ESCWA countries, such as Egypt, Lebanon and the Syrian Arab Republic, to collect and estimate such data.
Electricity consumption in the ESCWA industrial sector during the period 1995-1999, is shown in Table 4.(7) It can be seen from the table that the electricity demand in industry increased by about 25 TWh from 1990 to 1999, with an average growth rate of 5.0 per cent.
TABLE 4. ELECTRICITY CONSUMPTION IN THE INDUSTRIAL SECTOR IN THE ESCWA REGION FOR 1990-1999
1990 1995 1999 Avg. growth rate (%) Year GWh Share (%) GWh Share (%) GWh Share (%) (1995-1999) Total Industry in ESCWA Region* 53 549 29.8 65 898 26.8 78 180 26.0 5.0 Source: Statistical Abstract of the ESCWA Region, 2000/6. * For Iraq, the estimated share of electricity consumption in industry is 28% of total.
Since accurate data on the current energy consumption in the industrial sector is not available, the following figures were assumed in order to estimate such consumption:
(a) The industrial share in the total petroleum products consumption is kept at the same level (28%) as in 1995; thus in 1999, the end-use consumption of petroleum products will be about 34.75 mtoe;
(b) The contribution of natural gas in the industrial sector is estimated as 40 per cent of the total natural gas consumption, while the rest is used for power generation for the residential sector.
The above assumption is based on the fact that the use of natural gas in industry in the ESCWA region is completely diverse. While it has no contribution to industry in Lebanon and Yemen, its contribution in Bahrain, and UAE is very high, reaching 38 per cent in Egypt and about 7 per cent in the Syrian Arab Republic and Jordan.
Based on the above given assumptions, table 5 shows the estimated final energy consumption in the industrial sector by fuel type, for 1995 and 1999, as well as the projected demand from 2000 to 2010. The
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table shows that the use of industrial energy grew at a rapid annual average of 7.0 per cent per year to reach 134.21 mtoe (5.62 x 109 GJ) by 2010.
TABLE 5. ESTIMATED FINAL ENERGY CONSUMPTION IN THE INDUSTRIAL SECTOR (ktoe)
Item 1995 1999 2000 2005 2010 Avg. growth rate (%) Petroleum productsa/ 31 198 34 746 35 649 40 531 46 082 2.84 Natural gasb/ 15 895 25 400 27 940 44 997 72 468 12.4 Electricityc/ 5 666 7 229 7 753 11.017 15 655 5.8 Total 52 759 67 375 71 342 96 545 134 205 7.0
a/ Estimated as 28% of the total natural gas consumption. b/ Estimated as 40% of the total natural gas consumption.
2. Energy-efficiency indicators
The industrial energy-intensity (IEI) is usually used as an indicator for energy efficiency. It can be calculated on different bases, leading to different energy-intensity indicators for the manufacturing sector. Such as: energy/gross output, energy/industrial production, energy/value added, energy/value of production and energy/value of shipments. The choice between these indicators depends on the objective of the subject analysis and data availability. For the objective of this study, the industrial energy-intensity referring to the manufacturing value added (MVA) is considered. It will be calculated by dividing the final energy consumption in industry by the MVA. Table 6 shows the development of the industrial sector value added and energy-intensity in the ESCWA region for 1995-1999.
TABLE 6. INDUSTRIAL ENERGY INTENSITY DEVELOPMENT FOR 1995–1998
Year 1995 1996 1997 1999 MVA (US$) 32 693 36 622 40 775 45 270 I.E.I. (Kgoe/US$) 1.61 1.5 1.4 1.49
Source: Statistical Abstract of the ESCWA Region, 2000/6. MVA: Manufacturing Value Added. IEI: Industrial Energy Intensity.
It can be observed from the table, that industrial energy efficiency improved. This resulted in a decrease in industrial energy intensity (IEI) from 1.61 kgoe/US$ in 1995 to 1.49 kgoe/US$ in 1999.
3. The need for energy efficiency improvement
In view of the above, the industrial sector in the ESCWA region is facing the challenge to improve its energy efficiency and reduce the industrial energy intensity. This challenge is reflected by the fact that the total final energy consumption growth rate is as high as 7.0 per cent, far exceeding the final energy consumption growth rate in the region of 4.2 per cent, which itself exceeds the world average of 2.0 per cent. This is emphasized by the IEI level of 1.49 kgoe/US$ reached in 1999, accounting for almost 2.7 times the average primary energy intensity in the region of 0.522 kgoe/US$. These facts reflect the poor productivity of the energy used in industry and highlight the need for improved efficiency in energy use.
In conclusion, there is an urgent need to develop strategies and plans for improving energy efficiency and reducing environmental risks in the ESCWA industrial sector. However, this requires the identification of the appropriate measures and technologies that can effectively contribute in achieving such objectives. Chapters II and III of this study are devoted to identifying and evaluating these measures and technologies.
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II. PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR
Given the need and importance of fostering rational use of energy in the ESCWA industrial sector in order to enhance its productivity and added value, chapter II provides an overview of the potential measures and technologies that can be employed to achieve such goals. These measures can be technological, administrative and/or organizational, particularly in the phase of project implementation. This study puts an emphasis on identifying and evaluating available technological options. This is necessary because options can be complex and require heavy investment. This allows for assessment in order for them to compete with other project investment options.
In view of the above, this chapter presents: (a) a brief description of eleven potential technological options that are widely used in practice; (b) a procedure for identifying options for consideration in the region; and (c) a selection criteria for ranking the priority of options for application in the region.
A. POTENTIAL ENERGY EFFICIENCY AND CONSERVATION TECHNOLOGIES
Experience in the field of energy efficiency has shown that there are several well-proven, energy conservation technologies that have been successfully applied in industry. Some of them are limited to specific industries, while others can be replicated in different industries. A brief description of the eleven technologies that are widely used is given below.
1. Industrial process control
These control systems, usually microprocessor-based, are used to control energy, material and other inputs; Hence they improve the overall efficiency of the plant. They have been developed to improve productivity of all aspects of industrial processes and can be applied to control a single unit or the entire process in a plant. These control systems are mostly attractive for cement, chemical and metal factories. The savings of energy use is 5-15 per cent. This is in addition to overall productivity improvements. Payback is usually accomplished in less than two years.
2. Waste heat recovery (WHR)
Wasted heat in exhaust gases, hot effluents, hot products and/or by-products, can be recuperated through heat fuel, air, boiler feed water, process streams or condition space. Heat exchange, such as air-to-air and air-to-liquid are frequently the primary components of these systems. Other equipment used in such an approach are economizers, metallic recuperators, regenerators, air heaters and waste heat boilers. Typical applications of these systems are in cement, textiles, metals, chemical/fertilizer, glass and food plants. Design and installation takes from six months to one year. The amount of savings is in the range of 5-45 per cent. Frequently the payback period is achieved in from six months to two and a half years.
3. Improvement of combustion efficiency
These controls improve boiler and furnace efficiency by allowing more precise regulation of air combustion. These low cost systems sometimes have payback periods of few months. Generally, these controls regulate temperature, pressure, airflow and air-to-fuel ratio, in order to achieve consistent and replicable derating conditions. Currently, the most common types used are microprocessor-based controls which have proven very effective in the cement, chemical, metal and textile industries. The use of a combustion analyzer is one of the most attractive and cost-effective methods of control. The analyzer measures different gas parameters, including composition and temperature, and calculates combustion efficiency. Possible savings is in the range of 5-25 per cent. For automatic combustion controls, the payback period ranges from one to three years, while by using portable gas analyzers, it is less than six months.
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4. Energy Management Systems (EMS)
These are central control systems, in which microprocessor-based devices are used to control and optimize energy use in combination with good operating and maintenance practices. They are capable of on- site programming and adjustment by operating personnel. EMS can be programmed to achieve specific energy efficiency goals such as: scheduling on/off control of equipment, peak and time-of-day electric demand control. By load shedding or cycling, industries can take advantage of special pricing offered by utilities and/or avoid penalties for use at other times. This system can also be used for control of lighting in buildings, optimum operation of building heating, and ventilation and air conditioning (HVAC) equipment, etc. Savings in the range of 7-20 per cent are possible in the cement, textiles, chemicals and building sectors. Most systems pay for themselves in less than two years.
5. Combined Heat and Power (CHP) or Cogeneration
Combined heat and power is the simultaneous production of electric power and use of thermal energy from a common fuel source. Interest in CHP stems from its inherent thermodynamic efficiency. Fossil-fired central stations convert only about one-third of their energy input to electricity and reject two-thirds in the form of thermal discharges into the atmosphere. Industrial plants with CHP facilities can use the rejected heat in their plant process and thereby achieve a thermal efficiency as high as 80 per cent. Many industrial plants with continuous demand for low-grade steam are ideal candidates for CHP systems. Besides energy savings, there are several reasons for considering CHP in industry: energy independence, replacement of aging equipment, expansion of facilities, environmental considerations and power factor improvement.
With the application of CHP, savings of 5-40 per cent are possible in the food, textile, chemical and paper industries. Payback of CHP systems is usually accomplished in 1-5 years.
6. Power factor improvement
Low power factor means more reactive power in the electric system. Almost all electric utilities impose power factor penalties for low power factors (usually less than 0.9). The reason for low power factors is the existence of inductive loads such as motors, and fluorescent and gas discharge from lighting equipment. All industries with high contracted power (usually more than 500 kW) are good candidates for power factor improvement. Installing capacitor banks is one of the most common methods used for power factor improvement. Design and installation of the equipment takes about three to six months. Savings from power factor improvement come mainly from reductions in electric bills, which could amount to 5-15 per cent, through the release in the electrical network and the reduction of internal losses. Payback period is usually in the range of 1-2 years.
7. High efficiency lighting
Lighting frequently constitutes 10-15 per cent of the electrical load in industry. There are several approaches to gaining greater efficiencies by improving lighting systems. In addition to eliminating unneeded fixtures and lamps, more efficient lamps can be used in current fixtures. More efficient ballasts can be used, fixtures and bulbs can be replaced and reflectors and diffusers can be upgraded or added to improve the lighting system. Industries that are most likely to benefit from investments in high efficiency lighting systems are the textile, chemical, pharmaceutical, and food industries.
Electricity savings of 15-50 per cent are common. It is not unusual for such improvements to pay for themselves in less than six months.
8. High efficiency motors
The efficiency of converting electrical energy into mechanical motor energy is improved by reducing losses through friction, windage, core, static rotor and stray load. New motor manufacturing technology reduces all of these. Sizing of motors is an important factor towards improving efficiency. This means
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operating motors closer to their rated output. Candidate industries are textiles and chemicals. The timeframe for design and installation of high efficiency motors range from three to ten months. This option is most applicable for small motors where the improvement in efficiency may reach 5-10 per cent. Payback period is usually from 3 to 5 years.
9. Insulation and refractories
Advanced insulation systems consist of materials with very low thermal – conducting characteristics. These are used to cover the outside of hot/chilled water pipes, ducts, vessels, water heater, furnace and boiler walls in order to minimize heat conduction losses. Refractory materials are available in roll, sheet or brick form and include fiberglass, mineral wood, ceramic fibers, magnesite, zirconia and other refractory brick.
A typical use would be the complete insulation of large metallurgical furnaces and kilns in construction material manufacturing plants. In addition to saving energy, additional insulation reduces condensation and thermal expansion, and improves safety and comfort for operating personnel. Applications can be found in the metal production, cement, textile and glass industries. Savings are possible in the range 5-20 per cent; costs can be recovered in 2-3 years.
10. Steam Condensate Recovery (SCR)
Condensate from a steam boiler system is hot, mineral-free water. Strong condensation should be given to returning all usable condensate in order to minimize the use of cold makeup water, which must be heated prior to entering the boiler. An added benefit will be the decreased use of chemicals and improved boiler surfaces due to the fact that makeup water contains oxygen and minerals while condensate is oxygen free and minerals free. Cost savings can result from energy savings and reduction in water treatment cost. Key components include condensate return piping, flash tanks, and condensate pumps.
The condensate recovery system has to be designed to ensure that condensate return piping; flanges and valves are properly insulated.
Under this technology three options are usually considered in energy audits, namely low, medium and high steam condensate recovery. The main criteria which characterizes each steam condensate recovery option, is the quantity and quality of steam condensate recovered, the type of equipment and the instrumentation associated to each specified steam recovery option.
Savings could range from 5 to 50 per cent of the steam generated. The potential application of this technology is in the food, textile chemical and petroleum industries. The payback period ranges from 1 to 3 years.
11. Solid fuel-fired boilers
In addition to the high efficiency coal fire boilers, special boilers have been designed to use waste fuels such as bagasses, chemical sludge and paper waste. Some have burners, which allow the use of more than one type of fuel.
Old oil-fired boilers (25-30 years) with efficiencies under 70 per cent can be replaced with new package boilers, which can fire on multiple fuels with fuel-to-steam efficiencies of 83-85 per cent. These boilers also have much better environmental controls. Applications of such boilers may be found in the food, textile and pulp and paper industries. Savings on the due order 2 -15 per cent are possible. These boilers will usually recoup their initial cost in less than five years.
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B. THE PROCEDURE AND CRITERIA FOR RANKING AND SELECTING THE PRIORITY ENERGY EFFICIENCY AND CONSERVATION OPTIONS
1. The procedure
Most of the above described energy conservation and efficiency options have reasonable potentials for application in the ESCWA industrial sector. The following identifies and ranks priority options that can deeply and more rapidly move energy consumption patterns in the region to more rational ones.
(a) Identify major potential industries in the region that have large capacities and potential opportunities for upgrading energy use efficiency.
Table 3 in chapter I shows that, four industrial sub-sectors are accounting for roughly 45 per cent of all industrial energy consumption and are common in most of the ESCWA countries, namely, iron and steel, chemicals, petroleum refining, pulp and paper and cement. Table 7 provides examples of energy-efficient technologies and practices for the four identified industries of the energy intensive group that are most replicable in the region. The savings achieved as a result of applying such options in different countries indicate the positive outcome potential in these four industries.
(b) Qualify technological options for upgrading energy efficiency, based on intensive experience gained worldwide in the evaluation of energy conservation potentials and the performance of implemented projects using different technological options in industry. Table 8 shows summary information on the evaluation of the above described technologies, including the range of applications, the level of expected energy savings, chances of success and simple payback period;
Other attractive energy conservation measures are usually added to the above given technologies. These include the use of renewable energy in industrial process, and switching from liquid oil to natural gas. However, these do have specific application conditions, which are not discussed in this study.
(c) Screen and select options, where the status and opportunities of each is reviewed, and a set of final options are screened for evaluation for the following reasons:
(i) The “high efficiency lighting” technology is now detailed in a study conducted by EIS-ENRE Division for its application in the residential and commercial sector. Lighting energy in industry represent no more than 10-15 per cent of the total end-use consumption, thus the impact of this option on industrial savings is relatively small, especially for energy-intensive industries;
(ii) The “insulation and Refractories” option, it is not widely used in industry and usually applied in cases of rehabilitation and maintenance conditions;
(iii) The “power factor improvement”, option has a positive impact on the electric network and some reduction in internal losses. But the initiative of its implementation in industry is usually correlated with the penalty imposed by the utility and the amount of energy saved is only around 5 per cent;
(iv) The “solid fuel-fired boilers” option has specific applications and its implementation in industry, especially in the ESCWA region, is very limited.
(d) Ranking priority of the technological options based on a well-defined criteria to be applied within the context of the specific concerns and conditions on a regional, as well as on country level.
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TABLE 7. EXAMPLES OF THE IDENTIFIED MEASURES AND THE POTENTIAL ENERGY EFFICIENCY IMPROVEMENT IN SELECTED INDUSTRIES
Total potential Industry Country/region savings Identified efficiency improvement measures Iron & steel USA 2-30%1 * Heat recovery from steam generation; Pre-heating ICs 26-51%2 combustion air; Heat recovery coke over gases, and dry Developing countries 36-52%2 coke quenching; Heat recovery (steam generation), Canada 39-52%3 recovery of inert gases, efficient ladle preheating; Recuperative burners in reheating furnace; and adjustable speed drives
2. Chemicals Netherlands 5-12%3 * Process management and thermal integration (e.g. USA 2-11%1 optimization of steam networks heat cascading, low Europe (21% Avg.)4 and high temperature heat recover, heat transformers); Southern Asia 20-30%5 New compressor types; New catalysts; High Industrial Countries 23-27%8 temperature CHP (cogeneration), and adjustable speed drives
Pulp and paper Netherlands 33%4 * Continuous digester, indirect heating/batch digester, Europe 20-30%6 chemi.-mechanical pulping; Steam/gas turbine CHP, India 20-25%7 black liquor gasification; Improved boiler Southeast Asia 15-30%5 design/operation (CHP), and Distributed control USA 30-49%1 system
Cement USA 26-55%1 * Waste heat drying using preheats exit gases, roller mills, improved grinding media and linings; Kiln ICs 4-36%8 combustion system improvements, use of waste fuels; CHP (cogeneration); Distributed control system; and Latin America 13-41%8 Modified ball mill configuration
Notes: The measures given in the table represent the spectrum of options that can be applied in the specific industry, while the potential savings shown represent the estimated figures in the corresponding country.
1. DOE, Office of Industrial Technologies (1990), Reflects 1990-2010 scenario results. 2. WEC (1995a), Reflects technical potential for 1988 using best practice technology. 3. Worrell et al. (1994a). Reflects technical potential for 1988 using best practice technology. 4. Worrell et al. (1994b). Reflects technical potential for 1989 using best practice technology. 5. Ishiguro and Akiyama (1994). 6. Bateman (1992). Reflects comparison of current average to best available technology. 7. Tata Energy Research Institute (1994). Reflects technical potential using current best practice technology. 8. Worrell et al. (1995).
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TABLE 8. GENERAL CHARACTERISTICS OF THE WELL-PROVEN ENERGY CONSERVATION MEASURES
Type of Level of Impact on Need for fuel/energy expected Chance of Potential Simple GHG qualified Technology saved energy savings success application payback Reduction maintenance Potential Industries 1. Process Control Fuel oil Very Large High Medium 1-2 Years High High Chemical, cement, food, and metal 2. Waste Heat Recovery Fuel oil/ Large High High ½ to 2½ High Medium Chemical, cement, food, Systems Electricity years textile and metal 3. Combustion Efficiency Fuel oil / Large Very High Very High 1-3 Years Very High Medium Chemical, cement, food, Improvement Electricity textile and metal 4. Energy Management Electricity Large High Medium Less than 2 Medium High Systems years Chemical, cement, and textile 5. CHP or Cogeneration Electricity / Very Large Very High Very High 1-5 Years Very High Medium Chemical, cement, food, Systems Fuel oil textile and metal 6. Power Factor Electricity Large Very High High 1-2 Years Medium Low Improvement All high electricity consumers 7. High Efficiency Electricity Large Very High Very High ½ – 1 Year High Low Lighting Chemical, textile and food 8. High Efficiency Motors Electricity Medium High High 3-5 Years Low Low Textile and food 9. Insulation and Fuel oil Medium Very High High 2-3 Years High Low Chemical, cement, food, Refractory textile and metal 10. Steam Condensate Fuel oil, Large High High 1-3 years High Medium Chemical, textile, petroleum Recovery Diesel/Gas oil and food 11. Solid Fuel – Fired Fuel oil/ Very Large High Medium 2-3 Years Very High Medium Boilers Electricity Chemical, food, and textile Source: Egyptian National Committee—World Energy Council. Technological Methods of Energy Conservation in Non-petroleum Industries in Egypt, Cairo, May 1994.
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2. Criteria for selecting and ranking the priority energy conservation options
As presented in Chapter one, the industrial sector in the ESCWA region incorporates both high- intensive and low consumption categories. Chemical industries, petroleum, rubber and plastic products (ISIC 35) are the dominant contributor to the region’s total manufacturing value added. After these industries come, the textile industry (ISIC 32), food industry (ISIC 31), fabricated metal products (ISIC 38), basic metal industries (ISIC 37) and the non-metallic mineral products (ISIC 36) such as the cement and building materials industries as well as paper and allied products (ISIC 34).
In view of the above, the large number of the available “technology/application” options for improving energy efficiency in industry and the diversity among countries in the region, it is essential to select the appropriate measures for application in each country. In addition, it is important to emphasize that; the assessment of the potential application of any energy-efficient technology described above is a difficult task that requires plant-level data, which is not currently available in most of the cases.
With a lack of an appropriate database, the selection and ranking of the most appropriate technology options which could be applied to most of the ESCWA countries, will be guided by the criteria given below, with criteria items scored as to their importance and impact on the selection of measures:
(a) Potential replicability. Based on the structure of the manufacturing industry in the region and the potential demand of process heat and power and the possible application of each of the measures identified, the potential replicability for such measure can be determined. The measures with possible replicability are ranked above the others;
(b) Potential energy savings. Reference to previous experiences and records of projects implemented in the past with a high energy savings potential would be given priority;
(c) Investment cost. Particularly options with lower capital cost will show more feasibility. Operation and maintenance cost will also affect the evaluation;
(d) Payback periods. In many cases energy conservation measures are win-win options with payback periods varying from few months to some years. The analysis given below will allow for a maximum of a five-year payback time;
(e) Adaptability to local conditions. This is usually evaluated based on the following: (i) the need for foreign experience or imported equipment; (ii) compliance with local technology; (iii) percentage of local manufacturing; (iv) available local operation and maintenance staff; and (v) the need for training of local staff;
(f) The environmental benefits. The evaluation of benefits the option will have on the environment.
3. The ranked and selected priority options
(a) The ranked priority options
Based on the aforementioned issues and taking into consideration tables 3, 7 and 8, table 9 shows a matrix of scores assigned for each selected option and a total score reflecting the priority ranking of the different options. It can be seen that the seven options evaluated are ranked as follows:
(i) Combined heat and power; (ii) Combustion efficiency improvement; (iii) Waste heat recovery; (iv) Steam condensate return; (v) Industrial process control; (vi) Energy management systems; (vii) High efficiency motors.
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(b) The selected priority options
Based on the ranking order given above for the priority energy efficiency and conservation technologies, three high-priority options have been selected for further detailed analysis and, techno- economic evaluation in three ESCWA countries. The selected options are:
(i) Combined heat and power (CHP); (ii) Waste heat recovery (WHR); (iii) Combustion control or combustion efficiency improvement of boilers and furnaces.
C. THE SELECTED CASE STUDIES
In view of the selection procedure described earlier and the three identified priority options, three ESCWA member countries namely: Egypt, Lebanon and the Syrian Arab Republic have been selected for detailed case studies. The reasons of this selection is basically due to the following:
(a) The reasonably large volume and diversity of manufacturing industries in the three countries;
(b) The work force and the production value of the industrial sectors of the three countries count for more than 50 per cent of the total work force and industrial production in the whole region;
(c) The availability of minimum raw data required to perform the evaluation of the selected technologies in the three countries, as well as the performance database available from the Egyptian experience that can be used for evaluating the selected options in other countries;
(d) The diversity of the status of activities in the field of energy efficiency and conservation between the three countries, where the accumulated expertise and lessons learned are interchangeable;
(e) The availability of national institutions that are concerned with the development of energy efficiency, which can benefit from the outcome of the study.
To facilitate the evaluation of the potentials of selected technology options for each of the three selected countries, Chapter III and annex I of this study overview, in more detail, the essential technical background and classification of energy conservation systems associated with each of the selected options. They also describe the evaluation approaches for the selection of the priority options followed in the analysis. The three case studies are presented in chapters IV, V and VI of this document.
TABLE 9. MATRIX FOR THE SELECTION OF HIGH PRIORITY ENERGY CONSERVATION MEASURES
Maximum Energy conservation measures * Selection criteria weight IPC WHR CEI EMS CHP HEM SCR Remark 1. Potential Savings 20 16 16 12 8 18 4 12 20 For maximum expected saving (50%) 0 For no saving 2. Potential replication in the 20 For very high replicability industrial sector 15 For high replicability 10 For medium replicability 20 10 16 16 10 18 8 14 5 For low replicability 3. Simple payback period 10 For simple payback period less than 1 year 0 For simple payback period 10 4 8 10 4 6 4 6 more than 5 years 4. Capital cost (Less initial 10 For low-cost options investment) 10 5 8 10 4 5 4 8 0 For very high investment cost 5. Reduction of 10 For maximum GHG reduction environmental pollution per energy saved 10 6 8 6 6 10 2 2 0 For reduction of GHG
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TABLE 9 (continued)
Maximum Energy conservation measures* Selection criteria weight IPC WHR CEI EMS CHP HEM SCR Remark 6. Adaptability to local 10 For maximum adaptability conditions 10 8 10 10 8 10 6 10 0 For no adaptability (see text) 7. Less O&M costs 10 For no O&M costs 0 For O&M cost ≥ 5 per cent of 10 4 8 10 5 8 8 10 installation cost 8. History success of 10 For maximum successful implementation and option’s implementation and project life > life 20 years 10 8 8 10 6 10 5 8 0 For no success, life < 10 years Total 100 61 82 84 51 85 41 70
* IPC: Industrial Process Control. WHR: Waste Heat Recovery. CEI: Combined Efficiency Improvement. EMS: Energy Management Systems. CHP: Combined Heat and Power. HEM: High Efficiency Motors. SCR: Steam Condensate Return.
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III. EVALUATION OF THE SELECTED PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR
A. EVALUATION REQUIREMENTS AND LIMITATIONS
1. Requirements
Evaluation of the potential application and replication of the selected priority options for upgrading energy use efficiency in the industrial sector is a complex process. It is highly dependent on a variable set of requirements and conditions. These conditions are plant and/or site specific and cannot be totally met, particularly on a regional level. These evaluation requirements are related to:
(a) The natural and characteristics of the concerned industrial sub-sector; (b) The level of maturity of the selected technology option and the availability of basic cost and performance data for it; (c) The availability of an appropriate database on the subject industrial plant including all data required for evaluating the possible application of the technology option being analyzed; (d) The methodological approach for identifying the potential needs, selecting the appropriate technology option and evaluate its techno-economic feasibility; (e) The possible environmental and social impact associated with the system implementation.
2. Limitations
The evaluation of the potential application of the selected technology options at a regional level is a very difficult task due to the lack of available data collection facilities and capabilities for satisfying the requirements set above, these limitations mainly include:
(a) Lack of appropriate data. The industrial sector in the region is diverse, and the available data, if it exists, is limited to the sub-sectoral level rather than plant or process characteristic data. This represents a major constraint in qualifying the plants requirements and selecting the appropriate technology package;
(b) The variety of plant sizes and process characteristics are determined factors in identifying the selected technology system specifications. For some of the selected technologies (e.g. CHP), there are market-ready packages with different capabilities and well-defined characteristics. However, the evaluation of potential application should be linked to the plant specific characteristics which vary widely among member countries. A standard module may be used for evaluation purposes and will be described hereinafter;
(c) The level of available expertise and appropriate analytical tools are either not sufficient or nonexistent at the national level. There is a need to train concerned personnel in the field and use the analytical tools needed for evaluating the plant data;
(d) The variety of energy tariffs and available financing conditions among different countries, including fuel and labor costs, escalation and discount rates, taxes, etc. This makes it necessary for the analysis of options to be not only country specific but rather more site specific.
B. THE EVALUATION APPROACHES FOR THE SELECTED PRIORITY OPTIONS
In view of the requirements and limitations described earlier for the evaluation of potential applications of any of the selected energy efficiency options, the following describes the proposed approach for the preliminary evaluation of such potentials as linked to the specific requirement of each of the three selected options. It can be applied to evaluate the potential applications under the specific national circumstances of any of the member countries.
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Meanwhile, to make basic technical and financial information available on the three selected technology options, Annex I presents a brief on the development status of each.
1. Evaluation approach for combined heat and power systems
(a) CHP systems, classification and main characteristics
As detailed in Annex I, CHP systems are complex integrated systems that consist of several individual components, however, they are typically identified by a prime mover that drives the overall system. CHP systems that have been commercially used can be classified into the following main technologies: (1) back pressure steam turbines; (2) controlled extraction steam turbines; (3) gas turbines with waste heat recovery boilers; (4) reciprocating diesel engines; (5) reciprocating gas engines; (6) micro-turbines; and (7) fuel cells.
Table 10 summarizes the characteristics of each of the seven CHP technology options. It shows that CHP covers a wide capacity range from 50 kW in reciprocating engines to 200 MW in gas turbines. Estimated cost per installed kW ranges from $500 to $1500 for all considered technologies, with the exception of fuel cells, where the cost currently exceeds 3,000 US$/kW.
(b) CHP, potential evaluation procedure
Evaluation of the potential of CHP technology options in the industrial sector is a difficult task that requires plant-level data to match steam demand and electricity loads of the industrial plants with the technical specifications of the CHP technologies. The evaluation would be done through a sequential procedure that takes into account all specific plant data, available CHP systems to match the plant needs and the relevant technical and financial parameters that can affect system feasibility.
(i) Establish a plant database including, steam consumption and conditions, electricity consumption and peak demand, type of fuel and operating hours of the plant;
(ii) Select the type of CHP system for the specific application, which depends on many factors, including the amount of power needed, thermal needs, the duty cycle, space constraints, fuel availability, utility prices, interconnection issues and emission regulations. The established database can be used for conducting a preliminary techno- economical analysis for each site, to select the most appropriate CHP option for the plant conditions.
The criteria, which are usually considered for judging the appropriateness of the selected system, includes the volume of savings, the financial attractiveness, the simplicity of the system and the environmental impact of the system. The approach and data-basis are shown in figure V;
(iii) Select a commercially available module, of the identified CHP system type, and collect its technical and financial information to be used for the analysis. It is important to emphasize that the capital cost estimates of the CHP module should be based on the current market trends of the CHP equipment and the actual costs supplied by different venders. Typical examples of CHP modules capital cost, estimates are shown in table 11;
(iv) Analyze the performance of the selected CHP system, by feeding plant data into an appropriate software package developed for this system. The software is provided with the performance characteristics of the selected module and financial assumptions. The performance characteristics will include, but not be limited to, the following: unit size, unit average and maximum loading, heat rate, steam production of the unit, efficiency and whether if the unit is connected to the grid or not;
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(v) Conduct a techno-economic feasibility study for the system based on the parameters and feasibility analysis procedure shown in the flow chart in figure VI, as well as the prevailing financial and economic data for evaluating its economic and environmental feasibility. Using these parameters together with the cost of energy savings and equipment cost (including all customs and duty costs), the important financial indicators will be calculated. Once all this information is developed, the information will be fed into the CHP database, including the plants electrical and thermal information.
In conducting such an analysis, the net outcome of fuel saved by using CHP in the plant is calculated and compared with the fuel saved at the utility side due to the reduction in electricity consumption on the supply side. It is important, in this case, to define the average specific fuel consumption of the utility to produce one kWh. In the case that the operation of the CHP system is by the industrial company itself, the net annual savings are calculated as “NS = E + S + SG – F – OM – SP”.
E = annual saved electricity purchase costs. S = annual saved steam generation costs. SG = annual fuel costs saved from self stand-by generation, if exists. F = annual additional fuel costs for operation of the CHP facility compared with steam generation in boilers. OM = annual operation and maintenance costs (O&M) of the CHP equipment. SP = annual costs of stand-by power.
TABLE 10. COMPARISON OF THE CHARACTERISTICS OF THE CHP TECHNOLOGIES
Natural gas Fuel Item Steam turbine Gas turbine Diesel engine engine Micro-turbine cells 25-35% (simple) & Electric Efficiency (LHV) 15–35% 40-60% (combined) 30–50% 25-45% 20-30% 40-70% Size (MW) Any 0.5-200 0.05-5 0.05-5 0.025-0.25 0.2-2 CHP installed cost ($/kW) 800-1000 700-900 800-1500 800-1500 500-1300 > 3000 Thermal to electric ratio 2 – 30 1.2 – 5 0.8 – 1.2 0.8 – 1.2 0.5 – 1.2 0.5 – 1.2 O&M Cost ($/kWh) 0.004 0.002-0.01 0.005-0.008 0.007-0.015 0.002-0.01 0.003-0.015 Availability Near 100% 90-98% 90-95% 92-97% 90-98% >95% Hours between overhauls >50 000 30 000-50 000 25 000- 25 000 5 000-40 000 10 000-40 000 30 000 -60 000 Fuels All Natural gas, biogas, Diesel and Natural gas, Natural gas, Hydrogen, propane, distillate residual oil biogas, biogas, natural gas, oil propane propane, propane distillate oil Start-up time 1 hr- 1 day 10 min – 1 hr 10 sec 10 sec 60 sec 3 hrs-2 days Nox Emissions (kg/MWh) 0.8 0.14-1.8 1.4-15 1-13 0.4-2.2 <0.02 Uses of Heat Recovery LP-HP steam, LP-HP steam, Hot water, LP Hot water, LP Direct heat, Hot water, LP- district heating district heating, hot steam, district steam, district hot water, LP HP steam water, direct heat heating heating steam CHP Output (Btu/kWh) N/A 3,400-12,000 3,400 1,000-5,000 4,000-15,000 500-3,700 Usable Temp. for CHP 120 -400 250-600 80-500 150-550 200-340 60-370 (0C)
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Noise Moderate to high Moderate (enclosure Moderate to Moderate to Moderate Low (no (requires building supplied with unit) high (requires high (requires (enclosure enclosure enclosure) building building supplied with required) enclosure) enclosure) unit)
Source: Onsite Sycom Energy Corporation, “The Market and Technical Potential of CHP in Industrial Sector”, January 2000.
TABLE 11. TYPICAL EXAMPLES OF CHP SYSTEM CAPITAL COST ESTIMATES* Gas turbines Reciprocating gas engines Cost component Module 4 Module 6 Module 8 Module 9 Size (kW) 1 000 5 000 800 3 000 Package cost ($/kW) 550 400 430 380 Heat recovery ($) 75 75 75 65 Installation/Civil work ($) 90 75 105 90 Engineering and Management ($) 70 65 60 60 Interconnect/Switchgear ($) 40 20 63 35 Emission Control ($) 120 102 29 25 Fuel supply - compressor ($) 20 20 0 0 Miscellaneous equipment ($) 50 50 50 50 General contractor markup ($) 105 81 105 90 Contingencies and guarantees ($) 40 20 40 35 Carrying charges during construction ($) 90 90 50 45 Basic Turnkey Cost ($/Kw) 1 250 998 1007 875 O & M cost ($/kWh) 0.005 0.003 0.011 0.008 * Based on “Market and Technical Potential for CHP” prepared by ONSITE SYCOM Energy Corporation for EIA, 2000.
Figure V. Flow chart for creating CHP database
Plant Data - Steam consumption - Steam conditions - Type of fuel - Data of steam generator - Electricity demand and consumption - Number of operating hours
• Thermal/Electric Ratio • Fuel Type • Steam condition
Back pressure Extraction Gas turbine Reciprocating Reciprocating
steam turbine steam turbine diesel engine gas engine
CHP database ♦ Type and size of CHP ♦ Cost capacity ♦ Financial evaluation ♦ Cost of saved carbon ٢٤
Source: GHG Mitigation and Technology Assessment. Support for National Action Plan, 1997.
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Figure VI. Feasibility analysis procedure for CHP module
CHP Module Performance Characteristics Economic Data - Operating hours - Module size • Equipment unit cost - Fuel Properties - Module Availability • Fuel and electricity costs - Loading factor - Recovered energy • O & M costs - Specific fuel consumption • Equipment installation cost - Steam and electricity demands
Environmental Impact Data Processing Financial Economical Indicators Parameters Analysis Type of fuel • Equipment sizing and • SPP • Discount rate • Reduction of CO2 cost • DPP • Energy and fuel • Cost of saved carbon • Running cost • Energy savings • IRR escalation rates • NPV • Wages growth • ACF rate
Source: GHG Mitigation and Technology Assessment. Support for National Action Plan, 1997.
* SPP: Simple payback period *DPP: Discounted payback period *IRR: Internal rate of return *NPV: Net present value *ACF: Annualized cash flow
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2. Evaluation approach for waste heat recovery systems
(a) WHR systems classification
Waste heat recovery (WHR) is one of the most frequently occurring energy conservation opportunities identified in the industrial sector. However they are quite specific to the process application. The most common WHR options that have been implemented worldwide are:
Option 1: Regenerative burners (utilization of waste heat for combustion air preheating) Option 2: Recuperations (utilization of the heat of flue gases for combustion air preheating in furnaces) Option 3: Economizer (utilization of waste heat from boiler for preheating of feed water) Option 4: Water treatment (used to improve waste heat recovery) Option 5: Boiler feed water preheating systems from blow-down (utilization of the sensible heat of continuous blow-down from boilers for preheating boilers feed water) Option 6: Boiler air preheaters (utilization of waste heat from boilers for preheating of combustion air) Option 7: Preheating systems for feeding materials (utilization of the flue gases for stock preheating in furnaces and processes) Option 8: Waste heat boilers (utilization of process waste heat for steam production
(b) WHR potential evaluation
Evaluating the potentials for WHR applications requires the identification and qualification of waste heat sources as well as an existing possible application in order to utilize such heat at the plant site. In selecting a WHR system that is best suited for a specific application, certain key criteria must be met: (a) there must be sufficient heat available at a suitable temperature; (b) a use for the recovered heat must exist; (c) demand for heat must coincide with the availability of waste heat; and (d) The heat source must be at a higher temperature than the temperature of the system to which heat is to be transferred (only a heat pump can overcome this restriction).
In view of such requirements the procedure for WHR potential evaluation would include:
(i) Identify potential sources of waste heat and evaluate the heat content of the waste heat source (its temperature level and continuity);
(ii) Determine possible applications which match waste heat sources. Where required temperature should be reasonable lower than the available waste heat source;
(iii) Select WHR configuration as appropriate to the application and the site specific conditions and evaluate the energy and cost savings;
(iv) Develop a cost estimate for the systems implementation, to be used for performing the techno- economic feasibility for the system. Details on performing such feasibility are given in references (19, 20).
3. Evaluation approach for industrial boilers tune-up programmes
(a) Technical background
Optimum combustion efficiency is achieved when fossil fuel is burned with exactly the right amount of air for complete combustion. In practice, all combustion systems require more than the theoretical amount of air to achieve complete combustion. Excess air results in energy waste, as air usually enters a combustion system at low temperature and leaves unused at high temperature in the exhaust gases. As a result savings can be achieved if excess air is reduced through boilers tune-up.
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The US Industrial Assessment Center (IAC) has conducted energy audits in USA on 4,300 industrial facilities from 1990 to 1997. It investigated the impact of the boiler tune-up process on boiler fuel consumption. It was found that:
(a) A good boiler tune-up with a precision gas analyzer can result in boiler fuel savings of 2% to 20%;(6) (11) (b) A 3% decrease in flue gas O2 typically produces a 2% increase in boiler efficiency; (c) Boiler efficiency measures, including tune-up, provides an average savings of 3% on facility energy use and a simple payback period of 9 months was recommended at 20% of the 4,300 audited facilities.
(b) Evaluation of the tune-up process
Generally, any study for evaluating the tune-up programme should include both technical and financial aspects, with particular emphasis on; technology cost, impact on energy savings, financial needs, effect on GHG mitigation, and social and cultural impacts of the technology’s diffusion.
Substantial savings could be achieved, if the tune-up programme based on portable gas analyzers is implemented nationwide. The percentage of the installed boilers capacity to be covered by the programme should be estimated. Different levels of implementation may be considered. Boilers already having functionality and well-developed combustion control systems would not benefit from joining the nationwide gas analyzer programme.
The tune-up programme has to be compatible with the conditions of the industry in each country and it may be performed either by an energy service company (ESCO) or by plant technicians who would have had intensive training. In case of implementing a nationwide tune-up programme, it is preferable that the Ministry of Industry or any other organization responsible for the programme, create tune-up centers located around industrial areas. Each center would operate as a separate entity and would be equipped with several gas analyzers (6-8 units), and spare parts. A few, well trained, technicians (4-6) and one engineer would be enough to run the center. Training a technician would take about 3-4 hours and would have to be repeated every 3 to 4 months.
The cost of annual savings will simply be calculated as the difference between the average cost savings achieved from efficiency improvement/boiler and the cost of boiler tune-up for one boiler, multiplied by the number of tuned boilers per year.
To this end, it has to be noted once more that evaluation of possible regional replication of any of the proposed priority options is a complex task which should be based on appropriate country databases and implementation experiences. For this reason, three case studies on Egypt, Lebanon and the Syrian Arab Republic are given in the next chapters.
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IV. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF EGYPT
A. THE INDUSTRIAL SECTOR OF EGYPT: CLASSIFICATION AND MAIN FEATURES
1. Classification of Egyptian industries
Egypt has a huge number of manufacturing industries including various industrial activities. They are normally classified as:(10)
(a) Metal industries (ISIC-37), including integrated and non-integrated iron and steel, non-ferrous, pipes, forging and aluminum industries;
(b) Chemical industries (35), including fertilizers, chemicals, pesticides, dyes, paper (34), coke, oils, tires, industrial gases, wood manufacturing and match industries;
(c) Textile industries (32), including cotton spinning and weaving, dyeing, synthetic silk, wool, linen, gut, carpet and garment industries;
(d) Food industries (31), including sugar (from cane and beet roots), distillation, tobacco, salt and soda, oil, milk, vegetable and fruit preservation, bakery, confectionary, chocolate and soft drink industries;
(e) Cement and Refractories (36), including cement, salts, glass and crystal, refractories, clay and china;
(f) Engineering Industries (38), including shipyard works, railway, light transport, cars, springs, transportation fittings, steel structures, construction, industrial services, steel boilers, domestic appliances, workshop machines and tools, electric cable, radio and TV, refrigeration and air conditioning;
(g) Other industries (39), including all other industries unclassified under any of the above groups such as, pharmaceutical, brick, military, and private sector industries (textiles, glass ceramics, leather and light industries).
2. Main features
As per the year 1998, the textile industry was the largest in number of plants (about 5500), followed by the metal industry, machinery, cars, spare parts and assembly, and household appliance industries, which amounted to 5200 plants, and the food processing sector which included about 4500 industrial facilities. In addition, the wood manufacturing, chemical industries and building material and paper industries also contribute a good portion to the Egyptian industrial base.
The manufacturing industries in Egypt have contributed 15.1 per cent to the country’s GDP in 1999,(7) with a value added of 13,427 million USD and a final energy consumption of 13,743 ktoe,(8) representing 46.52 per cent of the total final energy consumption.
B. THE SITUATION OF ENERGY AND INDUSTRY IN EGYPT
1. Energy resources
Egypt has both the conventional energy resources of crude oil and natural gas, as well as the renewable resources of hydro power, solar, wind and biomass. Currently, petroleum, natural gas and hydropower are the major energy sources for Egypt. Proven oil and natural gas reserves were 3.7 billion barrels and 1,223 billion cubic meters respectively at the end of 1999.(3) These reserves were about 3.5 billion barrels and 31.5 trillion cubic feet on 1 January 1999,(3) reflecting a decline in oil reserves and an increase in natural gas reserves. In 1999, the production of crude oil in Egypt was about 40 million cubic meters and the production of natural gas was about 18.5 billion cubic meters.(4)
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2. The total primary energy consumption
The government of Egypt has been stimulating economic growth and has been moving towards more privatization. Energy demand has increased in recent years as a result of the improvement in the standard of living, the construction of new industrial zones and the expansion of the commercial and residential sectors.
Table 12 shows the development of primary energy consumption in Egypt during the period 1994/95 to 1998/99. It shows that total primary energy consumption counted for 42.188 mtoe in 1999 with an increase of about 10 mtoe from 1994/95 to 1998/99, with an average growth rate 6.93 per cent. The total share of crude oil and natural gas is about 92 per cent of the total consumption, while in 1999 the energy intensity reached 0.53 kgoe/US dollars.
TABLE 12. PRIMARY ENERGY CONSUMPTION IN EGYPT (mtoe) Item 1994/95 1995/96 1996/97 1997/98 1998/99 Average growth rate Crude oil 18.33 21.07 21.7 24.4 25.0 8.3 5 9 51 54 99 Natural gas 10.73 11.2 11.4 11.6 12.7 4.0 4 7 84 99 4 Total Petroleum energy 29.06 32.27 33.2 36.1 37.4 7.0 9 9 21 38 58 Hydro 2.562 2.554 2.63 2.68 3.36 - 2 1 5 Coal 0.701 1.011 0.83 1.13 926 - 6 Total consumption 32.33 35.84 36.6 39.9 42.1 6.9 2 4 89 49 88 3 Source: Organization for Energy Planning (OEP), “Energy in Egypt” (Annual Reports 1994/59 – 1998/99). Statistical Abstract of the ESCWA Region 2000.
A recent OEP study on the forecast of the total and sectoral energy consumption in Egypt to year 2016 showed that the total energy consumption is expected to increase from about 27.6 mtoe in 1990/91 to about (11) 99.8 mtoe in the year 2016/17 with a total average growth rate of 5.1 per cent. The associated total CO2 emissions is expected to increase from nearly 75 million tons of CO2 in 1990/91 to about 261 million tons in 2016/17 with a total average annual growth rate of 4.9 per cent.
3. The total final energy consumption
The final energy consumption in Egypt has increased from about 28.25 mtoe in 1997/98 to about 29.54 mtoe in 1998/99, with an average growth rate 4.57 per cent.(8) The sectoral distribution of this energy is illustrated in figure VII. As shown, the industrial sector is the major energy consumer, with a share of about 46.5 per cent of the end use energy consumption. Meanwhile, The electric energy consumption in 1998/1999 has reached 56.6 GWh, with increased consumption in all sectors. The two largest consumers were the residential and commercial sector (40.99 per cent) and the industrial sector (40.46 per cent), while other sectors consumed only 18.55 per cent of the total consumed electricity (see figure VIII).
Figure VII. The sectoral distribution of the final energy consumption in 1998/99
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2.42% 19.13% 30.85% 1.08%
46.52% Transport Industry Agriculture Residential & Commercial Government Buildings
Source: OEP “Energy in Egypt”, 1998/1999. Figure VIII. Sectoral distribution of electricity consumption in 1998/1999
14.60%
41.00%
40.50% 3.90% Services Industry Agriculture Residential and Commercial
Source: OEP, “Energy in Egypt, 1998/1999.
4. Industrial energy consumption
Table 13 presents the development in energy consumption of the industrial sector during a five year period from 1994/95-1998/99. It also shows the manufacturing value added (MVA) and the development of industrial energy intensity (IEI) during this period.
TABLE 13. DEVELOPMENT OF INDUSTRIAL ENERGY CONSUMPTION AND ENERGY INTENSITY IN EGYPT
Avg. growth rate Year 1994/95 1995/96 1996/97 1997/98 1998/99 (%) Industry end-use consumption (ktoe) 11 12 12 13 13 4 725 825 766 782 743 . 1 MVA (million US$) 6 6 8 9 10 1 033 851 060 061 112 3 . 8 Industrial energy intensity (kgoe/US$) 1.94 1.87 1.58 1.52 1.36 - 8
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. 4
Sources: 1. Statistical Abstract of the ESCWA Region, 2000. 2. OEP, Annual Reports (1994/95-1998/99), Cairo, Egypt.
The share of the different manufacturing sub-sectors was estimated in 1994/95(12) as illustrated in figure IX. At that time, the overall consumption of Egyptian industry was 11,725 ktoe.
Figure IX. Final energy consumption in Egyptian industry classified by sub-sectors (1995)
Others Textile 15 % 9% Cement, Minerological & Refractories 26 %
Metallurgical 26 % Food Chemicals 6% Engineering 17 % 1%
In 1998/99, Egyptian industry was the largest consumer of the final energy consumption. It consumed 13,743 ktoe, accounting for more than 46.5 per cent of the different energy sources, excluding renewable resources. As shown in figure X, the resources included: 3,750 ktoe (27.3 per cent) residual fuel oil, 1,800 ktoe (13.1 per cent) diesel/gas oil, 3,923 ktoe (28.6 per cent) natural gas, 1,969 (14.3 per cent) electricity, 926 ktoe (6.7 per cent) coal, and 1,375 ktoe (10 per cent) other petroleum products.(11)
In addition, several studies have been conducted by concerned authorities(13) on the energy end-use share by industrial processes. These have indicated that electrical motors are the dominant consumer of electricity (62.0 per cent), followed by process heat (31.0 per cent), while lighting is not a significant end-use in the industrial sector. On the other hand, process heat is the dominant consumer of fuels (65.0 per cent), followed by processes steam (30.0 per cent).
Figure X. Energy consumption in Egyptian industry classified by sources
10% 13% 7% 29%
14%
27% Gas/Diesel oil Coal Electricity Fuel Oil Natural Gas Other petroleum products
Total consumption: 13,743 ktoe
5. The need of energy efficiency improvement
Table 13 shows an improvement in energy efficiency, or decreased industrial energy intensity, during the period (1994-1999), at a rate of 8.4 per cent. This is due to the increased contribution of the private sector in Egyptian industry and efforts towards more efficient energy use in the sector. However, industrial energy
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intensity is much higher (2.6 times) than that of the total primary energy consumption (0.533). Still many efforts have to be made as will be discussed in the following section.
The total size of the potential energy efficiency market in Egypt was estimated at LE (Egyptian Pounds) 3.6 billion (about US$ 0.9 billion). The industrial sector accounts for 95 per cent of the total, distributed by sub-sector as chemicals (accounting for 18.0 per cent), metals (18.9 per cent), building materials (18.7 per cent), food industries (14.7 per cent) and textiles (11.0 per cent).(13)
An assessment of demand-side management (DSM) for Egyptian industry, buildings and domestic sector indicated that industrial energy-efficiency improvements accounts for more than half the total DSM potential. It also showed that the most cost-effective or “least cost” energy saving potential at different industrial sites can count between 14 and 85 per cent of the total potential for energy efficiency improvements at that site. Moreover, the energy audits conducted in the industrial sector, have shown that, the private sector enterprises are more energy-efficient than their public sector counterparts. The most dramatic difference is in the fertilizer industry, where public sector plants are 15 times more energy intensive as their private sector counterparts.
In addition to the above-mentioned indicators, the following are reasons behind the urgent need for energy efficiency improvement in Egyptian industry. They include: (a) existing inefficiencies in the metal and glass industries due to inadequate scrap metal processing, uneven heat distribution, excessive heat loss, and lack of process or combustion control; (b) most industrial process heat generation and transmission systems have significant losses, because energy costs were not a concern in the original designs; and (c) the below capacity operation and condition of existing boilers is a major problem for many plants seeking to expand production. C. STATUS OF ACTIVITIES FOR IMPROVING INDUSTRIAL ENERGY EFFICIENCY
Since the early 1980s, concerned Egyptian organizations have directed concerted efforts towards adopting and implementing measures for upgrading energy production and energy use efficiency in different sectors, particularly in the power and industrial sectors. The activities directed for the industrial sector have covered survey and assessment studies, industrial energy audits, demonstration projects, as well as a wide spectrum of training and awareness programmes.
The activities for energy conservation in industry were led by the Organization for Energy Planning (OEP), the Egyptian Electricity Holding Company (EEHC), Tabbin Institute for Metallurgical Studies (TIMS), the Development Research Center and the Technological Planning Center (DRTPC) of Cairo University, the Federation of Egyptian Industries (FEI), and the New and Renewable Energy Authority (NREA). They were mostly implemented with the technical and financial support of several bilateral and international organizations, particularly the United States Agency for International Development (USAID), United Nations Development Programme (UNDP), Global Environmental Facility (GEF), and the African Development Bank (ADB).
In addition, and as a result of the expertise gained and the level of awareness created on the subject, the Egyptian Energy Services Business Association (EESAA) was established. It includes about 22 private Energy Service Companies (ESCOs) working in the field of energy efficiency.
The following, spotlights the achievement of the different programmes implemented or being implemented for the industrial sector. However, the information on achievements relevant to the three selected energy efficiency options are given with more detail in sections D, E and F of this chapter.
1. The Organization for Energy Planning (OEP) programmes
OEP is entrusted to undertake comprehensive and integrated energy planning and policy analysis within the economic development framework of Egypt. Since the late 1980s, OEP has conducted several surveys and field studies with the objective of assessing the potential for upgrading energy efficiency in the industrial sector of Egypt. It has also conducted about 35 detailed audits in large industrial companies, and many other less-detailed audits in different sectors.
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In cooperation with the European Community (EU), OEP has completed a leading project in energy efficiency improvement: “Urban Energy Planning in Alexandria Governorate”. The project was executed during the period 1993-1997 and puts emphasis on the residential and commercial sectors. However, in Phase I, which was completed in 1994, it had also directed efforts in the development and prioritizing of energy efficiency improvement programmes in the field of combustion and lighting technologies, as well as identifying projects which would demonstrate energy efficiency technologies. In Phase II, pre-feasibility studies were prepared for future investments in energy conservation and environmental protection in the Alexandria Governorate. Including an energy–environment profile of small and medium sized enterprises (SME), where about 240 SME were covered in the energy assessment survey.(14)
2. The Energy Conservation and Environment Project (ECEP)(13,15)
(a) Project objectives and partners
The ECEP project was financed by USAID and executed during the period from 1988 to 1998. Its purpose was to encourage energy efficiency and increase Egyptian institutional capability to implement energy conservation activities and projects. Three Egyptian partners have coordinated efforts for the projects implementation. These are: TIMS for public sector activities; DRTPC for private sector activities; and FEI for training and promotional activities.
(b) The ECEP/DSM pilot programme(15)
Prominent among ECEP activities was the support of a pilot demand side management (DSM) programme (1994-1998), implemented by ECEP in coordination with the Alexandria Electricity Distribution Company (AEDC). The programme was designed to consolidate the knowledge and experience acquired through ECEP and related activities. Through interagency cooperation it continues the consensus building on national energy efficiency policy directions. The core objectives were as follows:
(i) Develop and train DSM operating units at AEDC and EEA; (ii) Test potential impacts of industrial DSM; (iii) Evaluate DSM impacts on gas emissions for Egypt’s Climate Change Plan; (iv) Integrate data toward the development of national DSM programmes in Egypt; (v) Conduct a comprehensive training programme to support the transfer of capabilities to local counterparts.
The pilot programme is a demonstration of DSM planning and implementation in which the four organizations and others participated actively. The central effort has involved: (1) selection of 12 industrial plants and a hotel (customers of EEA and AEDC); (2) energy audits of these facilities; (3) selection of DSM projects for implementation; (4) procurement (primarily USAID-funded) and installation of equipment; (5) monitoring of results; in addition to (6) a comprehensive training programme to support the transfer of capabilities to local counterparts.
(c) The achievements of the ECEP project
(i) Technology assessments and sectoral studies
Since the early 1980s, several studies have confirmed the potential for energy conservation and demand side management (DSM) in Egypt. A series of technology assessment and sectoral studies were carried by ECEP and integrated with earlier studies to estimate overall potential.
Technology assessments were prepared under the DSM Pilot Programme for: (a) cogeneration; (b) motors and motor drives; (c) steam systems; and (d) lighting. These technology studies were planned to provide sufficient information to develop technology-based strategies for DSM, while sectoral studies aiming to aimed to identify DSM opportunities that may be common to a group of industrial plants in a given sector, such as cement or metals. The DSM Pilot Programme selected 5 of these for broad sectoral studies,
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representing 77 per cent of industrial energy use. They included: (a) cement; (b) petroleum and chemical; (c) metal and textiles.
The ECEP studies have indicated that the greatest potential is in industry, where 30-40 per cent of energy use could be eliminated and 600-1,200 MW of electric power could be produced by using cogeneration. This potential wealth has not been realized due to institutional, financial, and other obstacles.
In addition, ECEP market surveys revealed that prevalent barriers to the adoption of energy-efficient technologies include financial constraints, customer’s lack of information, and limited availability of energy services. In recognition of the financial and informational market barriers, the DSM pilot programme in Alexandria targets low-cost efficiency measures and concentrates on increasing customer awareness while developing the capabilities of domestic energy service providers.
(ii) Industrial energy audits
The industrial facilities that were selected for energy audits broadly represented all of the major sectors of Egyptian industry, with at least (2-3) audits in each type of industry. The energy audit teams found a wide variety of potential projects, including thermal and electric DSM measures in each of the industrial sub-sectors. However, the net savings recommended varied considerably among individual plants (from <1% to 47%), while the average total savings found was ten per cent of annual energy consumption and 14 per cent of peak demand reduction. The average simple payback period for the recommended projects was 2.1 years. Table 14 shows the audit results assessed several different ways.
TABLE 14. ECEP/DSM, ENERGY AUDIT RESULTS
Electricity peak Payback Grouping Fuel savings Electricity savings reduction period All plants 7 16% 14 4.1 % % Public sector only 16 32% 17 4.9 % % Private sector only 5 9% 12 2.7 % % 14 plants 6 38% 35 2.1 % % Low cost projects 8 3% 6 0.1 % % Medium cost projects 6 1% 1 1.7 % % High cost projects - 34% 29 2.6 9 % %
Source: B. Wood. “Egypt’s DSM Pilot Program: Results-to-Date and Lessons Learned”, DSM and the Reforming Energy Market Conference, 15-17 December, 1997, Cairo, Egypt.
The results shown in the table point to some conclusions about the audit processes that are relevant to future energy audit-based programmes:(14)
(a) Public sector plants generally have more DSM potential than private sector plants because the private plants were relatively new and modern with higher efficiencies. Nevertheless, private sector plants are more able to invest in profitable DSM projects, so lesser DSM opportunity may be balanced by greater readiness for implementation;
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(b) Low and medium cost projects represent a significant amount of DSM potential. Low-cost projects could become the focus of a large-scale programme, because many of these projects are applicable across many industries;
(c) The larger and more sophisticated plants require specialized skills for auditing activities as the energy audit team must understand the processes of the plant and be able to offer valuable technical advice;
(d) Data collection at the plants is generally difficult and time consuming and high-level management approval is vital to the audit’s success, since plant management may reject many feasible and profitable projects because they are not well informed.
(iii) Project implementation
ECEP had implemented about 30 capital investment projects in industry. The implemented projects covered the applications of different technologies including cogeneration, waste heat recovery, combustion control, efficient lighting and others. The cost of energy efficiency equipment supplied by the project reached 25 million US$ over 7 years (1991-1998). More details about these implemented projected are included in references 14 and 15, while Annex II presents information on three of these projects(16).
(iv) ECEP/DSM Training activities
The ECEP has conducted intensive training programmes directed at capacity building on the subject for the industrial sector and the relevant planning and expert organization. It covered different areas of expertise and totaled about 7000 trained engineers and technicians, as well as 50 trainees and 30 in-house experts of the implementing agencies. This was achieved through (100) specialized training courses and 40 technical training proceedings.
The DSM pilot programme training activities were aimed at developing self-contained capabilities in its participating organizations in order to plan and implement new DSM programmes. Ten training courses have been held on: (a) energy audit; (b) energy systems short courses; (c) topical training on cogeneration evaluation, load profiling/power quality, steam surveying and electric motor rewinding; and (d) DSM programme planning. Each course emphasizes practical learning in field to duplicate conditions under which the lessons will be applied. Nearly all the courses had components in industrial plants where applications were tested and the results assessed. These courses were attended by more than 250 engineers and technicians.
(v) The ECEP impacts
The impact of the ECEP project achievements over its ten year lifetime is remarkable for building capacity and awareness on energy efficiency issues within the industrial sector of Egypt. This is emphasized by the following:
a. A wide range of industries were covered through project activities. 100 companies were involved in the national boiler tuning programme, seven companies in the DSM activities, 13 companies in the stem networks insulation programme and 45 companies in the air quality and environmental assessment activities;
b. The ECEP has conducted intensive training programmes, covering different areas of expertise and totaling about 7000 trained engineers and technicians;
c. The results of the implemented projects on efficiency improvement in plant sites as well as the valuable database developed on project development procedure, cost information and performance evaluation, will be very helpful for conducting studies on similar projects.
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3. Energy efficiency improvement and greenhouse gas reduction project(17)
(a) Project objectives
The Energy Efficiency Improvement and Greenhouse Gas Reduction Project (EEIGGR) started in February 1999 as a joint effort between GEF, UNDP, EEHC and OEP). The overall objective of this project is to assist Egypt in reducing the long-term growth of GHG emission from electric power generation and from consumption of non-renewable fuel resources. The project objectives that are relevant to the industrial sector are;
(i) Facilitating the adoption and implementation of energy conservation measures in residential, commercial and industrial sectors through education and promoting financing and standard- setting activities;
(ii) Stimulating and guiding the private sector in the development of a capability for end use energy efficiency service planning, feasibility analysis, conceptual design and project implementation including the manufacture of energy efficient products;
(iii) Assisting in the international and regional transfer of technology and experience that could be instrumental in GHG emission reduction;
(iv) Promoting public and private sector investments in energy projects that are beneficial for the global environment.
(b) Project components relevant to industry
The EEIGGR project is made up of three components. Component 1 has an emphasis on the power sector and includes the activity: Study and Analyze Time of Day Tariff for the Industrial Sector, while components II and III are highly linked to the industrial sector as described below.
(i) Component I1: Energy efficiency market support, including an activity on energy service industry support and promotion, which is being implemented through: performing energy audits; providing business advisory services to overcome start-up barriers; encouraging the reduction of customs duties on three major classes of energy end-use equipment; design, package and market compact, fluorescent lamp leasing programme, and loan guarantee programme for partially private companies;
(ii) Component III on Cogeneration with the objectives of: (1) Creation of an operational small power group within EEHC’s planning studies and design sector; (2) Parallel grid connection requirements; (3) Infrastructure for purchase of small producer power created; customer training programme prepared; and (5) Industrial cogeneration and agricultural waste projects proposed and developed.
(c) Project achievements
The summery of the current level of achievements of the EEIGGR project relevant to the industrial sector after 50 per cent of its anticipated lifetime as follows:
(i) Achievement on energy efficiency market support
Since the start of the EEIGGR project, it has actively collaborated with seven ESCOs, four of which are EESBA members. The total number of audits exceeded 102, with 16 implemented already. The EEIGGR collaboration and support to ESCOs took one or more of the following forms: (1) Providing energy efficiency related information upon request; (2) Providing training and consultation on different aspects of ESCOs activities through local and international consultants; (3) Awarding more than twenty energy survey
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contracts to private sector ESCOs to stimulate the end-user market. Assisting the ESCOs in presenting the findings of these surveys to end-users, including some electric utilities and is currently working with these ESCOs to move ahead with possible implementation; (4) Establishing well-qualified teams of experts to develop equipment standards; and (5) Recommend planning a to ensure local manufacturing capacity.
In addition, EEIGGR has also assessed custom duties for energy efficient equipment and possible customs reduction as incentives for energy conservation, as well as assessed efficient lighting potential and conducted few demo applications including government buildings. A savings of more than 30 per cent was realized; initiating a financial credit programme between the suppliers of energy efficiency lighting systems and EC’s; negotiated implementation agreements between ESCO and energy end-users, utilizing a partial financing guarantee against 30 per cent of the anticipated savings; and produced 17 technical briefs on energy conservation and energy efficiency related matters.
(ii) Achievement on cogeneration
The achievement of the cogeneration component includes: (a) The establishment of the co-generation group from EEHC staff; (b) A co-generation-training course was conducted and attended by engineers from electricity companies and EEHC (30 eng.); (c) Specifications of required interconnection equipment has been prepared; (d) Arabic draft power purchase agreements for CHP produced electricity has been developed for approval; (e) A new tariff structure for cogeneration has been developed for approval; and (f) the project has negotiated with two of the private sector cogeneration systems suppliers/contractors in Egypt to cooperate in cost sharing a cogeneration pilot project in order to select one of them. The cost sharing will not exceed 5 per cent of the cost.
4. The NREA solar industrial processes heat (SIPH) and conservation activities(18)
NREA has designed, built and tested two (SIPH) pioneering projects in the food and textile industries. They are integrated with waste heat recovery systems. Their objectives were to demonstrate and field test (SIPH) waste heat recovery systems in different sectors. Each solar system included a solar hot water system using flat plate collectors with a total surface area of 350 m2 producing 26 m3/day of hot water at 50-60oC. The annual fuel saving was found to be over 1800 toe/year.
In addition, during 1996-1998, the NREA performed a study to use field energy audits to forecast the potential of SIPH and waste heat recovery systems for six industrial sub-sectors in Egypt. The study was financed by the African Development Fund (ADF). A set of demonstration pilot project were conceptually designed and evaluated for the different industrial sub-sectors. A pilot projects representing the most replicable priority system options was selected for implementation. It will be built at The El-Nasr Pharmaceutical company site, and is planned to be operational during year 2002 with an expected fuel saving of about 1300 toe/year.
5. Initiatives by the industry
In addition to the above organizational efforts, self-initiated energy efficiency projects have been implemented by industrial companies. More than 150 million US$ has been invested, mainly in combined heat and power, power factor improvement, the revamping of industrial boilers and furnaces. More details about energy efficiency projects implemented in Egypt are included in references 14 and 15.
D. COMBINED HEAT AND POWER SYSTEMS, STATUS ASSESSMENT AND EVALUATION
Based on the analysis given in chapter II of this report, for ranking the priority energy conservation and efficiency options for the industrial sector of ESCWA member countries (MC’s), combined heat and power (CHP) systems were ranked as the first priority option with high possible replicability in most of the MC’s. Meanwhile, the Egyptian experience in developing and implementing such systems has been recognized, particularly due to the acquired experience and availability of practical database produced from the activities described earlier.
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This part of the chapter summarized the CHP application status in Egypt and the application potentials in Egyptian industry. It also presents examples for the preliminary techno-economic evaluation of CHP systems based on the approach described in chapter II, and cost and performance data that have been recorded based on the ECEP implemented projects.
1. The CHP application status
The current applications of CHP systems in Egypt are basically in the industrial sector. In 1992, the total installed CHP capacity was 363 MWe of which only 10 MW was generated by diesel engines; the remainder use steam and gas turbines(19). The largest CHP project has implemented in El-Mahala El-Kobra Textile plant, where two CHP units of the extraction turbine type were used with a total of 80 MW.
From 1992 to 2000, a very limited number of CHP projects were added to the installed capacity. This was due to economic, regulatory and institutional barriers, as well as to the unclear picture of the electricity market. In addition to the two demonstration projects implemented by ECEP(16) in the Alumisr Company (525 kW) in April 1993, and in Abu-Zabual Fertilizers (1.8 MW) in September 1996, about 77 MW in the second half of 1999 of which 17.25 MW was installed by Talkha Fertilizers and 60 MW by the Egyptian Petrochemicals Company(20). Both projects are connected to the national grid. Annex II outlines the specifications of two of the CHP demonstrated projects at a fertilizer and aluminum industries.
2. The application potentials of CHP systems
In order to gauge the potential application of CHP, it would be necessary to obtain detailed energy use information for all major industrial facilities in the country. Since 1993, several studies have been conducted by OEP to estimate the potential of steam production and use in the Egyptian industry, and consequently estimate the potential opportunities of CHP application.
Based on the latest study “Cogeneration Potential in Egyptian Industry”,(19) conducted by (OEP) in 1996 using the data provided by several previous OEP surveys, the potential of CHP in industry was estimated to be 1070 MWe. Taking into consideration such OEP estimates and the average growth rate of energy consumption in industry (4 per cent between 1996-1999), the potential CHP capacity in Egypt is estimated to be 1200 MW for 1999.
The study was based on the assumption that all the steam needed by the industry could be generated through CHP systems. A conservative approach was followed in this study assuming that cogeneration units are sized such that they only consume the fuel currently consumed by the existing boilers. The study had shown that the remaining potential of CHP is found in those industries that have traditionally relied on CHP, such as food, pulp and paper, chemicals, petroleum and primary metals. Significant potential also exists in other industries, such as textile, rubber and plastic industries, that have not aggressively implemented CHP.
Table 15 shows up-dated data on CHP installed and potential capacities distributed by industrial sub- sectors. Figures XI(a) and XI(b) show the share of each industrial sector as a per cent of the total and potential CHP capacities, respectively.
TABLE 15. INSTALLED AND ESTIMATED POTENTIAL CAPACITIES OF CHP IN EGYPTIAN INDUSTRY
CHP Capacity (MW) Estimated ISIC Industry Installed Share (%) potential Share (%) 31 Food 108.5 24.7 541 45.0 32 Textiles 116.0 26.4 174 14.5 35 Chemical, pharmaceutical 101 23 173 14.4 35 Petroleum 105 23.8 197 16.4
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37 Metals 0.525 0.1 50 4.2 36 Mining and refractories 9.04 2.0 66 5.5 Total 440 100 1 200 100
Source: OEP estimates based on surveys and studies conducted by OEP and ECEP.
Figure XI. CHP capacity in Egyptian Industry
(a) Existing Capacity (b) Estimated Potential (Total 440 MW) (Total 1200 MW)
4% 6% 0% 2% 24% 25% 16% 45%
14% 23% 26% 15%
Food Textiles Food Textiles Chemicals & Pharm. Petroleum Chemicals & Pharm . Petroleum Metals Mining & Refrac. Metals Mining & Refrac .
1. Evaluation of selected CHP systems modules
(a) The procedure
As described earlier in chapter III, the evaluation approach for a selected CHP system has to go in sequential steps based on:
(i) Selecting a commercially available module of the selected CHP system type and collecting the technical and financial information relevant to it, as well as performance records collected from the demonstrated or commercially installed system;
(ii) The potential replicability of each module in the targeted industrial sector is estimated, based on several factors, mainly: Previous diffusion of the installed capacity, potential savings, fuel availability, market saturation, advances in CHP technologies, and capital investment;
(iii) On the basis of the options set in table 16, a techno-economic analysis was conducted through this study for options 1, 2, 3 and 5, (shown in table 16), to present examples of the benefits of CHP systems application and technical and environmental feasibility.
Table 16 shows a set of proposed options, each with one or more modules or more for application in the Egyptian industry. It covers the five identified CHP options, namely: backpressure steam turbines, extraction steam turbines, gas turbines, reciprocating diesel engines and reciprocating gas engines. The table also shows, size, capital cost and features of each module. The net savings and the simple payback period are calculated by considering performance characteristics of the module and the cost of fuel and electricity to the plant.
TABLE 16. THE SET OF PROPOSED CHP OPTIONS MODULES FOR APPLICATION IN THE EGYPTIAN INDUSTRY
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Modules CHP option No. Size (MW) Comments 1. Back-pressure 1 1 000 Offer the best fuel flexibility and a wide array of designs Steam Turbines 2 5 000 and complexity to match desired application and/or 2. Extraction steam turbines 3 3 000 performance specifications 3. Gas turbines 4 1 000 Not currently strong market area due to competition with 5 3 000 reciprocating engines, technology improvements may enhance future competition 6 5 000 First tier of the GT competitive range where GT systems begin to merge as the strongest competitor 7 10 000 Second tier of GT competitive range. Few units (10-15 MW) are implemented in chemicals & petroleum industries 4. Reciprocating diesel engines 8 500 5. Reciprocating gas engines 9 800 Currently the most competitive size range for 10 1 000 reciprocating engines 11 3 000 Engines compete with GT up to 10-15 MW per site often in installations of multiple engines Note: Recommended Modules based on “Industrial CHP Assessment, ONSITE SYCOM, Energy Corporation, Prepared for EIA, January 2000.
(b) Results of CHP modules evaluation
A spreadsheet analysis has been performed for each of the selected CHP modules. In each spreadsheet, the cost flow, cumulative cash flow and discounted cash flow are calculated. The amount of CO2 reduction and CSC are also shown in the spreadsheets. Financial assumptions for the analysis are taken from the technology characteristic values given in table 10. Income taxes are not considered in the financial evaluation. A sample of financial analysis is presented in annex III.
For each module, both the internal rate of return (IRR) and the net present value (NPV) are calculated. The amount of energy saving in toe, the simple payback period and the discounted payback period are also calculated. Modules having an IRR value of less than 10 per cent or having simple payback periods of more than 10 years would not be considered for diffusion in industry. The results of the performed techno-economic analysis are summarized in table 17 indicating that: (i) comparison between financial indicators show that steam turbines CHP systems are the most attractive having the highest IRR and quickest payback periods; (ii) by implementing the estimated CHP potential capacity of 1200 MW, the expected amount of primary energy saving will vary between 2.1-3.3 mtoe/year; and (iii) the corresponding electricity saved for the utility will be about 8,736 GWh/year.
TABLE 17. EVALUATION RESULTS OF THE SELECTED CHP MODULES FOR ENERGY EFFICIENCY APPLICATION IN EGYPTIAN INDUSTRY*
Avg. annual Avg. capital Annual Avg. capital energy Potential costs energy investment Avg. Total saved C.S.C.
1 Fuel savings capacity (1000 $/ saved (million S.P.P. CO2 ($/ton
CHP options Type (toe/MW) (MW) MW) (GWh) US$) (yrs.) IRR (1000 ton) CO2) Steam Turbines Fuel oil 1 777.8 486 650 3 731.90 315.90 2.5 From 1 907.33 -390 (Options 1&2) 15% to 42%
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Gas Turbines Natural 1 893.1 165 1 070 1 235.82 176.55 4.2 From 474.38 -86 (Option 3) gas. 12% to 15%
Gas Engines Natural 1 644.8 549 877 3 768.69 481.473 4.58 12% 1 622.87 -66 (Option 5) gas
Total 1 200 8 736.41 973.923 4 004.58
* Details of calculations are presented in Annex III. 1 Savings at the utility. S.P.P. Simple payback period. IRR Internal rate of return. C.S.C. Cost of saved carbon.
E. WASTE HEAT RECOVERY (WHR) SYSTEMS, STATUS ASSESSMENT AND EVALUATION
The WHR is the second ranked priority option for upgrading energy efficiency in ESCWA MC’s. In Egypt, there is accumulated experience on such systems and several projects have been implemented. The following summarizes the WHR application status and predicted application potentials for it. It also presents examples for system evaluation.
1. The WHR application status
In Egypt, the problem of energy waste is compounded by low efficiency thermal equipment, which even by design, discharges effluents/gases at fairly high temperatures. As the cost of out right replacement of the equipment is very substantial, heat recovery acquires an even greater importance for improving overall efficiency of energy use at a fraction of the cost of equipment replacement.
Nine of the ECEPs 30 demonstration projects on energy conservation are WHR systems. Table 18 presents the major implemented WHR systems in Egyptian industry. In addition, two waste heat recovery projects were implemented by NREA as an integral part of SIPH system in the food and textile industries. An example of a WHR demonstration project in Misr Aluminum Company is presented in annex II.
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TABLE 18. A SUMMARY OF MAJOR AUDITED AND IMPLEMENTED WHR OPTIONS IN EGYPTIAN INDUSTRY (1987-1996)
Status Total fuel savings Investment Total saving cost Simple payback period WHR options Audited Implemented (toe/yr) (US$) (US$/yr) (yrs) 1. Combustion air recuperator 3 2 4 645 785 605 534 690 0.22-4.57 2. Regenerative burners 1 3 19 816 1 341 900 2 180 000 0.67-1.6 3. Improved WHR through water treatment 3 1 31 970 3 637 863 3 731 240 0.25-2.9 4. WHR from gas engine 1 485 184 000 57 250 3.2 5. Recover blow-down heat 4 5 947 1 697 100 721 067 1.3-3.83 6. WHR for boiler feed water heating 4 8 502 1 572 950 978 416 0.2-4.0 7. Air preheating system 6 11 007 1 661 630 1 373 061 0.85-2.42 8. Waste heat boiler 5 9 733 1 188 135 1 094 732 0.72-2.55 9. WHR from condensate 1 17 2 667 1 900 1.4 10. Boiler economizer. 1 787 226 000 74 132 3.1 11. WHR from digester 2 5 816 731 640 703 628 0.85-1.05 12. WHR from desalted water 1 575 142 400 66 335 2.15 13. WHR with gas turbine 1 62 560 31 610 000 6 256 000 5.0 14. WHR for bagasse dryer 1 5 719 2 656 800 660 204 4.0 15. Heat pipes 1 192 12 520 19 200 0.65 16. WHR from stack 1 94 24 000 9 400 2.55 17. WHR for combustion air 1 5 019 2 866 000 579 402 4.95 18. WHR for Juice preheating 1 44 6 000 5 043 1.2
Source: Organization for Energy Planning, Cairo, Egypt; and Energy Conservation and Environment Project (ECEP), 1988-1998.
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2. The WHR application potentials
As a result of the series of potential evaluation studies on WHR performed in Egypt, the estimated market size for energy efficiency products and services using WHR system’s is around 79 million US$, based on ECEP estimations(20). This will yield an expected savings of about 220,000 toe/year. Accordingly, the GHG emissions are expected to be reduced by 710,000 ton of CO2, 15,820 ton of SOx, 850 ton of NOx, and 18 ton of CH4.
Based on the accumulated experience of Egypt in waste heat recovery systems, ECEP studies have evaluated the potential implementation of the selected eight WHR options and ranked them according to priority as shown in table 19. The table also shows the fields of implementation, the expected percentage of local manufacturing (LM%), and the status of previous implementation in local industry.
TABLE 19. PRIORITY RANKING OF THE SELECTED WHR SYSTEMS FOR EGYPTIAN INDUSTRY
Priority order Title/Description Industrial sector(s) of implementation LM % Status of implementation 1. Regenerative Burners/Utilization of waste Typically applied in high temperature 15-25 Implemented in aluminum heat for combustion air preheating industrial furnaces. Furnaces of glass, industry on N.G. and light oil aluminum. Metal shaping (forging fired furnaces rolling), and heat treatment 2. Recuperators/utilization of the heat of flue Furnaces of glass, aluminum, metal 25-60 Implemented in glass and gases for combustion air preheating in shaping, heat treatment and lead and metallurgical industries furnaces copper smelters 3. Economizer/utilization of waste heat from Water tube- and to some extent – fire 80-100 Implemented in water tube boilers for preheating of feed water tube boilers of chemical, textile, food boilers in chemical, textile and and metallurgical industries food industries 4. Water treatment/to improve waste heat Treatment of feed and cooling water in 50-70 Implemented in fertilizer, utilization in condensers of power generation chemical, fertilizer, textile, food and chemical, food, and and process heat exchangers metallurgical industries metallurgical industries 5. Boiler feed water preheating systems from Water tube boilers of chemical, 90-100 Implemented in some chemical, blow-down/ utilization of the sensible heat fertilizer, textile, food and metallurgical fertilizer, food industries of continuous blow-down from boilers for industries preheating boiler feed water 6. Boiler air preheaters/utilization of waste heat Water tube boilers of chemical, 20-30 Implemented in few locations from boilers for preheating of combustion air fertilizer, food and textile industries in fertilizer, sugar and some chemical industries 7. Preheating systems for feeding Incorporated in the design of furnaces 50-80 Implemented in metallurgical materials/utilization of the flue gases for and thermal units, mainly in reheating furnaces, refractories stock preheating in furnaces and processes metallurgical, refractories and cement dryers industries 8. Waste heat boilers/utilization of process Waste heat boilers of metallurgical, 20-30 Implemented in steel 80 F, lime waste heat for steam production fertilizer and chemical industries kilns, fertilizer industries
3. Examples of evaluation of WHR systems
The selected WHR systems are evaluated using cash flow analysis for producing indicators on its feasibility. Each option will be considered as a replicable module for the subsequent process of calculations. An example of the analysis used for the techno-economic evaluation of WHR systems is presented in Annex III for the option of regenerative burner.
In performing the analysis, cost estimates in the audit reports produced by ECEP are used. However, international prices for both energy sources and equipment costs are used. Table 20 shows an evaluation summary of the eight selected WHR options, indicating that: (a) a potential exist for about (135) WHR projects based on the selected modules with regenerative burners being the most replicable (35); (b) the annual fuel savings would reach more than 400 ktoe/year in case such potentials are applied, associated with CO2 savings of over 1.3 m.tons/year; and (c) the total cost of implementation would be around 80.0 m.US$.
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TABLE 20. EVALUATION SUMMARY OF WASTE HEAT RECOVERY OPTIONS
Option Avg. energy Ann. avg. Ann. avg. Total energy Total CO2 Fuel savings energy Capital saved CO2 CSC Replicability savings reduction Total capital No. Name type (tons) savings (toe) costs ($) (tons) ($/ton) times (toe/yr) (tons) cost ($) 1. Regenerative Burner Gas oil 810 863 245 022 2 600 24.58 35 30 221 91 000 8 575 770 2. Metallic Recuperator Fuel oil 915 889 62 805 2 845 13.21 20 17 780 55 285 1 256 100 3. Economizer Fuel oil 506 492 260 000 1 573 -9.02 10 4 918 15 730 2 600 000 4. Water Treatment Fuel oil 11 673 11 346 1 480 000 36 297 24.76 20 226 930 725 940 29 600 000 5. Boiler Feed Water Fuel oil Preheating Systems 4 850 4 714 1 500 000 15 080 3.13 20 94 284 301 600 30 000 000 6. Boiler Air Preheaters Fuel oil 1 340 1 303 250 000 4 1670 4.6 20 26 060 81 031 5 000 000 7. Preheating System for Fuel oil Feeding Materials 42 40 6 000 129 9.59 5 202 645 30 000 8. Waste Heat Boilers Fuel oil 2 032 1 975 40 000 6 318 8.37 5 9 876 31 590 2 000 000 Total 1 309 985 79 061 870
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F. TUNE-UP OF BOILERS AND FURNACES, STATUS ASSESSMENT AND EVALUATION(13,16)
In Egyptian industry, a high potential of energy savings in most of the operating thermal units can be achieved through combustion efficiency improvement producers. The screening performed by ECEP for boilers, ovens and furnaces has shown that, at least, 25 per cent of the industrial thermal units have the potential for significant savings through the application of combustion efficiency improvement measures, particularly through the tune-up of boilers.
1. The boiler tune-up application status
Egypt started a unique tune-up pilot programme in October 1991, aiming to distribute up to 100 portable gas analyzers to local industry, through the Energy Conservation and Environment Project (ECEP). The first phase of the programme was the loan of 60 portable electronic gas analyzers to 54 public sector companies located throughout the country. In 1995, the project, during its second phase, covered all sectors of industry, including: The textile (spinning and weaving), chemical, food, metallurgical, mining and refractories, engineering and petroleum industries.
A key point in the project’s management success has been to make the participating companies responsible for the equipment and committed to using it on a regular basis while submitting monthly reports to ECEP. This facilitated the compilation of information for a database used to track the success of the project as well as to enable ECEP staff to monitor the energy savings achieved by the individual industries, give feedback to each company and identify plants requiring additional training or assistance. At the outset, all industry staff received general training so they could operate the equipment with minimal assistance from ECEP staff.
2. Evaluation of the boiler tune-up programme
(a) Overall evaluation
Improvements realized in the participating 54 public sector companies recovered project costs (LE 3,340,000) ten-fold while realizing an annual energy saving of 7.7 per cent. This represents a fuel savings of more than 208,000 toe. In addition to energy benefits, the project has achieved a huge reduction (about 634,000 metric tons) in toxic emissions to the environment, including pollutants such oxides of carbons, sulfur and nitrogen(15).
Figure XII(a) demonstrates the absolute amounts of fuel savings in toe for each industrial sector over three years. While figure XII(b) gives the percentage of each sector’s participation in the total annual savings.(15)
Figure XII. Boilers tune-up project, fuel savings and its sectoral participation
40000 60
35000 50
30000 1st year 40 25000 2nd year 3rd year 20000 30
15000 20
10000 10 5000
0 0 Spinning Chem. Food Mining Metal Eng. Petrol. Spinning Chem . Food Mining Metal Eng. Petrol .
(a) Fuel Savings (b) % Sector Participation
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Table 21 shows the level of fuel savings and the impact of the programme on environmental protection. It specifies how much each industrial sector contributes to the reduction of different emissions.
TABLE 21. FUEL SAVINGS AND EMISSIONS REDUCTION BY INDUSTRIAL SECTORS (Tune-up programme)
Fuel saving CO reduction by CO2 reduction NOx reduction SOx reduction Sector (toe/yr) ton by ton by ton by ton Textiles (spinning & weaving) 80 152 2 695 227 525 713 2 851 Chemical industries 81 920 1 674 229 734 862 7 129 Food industries 23 248 618 75 628 320 3 562 Metallurgical 8 272 8.45 35 079 591 137.6 Mining and refractories 10 391 109 29 048 44 48.79 Engineering 2 938 273.5 9 601 29.25 484 Petroleum 1 775 0.94 5 148 4.27 63.3
(b) Financial Indicators
Based on the monthly data submitted from the plants participating in the tune-up programme, a techno-economic evaluation was performed by ECEP (annex III-C), showing the cash flow calculations of the tune-up option. The results of which are summarized by the following financial indicators:
• Total capital costs: ($ 749,909); • Annual material costs: ($ 18,000); • Annual labour costs: ($ 187,500); • Energy savings (toe/year): ($ 71,500); • Total discounted cash flow: ($ 31,545,754); • Simple payback period: 40 days
(c) Potential replication impacts
In the case the tune-up programme spreads to cover the whole industrial sector, it will be assumed that 7 and 3 per cent annual fuel savings could be achieved for boilers and furnaces respectively. It is estimated that about 75 per cent of the total installed boiler capacity and 60 per cent of the total installed furnace thermal capacity will benefit from the programme(22). Thus, with full (100%) implementation of the programme, it is anticipated that the annual fuel savings listed in table 22 will be achieved.
(d) Lessons Learned
In addition to the significant benefits achieved in Egyptian industry by this unique low cost programme, the project experience has yielded a number of valuable “lessons learned”.
(i)Low cost measures distributed to many end-users can result in a large savings normally difficult to achieve without large capital investment. This is provided that the project is managed effectively;
(ii) It is more effective to adopt simple, locally handled and sustained technologies rather than high- level sophisticated systems with a short-term sustaining period;
(iii) To facilitate project success, the individual companies must be responsible for the equipment and willing to accept project pre-conditions, such as the submission of monthly reports. The global statistics obtained from these reports have been valuable for the work of many energy and environment related ministries and organizations. To collect this information, the programme must be supported by a very efficient database;
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(iv) There must be a high level of Egyptian technical support to repair the equipment. This expertise must be supported by an adequate spare parts inventory;
(v) There must be on-going training, for replacement personnel in the participating industries.
TABLE 22. ANTICIPATED FUEL SAVINGS OF FUEL OIL, GAS OIL, AND NATURAL GAS FOR THE NATIONWIDE TUNE-UP PROGRAMME OF BOILERS AND FURNACES
Fuel Type Savings (ktoe/year) Fuel oil 127.00 Gas oil/Diesel 49.22 Natural gas 96.757 Total 272.977
Table 23, summarizes the results of the analysis for the nationwide tune-up programme. Several rates of implementation have been considered. Roughly 10 per cent rate of implementation means that the financial is based on savings equivalent to 10 per cent of those listed in table 22. Table 23 shows that with 10 per cent of anticipated savings, the CSC is positive.
TABLE 23. SUMMARY OF THE ANALYSIS OF NATIONWIDE TUNE-UP PROGRAMME USING PORTABLE GAS ANALYZERS
Implementation level, (%) of Total* 10% 20% 50% 75% 100% Annualized cash flow, $ -88 667 1 597 628 6 656 512 10 872 249 15 087 986 Average annual CO2, saved, tons 83 502 167 004 417 511 626 266 835 021 CSC, $/ton (negative value) (1.06)** 9.57 15.94 17.36 18.07 * The total here is 75% of the installed boiler capacity and 60% of the installed furnace capacity. ** Positive value. CSC: Cost of saved carbon.
G. CONSTRAINTS AND RECOMMENDATIONS
1. Constraints
Whilst the overall efficiency of energy use should continue in Egypt to improve in the normal course of economic growth, many potentially cost-effective projects and management changes to improve energy efficiency are not implemented owing to a range of market constraints. These include:
(a) Lack of information and understanding, about the energy efficiency measures available and their economics. This is especially true among small and medium sized industrial facilities, no public awareness of issues pertaining to energy conservation and measures are also often poorly marketed with purchasers facing a complicated supply and installation chain;
(b) Economic and financial constraints, where the finance is unavailable or the resources required may be needed for other priorities. Also, the high prices of energy efficiency equipment and the lack of incentives hinder the implementation of energy efficiency projects. On the other hand, energy prices in Egypt represent one of the most significant economic constraints, since public-sector companies receive a large subsidy than private- sector companies;
(c) Institutional constraints, arising from the lack of national policy to promote more efficient use of energy and from users being able to pass to others the responsibility for meeting their energy costs. For example, energy used in industrial facilities or in offices is rarely the employee’s concern;
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(d) Inadequate training and capacity building, due to the lack of time and resources that should be given to provide sufficient training on energy efficiency related aspects. Among constraints, also the insufficient capacity among government or private companies to perform energy audits, identify energy efficiency options, monitor and verify savings.
In addition to the above general constraints, several specific constraints face the promotion of CHP energy efficiency measure summarized as follows:
(i) The market is still unaware of developments in CHP technology that have expanded the potential for CHP;
(ii) Current regulations do not recognize the overall energy efficiency of CHP or credit the emissions avoided from displaced grid electricity generation;
(iii) Very low tariffs for surplus CHP electricity sold to the grid;
(iv) The lack of incentives for CHP producers;
(v) The new policy and legislation regarding private power is not yet well defined. Such a policy would be probably have to be initiated by the Supreme Energy Council.
2. Recommendations
As a result of privatization and changes in the energy sector, it is expected that a more aggressive approach to pursuing energy efficiency measures will be established in Egypt. However, the following recommended actions have to be considered:
(a) A national energy efficiency policy is needed that provides incentives to Egyptian industry and recognizes the benefits of the high priority measures. For the CHP option, the national policy should not be developed solely as energy sector reform, but as part of on-going economic reform as well;
(b) Implementing a database oriented to energy efficiency including new and cost-effective technologies;
(c) Establish training programmes for engineers and technicians, especially in the public sector;
(d) Develop new customs policies and laws that encourage energy efficiency industry and marketing;
(e) Many efforts have to be made to eliminate, or reduce, the existing barriers;
(f) Financial and environmental incentives have to be provided to encourage the implementation of discussed high priority options including small power producers.
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V. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF LEBANON
A. THE INDUSTRIAL SECTOR IN LEBANON: CLASSIFICATION AND MAIN FEATURES
1. Classification of Lebanese industries
In 1998, there were 22,025 industrial facilities in Lebanon,(21) the bulk of which (88.6%) belong to 8 major industrial branches: food and beverages, textiles, clothing and fur, leather and tanning, wood products (excluding furniture), non-metal products, metal products, furniture and assimilated products. The distribution of these establishments by industry is given in table 24 and illustrated in figure XIII. The main features of these industries are summarized below.
(a) The food and beverage industry is the largest industry in the country. It represents over 20 per cent of the industrial facilities, about 23 per cent of the total workforce in the industry, 26 per cent of the total industrial output, and more than 25 per cent of the industrial value added. The food and beverage industry accounts for 20 out of 67 enterprises employing more than 100 workers in the entire industrial sector. On the other hand, almost half of the enterprises of the sector are bakeries (2163 units in 1998), and are generally small units. The food and beverage sector has the lowest ratio of energy expenditures to total inputs (3.5 per cent). However, raw materials represent more than 80 per cent of inputs, which is the average ratio in the industry;
(b) Building materials industries are not classified under one ISIC. In Lebanese industry, they include industries classified under metals (37), “non-metallic and mineral products” (36, cement, ceramic, etc.) and wood products (33). Building materials industries, therefore, represent about 38 per cent of industrial establishments and 30 per cent of the workforce. There are 6 large enterprises (over 250 workers) in the building sector, all of which belong to non-metallic industry (mainly cement producers). The value- added to output in the non-metallic sector is 47.5 per cent, which is significantly higher than the industry average (43.2 per cent). Energy expenditures represent 24.6 per cent in this sector, while the share of raw materials in total inputs represents 53 per cent, compared to 81 per cent on the average;
(c) The clothing and textiles industries seem to be the most affected by economic slowdown. The clothing sector lost 25 per cent of its establishments and 40 per cent of its workers between 1994 and 1998. Output in this sector fell by 33 per cent, whereas an average 11.5 per cent increase was observed in the industrial sector. In 1998, the share of the clothing and textiles industries was 14 per cent and 12.5 per cent in the number of establishments and workforce respectively;
(d) Furniture and manufactures products, include two main industries: furniture manufactures and jewelry. It represents about 2352 establishments and about 10.7 per cent of all industrial establishments. It employs 11.7 per cent of the total industrial workforce. For the furniture industries, the value-added compared to output is relatively high, reaching 51 per cent, compared to 43.2 per cent in the industry;
(e) In the jewelry sector, the ratio of value-added to output only reaches 36 per cent. The jewelry sector remains a small industry mainly limited to transformation and with relatively expensive raw material.
Figure XIII. Distribution of the number of establishments by type of industry(21)
Other Branches Food & Beverages Furniture 11% 21% 11% Textiles 4% Clothing & Metal products Furniture 10% 16% Non-metallic Leather & Tanning products Wood products 6% 11% 10%
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2. Main features of major industries in Lebanon
Lebanese industry has a total of 22,025 establishments and is characterized by huge number of small units; since about 16,223 facilities (73.7%) employ less than 5 workers, and 20,961 (95.2%) employ less than 10, while only 67 facilities (0.3%) employ over 100 workers. Considering that the medium-sized enterprises are those employing between 10 and 50 workers, and larger ones are those employing more than 50; only 4.2 per cent of Lebanon’s industrial companies are medium-sized, and 0.6 per cent are large ones.
The largest industrial sub-sector is the food industry, followed by metal products, as shown by the main indictors of the industrial sector in table 24. It also shows that the total industrial US$ value of output is 3.953 billion for the year 1998 and the total value added is about 1.707 billion.
TABLE 24. MAIN INDICATORS OF THE LEBANESE INDUSTRIAL SUB-SECTORS(21)
Energy No. of Value-added expenditures/ establishments No. of employees Output (‘000 US$) (‘000 US$) total inputs 2 digit % of % of % of % of 1998 1998 1998 1998 (%) ISIC Industrial sub-sector total total total total 31 Food and Beverage 4 480 20.3 18 344 23.3 1 011 313 25.6 432 796 25.4 3.5 37 Metal products 3 553 16.1 9 .342 11.9 454 976 11.5 185 168 10.8 5.4 36 Non-metallic products (glass, ceramic, … etc.) 2 530 11.5 10 045 12.8 552 374 14.0 262 397 15.4 24.6 33 Furniture, other products 2 352 10.7 7 512 9.6 327 890 8.3 159 026 9.3 4.2 32 Clothing 2 262 10.3 6 654 8.5 212 026 5.4 91 497 5.4 4.4 33 Wood products (except furniture) 2 246 10.2 3 490 4.4 112 926 2.9 52 860 3.1 7.6 32 Leather and Tanning 1 291 5.9 4 212 5.4 111 012 2.8 45 113 2.6 4.8 32 Textiles 804 3.7 2 207 2.8 100 874 2.6 41 078 2.4 5.6 39 Other industries 2 507 11.4 16 834 21.4 1 069 519 27.1 436 874 25.6 6.6 Total 22 025 100 78 640 100 3 952 910 100 1 706 809 100 7.6
Source: A report on “Industry in Lebanon, 1998-1999: Statistics and Findings", Ministry of Industry, Lebanon.
B. THE SITUATION OF ENERGY AND INDUSTRY IN LEBANON
1. Energy resources
Lebanon is not an oil producing country, however, it used to be a transit and refinery center for part of the exported crude oil from Iraq and Saudi Arabia. Both countries were connected by oil pipelines to two coastal refineries in Lebanon (Zahrani in the south and Tripoli in the north). It is due to the events of 1975-1990, that the refining process had stopped, and currently Lebanon imports its combustibles from the international market. However, limited hydro resources are available and there is a plan under consideration for natural gas to be imported from the Syrian Arab Republic and Egypt.
2. The total primary energy consumption
In 1996, Lebanon consumed 4647 ktoe as primary energy,(22) 97.4 per cent of it is imported fossil energy, and the remaining 2.6 per cent is renewable energy (1.8% hydro-energy and 0.8% wood energy). The energy bill of imported petroleum products was 770 million US$ in 1996, and in 1997 it was raised to 840 million US$, accounting for nearly 10 per cent of Lebanese imports and almost 9 per cent of the GDP. figure XIV shows the distribution of primary energy consumption by sources. The primary energy intensities in Lebanon have reached about 0.62 kg/US$ of GDP in 1996, that is about 2.2 times higher than the OECD countries (see table 25), and almost double the world average.
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TABLE 25. MAIN INDICATORS OF ENERGY SITUATION IN LEBANON
Indicator 1992 1993 1994 1995 1996 Av. growth rate Primary energy consumption (ktoe) 2 865 3 467 3 820 4 511 4 647 13% Final energy consumption (ktoe) 2 250 2 768 2 984 3 687 3 668 13% Electricity production (GWh) 4 190 4 720 5 184 5 573 7 648 16% Importation bill of energy (million US$) 600 500 484 644 770 14% GDP (US$) 5 500 6000 6 350 7 000 7 500 8% Energy intensity = primary energy consumption/GDP (toe/1000 US$) 0.52 0.58 0.6 0.64 0.62 4.65% Source: Chehab, S. and T. Matar. “State of Energy in Lebanon”, 1999.
3. The total final energy consumption
The total final energy consumption for 1996 in Lebanon reached 3668 ktoe. Gasoline represents about 40 per cent of this and is mainly used in the transport sector, diesel/gas oil represents 23 per cent used in transport, industry, heating and mainly in thousands of back-up private generators complimentary to the electricity produced by Electricité du Liban (EDL). The residual fuel is used mainly in power generation (83%), and the rest (17%) is used in industry for steam generation and heating.
The sectoral distribution of the total final energy consumption is: transportation 45 per cent, industry 25 per cent, and residential and public buildings 30 per cent. Table 25 shows an increase in the final energy consumption at a rate of 13 per cent, while the GDP increases at a lower rate (8%) which reflects that energy resources are not efficiently used.
Electrical energy consumption in 1996 increased by 37 per cent relative to 1995 and reached 7648 GWh representing 16 per cent of the total final energy consumption. The distribution of the energy by sectors is illustrated in figure XV;(22) the residential sector is the largest consumer (2900 GWh), followed by the industrial sector (1990 GWh), public buildings (1300 GWh) and other sectors including losses (1460 GWh).
Figure XIV. Primary energy consumption by sources in Lebanon
Kerosene Hydro + 5% Renewable LPG 3% 3% Fuel Oil Coal 35% 4%
Diesel 20% Gasoline
30%
Source: Chehab, S. and T. Matar. “State of Energy in Lebanon”, 1999.
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Figure XV. Sectoral distribution of electricity consumption by the different economic sectors of Lebanon
Other Sectors + Industry Losses 26% 19%
Public Residential Buildings 38% 17%
Source: Chehab, S. and T. Matar. “State of Energy in Lebanon”, 1999.
4. Industrial Energy consumption
(a) Energy consumption patterns
The available data on the end-use energy consumption in Lebanese industry is only for the year 1994, when it reached about 970 ktoe. The energy for heat and power, including around 149 ktoe used for local electricity generation, represents 15.9 per cent of total fuel used in industry. As shown in table 24, the average energy expenditures in Lebanese industry count for 7.6 per cent of the total industrial inputs. However, it varies from 3.5 to 7.6 for different industrial sub-sectors, with the exception of the non-metallic products sub-sectors, where it reaches 24.6 per cent.
The total electricity consumed by industry, during 1994, was 2817 GWh, sharing 25.9 per cent of total industrial end-use consumption, about 61 per cent of such total electricity is produced locally on industrial sites, and the rest (1089 GWh is imported from the national EDL grid.(23,24) Table 26 shows the amount of fuel consumed in Lebanese industry in 1994, and the electrical energy imported from EDL to the sector. The residual fuel oil and diesel used directly in combustion processes represent 26.9 per cent and 26.6 per cent respectively. The gas/diesel oil used in industry was estimated at 52 per cent of the total fuel imported by the country. The fuel-oil is calculated as the total imported minus the EDL consumption.(23)
TABLE 26. ENERGY CONSUMPTION BY TYPE OF FUEL IN LEBANESE INDUSTRY IN 1994
Electricity Petroleum products Coal 93.64 ktoe (1089 GWh from EDL) Diesel/Gas oil 453.5 ktoe (425.424 ktons)1/ 120.6 ktoe (180 kton) Fuel oil 278.9 ktoe (286.94 ktons) LPG 23.7 ktoe (21.06 ktons) Total petroleum products: 756.1 ktoe Total end use consumption in industry: 970.34 ktoe (about 40.6 million GJ) Source: Ministry of Environment “Lebanon’s First National Communication Under The UN Framework Convention On Climate Change, Final Report, 1999. 1/ Including fuel used for local electricity generation.
In 1994, Lebanese industry emitted 1,924 thousand tons of carbon dioxide.(26) The cement industry is the major source of CO2 emissions among the industrial manufacturers in Lebanon. It is responsible for 77.2 per cent of the total emissions followed by the iron and steel industry, which produces 21.7 per cent of the total CO2 emissions from industrial processes.
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(b) Energy demand forecast for Lebanese industry
In the Lebanon First National Communication (Technical Annex)(24) the baseline scenarios for the projected energy use in Lebanese industry and the corresponding GHG emissions were developed, reflecting technologies, activities and practices that are likely to evolve. The scenarios are directly linked to the economic conditions in the country. In most industries, it was assumed that the industrial $ value growth rate is the same as the GDP’s (Gross Domestic Product) economic growth. Table 27 shows the industrial sector’s energy demand represented by fuel type for the low growth rate scenario of 3 per cent, which is consistent with the government projections.(25) The table shows the projected energy demand during the years 2000– 2015. Projected energy demand in the industrial sector is projected to increase by 14.5 per cent by the year 2005 and 50 per cent by the year 2015.
The demand for energy shows that residual fuel oil is the largest energy source used by the industry. It is followed by diesel oil and then electricity. Fuel oil is mainly used in boilers that are more than 20 years old and inefficient.(26) The projected energy demand did not take into consideration the contribution of natural gas in industry; however it may be available by the year 2005.
TABLE 27. ENERGY DEMAND FORECAST IN LEBANESE INDUSTRY (ktoe) Year 2000 2005 2015 Electricity 282 325 432 Diesel/Gas oil 283 315 391 Residual fuel oil 295 342 459 LPG/Bottled gas 28 32 43 Coal bituminous 179 208 278 Total 1 067 1 222 1 603 Source: Technical Annex to Lebanon’s First National Communication, Climate Change Project. Final Report, 1999.
5. The need for energy efficiency improvement
There is an urgent need in Lebanon for the development of energy conservation measures and programmes to respond to the needs for: (a) reducing the bill of imported fuel; (b) building extra generating capacities in the near future to meet the future electric energy demand, of about 3-5 per cent of the installed capacity,(27,28) and (c) treating both government and Lebanese Electric Utility (EDL) debt and debt services.(25)
Such need is emphasized by: (a) the practiced high energy intensities; (b) the high energy expenditure in some major industrial sectors; (c) the lack of information and awareness on the available energy conservation measures, and their economies, especially among small industrial enterprises; and more importantly (d) the absence of a national policy adopted on the rational use of energy.
C. STATUS OF ACTIVITIES FOR IMPROVING INDUSTRIAL ENERGY EFFICIENCY
1. Current activities
Limited activities have been directed for improving industrial energy efficiency in Lebanon. They are limited to the following:
(a) In the late 1990s, concerned Lebanese authorities, particularly the Ministry of Energy and Water (MOEW) realized the need for developing programmes on energy efficiency in different sectors as well as the need to build capacity in the field. As a result, the MOEW, in cooperation with the UNDP and with the approval of the parliament (Decree No. 56 for 2001), started a plan to implement (June, 2001) a project on “Energy efficiency and greenhouse gas abatement” for all sectors of Lebanon. The budget of the project is 4.9 m US$ including a UNDP/GEF grant of 79.6 per cent of the budget. The project has just begun and no activities have been implemented yet;
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(b) In 2000, the Association of Lebanese Industrialists; started to establish a database on fuel consumption in major industrial plants. The survey covered about 140 plants and included data on the annual consumption of residual fuel oil, gas/diesel oil and LPG for the years 1998, 1999 and the estimated consumption for 2000. The electrical energy consumption purchased from the EDL national grid is not included in the collected data. In cooperation with the ESCWA/ENRED/EIS, the Association of Lebanese Industrialists had classified the available data on fuel consumption by industrial sub-sectors (2-digit ISIC).
2. Application potentials of selected priority options
The potential application of the three selected energy efficiency options will be examined in Lebanese industry. These measures are: Combined heat and power (CHP), waste heat recovery (WHR) and combustion efficiency improvement, through the tune-up of boilers and furnaces. The analysis of these measures in industry needs plant-level data on electrical and thermal demands are key elements for such analysis. Sections D, E and F of this chapter will deal with the assessment and evaluation of three such options consequently, while the following describes the status of data availability and assumptions used for the analysis.
(a) Data availability
Based on the survey information made available by the Association of Lebanese Industries, the response of the surveyed plants has shown that fuel oil and LPG are used mainly in boilers and furnaces, while diesel oil is used mainly for local generation. Table 28 provides a summary of the plants data provided by major consumers in Lebanese industry for the years 1998, 1999 and 2000. This data will be used in the following sections to assess the potential of selected energy conservation measures. It can be noticed from the table that the total consumption of fuel oil is 290,246 tons, i.e. about 282.12 ktoe for the year 2000. This value is slightly less than the projected one shown in table 27. However, the total quantity of diesel oil consumed by the surveyed plants is much less than the actual consumption by the whole sector (about 34 per cent). This is due to two main reasons:
(i) Bakeries represent 48 per cent of the establishments in the food and beverage industry(21) and use large amounts of diesel oil in direct combustion for their furnaces. The estimated amount of diesel oil used by bakeries in 1994 was 145,000 tons(25) The demand projections of diesel oil consumption for bakeries in the year 2000 was estimated to be 6.72 million GJ(25), that is around 150,560 ton diesel oil;
(ii) Hundreds of small industrial enterprises use diesel oil for local electricity generation and are not considered in the survey and most probably they are not registered with the Association of Lebanese Industrialists.
TABLE 28. A SUMMARY OF THE FUEL CONSUMPTION BY SUB-SECTOR FOR THE SURVEYED INDUSTRIAL PLANTS (tons)
No. of 1998 1999 2000 Industry plants Fuel oil Diesel LPG Fuel oil Diesel LPG Fuel oil Diesel LPG Food 37 32 041.2 18 035.2 -- 40 23 015 2 39 575 23 375 28 209.5 890 8 Textiles 12 13 23.3 1 378.4 -- 1 1 -- 1 400 1 377.2 -- 498.1 346.4 Paper 18 34 317.7 10 087.1 -- 34 10 -- 34 398 12 664 -- 425.7 246.1 Chemicals 26 32 050 7 051.6 -- 32 050 9 9.5 32 200 10 818.7 -- 209.9 6 Cement & Non- 186 19 173 05 Metallic Mineral 13 348 19 574.7 4 688.4 169 538.5 505.7 4 635.2 973 20 912 0 Basic Metals 5 8 500 7 172 1 8 500 8 1 8 500 9 028 1
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071 631.5 048 15 0 Fabricated Metal Products 22 92.3 11 477 110 300 11 130 200 10 061.1 13 683.4 5 Wood & Wood Products 7 -- 545 -- -- 584.4 27 -- 461.6 -- Total 140 298 322.5 75 170.8 5 869.4 286 693.4 85 207.7 6 239.7 290 246 88 697.6 7 623
Source: Association of Lebanese Industrialists, Beirut, Lebanon.
The data given in the table is calculated and classified for the objectives of this study and is based on the data supplied by the Association of Lebanese Industries.
(b) Assumptions
The analysis of the selected, high priority, energy conservation measures in Lebanese industry is based on the following technical and financial assumptions:
(i) Costs and revenues are expressed in current terms and reflect the general price inflation rate of 10% (based on 1998). The exchange rate is assumed to remain constant at 1,500 LL/US$;
(ii) Electricity tariff structure as introduced by EDL on February 1996 is a three-part-tariff equivalent to US ¢ 5 –7 –20 /kWh, for industrial tariffs (high and medium voltage), aimed at discouraging the use of electricity during peak hours. As a result, the average billing price, for medium voltage customers is around 11 ¢/kWh (about 165 LL). However, as a conservative approach, an average rate of 8 ¢/kWh will be used in the present study.*
(iii) Based on the information provided by the Association of Lebanese Industrialists, fuel prices will be considered as follows:(29,30) (1) 163 US$ / ton for residual fuel oil; (2) 216.7 US$/ton for diesel/gas oil; and (3) 215.93 US$/ton for LPG;
(iv) Technical electricity network losses (transmission and distribution) are currently estimated at approximately 15 per cent;(27)
(v) The future prospects of natural gas in Lebanon are promising. The supply of natural gas to Lebanon is now under negotiation, and may be available for Lebanese industry by the year 2005. For this reason, the analysis of any conservation measure should take into consideration the opportunity of switching from oil to natural gas after 2005;
(vi) Other financial parameters will be considered as shown in table (18) (see chapter III).
D. COMBINED HEAT AND POWER SYSTEMS, STATUS ASSESSMENT AND EVALUATION
1. The CHP application status
In spite of the existing opportunities in Lebanese industry for applying the CHP system, the available information indicates that there are no applications of CHP in the Lebanese industry. However, it has to be noted, based on the current situation described earlier, the CHP is an attractive and cost-effective energy efficiency option for Lebanese industry for many reasons:
(a) The industrial sector in Lebanon generates about 61 per cent of its electric demand through isolated diesel engines, while the rest is purchased from EDL. Most of these private generators are operating with an average age of 15 years and with a low thermal efficiency that is around 20 per cent.(12) In 1994, the annual consumption through local generation was 1728 GWh, which means an installed power of more than
* Information provided by the Ministry of Industry of Lebanon.
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600 MW assuming an average of eight operating hours per working day. It is important to emphasize that most of the facilities with local generation, either do not rely on EDL national grid at all, or use diesel generators during peak hours plus periods of electricity shutdown;
(b) The high cost of electricity, especially during peak hours (20 US ¢/kWh) makes CHP a high cost- effective alternative particularly in cases of considerable thermal demand and annual operating hours. Information submitted had shown that fuel oil is used mainly for industrial heating and steam generation, while diesel or gas oil is used for power generation;
(c) Most of the dominating industries in Lebanon require thermal energy, low grade steam and hot water, for their production processes, such as food processing, textiles, chemicals and paper industries;
(d) The efficiency of the existing conventional boilers is very low, since they are 20 to 30 years old.(27) In the absence of an energy code for boiler-efficiency standards, engineering estimation and sizing of boilers to their respective applications is not properly administered. As an energy efficiency and CO2 option, previous studies(27) have recommended to replace these boilers with more efficient ones. The use of CHP is a better optimum solution in this case.
2. The application of potential CHP systems
(a) Potential estimates
The combined heat and power systems are site-specific and appropriate selection of the type as well as exact sizing need detailed plant-level data. However, in the present study, an analysis to evaluate the potential applications of CHP was conducted and a rough estimate of the CHP potential in Lebanese industry is predicted based on reviewing the plants fuel consumption summarized in table 28 (detailed plants data are available by ESCWA). It is important to emphasize that this data does not fully represent the consumption of gas/diesel oil in the whole industrial sector, but it is more representative of fuel oil consumption. From this data, the target applications were identified where CHP can provide a reasonable fit to the electric and thermal needs. The identified target applications in Lebanese industry were identified as: food processing, textiles, chemicals, pulp and paper (dry pulp is not produced in Lebanon and is imported from other countries), cement and other industries including basic metals and non- metallic minerals. For each industrial sub-sector, CHP potential was estimated based on the following assumptions:
(i) Electrical match is used, that is the CHP system is designed to meet the average annual electrical demand for the target applications, since additional thermal demand could be provided using standby boilers;
(ii) The average efficiency of diesel engines used locally is 25 per cent;
(iii) The average plant operating hours is not less than 16 hours per day (two shifts).
Table 29 shows the estimated CHP potential in the covered plants and the range of recommended sizes of CHP options. Figure XIX shows the percentage share of each industry in CHP potential.
TABLE 29. CHP POTENTIAL IN LEBANESE INDUSTRY BASED ON ACTUAL PLANTS DATA
Proposed CHP sizes (MW) Total potential Industry 0.25-1.0 1.0-5.0 (MW) Share (%) Food 10 12 22.0 14 Textiles 2.0 - 2.0 1 Paper 4.0 15 19.0 12
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Chemicals 6.0 11 17.0 11 Cement and non-metallic minerals - 95 95.0 59 Basic metals 2 3 5.0 3 Total 24 136 160 100
Figure XVI. Share of industries in the CHP potential in Lebanon
22.30% 22.30%
3.10%
25% 18.60%
Food Textiles Paper Chemicals Others
2. CHP modules evaluation
For the analysis of CHP options, typical module sizes were selected to be applied in Lebanese industries. The maximum module size considered is 5000 kW, since it is rare to find higher rates, except in the cement industries. However, more modules could be combined depending on the plant condition. A spreadsheet analysis has been performed for each CHP module. In each spreadsheet, the cost flow, cumulative cash flow and discounted cash flow are calculated. Financial assumptions for the analysis are taken from table 12. A sample of the cash flow analysis is presented in annex III.
For each module, both the internal rate of return (IRR) and the net present value (NPV) were calculated. The amount of energy saving in toe, the simple payback period and the discounted payback period were also calculated. Modules having an IRR value of less than 10% and payback periods of more than 10 years were excluded from the diffusion in industry.
In order to estimate the cost of saved carbon (CSC), i.e. the cost (or profit) generated per each ton of carbon dioxide (CO2) mitigated, the annualised equivalent cash flow has to be calculated. The amount of CO2 reduction and CSC are shown in the spreadsheets.
The potential replicability of each module in the targeted industrial sector was estimated based on the number of facilities in each industry.
The results of financial analysis are summarized in table 30. Financial indicators show the economic attractiveness of implementing CHP potential in Lebanese industry, where annual energy savings may reach 1685 toe/MW of installed capacity. Depending on the technology used, the simple payback period ranges from 1 to around 4 years and the internal rate of return ranges from 18 to 90 per cent. The amount of saved carbon dioxide is more than 600 kg/MWh. The cost-effectiveness shown in the table, indicate that the promotion of CHP in Lebanese industries is highly recommended.
TABLE 30. A SUMMARY OF FINANCIAL INDICATORS FOR CHP IMPLEMENTATION IN LEBANESE INDUSTRY
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Annual Avg. capital Avg. Avg. saved savings cost S.P.P. IRR carbon CHP option Fuel type (toe/MW) (1000$/MW) (yrs.) (%) (kg/MWh) Steam turbines Fuel oil 1685 650 1-2.9 23-92 670 Reciprocating gas engines Dual fuel* 1166 900 2-3.6 18-41 612 * Including natural gas. S.P.P.: Simple payback period. IRR: Internal rate of return.
E. WASTE HEAT RECOVERY SYSTEMS, STATUS ASSESSMENT AND EVALUATIONُ
Waste heat recovery (WHR) systems have not yet been introduced to the Lebanese industry. Moreover, the potential of the selected WHR technology options needs more investigation in Lebanese industry. Industrial assessment is required to evaluate its economic and environmental impacts and to estimate its potential replicability in the industry. This assessment could be conducted by individual experts or by energy service companies (ESCO’s).
Given the difference in fuel and electricity prices between Egypt and Lebanon, and using the same other cost/benefit data available from the previously implemented WHR options in Egyptian industry; an analysis was conducted in this study for the application of a single WHR technology option in Lebanese industry; the economizer. The economizer (steam-water heat exchanger) is used for pre-heating boiler feed water, and can be implemented in all industries with considerable steam demand.
The results of the analysis indicated an average annual saved energy of 5,060 ton/year, and saved carbon of 1,573 tons, internal rate of return of 15.0 per cent and cost of saved carbon –23.69 $/ton CO2. These results indicate that the high cost of fuel oil, applied in Lebanese industry, give more attractive financial indicators as compared with the case of Egypt.
F. TUNE-UP OF BOILERS AND FURNACES, STATUS ASSESSMENT AND EVALUATION
The industrial sector in Lebanon consumed more than 290 kton of fuel oil in 2000 (see table 32) for heating processes, mainly in boilers and furnaces. The tune-up of boilers and furnaces, using gas analyzers, is new for Lebanese industry and since the cost of fuel oil is relatively high (US$ 163/ton), its implementation in Lebanese industry is expected to achieve a tremendous energy savings and have a positive environmental impact.
Unfortunately, no data is available about the number, age or condition of boilers and furnaces in industry, so the approach will be based on the overall consumption of fuel oil in the sector and particularly in industries of considerable steam demand (boilers only). Boilers operated with diesel/gas oil will not be considered.
Assuming 40 per cent of fuel oil consumption in 2000 is used for steam generation, and a maximum of 75 per cent of installed boilers may benefit from the tune-up programme, the amount of fuel oil consumed in these boilers will be approximately 87,000 ton as shown in table 31. The table shows the cost of saved fuel against the rate of boiler participation, along with different savings percentages.
TABLE 31. ESTIMATED ENERGY SAVINGS FROM THE TUNE-UP OF BOILERS USING PORTABLE GAS ANALYZERS (CASE OF LEBANON)
Rate 20% 40% 60% 75% Fuel oil consumption (tons) 23 46 69 600 87 200 400 000 3% Savings ($) 113 226 340 425 448 896 344 430 5% Savings ($) 189 378 567 709
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080 160 240 050 7% Savings ($) 264 529 794 992 712 424 136 670 10% Savings ($) 378 756 1 134 1 418 160 320 480 100 Total capital cost ($) 78 000 Simple payback period for 7% savings (days) 106 53 35 28
For financial analysis, it was assumed that the maximum number of boilers participating in the tune- up programme is 200. Each boiler is tuned 4 times per year. Using the same previously used financial terms*, the analysis shows that the average implementation cost and implementation benefits are: (a) total capital costs ($78,000); (b) energy savings (toe/year) 5,920; (c) total cost of saved fuel (709,050); (d) internal rate of return (1424%); (e) payback period (32 days); and (f) average annual saved CO2 (18,940 ton/year).
G. CONSTRAINTS AND RECOMMENDATIONS
1. Constraints
(a) The major constraints facing the promotion of energy efficiency measures in Lebanese industry mainly include the following:
(i) Lack of data on patterns and end-use consumption in different industrial sub-sectors; (ii) Lack of awareness of issues pertaining to efficient use of energy; (iii) Lack of national policy to promote more efficient use of energy; (iv) Lack of demonstration experience for different energy efficiency technology options; (v) High prices of energy efficiency equipment in the local market.
(b) The promotion of CHP energy efficiency option in Lebanese industry may face these obstacles:
(i) The lack of financing. There are no dedicating financing schemes or incentives for CHP promotion; (ii) Illegal connections to the national grid; (iii) CHP applications are not widely known in the industrial sector;
2. Recommendations
In view of the above, it is recommended to accelerate the diffusion of energy efficiency measures in Lebanese industry by:
(a) Developing a national energy efficiency policy that provides incentives to Lebanese industry;
(b) Better management of the available resources starting with low cost options, proper training programmes, rational technology transfer and establishing within the country, the proper energy conservation financial mechanisms using the revolving fund concept. These could be the most suitable measures to overcome the technology diffusion constraints.
* The assumptions used in the analysis are: project life (years); discount rate; energy escalation; labour escalation; material escalation; and depreciation.
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VI. EFFICIENT USE OF ENERGY IN THE INDUSTRIAL SECTOR: THE CASE OF THE SYRIAN ARAB REPUBLIC
A. THE INDUSTRIAL SECTOR OF THE SYRIAN ARAB REPUBLIC: CLASSIFICATION AND MAIN FEATURES
1. Classification of Syrian industries
The main bulk of the manufacturing industries in the Syrian Arab Republic belongs to the public- sector, and are normally classified into six industries belonging to six different organizations related to the Ministry of Industry. These industries are:
(a) Cement Industries (36), belong to the General Organization of Cement and include the following industries: cement, porcelain, plumbing tools, and building materials. There are 8 major cement producers in the Syrian Arab Republic. They produce about 4.8 million tons per year, 3 of them use the dry method and 3 use the wet method and 2 use both wet and dry;
(b) Textiles industries (32), belong to the General Organization for Textile Industries, and include: cotton yarn, spinning and weaving, dyeing, synthetic silk, wool, nylon and other industries;
(c) Food industries (31), belong to the General Organization for Food Industry, including: dairy and chocolates, oil and soap, milk, canned food, bakery, water and soft drink industries;
(d) Chemical industries (35), belong to the General Organization for Chemical Industries, and include the following industries: fertilizers, chemicals, paints, rubber and plastic products, tanning, cleaning products, paper (34), glass, tires and leather products;
(e) Sugar industries (31), belong to the General Organization for Sugar which includes the manufacturing of sugar and yeast;
(f) Engineering Industries (38), belong to the General Organization for Engineering Industries and include: aluminum, iron and steel, cables, matches and wood, tractors, batteries, and electronics industries.
2. Main features
The contribution of the manufacturing industries in the gross domestic product (GDP) in the Syrian Arab Republic was about 5.3 per cent in 1990(31) , and increased to 5.8 per cent in 1998. The public sector manufacturing industries in the Syrian Arab Republic has six main sub-sectors. Table 32 shows the number of facilities, production capacity and the percentage of energy expenditures to production for each of these sub-sectors. As shown, the percentage of energy expenditures is maximum in the case of cement industry (25%), and for other industries it ranges from 2 to 6.4 per cent.
TABLE 32. THE MAIN INDICATORS OF SYRIAN INDUSTRY
Industry Number of facilities Prod. capacity (tons) Energy expend./prod. value (%) 1. Cement (36) 1 4 837 25.26 1 399 2. Textiles (32) 2 59 2.34 6 087 3. Food (31) 2 261 2.01 4 165 4. Chemical (35)s 1 995 6.4 4 578 5. Sugar (31) 9 182 3.7
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623 6. Engineering (38) 1 16 2.93 4 638 Source: Extracted from the results of a survey performed by the Energy Planning and Conservation Centre, Ministry of Electricity, the Syrian Arab Republic. The role of the private sector in Syrian industry is increasing at a high rate, especially in food and textile industries. However, data about its exact size and contribution in the MVA is not yet available.
B. THE SITUATION OF ENERGY AND INDUSTRY IN THE SYRIAN ARAB REPUBLIC
1. Energy resources(3)
The Syrian Arab Republic has oil and gas resources in addition to renewable resources such as hydro, solar and wind. In January 1998, the proven oil and natural gas reserves in the Syrian Arab Republic were 2.5 billion barrels and 241 billion cubic meters respectively. The total energy production reached 694 thousand bo.e/d including the oil production capacity of 0.55 million barrels per day,(3) 5.8 billion cubic meters NG, and 18.0 ktoe of hydro electricity.
2. The total primary energy consumption
Table 33, shows the quantities of production and consumption of primary energy in the Syrian Arab Republic in 1995 and 1999. Comparing the primary consumption of the two years, it can be seen that the ratio of oil consumption to production has increased from 31 to 36 per cent, while the natural gas consumption has decreased from 76 per cent to 55 per cent. The ratio of total fossil fuel consumption to production has increased from 36 per cent in 1995 to 40 per cent in 1999. During this period, an improvement in energy intensity from 0.647 toe/1000 US$ to 0.594 toe/1000 US$ has been achieved; however, it is still about twice the world average.
TABLE 33. PRIMARY ENERGY CONSUMPTION IN THE SYRIAN ARAB REPUBLIC (ktoe)
1995 1999 Item Productio Consumptio % Prod./cons. Productio Consumptio % Prod./cons. n n n n Crude oil 29 9 134 31.0 27 9 680 36 899 263 Natural gas 3 2 929 76 6 3 723 55 843 725 Hydro 685 685 10 894 894 10 0 0 Coal* 5 5 Total** 33 12 068 36 33 13 408 40 742 988 Energy intensity = primary energy consumption/G DP (toe/1000 US$) 0.647 0.594 Source: Annual Statistical Report, 2000, OAPEC. * The coal is imported. ** Excluding hydro.
3. The total final energy consumption
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The major sources of end-use energy are petroleum products, natural gas and electricity. About 78 per cent of natural gas consumption is for electricity generation and the rest is used by the manufacturing, mining and petroleum industries. Table 34, shows the development of the final energy consumption during the period 1997-1999. The table shows the distribution of petroleum products (including natural) and electricity by economic sectors. The transport sector is the largest consumer of petroleum products (33.3%), followed by the residential and commercial sector (31.0%) and the industrial sector (23%).
Concerning electrical energy consumption, the residential sector comes in first (42%), followed by the industrial sector (27%) and other sectors including agriculture (31%). Figure XVII-a and XVII-b illustrates the consumption by sector of petroleum products and electricity respectively, for the year 1999. The average growth rate of the final energy consumption is 1.7 per cent during 1997-1999.
TABLE 34. THE FINAL ENERGY CONSUMPTION IN THE SYRIAN ARAB REPUBLIC
Petroleum products (kto)1 Electricity (GWh)3 Residential and Residential and Others incl. Total Year Industry2 commercial Transport Agriculture Others Industry1 commercial4 agriculture Total3 (ktoe) 1997 2 123 2 397.6 2 596 732 204 4 745 8 001 4 718 17 464 9 555 1998 2 028 2 495.7 2 565 739 202 5 067 8 743 5 192 19 003 9 664 1999 2 099 2 463.1 2 635 765 215 5 462 8 597 6 521 20 580 9 947
Sources: 1. Data supplied by the Ministry of Industry of the Syrian Arab Republic. 2. The Energy Planning and Conservation Centre, Ministry of Electricity. 3. Ministry of Electricity. Annual report, 1999/2000, Syrian Arab Republic. 4. Statistical Abstract of the ESCWA region, 2000 Issue No. 20.
Note: Natural gas is included in the petroleum products. Figure XVII-a and XVII-b. The sectoral distribution of final energy consumption in the Syrian Arab Republic (1999)
Petroleum products Electricity 26.0% 42%
32.0% 30.0% 27% 2.6% 9.4% 31%
Industry Industry Residential/Commercial Residential/Commercial Agriculture Others Others + Agriculture Transport
4. Industrial energy consumption
The Energy Planning and Conservation Center/Ministry of Electricity, in cooperation with the Ministry of Industry in the Syrian Arab Republic took a positive step towards the establishment of an industrial database, by collecting and compiling data on the industrial plants in the public sector. Information about production capacity, electricity and fuel consumption were compiled and tabulated for the years 1998 and 1999. For the year 2000, data is now being processed. In 1999, the manufacturing industries consumed about 96 million GJ (2290 ktoe) for heat and power. These energy consumptions include about 5,461 GWh of electrical energy, 83.6 million cubic meter of natural gas used in cement furnaces, 1166 kton fuel oil and about 576 kton diesel oil(32,33).
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Table 35 summarizes the total energy consumption of the major public sector industries for the years 1998 and 1999, and its distribution on the six industrial sub-sectors. The table also shows the annual production capacity and the overall specific energy consumption (SEC) in toe per ton of product output. This value has to be examined in each industrial sub-sector, since each has its own SEC.
Natural gas is used in the cement industry in kilns and in chemical industries (The General Company for Fertilizers) as raw material. The total electrical energy consumed in the public sector in 1999 was approximately 1395 GWh, distributed between industrial branches as shown in figure XVIII-a. The distribution of petroleum products, excluding natural gas as feedstock, is illustrated in figure XVIII-b.
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TABLE 35. CONSUMPTION OF ELECTRICITY AND OIL DERIVATIVES IN SYRIAN INDUSTRY (PUBLIC SECTOR)
Energy consumption Petroleum products Production Electricity Fuel oil Diesel Natural gas Total Overall SEC* Industry Year (tons) (GWh) (ton) (ton) (1000 m3 ) (ktoe) (toe/ton) 1995 -- 708.94 504 560 16 230 0 568.69 -- 1998 4 635 354 717.506 448 026 15 136 83 491 586.233 0.127 Cement 1999 4 837 399 733.596 443 318 14 316 83 638 582.296 0.120 Avg. growth rate 2.1% 1995 -- 242.00 31 010 8 580 13 60.11 -- 1998 45 409 315.784 28 631 6 607 0.7 62.026 1.366 Textiles 1999 59 087 253.769 28 938 6 388 0 56.758 0.96 Avg. growth rate -0.8% 1995 -- 47.94 13 240 15 280 0 33.28 -- 1998 275,391 48.803 11 869 11 752 0 28.261 0.103 Food 1999 261,165 44.046 12 402 11 504 0 28.105 0.108 Avg. growth rate 1.2% 1995 -- 131.85 61 410 9 490 178 142 236.74 -- 1997 1 097 498 186.908 74 218 8 526 250 310 315.928 0.288 Chemicals 1999 995 578 184.932 57 148 10 239 319 858 361.737 0.363 Avg. growth rate 4.02% 1995 -- 58.70 106 360 2 970 0 111.60 -- 1998 116 658 54.741 68 115 1 929 0 72.971 0.626 Sugar 1999 182 623 78.733 82 863 2 803 0 90.301 0.495 Avg. growth rate -3.4% 1995 -- 73.2 2 340 6 690 0 16.04 -- 1998 --- 101.403 2 362 15 467 0 27,503 -- Engineering 1999 16 638 99.809 2 078 12 714 0 24,155 1.452 Avg. growth rate 6.1%
Source: Energy planning and conservation centre, ministry of electricity, the Syrian Arab Republic.
* Sec = specific energy consumption.
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Figure XVIII-a, XVIII-b. The distribution of energy consumption by sub-sectors (1999)
(a) Electricity (b) Petroleum Products
7.2% 8.2% 1.5% 5.6% 13.3% 33.8% 50.7% 3.2% 52.6% 2.4% 18.2% 3.4%
Cement Textiles Food Cement Textiles Food Chemicals Sugar Engineering Chemicals Sugar Engineering
5. The need of energy efficiency improvement
An ESCWA study on “Regional perspectives for upgrading energy efficiency in the ESCWA region”,(5) published in 1997, has indicated that more than 45 per cent of energy efficiency improvements could be achieved in some Syrian industrial sub-sectors such as cement and sugar industries.
In addition, the information available from the database being developed by the Syrian Energy Planning and Conservation Centre, has been used in this study to estimate specific energy consumption by the various industrial sub-sectors in the Syrian Arab Republic. The (SEC) shown in table 35, is much higher than the world average, indicating the need for energy efficiency improvement in all Syrian industrial sub- sector.
6. Estimated potentials for energy efficiency improvement in the industrial sub-sectors
Within the course of this study and based on the data collected from the Syrian authorities, the specific energy consumption in each of the industrial sub-sectors is calculated and the potentials for energy efficiency improvement are estimated as described below.
(a) Cement industry
The cement industry is the largest energy consumer in the Syrian manufacturing industry. It consumes about 52.6 per cent of total end-use electricity in the sector, and about 51 per cent of total industrial petroleum products consumed. For this reason, special attention should be given to the energy efficiency challenge of this industry.
The cement industry is characterized by its high percentage of energy cost in the total production cost. In average, it varies between 20 to 30 per cent(34) for portland cement production. Data provided by the Syrian Ministry of Industry shows that the energy expenditures per value of production, in cement industry is 25.26 per cent. Considering the low price of energy in the Syrian Arab Republic, this percentage is higher than the world average.
In addition, the type of kiln used has a dramatic effect on fuel consumption. The average fuel consumption in wet kilns is 60 GJ/ton, while it only counts for 4.5 GJ/ton and 3.6 GJ/ton for long dry kilns and pre-heater kilns, respectively.
The Canadian experience in the cement industry has shown that the electrical consumption for cement production in 1990 was 156 kWh/ton, with most used for the crushing, grinding, and transport of raw materials and products. In 1990, the total energy use (fuel + electricity) averaged 4.35 GJ/ton of cement.(35) Comparing this value with the current consumption rates provided by the Energy Planning and Conservation Centre, the specific energy consumption is higher in most of the plants, and energy conservation measures must be considered.
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It is recommended in these cases that detailed energy audits and conduct measurements to identify the possible opportunities to improve the SEC be executed. It is also recommended to compare the figures from energy audits with that given by the performance guarantee figures of the facility.
(b) Textiles industries
In 1999, textile industries in the Syrian Arab Republic consumed about 56,758 toe of energy, accounting for about 5 per cent of the total public-sector consumption. This energy is classified as follows: 253.77 GWh electricity, 28,938 ton fuel oil, 6388 ton diesel (Mazout in Syrian terminology) and 389 ton LPG. The average SEC of textile industry in 1999 was approximately 960 kgoe/ton of product output, which lies within the world’s norms (1725 kgoe/ton in 1990) (36); however, it is important to emphasize that the textile-making industry has a wide range of specific energy consumption dependent on the type of textile product. For this reason, it is recommended to examine each plant individually and conduct detailed energy audits.
(c) Food industries
The major food industrial plants in the Syrian Arab Republic produced 261,165 tons of various products and consumed about 28.11 ktoe of energy in 1999. From the wide range of products within the industry it has been selected, as an example, to predict the potential of energy conservation. In the selected five plants (table 36), the conservation potential ranges from 60 to 74 per cent, with an average potential savings of 70 per cent.
During the last mission of EIS/ENRED/ESCWA’s team to the Syrian Arab Republic, a site visit and a walk-through audit were conducted in one of the major food industrial plants: “The Syrian Company for Dairy - Damascus”. The company produces sterilized milk, yogurt, cheese, butter, and other dairy products. By considering the production line of sterilized milk, table 37 shows the production and consumption data for the year 2000. The calculated specific energy consumption indicates a potential of energy conservation from 41 to 58 per cent, with an average about 51 per cent compared with the world’s norm.(5, 36) The energy efficiency measures that could be applied in this plant will be discussed later.
TABLE 36. ENERGY CONSERVATION POTENTIAL IN CONSERVES FOOD PLANTS IN SYRIAN INDUSTRY (1999)(32) Annual Syrian SEC World SEC Production consumption norms norms (51) Conservation Plant (tons) (toe) (kgoe/ton) (kgoe/ton) potential (%) 1. Conserves – Damascus 3 550 1 119 315 93 71 2. Conserves – Hasakeh 1 010 233 231 93 60 3. Conserves – Idlieb 861 237 275 93 66 4. Al Furat for Conserves – Mayadeen. 1 239 441 356 93 74 5. The Syrian Conserves Co. – Derra 2 525 833 330 93 72 Total 9 185 2 863 312 93 70
Source: Energy Planning and Conservation Centre, Ministry of Electricity, the Syrian Arab Republic.
TABLE 37. ENERGY CONSERVATION POTENTIAL IN THE “SYRIAN COMPANY FOR DAIRY – DAMASCUS”(37) (Production type: sterilized milk)
Prod. Consumption Syrian norms Worlds norms Conservation Period (ton) kWh F.O. (ton) Diesel (litre) Total (MJ) MJ/ton MJ/ton potential (%) 1st Quarter 2000 1 003.505 220 699.150 112.950 46 643.880 7 473 191.3 7 447.089 3 434 53.89% 2nd Quarter 2000 1 091.820 233 076.000 133.016 40 987.367 8 081 917.3 7 402.243 3 434 53.61% 3rd Quarter 2000 1 340.000 234 326.510 124.560 42 583.980 7 813 542.1 5 831.002 3 434 41.11% 4th Quarter 2000 837.510 202 117.385 115.684 31 919.216 6 860 352.2 8 191.367 3 434 58.08% Total 4 272.853 890 219.045 486.210 162 134.443 30 229 003 7 074.665 3 434 51.46% Source: Data collection though a walk-through audit in “The Syrian Company for Dairy – Damascus”.
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(d) Chemical industries
Chemical industries in the Syrian Arab Republic consumed about 367 ktoe of energy in 1999. The largest energy consumers are glass manufacturing, tires and fertilizers. The highest energy demand was recorded in the “General Company for Fertilizers—Homs”; which is the only factory using natural gas as a raw material.
Two flat glass manufacturing plants, namely: (1) Al-kadam glass company, and (2) Aleppo glass company, were selected for estimating their energy conservation potential as examples.
Calculations of the specific energy consumption in 1999, give 494 kgoe/ton and 608 kgoe/ton for the two plants respectively. These figures indicate an improvement in efficiency compared with the figures of 1995,(5) however, it still higher than the world’s norms.
(e) Sugar industry
Based on the plants data available (Ref.), the values of specific energy consumption for the sugar plants in the Syrian Arab Republic are shown in table 38. Comparing these values with the world norm (95 kgoe/ton), it can be noticed that the conservation potential in this industry is high and reaches an average value of 82 per cent. Cost-effective energy conservation measures that could be applied in this industry will be discussed later.
TABLE 38. ENERGY CONSERVATION POTENTIAL IN SYRIAN SUGAR INDUSTRY (1999)(29)
Production Annual consumption Syrian SEC norms Conservation Plant (tons) (toe) (kgoe/ton) potential (%) 1. Al-Ghab Sugar Company 20 875 11 824 566.42 83% 2. Deiezzor Sugar Company 15 289 14 253 932.24 90% 3. Homs Sugar Company 61 373 15 041 245.08 61% 4. Al-Thawra Sugar Company 26 632 15 648 587.56 84% 5. Al-Reqqa Sugar Company 25 554 17 807 696.84 86% 6. Tal-Salhab Sugar Company 15 896 11 160 702.06 86% Total 165 619 85 733 517.652 82% Source: Energy Planning and Conservation Centre, Ministry of Electricity, the Syrian Arab Republic.
(f) Engineering industries
Engineering industries in the Syrian Arab Republic comprise a wide range of products, including electronic equipment, iron and steel, aluminum, cables, batteries, tractors and other products. The production value output of this sub-sector is 8115.1 million SP. It consumed about 24 ktoe of energy in 1999, diesel oil comes in first (12,968 toe), followed by electricity (8,584 toe) and heavy fuel oil (1,995 toe). About 65 per cent of the total consumption is used in the “General Company for Iron and Steel Products—Hama”. The variety of products in this sector, and the variety of methods used for production, make it necessary to perform deep energy efficiency studies and identify energy conservation opportunities in this sector.
In view of the above, a considerable waste in energy utilization exists in Syrian industry, which needs more attention and deep examination. As in most of the developing countries, energy efficiency improvement can save substantial sums of money for the firms and at the same time bring about substantial environmental improvements, without large capital investment.
C. STATUS OF ACTIVITIES FOR IMPROVING INDUSTRIAL ENERGY EFFICIENCY
The key drivers of energy efficiency activities in the Syrian Arab Republic, as well as the efforts that have been done for the efficient use of energy, are presented in the previous ESCWA study.(5) In addition to
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the energy efforts conducted by the Ministry of Industry and its associated organizations and the Ministry of Petroleum since 1980, it is important to point out the following activities:
1. The activities of energy planning and conservation
The recently created “Energy Planning and Conservation Centre” in the Ministry of Electricity, is a very good step towards the efficient use of energy in the country. The centre is now establishing an industrial database including all data about energy and fuel consumption as well as environmental issues. Database will cover the industrial private sector and other economic sectors. It is recommended to include in the analysis, the energy efficiency previous activities such as energy audits, studies, implemented projects and successful case studies. Energy efficiency equipment, codes and standards are also important and will be included.
2. The Syrian Ministry of Industry (MOI)
Several field studies were conducted by the Ministry of Industry, particularly in cement, fertilizers and iron and steel industries to access and classify energy consumptions and identify potential energy conservation opportunities. Valuable documents are published and have to be considered in any future energy efficiency activities.
In addition, the MOI completed a study in 1998 on industrial boilers, which is important and should be considered as a base for any future studies. It is recommended that it be included in the database mentioned above.
3. Supply side efficiency and energy conservation and planning project (SSEECP’s)
The Ministry of Electricity, in cooperation with UNDP and GEF programmes, are currently implementing a project “Supply side efficiency and energy conservation and planning project” (SSEECP’s). The project objective is to improve energy efficiency in electricity generation, industrial production and private enterprises, and reduce GHG emissions from these sectors.
Among SSEECP activities the Syrian energy services center will be established and will continue to perform its duties after the initial four year period of the project.
While starting its activities, the project has sponsored the training of (60) Syrian engineers and technicians in (AEDC) Egypt. These groups each of (20) trainees had been trained on conducting energy audits, energy efficiency project development, as well as technical site visits for implemented energy efficiency projects.
D. COMBINED HEAT AND POWER SYSTEMS, STATUS ASSESSMENT AND EVALUATION
1. Application status
In the Syrian Arab Republic, CHP, or cogeneration, is not yet implemented, except few limited seasonal applications in the sugar industry (about 32 MW). These systems operate only 100 days per year.
2. Potential CHP application in Syrian industry
The Syrian Arab Republic has a large potential in other industries where need of power and thermal energy are particularly acute. The targeted industries in the Syrian Arab Republic, which are most convenient for CHP facilities are: food, chemicals, textiles, cement and engineering. The aging of industrial boilers, providing process steam to these industries is opening up new opportunities to implement CHP technologies. A rough estimation of the CHP potential in Syrian industry is shown in table 39 and figure XIX. The estimation is made only for the major consumers in the public-sector based on the consumption figures available.
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TABLE 39. ESTIMATED CHP POTENTIAL IN SYRIAN INDUSTRY
Industry CHP potential (MW) Percentage Proposed module sizes (MW) Cement 9 47 5-10 MW 3 Food 1 5 0.3-15 MW 0 Textiles 3 17 0.3–1 MW 4 Chemicals 4 22 3–10 MW 4 Engineering 1 9 0.5–5 MW 7 Total 1 10 9 0 8
Figure XIX. The Estimated CHP Potential in Syrian Industry
Total capacity 198 MW
47% 22%
17% 9% 5%
Cement Chemicals Textiles Food Engineering
3. Evaluation of CHP
Since CHP is site specific, thus the above estimated figures need to be verified and/or corrected with detailed site investigation. In the following section, a typical example of the feasibility of implementing CHP systems in Syrian industry will be demonstrated, based on site-visit conducted in April 2001, at the: The Syrian Company for Dairy—Damascus.(36)
(a) Plant situation
The electrical energy is supplied to the plant through three transformers with installed capacity of 1660 MVA, and a stand-by generator rated 470 kW operated by diesel oil (Mazout in Syrian terminology). In 2000, the annual electrical energy purchased from the grid was 1238.4 GWh at a cost of 1,114,560 Syrian Lire (0.9 Lire/kWh). The stand-by generator operated only 20 hours and consumed 835 litres diesel oil for a total cost of about 5277 SL. The average power factor of the plant is 0.9. Process steam is supplied to the production lines, at 7 bar, by three boilers, one is operating and the other two are stand-by. The boiler in operation has a capacity of 8 tons per hour, 9 bar and the two stand-by boilers of capacity 1.5 tons per hour, 9 bar, each. The fuel used in these boilers is mainly heavy fuel oil. Its consumption in 2000 was 667.2 tons a cost about 880,000 SL.
(b) Economical evaluation
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The average plant operates 12 hours per day and sometimes is extended to 16 hours (two shifts) according to market demand. That means, the average power demand is approximately 300 kW. The pre- feasibility analysis of the plant, under the actual operating conditions, is illustrated in Annex III(sheet 7). It is clear from the chart, that the application of CHP in such conditions is not viable (the simple payback period is 62 years) due to the low cost of energy, low operating hours and lightly loaded condition. In contrast, Annex III(sheet 8) shows the pre-feasibility analysis with appropriate cost of electricity (0.05 US$/kWh) and appropriate annual operating hours. With such conditions a simple payback period of 3.1 years could be achieved. In view of the above, it can be concluded that the most important barrier in the development of energy efficiency activities, in general, and CHP technologies in particular, is the cheap energy prices offered to industrial facilities.
E. WASTE HEAT RECOVERY (WHR) SYSTEMS, STATUS ASSESSMENT AND EVALUATION
1. The application status
In Syria industry, process heating is used extensively in almost all manufacturing processes. About 1133 ktoe of residual fuel oil and 614 ktoe of diesel oil,(33) were used in 1999, mainly, in boilers and furnaces. Both represent about 76 per cent of total energy used in heat and power for the Syrian industry. Also, in 1999, natural gas used in kilns in cement industries amounted about 84 million m3, accounting for 21 per cent of total natural gas used in this industry.
2. The potential application
There is no sufficient available information to evaluate the potential application of WHR in the Syrian industry, thus WHR options identification and evaluation need more investigation through energy audits. These audits can be conducted either by individual experts or energy service companies (ESCOs).
However, discussions with concerned personnel in Syrian industry have indicated existance of high potential application of most of the selected WHR options, particularly, the regenerative burners, the boiler blowdown heat recovery, and preheating systems for feeding materials. The application of economizers and water treatment options have limited potential since they are used extensively in food and textile industries. Table 40 shows the WHR options and its priority of application in Syrian industry, as well as the potential sub-sectors for its implementation.
TABLE 40. APPLICATION OF SELECTED WHR OPTIONS IN SYRIAN INDUSTRY
WHR Potential option Title Fuel used Typical applications Syrian sub-sectors application Option 1 Regenerative burners Diesel/Gas Industrial furnaces, glass, metal Cement and Very high oil shaping, aluminum and heat engineering treatment Option 2 Recuperators Fuel oil Furnaces for glass, metal Food, textiles, High shaping, aluminum, heat chemicals, and treatment and lead copper Sugar smelters. Option 3 Economizer Fuel oil Water tube and, to some extent, Chemicals, food, Medium fire tube boilers. sugar, textiles and engineering Option 4 Water treatment Fuel oil Treatment of feed and cooling Food, textiles, Medium water in boilers and process chemicals, and heating equipment. Sugar Option 5 Boiler feed water Fuel oil Water tube boilers in chemicals, Food, textiles, Very High preheating systems fertilizers, food, etc chemicals, and from blow-down Sugar
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Option 6 Boiler air preheaters Fuel oil Water tube boilers in chemicals, Food, textiles, High fertilizers, food, etc chemicals, and Sugar Option 7 Preheating systems for Fuel oil Mainly in metallurgical Cement and Very high feeding materials industries, refractories and engineering cement. Option 8 Waste heat boilers Fuel oil In metals, fertilizers, and Cement, chemicals High chemical industries. and engineering 3. Evaluation of WHR applications
An example of estimating the cost-effectiveness of implementing a WHR option in Syrian industry is presented here. The selected option is the regenerative burner (use of waste heat for combustion air preheating), and the fuel used is diesel oil. Typical values of capital cost and energy savings are taken from similar implemented projects in Egyptian industry [see Annex B(II), chart 2-1]. The example illustrates the sensitivity to fuel price and financial parameters. The cash flow calculations is shown in Annex D(II), chart- a, from which the internal rate of return is 16 per cent, the net present value is US$ 31,118, and the cost of saved carbon is approximately –12. These financial indicators are almost half that obtained in the case of Egyptian projects due to lower fuel costs.
F. TUNE-UP OF BOILERS AND FURNACES, STATUS ASSESSMENT AND EVALUATION
Combustion efficiency improvement, through the tune-up with portable gas analyzers has the advantage of being a low cost and short payback period, as presented in the case of Egypt. The application of this option in Syrian industry is highly recommended, since most of the boilers are more than 20 years old and most likely have mistuned combustion systems.
1. Potential applications
In Syrian industry, the targeted sectors for boiler tune-ups are: textiles, chemicals, food and sugar. About 50 per cent of the total energy consumed in these industries is used for steam and hot water generation. The main sources of fuel used are heavy fuel oil and diesel oil. The targeted sectors consumed about 181,351 tons of fuel oil and 30,934 tons of diesel oil.
2. Evaluation of tune-up boilers
To estimate the amount of fuel savings by implementing this option in Syrian industry, we use the DOE/IAC database, in which 4,000 industrial facilities were audited in USA from 1990-1996.(38) The results of the conducted audits lead to a recommendation rate of 21 per cent of the approximately 4,000 facilities for boiler efficiency measures. The results of the audits have also shown that the average annual expected energy savings is about 2.9 per cent of the total facility energy use by implementing boiler efficiency measures. Thus if boilers represent 50 per cent of a typical facility’s energy use, then the estimate of boiler energy savings would be 5.8 per cent (0.029, 0.5). This gives an annual savings of about 10,518 tons of fuel oil and 1794 tons of diesel oil. The total cost of these savings in local currency is about 25.2 million SL.
G. CONSTRAINTS AND RECOMENDATIONS
The most significant constraints facing the diffusion of energy efficiency measures in Syrian industry are:
(a) Very low energy prices, especially electricity, where industrial facilities receive large subsidies;
(b) Inadequate experience for energy efficiency technology applications and project development models for different and potential industry sectors;
(c) The lack of trained engineers and technicians for accessing and implementing energy efficiency projects.
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Consequently, urgent steps have to be adopted to remove, or reduce, the existing barriers and to accelerate the diffusion of proposed energy efficiency options.
The energy demand of Syrian industry is growing at an average slow rate of 1.7 per cent in the public sector and rapid growth rate of 18 per cent in the private sector. Based on the previous analysis, the following can be concluded:
(i) There is a significant potential of energy conservation opportunities in Syrian industry. Some efforts have been made to use energy more efficiently, however, still many more efforts have to be initiated;
(ii) Establishing an industrial database by the newly created centre “The Planning and Conservation Centre” in the Ministry of Electricity, is a positive step towards the promotion of energy efficiency activities in the Syrian Arab Republic;
(iii) Very cheap energy prices are one of the most serious barriers facing energy efficiency improvement in the industrial sector. Other barriers, such as lack of awareness, market and regulatory constraints, lack of incentives and clear energy conservation policy need to be initiated;
(iv) It is recommended to extend the man-power energy efficiency capacities system, including internal evaluation mechanism and the provision of suitable training services to the different technical levels within industrial enterprises;
(v) Special attention has to be given to the No cost/Low cost energy conservation measures such as house-keeping, waste heat recovery and combustion efficiency improvement through the tune-up of boilers and furnaces;
(vi) Detailed energy audits are required, especially in the public-sector industrial facilities, which may come-up with specific, cost-effective, energy efficiency projects.
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VII. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
There is an urgent need in the ESCWA region to promote more sustainable energy consumption patterns, particularly in the major energy consuming sectors. Meanwhile, the industrial sector consumes almost 28.0 per cent of the petroleum products and 24.7 per cent of the generated electricity in the region. It is due to this situation that the Energy, Natural Resources and Environment Division (ENRED) of the ESCWA Secretariat has included this study in the 2000-2001 work programme of the Energy Issues Section (EIS).
The core objective of the study is to identify a set of priority measures for efficient use of energy in the industrial sector of the selected member countries, assess its application potentials and recommend actions for its realization.
This study has reviewed the main features of the industrial sector in the region, the energy situation and industrial energy consumption patterns. It has also screened the available technological measures for improving industrial energy efficiencies, developed criteria for its priority ranking, and recommended three high priority options for application in the region. Three case studies have been preformed for the selected member countries, namely Egypt, Lebanon and the Syrian Arab Republic.
This chapter summarizes the main conclusions of the study and offers relevant recommendations for further actions in the field.
A. SUMMARY AND MAIN CONCLUSIONS
1. The ESCWA industrial sector main features and energy consumption patterns
(a) The main features
There is a wide variety of manufacturing industries in the region. The classification and main features of the major industries in each member country are shown in table 3 page 8 of this report. The percentage contribution of the industry in the GDP of countries in the region varied in 1999 between 7.3 per cent in both Qatar and Saudi Arabia to 18.5 per cent in Jordan followed by 15.1 per cent in Egypt.
The dominant industries in the GCC countries are: chemical and petrochemical industries, non- metallic mineral products and the basic metal industries. In the countries of diversified economies, the main manufacturing industries are the food and textile industries.
(b) The energy and industry in the region
The study has analyzed the energy situation in the region with an emphasis on industrial energy consumption patterns and indicators. The main conclusions are:
(i) Industrial energy consumption
The industrial sector final energy consumption in the region has reached 67,375 mtoe in 1999 accounting for 23.0 per cent of the region’s final energy consumption and it is expected to reach 134,205 in 2010, with an average growth rate of 7.0 per cent. The primary energy consumption in the region will grow by 4.2 per cent in the same year. The electricity consumption in the sector was 78,180 GWh, accounting for 26.0 per cent of the total electricity consumption in the region, with an average growth rate of 5.0 per cent.
(ii) The need for energy efficiency improvement
The industrial sector in the ESCWA region is facing a challenge to improve its energy efficiency and reduce industrial energy intensity. Such a challenge is reflected by the fact that the total final energy consumption growth rate is as high as 7.0 per cent, far exceeding the growth rate of final energy consumption in the region of 4.2 per cent, which itself exceeds the world average of 2.0 per cent. This is
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emphasized by a level of industrial energy intensity of 1.49 kgoe/US$ reached in 1999, accounting for almost 2.7 times the average rate of primary energy intensity in the region (0.522 kgoe/US$) and 4.7 times that of the world average (0.32 kgoe/US$). These facts reflect the poor productivity of the energy used in industry and highlights the need for improving energy use efficiency in the sector.
2. Priority options for efficient use of energy in the ESCWA industrial sector
(a) Potential technological options
The study has identified and briefly described eleven potential energy efficiency technology options that can serve the objective of improving industrial energy efficiency in the region. These technologies are: (1) industrial process control; (2) waste heat recovery; (3) improvement of combustion efficiency; (4) energy management systems (EMS); (5) combined heat and power or cogeneration; as well as (6) power factor improvement; (7) high efficiency lighting; (8) high efficiency motors; (9) insulation and refractories; (10) steam condensate recovery (SCR); and (11) solid fuel-fired boilers.
(b) Ranking and selecting priority options
(i) The study has followed a qualification and selection procedure through which seven options were selected to be analyzed according to their applicability, replicability and feasibility in the region. A criteria for ranking the priority options was set, including: (a) potential replicability; (b) potential energy savings; (c) investment cost; (d) payback periods; (e) adaptability to local and regional conditions; and (f) the environmental benefits.
(ii) In applying the criteria given above, the priority ranking order of the seven selected technological options was set and the three highest priority options were identified for further evaluation. These options are: (1) combined heat and power; (2) waste heat recovery; and (3) combustion efficiency improvement.
(c) The selected case studies
Three ESCWA member countries namely, Egypt, Lebanon and the Syrian Arab Republic were selected for detailed case studies. Such selection is basically due to: (1) the reasonably large volume and diversity of the available manufacturing industries in the three countries; (2) the workforce and the production value of the industrial sectors of the three countries count for over 50 per cent of that in the whole region; (3) the availability of the minimum raw data required to perform the evaluation of the selected technologies in the three countries, as well as available performance data from the Egyptian experience which can be used for evaluating the selected options in other countries; (4) the diversity of the status of activities in the field among the three countries, where the accumulated expertise and lessons learned can be interchanged; and (5) the availability of national institutions that are concerned with the development of energy efficiencies, and can benefit the study outcome.
3. Evaluation of the selected options
To facilitate the analysis of options in the case studies, the study has investigated the requirements and limitations for evaluating the application and replication potentials of the selected priority options. The study set a procedure for evaluation and provided a background of technical performance and financial information that can be used for the analysis for each of the selected options.
4. Egypt’s case study
(a) The industrial energy consumption
(i) The energy consumption in the Egyptian industrial sector has increased from 11.725 to 13.743 mtoe between 1994/1995 and 1998/1999 with an average growth rate of 4.1
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per cent. Meanwhile, the MVA has risen from 6,023 to 10,112 million US$ in the same period. As a result, the IEI has decreased from 1.94 kgoe/US$ to 1.36 kgoe/US$ indicating an improvement in industrial energy use efficiency. This is mainly due to the increased contribution of the private sector in Egypt’s industrial sector and efforts directed towards more efficient energy use in the sector.
(ii) In spite of the above-described improvement in IEI which reached 1.49 kgoe/US$ in 1999, it is still much higher than the average total energy intensity in the country (0.533 kgoe/US$) and more drastic it reaches 4.7 times the world average energy intensity (0.32 kgoe/US$).
(iii) The major energy consuming industrial sub-sectors in Egypt are the cement, metallurgical and chemical industries, consuming 26 and 17 per cent, respectively, of the total industrial energy consumption.
(b) Status of activities for improving industrial energy efficiency
Since the early 1980s, Egypt has directed concerned efforts in the field and a number of major initiatives have been or are being implemented by different national organizations supported by bilateral and international organizations. The main results of such activities are:
(i) Energy audits were conducted in more than 100 public and private industrial facilities. The potential of the different energy efficiency options were evaluated;
(ii) The audits have shown that a wide variety of potential projects exist, including thermal and electric DSM measures in all of the industrial sub-sectors. However, the net savings recommended varied considerably among individual plants (from <1% to 47%), while the average total savings was ten per cent of annual energy consumption and 14 per cent of peak demand reduction. The average simple payback period for the recommended projects was 2.1 years;
(iii) The audits also concluded that; (1) public sector plants generally have more DSM potential than private sector plants because the private plants were relatively new and modern with higher efficiency; (2) low and medium cost projects represent a significant amount of DSM potential, low-cost projects could become the focus of a large-scale programme; (3) high-level management approval is vital to the audit’s success;
(iv) More than 35 capital investment projects were implemented in industry. They covered the applications of different technologies including cogeneration, waste heat recovery, combustion control, efficient lighting, solar industrial process heat and others;
(v) Intensive capacity building and training programmes were implemented for decision- makers, engineers and technicians totaling about 7000 trainees. It included training the staff of Energy service companies (ESCOs), as well as training the trainers for the industrial sector;
(vi) A rich database was developed based on the results of the audits and the performance records of the implemented projects, which can be used for evaluating any future application.
(c) Status assessment and evaluation of the selected options
(i) Combined heat and power (CHP)
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Currently the total installed capacity of CHP systems in Egypt is 440.0 MW, mostly in the food (108 MW) and textile (116 MW) industries. The total predicted application potential for CHP is about 1200 MW, distributed among the industrial sub-sector. The largest potentials are (541 MW) in the food industry and 174 MW each in the textile and chemical industries.
The implementation of the 1200 MW potential capacity of CHP systems, is expected to result in energy savings varying between 2.1-3.3 mtoe/year depending on the type of CHP implemented. The corresponding electricity saving for utilities will be about 8,736 GWh/year. This will also reduce annual CO2 emissions by 4.0 million tons.
(ii) Waste heat recovery (WHR)
Different types of waste heat recovery (WHR) systems have already been used in Egyptian industry, since they have very short payback periods ranging from a few months to three years.
The evaluation of current WHR potentials in Egypt indicated that: (a) a potential exists for about 135 WHR projects; (b) the annual fuel savings would reach more than 400 ktoe/year with CO2 savings of over 1.3 m tons/year in cases where such potential is applied; and (c) the total cost of implementation would be around 80.0 million US$.
(iii) Boiler tune-up programmes
Egypt started a unique tune-up pilot programme in 1991. During the first phase of the programme, 60 portable electronic gas analyzers were loaned to 54 public sector companies to be used for boiler tune-ups. The second phase covered all sectors of industry.
Improvements in the participating 54 public sector companies has generated a savings (LE 3,340,000) ten times the amount of the project cost. It also increased annual energy saving of by 7.7 per cent. This represents a fuel saving more than 208,000 toe. It is to be noted that a good boiler tune-up with a precision gas analyzer can result in a boiler fuel savings of 2.0 to 20.0 per cent.
In case a nationwide tune up programme is implemented for boilers and furnaces, as a low cost energy efficiency option, it is expected to achieve an energy savings of 273 ktoe per year with a simple payback period of around 40 days to few months.
5. Lebanon’s case study
(a) The industrial energy consumption
(i) The available published data on end-use energy consumption in Lebanese industry is from the year 1994, when it reached about 970 ktoe. The energy for heat and power represents 15.9 per cent of the total fuel used in industry. The gas/diesel oil used in industry was estimated at 52 per cent of the total fuel imported by the country. During the years 2000-2015, energy demand in the industrial sector is projected to increase by 14.5 per cent and 50 per cent over the 2000’s level by the years 2005 and 2015, respectively;
(ii) The total electricity consumed by industry, during 1994, was 2817 GWh, sharing 25.9 per cent of total industrial end-use consumption. About 61 per cent of such electricity is produced locally on industrial sites and consumed 149 ktoe, while the rest (1089 GWh) is imported from the national EDL grid.
(iii) There is an urgent need in Lebanon for developing energy efficiency and conservation measures and programmes to respond to the needs for: (a) reducing the bill of imported fuel; (b) building extra generating capacities in the near future; and 9c) treating both government and Lebanese Electric Utility (EDL) debt and debt services.
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Such need is emphasized by: (a) the practiced high-energy intensities; (b) the high energy expenditure in some major industrial sectors; and (c) the absence of a national policy adopted on the rational use of energy.
(b) Status of activities for improving industrial energy efficiency
Limited efforts have been directed towards improving industrial energy efficiency in Lebanon. They are:
(i) The Ministry of Energy and Water (MOEW), in cooperation with UNDP, have developed, a project on “Energy efficiency and greenhouse gas abatement” in all sectors of Lebanon. The project was approved by the parliament (Decree No. 56 for 2001) and started implementation in June 2001;
(ii) In the year 2000, the Association of Lebanese Industrialists started to establish a database on fuel consumption in major industrial plants.
(c) Status assessment and evaluation of the selected options
In Lebanon, the high prices of energy can lead to the possibility of the potentially highly cost-effective application of all selected options.
(i) Combined heat and power (CHP)
In spite of the existing opportunities to apply the CHP system in Lebanese industry, they have not yet been applied. However, it is an attractive, rational and cost-efficient energy efficiency option for Lebanese industries for many reasons: (1) The industrial sector in Lebanon generates about 61 per cent of its electric demand through isolated diesel engines, while the rest is purchased from EDL. Most of these private generators are operating with low thermal efficiency (around 20 per cent), which can be upgraded by CHP systems; (2) The high cost of electricity, especially during peak hours (20 US ¢/kWh) makes CHP a highly cost-effective alternative; and (3) The efficiency of the existing conventional boilers is very low, since they are 20 to 30 years old. In addition, the capacity of potential CHP is about 160 MW, and is expected to achieve an annual savings of around 228 ktoe, average saved carbon of 0.64 ton/MWh, and a simple payback period from 1.0 to 3.6 years.
(ii) Waste heat recovery (WHR)
Waste heat recovery (WHR) systems have not yet been introduced to Lebanese industry and it needs more investigation. However, the example presented in the study has shown the cost-effectiveness of its possible implementation in Lebanon.
(iii) Boiler tune-up programmes
Although currently no programme is implemented for the boilers tune-up in the Lebanese industry, however, it is recommended to be considered, since it is expected to achieve an annual saving of around 1.42 million US$ with a simple payback period of less than one month.
6. Syria’s case study
(a) The industrial energy consumption
(i) In 1999, the manufacturing industries consumed about 96 million GJ (2290 ktoe) for heat and power, including about 5,461 GWh of electrical energy, 83.6 million cubic meters of natural gas used in cement furnaces, 1166 kton fuel oil and about 576 kton diesel oil. The total electrical energy consumed in the industrial public sector in 1999 was approximately 1395 GWh;
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(ii) The growth rate of the energy demand in Syrian industry is much lower in public sector (1.7 per cent) than in private sector (18.0 per cent) due to the newly established and active private enterprises;
(iii) There is huge potential for energy efficiency improvement in Syrian industry, particularly in the cement, food and sugar industries. Initial estimates by sub-sectors were conducted through this study. However, very low energy prices made it difficult to show feasibility in many cases.
(b) Status of activities for improving industrial energy efficiency
The efforts that have been directed towards improving industrial energy efficiency in the Syrian Arab Republic are limited to:
(i) The Ministry of Electricity, in cooperation with UNDP and GEF programme, are currently implementing a project on “Supply side efficiency and energy conservation and planning project” (SSEECP’s). The project objective is to improve energy efficiency in electricity generation, industrial production and private enterprises, and reduce GHG emissions from these sectors;
(ii) The recently created “Energy Planning and Conservation Center” in the Ministry of Electricity, is a very good step towards efficient use of energy in the country. The center is now establishing an industrial database, including all data about energy and fuel consumption as well as environmental issues.
(c) Status assessment and evaluation of the selected options
(i) Combined heat and power (CHP)
With the exception of a limited seasonal application in sugar industries (about 32 MW), CHP systems are not yet implemented in Syrian industry. The study has estimated an existing potential of (198 MW) for CHP applications, mostly in the cement (93 MW), chemical (44 MW), textile (34 MW) industries and 27 MW in all other industries.
(ii) Waste heat recovery (WHR)
WHR systems are not yet used and therefore have not been evaluated in Syrian industry and there is limited information on process heat operations. This makes it difficult to evaluate WHR potential, however, there are indications of possible high potential for the use of regenerative burners and boiler blow-down heat recover systems. Efforts should be directed towards performing appropriate industrial energy audits to facilitate the evaluation of WHR potentials, as well as other energy efficiency options.
(iii) Boiler tune-up programmes
Boiler tune-up programmes have not yet applied in the Syrian Arab Republic, while boilers are consuming almost 50.0 per cent of the total industrial energy consumption. Based on that, this study has estimated that, if boiler tune-up is disseminated, 10,500 tons of fuel oil and 1,794 tons of diesel oil can be saved annually.
7. Constraints facing energy efficiency improvement in the industrial sector of the ESCWA region
The targeted dissemination of measures and technologies that can contribute to the improvement of energy efficiency in industry is faced by two groups of limitations and/or constraints. These are:
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(a) Limitations facing the evaluation of the potential applications, at the national and regional levels, particularly;
(i) The lack of appropriate data on plant level, since the available data, if exist, is limited to the sub-sectoral level, which is a major constraint in qualifying the plants requirement and selecting the appropriate technology package;
(ii) The variety of plant sizes and process characteristics which are determining factors in identifying the selected technology system specifications;
(iii) The limited availability of expertise, which necessitates the training of concerned personnel in the field to use appropriate analytical tools for analyzing the plant data;
(iv) The variety of energy tariffs and available financing conditions among different countries, including fuel and labor costs, escalation and discount rates, taxes, etc.
(b) Constraints facing the dissemination of measures and technologies in the industrial sector, including:
(i) Lack of information and awareness, of available technologies for energy efficiency measures available and their economics, especially among small and medium sized industrial facilities;
(ii) Economic and financial barriers, including high prices of some energy efficiency equipment, absence of incentives, low energy prices, and the priority financing needs at the plant;
(iii) Institutional barriers, arising from the lack of national policy to promote more efficient use of energy and to monitor the energy-use efficiency and to design policies and programmes to improve it;
(iv) Inadequate training and capacity-building, on relevant issues and promoting markets;
(v) Insufficient capacity for performing energy audits, which is highly needed for identifying energy efficiency options, monitoring and verifying performance and evaluating savings.
B. RECOMMENDATIONS
The conclusion of the present study indicates the urgent need for the industrial sector in ESCWA member countries to direct efforts towards upgrading industrial energy use efficiency at the national level and enhance the subregional and regional exchange of expertise and coordination and cooperation in the field. In view of such needs and in line with the need for developing a more sustainable energy sector in the region, the following may be recommended:
1. At the national level
(a) Countries in the region should give serious consideration to the adverse effects of their current energy consumption trends, particularly in the industrial sector, on both the economy and the environment. They should move towards more sustainable energy patterns through the use of appropriate policy, regulatory and technological measures;
(b) Develop national strategies and action programmes with specific targeted objectives for upgrading energy-use efficiencies. Develop and implement appropriate national and regional policies for creating an enabling environment for wide dissemination and commercialization of such technologies to reduce the energy sectors adverse effects on the atmosphere;
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(c) Develop and implement measures that make energy efficiency technologies more affordable and reduce energy intensities through: (1) phasing out conventional subsidies with due consideration to social development needs; and (2) promoting an enabling environment for widespread applications and encouraging energy service companies (ESCOs);
(d) Top priority should be given to upgrading institutional capacities in the field of energy conservation and efficiency with particular emphasis on the relevant industrial institutions, including: (i) formulating policies and taking action to support the implementation of economic instruments designed to encourage more efficient use of energy; (ii) strengthening capacities for developing, implementing and enforcing standards, codes, laws and regulations that can enhance the opportunities for upgrading energy efficiencies; and (iii) Develop appropriate custom, tax and duty policies that encourage energy efficiency in industry and marketing; (e) Adopt measures and technologies for improving demand side management of generated electricity and energy conservation in industry;
(f) Raise awareness, facilitate information dissemination and capacity building for promoting energy efficiency measures and systems in the industrial sector, with an emphasis on training for industrial engineers and technicians on energy audits, project development and monitoring energy efficiency projects;
(g) Promote innovative financing arrangements aimed at reducing up-front cost of equipment and promote internalization of externalities, and mobilize sufficient investments from domestic and foreign sources to meet the financing requirements for introducing the energy efficiency technologies to the industrial sectors;
(h) Direct efforts for developing country as well as plant specific industrial energy databases, including details on energy consumption by industrial sub-sectors, such as steam and electricity demands. These databases also have to include information on the energy efficiency activities and priorities for action in each specialized industry, monitoring and verification of the technological options and identification of appropriate incentives and financial mechanisms;(39)
(i) In assessing potentials and developing energy efficiency projects for the industrial sector in the ESCWA member countries, the following has to be considered:
a. Special attention has to be given to no cost/low cost energy conservation measures such as house-keeping, waste heat recovery and combustion efficiency improvement through the tune-up of boilers and furnaces. Low cost measures distributed to many end-users can result in a large savings normally difficult to achieve without large capital investment, provided the project is managed effectively;
b. Detailed energy audits are requied, especially in the public-sector industrial facilities, which may come-up with specific, cost-effective, energy efficiency projects;
c. Priority is to be given for adopting simple, locally handled and sustained technologies rather than high-level sophisticated systems with a short-term sustaining period;
d. To facilitate project success, the individual companies must be responsible for the equipment and willing to accept project pre-conditions.
2. On the regional and international levels
(a) Developing appropriate technology transfer arrangements with enhanced national and regional contributions;
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(b) Foster regional coordination and cooperation through existing mechanisms and seek further asistance from international organizations in developing appropriate institutional tools to promote large-scale direct foreign investment;
(c) ESCWA should take the initiative in promoting programmes to build and/or increase the capacity of member countries in the field of energy efficiency, particularly in the industrial sector, including:
(i) Support actions to be taken by member countries for developing the energy sector’s strategies to support sustainable development;
(ii) Develop capacity-building programmes on energy and sustainable development, including training programmes;
(iii) Continue to study and evaluate sectoral energy issues in the region that can affect sustainable development. REFERENCES
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ﺍﻟﻠﺠﻨﺔ ﺍﻻﻗﺘﺼﺎﺩﻴﺔ ﻭﺍﻻﺠﺘﻤﺎﻋﻴﺔ ﻟﻐﺭﺒﻲ ﺁﺴﻴﺎ. ﺘﺤﺴﻴﻥ ﻜﻔﺎﺀﺓ ﺍﺴﺘﺨﺩﺍﻡ ﺍﻟﻁﺎﻗﺔ ﻤﻥ ﻤﻨﻅﻭﺭ ﺇﻗﻠﻴﻤﻲ ﻓﻲ ﺩﻭل .5 ﺍﻹﺴﻜﻭﺍ(E/ESCWA/ENR/1997/13).
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15. Wood, B. Egypt’s DSM Pilot Program: Results-to-date and Lessons Learned, Paper presented at DSM and the Reforming Energy Market Conference, Cairo, Egypt 15-17 December 1997.
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17. Yassin, I. Egypt’s Energy Efficiency Improvement and Greenhouse Gas Reduction Project. Paper presented at the Expert Group Meeting on Energy for Sustainable Development in ESCWA Member States: the Efficient Use of Energy and Greenhouse Gas Abatement, ESCWA, Beirut, 8-11 October 2001.
ﺭﺍﺠﻲ ﻓﺭﻴـﺩ ﺭﺍﺠﻲ. ﺍﻟﺘﺴﺨﻴﻥ ﺍﻟﺸﻤﺴﻲ ﻓـﻲ ﺍﻟﻌﻤﻠﻴﺎﺕ ﺍﻟﺼﻨﺎﻋﻴﺔ ﺒﺎﻻﺭﺘﺒﺎﻁ ﺒﻨﻅـﻡ ﺘﺭﺸﻴﺩ ﺍﻟﻁﺎﻗﺔ ﻓﻲ ﻤﺼﺭ. .18 ﻭﺭﻗﺔ ﻗﺩﻤـﺕ ﺇﻟـﻰ ﺍﺠﺘﻤﺎﻉ ﻓﺭﻴﻕ ﺍﻟﺨﺒﺭﺍﺀ ﺤـﻭل ﺍﺴﺘﺨﺩﺍﻡ ﺍﻟﻁﺎﻗـﺔ ﻷﻏﺭﺍﺽ ﺍﻟﺘﻨﻤﻴﺔ ﺍﻟﻤﺴﺘﺩﺍﻤﺔ ﻓـﻲ ﺩﻭل ﺍﻻﺴﻜﻭﺍ: ﺍﺴﺘﺨـﺩﺍﻡ ﺍﻟﻁﺎﻗﺔ ﺒﻜﻔﺎﺀﺓ ﻭﺍﻟﺤﺩ ـﻤﻥ ﻏﺎﺯ ﺍﻟﺩﻓﻴﺌـﺔ. ﺒﻴـﺭﻭﺕ، ٨-١١ ﺘﺸﺭﻴﻥ ﺍﻷﻭل/ﺃﻜﺘﻭﺒـﺭ ٢٠٠١. .(E/ESCWA/ENR/2001/WG.2/20)
19. El Touny, Salah. Cogeneration Potential in the Egyptian Industry: Interim Report, Organization for Energy Planning (OEP), Cairo 1996.
20. Khozam, A. Current State and Trends of Energy Efficiency and Cogeneration in Egypt. Paper presented at the Expert Group Meeting on Industrial Energy Efficiency, Cogeneration and Climate Change, UNIDO, Vienna 2-3 December 1999.
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22. The Lebanese Association for Saving Energy (ALME). State of the Energy in Lebanon, Lebanon, April 1998.
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25. Chedid, R. Energy Efficiency Options in the Industrial Sector. Paper presented at Seminar on Energy Efficiency and Conservation, Damascus 11-12 November 2000.
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27. Electricité du Liban. Business Plan 1996 - 2002. Lebanon, December 1996.
28. Chedid, R. et al. Policy Analysis of Greenhouse Gas Emissions: the Case of the Lebanese Electricity Sector. Energy Conservation and Management, 42: 373-392, 2001.
29. Said El-Owaeini, General Manager, Ministry of Industry, Association of Lebanese Industrialists, Beirut, Lebanon.
30. Hicham Abou Jaoude, Secretary of the Environment Committee, Association of Lebanese Industrialists, Beirut, Lebanon.
31. United Nations Industrial Development Organization. http://www.unido.org/data/stats/
32. Energy Planning and Conservation center, Ministry of Electricity, the Syrian Arab Republic.
33. Ministry of Petroleum. Tables of Energy Balance in the Syrian Arab Republic (1995-1999).
34. UNIDO. http://www.unido.org/ssites/env/sectorcement034.html
35. Smith, David F. The Cement Industries in Canada: present and Future Use of energy. Cement,
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Natural resources, Canada.
36. ECEP. Industrial Energy Survey Reference Manual, November 1990, Egypt.
37. Data collected from The Syrian Company for Dairy - Damascus. A walk-through audit, April 2001.
38. US Department of Energy. http://www.oit.doe.gov/best practices.
39. ESCWA. The Role of the Energy Sector in Achieving Sustainable Development in the ESCWA Region. Paper presented to the Expert Group Meeting on Energy for Sustainable Development in ESCWA Member States: the Efficient Use of Energy and Greenhouse Gas Abatemen, Beirut, 8- 11 October, 2001 (E/ESCWA/ENR/2001/WG.2/10).
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Annex I
A BRIEF ON THE DEVELOPMENT STATUS OF THE SELECTED PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR
As detailed in Chapter II of this report, this study has investigated, qualified and screened a wide range of currently available technological measures and/or systems that can be used for upgrading energy use efficiencies in the major manufacturing industries in the ESCWA region. As a result, three main technologies were selected as priority options for further evaluation in selected ESCWA countries. The following presents a brief on the development status of the three options, namely: combined heat and power; combustion efficiency improvement; and waste heat recovery.
A. COMBINED HEAT AND POWER (CHP)
1. Background
(a) The concept
Combined heat and power (CHP), or cogeneration systems, generate electrical/mechanical and thermal energy simultaneously, recovering much of the energy normally lost in separate generation. This recovered energy can be used for heating or cooling purposes, eliminating the need for separate a boiler. Significant reduction in energy, criteria pollutants, and carbon emissions can be achieved from the improved efficiency of fuel use. CHP systems can deliver energy with efficiencies exceeding 80 per cent.
Figure I compares a CHP system providing 80 units of useful thermal and electric energy in a single process with just 20 units of losses, with separate production of heat and electricity that produces 83 units of wasted energy.
Figure I. CHP versus power generation and heat production
Source: UN Economic and Social Commission for Asia and the Pacific. http://www.unescap.org/enrd/energy/co-gen/part1
(b) Status and advantages of CHP
Generating electricity on or near the point of using CHP systems also avoids transmission and distribution losses and defers expansion of the electricity transmission grid. Several recent developments make dramatic expansion of CHP a cost-effective possibility over the next decade: (i) Advances in technologies such as combustion turbines, steam turbines, reciprocating engines, fuel cells, and heat recovery equipment have decreased the cost and improved performance of CHP systems; (ii) A significant portion of
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the already installed boilers will need to be replaced in the next decade, creating an opportunity to upgrade this equipment with clean and efficient CHP systems; (iii) Environmental policies, including addressing concerns about greenhouse gas emissions, have created pressure to find cleaner and more efficient means of using energy; (iv) Electric power market restructuring is creating new opportunities for innovations in power generation and smaller-scale distributed systems such as CHP.
2. Classification of CHP systems
CHP systems are complex integrated systems that consist of a number of individual components from fuel treatment, combustion, mechanical energy, electric energy, electricity conditioning, heat recovery and heat rejection systems. However, they are typically identified by a prime-mover that drives the overall system.
CHP systems that have been commercially used can be classified into the following main technologies: (1) Back pressure steam turbines; (2)Controlled extraction steam turbines; (3) Gas turbines with waste heat recovery boilers; (4) Reciprocating diesel engines; (5) Reciprocating gas engines; (6) Micro- turbines; and (7) Fuel cells.
Selecting a CHP technology for a specific application depends on many factors, including the amount of power needed, thermal needs, the duty cycle, space constraints, fuel availability, utility prices, interconnection issues and emission regulations.
(a) Steam turbine CHP systems
The two types of steam turbines most widely used are the back pressure and the extraction- condensing types. The choice between back pressure turbine and the extraction-condensing turbine depends mainly on the quantities of power and heat, and economic factors. The extraction points of steam from the turbine could be more than one, depending on the temperature levels of heat required by the processes. Figure II shows a schematic diagram of the two steam turbine, CHP systems.(17)
Figure II. Steam turbine CHP systems
(I) Back-Pressure Turbine (II) Extraction - Condensing Turbine
Source: UN Economic and Social Commission for Asia and the Pacific. http://www.unescap.org/enrd/energy/co-gen/part1
The specific advantage of using steam turbines in comparison with other prime movers is the option of using a wide variety of conventional as well as alternative fuels such as coal, natural gas, fuel oil and biomass. The power generation efficiency of the cycle may be sacrificed to some extent in order to optimize heat supply. In back pressure cogeneration plants, there is no need for large cooling towers. Steam turbines
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are mostly used where the demand for electricity is greater than one MW and up to a few hundred MW. Due to the system inertia, their operation is not suitable for sites with intermittent energy demand.
(b) Gas turbine CHP systems
Gas turbine CHP systems can produce all or part of the energy requirement of the site, and the energy released at high temperature in the exhaust stack can be recovered for various heating and cooling applications. Though natural gas is most commonly used, other fuels such as light fuel oil or diesel can also be employed. The typical range of gas range of gas turbines varies from a fraction of a MW up to around 100 MW.
Gas turbine cogeneration has probably experienced the most rapid development in recent years due to the greater availability of natural gas, rapid progress in technology, significant reduction in installation costs, and better environmental performance. Furthermore, the gestation period for developing a project is shorter and the equipment can be delivered in a modular manner. Gas turbines have a short start-up time and provide the flexibility of intermittent operation. Though it has low heat to power conversion efficiency, more heat can be recovered at higher temperatures. If the heat output is less than that required by the user, it is possible to have supplementary natural gas firing by mixing additional fuel to the oxygen-rich exhaust gas in order to boost the thermal output more efficiently. Figure III shows heat recovery from a gas turbine. The hot exhaust gas can be used directly in a process or by adding a heat recovery steam generator (HRSG) and exhaust heat can generate steam or hot water.
Figure III. Schematic diagram of gas turbine CHP system
Source: Office of Industrial Technologies, US Department of State, “Review of Combined Heat And Power Technologies”, October, 1999.
(c) Reciprocating engine CHP systems
Also known as internal combustion engines, these CHP systems have high power generation efficiencies in comparison with other prime movers. There are two sources of heat for recovery: exhaust gas at high temperature and engine jacket cooling water system at low temperature. As heat recovery can be quite efficient for smaller systems, these systems are more popular with smaller energy consuming facilities, particularly those having a greater need for electricity than thermal energy and where the quality of heat required is not high, e.g. low-pressure steam or hot water. Figure IV shows a typical reciprocating engine CHP system.
Several types of reciprocating engines are commercially available, however, two designs are of the most significance to stationary power applications and include four cycle-spark – ignited (Otto cycle) and
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compression – ignited (diesel cycle) engines. Reciprocating engines are available in a broad size range of approximately 50 kW to 5,000 kW suitable for a wide variety of commercial, institutional and small industrial facilities. CHP projects using reciprocating engines are typically installed between $800 - $1500/kW.
The high end of this range is typical for small capacity projects that are sensitive to other costs associated with construction of a facility, such as fuel supply, engine enclosure, engineering costs and permitting fees.
Figure IV. Typical reciprocating engine CHP system
Source: UN Economic and Social Commission for Asia and the Pacific. http://www.unescap.org/enrd/energy/co-gen/part1
(d) Micro-turbines
A new class of small gas turbines called micro-turbines is emerging for the distributed resource market. Several manufacturers are developing competing energies in the 25-250 kW range. The operation of the micro-turbine is similar to the gas turbine, except that most designs incorporate a recuperator to recover part of the exhaust heat for preheating the combustion air. With recuperation, efficiency is currently in the 20-30 per cent LHV range.
Installed prices of $500-1300/kW for CHP applications are estimated when micro-turbines are mass- produced. The availability of micro-turbines is in the 90-95 per cent range. Maintenance costs are being estimated at 0.006-0.01$/kW.
The application of micro-turbines in industry is limited to light industrial facilities. Since these customers often pay more for electricity than larger end-users, micro-turbines may offer these customers a cost effective alternative to the grid.
(e) Fuel cells
Fuel cells are similar to batteries in that they both produce a direct current (DC) through an electro- mechanical process without the direct combustion of a fuel source. However, whereas a battery delivers power from a finite amount of stored energy, fuel cells can operate indefinitely provided that a fuel source is continuously supplied.
Fuel cells offer the potential for clean, quiet, and very efficient power generation, benefits that have driven their development in the past two decades. Fuel cells offer the ability to operate at electrical efficiencies of 40-60 per cent (LHV) and up to 85 per cent in CHP.
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Although several fuel cell designs are under development, only the phosphoric acid fuel cell (PAFC) is commercially available. The price of the most competitive PAFC is still around $ 3000/kW, which is still too high for most industrial and commercial applications.
3. Summary of CHP characteristics
Table 1 summarizes the characteristics of each CHP technology. The table shows that CHP covers a wide capacity range from 50 kW reciprocating engines to 200 MW gas turbines. Estimated cost per installed kW ranges from $500 to $1500 for all considered technologies.
TABLE 1. COMPARISON OF CHP TECHNOLOGIES
Item Steam turbine Gas turbine Diesel engine Natural gas engine Micro-turbine Fuel cells 25-35% (simple) Electric efficiency 15–35% & 40-60% 30–50% 25-45% 20-30% 40-70% (LHV) (combined)
Size (MW) Any 0.5-200 0.05-5 0.05-5 0.025-0.25 0.2-2
CHP installed cost 800-1000 700-900 800-1500 800-1500 500-1300 > 3000 ($/kW)
Thermal to 2–30 1.2–5 0.8–1.2 0.8–1.2 0.5–1.2 0.5–1.2 electric ratio
O&M Cost 0.004 0.002-0.01 0.005-0.008 0.007-0.015 0.002-0.01 0.003-0.015 ($/kWh)
Availability Near 100% 90-98% 90-95% 92-97% 90-98% >95%
Hours between 10 000- > 50 000 30 000-50 000 25 000-30 000 25 000-60 000 5 000-40 000 overhauls 40 000
Natural gas, Natural gas, Hydrogen, Diesel and Natural gas, Fuels All biogas, propane, biogas, propane, natural gas, residual oil biogas, propane distillate oil distillate oil propane
Start-up time 1 hr- 1 day 10 min – 1 hr 10 sec 10 sec 60 sec 3 hrs-2 days
Nox Emissions 0.8 0.14-1.8 1.4-15 1-13 0.4-2.2 <0.02 (kg/MWh)
LP-HP steam, Hot water, LP Hot water, LP Uses of Heat LP-HP steam, district heating, Direct heat, hot Hot water, steam, district steam, district Recovery district heating hot water, direct water, LP steam LP-HP steam heating heating heat
CHP Output N/A 3,400-12,000 3,400 1,000-5,000 4,000-15,000 500-3,700 (Btu/kWh)
Usable Temp. for 120 -400 250-600 80-500 150-550 200-340 60-370 CHP (0C)
Moderate Moderate Moderate to high Moderate to high Moderate to high Low (no (enclosure (enclosure Noise (requires building (requires building (requires building enclosure supplied with supplied with enclosure) enclosure) enclosure) required) unit) unit)
Source: Onsite Sycom Energy Corporation, “The Market and Technical Potential of CHP in Industrial Sector”, January 2000.
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B. WASTE HEAT RECOVERY (WHR)
1. Background
(a) The concept
Waste heat is thermal energy exhausted to the environment before it has been utilized to its fullest extent. Waste heat recovery is one of the most frequently occurring energy conservation opportunities identified during energy surveys of industrial plants and commercial buildings.
Waste heat recovery opportunities mostly exist in metallurgical industries, glass manufacturing, the fertilizer industry, food processing, oil refineries and the textile industry. However, there exist less opportunities for WHR in commercial buildings and residential sector.
(b) The status and requirements
WHR technologies normally fall under the medium to high cost categories and obviously are second level measures after housekeeping and no cost/low cost measures. That is, one must first improve the efficiency of the thermal equipment as much as practically possible to minimize the waste heat being produced by the equipment. Only then, the potential of WHR should be studied.
Between high temperature waste stream and heat demand in thermal processes, exists a place for WHR equipment. The manufacturers of this equipment are many and they have existed in the market since the beginning of the 20th century, as historically WHR is one of the earliest energy conservation technologies applied in industry. In some cases, WHR is applied for other technological reasons rather than energy conservation, like to increase the temperature level in combustion chambers or to improve the quality of production.
Even when thermal process equipment operates at optimum efficiency, effluents and gases are discharged at temperatures well above ambient. How much of this waste heat could and should be recovered must be justified in terms of cost effectiveness of a best recovery project. Where such projects are possible, WHR results in better energy rise and improvement in energy efficiency. In developing countries, rising energy prices during the last 20 years means that even a plant designed for optimum energy utilization 20 years ago, can offer considerable potential for economic WHR.
Due to the increasing cost of energy, WHR projects offer a considerable potential for reducing energy costs to the industrial sector. Unfortunately, heat recover systems, except for few applications, are quite specific to the process application in question and it is not often that a system can be copied exactly.
Engineers and technicians, therefore, need to be aware of all aspects of a heat recovery project at the design stage in order to select a system best suited for their specific application. For a viable WHR option, certain key criteria must be met:
(a) There must be sufficient heat available at a suitable temperature; (b) A use for the recovered heat must exist; (c) Demand for heat must coincide with the availability of waste heat; (d) The heat source must be at a higher temperature than the system to which heat is to be transferred (only a heat pump can overcome this restriction).
Obviously, meeting this criteria is not difficult for most industries using thermal equipment. The subject of identifying potential sources of waste heat, evaluating the heat content of the waste heat sources, determining possible applications for waste heat, matching waste heat sources to the right applications, selecting WHR configuration, evaluating energy and cost savings, developing a budget cost estimate for implementation and evaluating return on investment, is detailed in references.(18,19)
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2. Classification of WHR systems
The most common WHR options, which have been implemented worldwide and in several ESCWA countries:
Option 1: Regenerative burners (utilization of waste heat for combustion air preheating). Option 2: Recuperations (utilization of the heat of flue gases for combustion air preheating in furnaces). Option 3: Economizer (utilization of waste heat from boiler for preheating of feed water) Option 4: Water treatment (used to improve waste heat recovery). Option 5: Boiler feed water preheating systems from blow-down (utilization of the sensible heat of continuous blow-down from boilers for preheating boilers feed water). Option 6: Boiler air preheaters (utilization of waste heat from boilers for preheating of combustion air). Option 7: Preheating systems for feeding materials (utilization of the flue gases for stock preheating in furnaces and processes). Option 8: Waste heat boilers (utilization of process waste heat for steam production.
Fortunately, WHR options are self-categorized from the economic effectiveness standpoint. The higher the temperature and heat content of the waste stream, the better the opportunity is of having an economically attractive WHR application.
C. COMBUSTION EFFICIENCY IMPROVEMENT: TUNE-UP OF BOILERS WITH PORTABLE GAS ANALYZERS
1. Technical background
Optimum combustion efficiency is achieved when fossil fuel is burned with exactly the right amount of air for complete combustion. In practice, all combustion systems require more than the theoretical amount of air to achieve complete combustion.
Excess air results in energy waste, as air usually enters a combustion system at low temperature and leaves unused at high temperature in the exhaust gases.
Four factors determine the amount of excess air in any combustion system: the fuel burned, the adjustment and operation of the overall combustion system, the air/fuel ratio control system, and the burner design and condition.
In industry, excess air levels in combustion systems are generally higher than necessary and so savings can be realized if excess air is reduced. To achieve this, the four factors given above must be optimized.
In existing systems, fuel type, air/fuel ratio control systems and burners are fixed and improvements are limited to minimizing the excess air. This means the system must be properly adjusted and operated. Proper adjustment or tune-up can only be done with a combustion gas analyzer. A quality burner design will allow firing at minimum excess air levels of 15 per cent (3% as O2). O2 represents per cent oxygen in the flue gas. Excess air is measured by sampling the O2 in the flue gas. The gas analyzer measures flue gas temperature, carbon dioxide and oxygen content.
2. Improvements of boiler performance and savings
Performance can be judged by the CO2 or O2 readings. Table 2 relates these readings to boiler performance. Efficiency can also be determined from the net stack temperature by referring to the figures below.
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TABLE 2. BOILER PERFORMANCE VS. VALUES OF O2 AND CO2 Natural gas Gas oil/diesel (No.2 Oil) Fuel oil (No. 6 Oil) Rating O2 CO2 O2 CO2 O2 CO2 Excellent 3% 10% 4% 12.8% 3.5% 13.8% Good 5% 9% 5.5% 11.5% 4.5% 13% Fair 6% 8.5% 7.5% 10% 5% 12.5% Poor > 7% < 8% > 9% < 9% > 6% < 12%
Substantial savings in investment and running cost can be achieved, if the configuration of the gas analyzer is kept at the level just required for successful tune-up, where the gas analyzer should, at least, measure CO/CO2 as well as oxygen concentrations.
Table 3, gives a rough indication of fuel cost savings which result from efficiency improvements. Boilers are one of the most important energy uses in industry, typically comprising over 25 per cent of total manufacturing energy demand. Typical boiler efficiencies ranges from 70 to 87 per cent depending on fuel type, configuration, and heat recovery capability.
TABLE 3. FUEL COST SAVINGS VS. EFFICIENCY IMPROVEMENTS Savings for every $100 fuel costs by increase of combustion efficiency assuming constant radiation and other unaccounted for losses To an increase combustion efficiency of: From an original efficiency of: 55% 60% 65% 70% 75% 80% 85% 90% 50% $9,10 $16.7 $23.1 $28.6 $33.3 $37.5 $41.2 $44.4 0 0 0 0 0 0 0 55% -- 8.30 15.40 21.50 26.70 31.20 35.30 38.90 60% -- -- 7.70 14.30 20.00 25.00 29.40 33.30 65% ------7.10 13.30 18.80 23.50 27.80 70% ------6.70 12.50 17.60 22.20 75% ------6.30 11.80 16.70 80% ------5.90 11.10 85% ------5.60 Source: United States Environment Protection Agency (website).
Based on the Industrial Assessment Center (IAC), audit conducted in USA on 4,300 industrial facilities, audited from 1990 to 1997, it was found that:
(a) A good boiler tune-up with precision gas analyzer can detect and correct excess air losses, smoking, unburned fuel losses, soothing and high stack temperatures, and result in boiler savings of 2 to 20 per cent;(6)
(b) A 3 per cent decrease in flue gas O2 typically produces a 2 per cent increase in boiler efficiency;(11)
(c) Boiler efficiency measures, including tune-up, with an average savings of 3 per cent of facility energy use and a simple payback period of 9 months were recommended at 20 per cent of the 4,300 audited facilities.
C. ECONOMIC EVALUATION AND ASSUMPTIONS
There are many methods employed for measuring the financial attractiveness of any investment. Energy efficiency investments can, and should be, judged on the same basis as any other company project to increase production or productivity.
In this study, a cluster of Excel spread sheets will be used as a tool for economic evaluation. This evaluation is based on the general methodology for cost-benefit analysis of energy saving technologies investment. It begins with calculating the incremental/marginal cost of each option and its impacts on the energy consumption of the industrial sector and its impact on the GHG emission reduction. The developed
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economic evaluation worksheets are designed based on cash flows rather than accounting profit. Six essentially capital budgeting decision techniques will be used for evaluating the selected energy efficiency options in terms of their financial and economic attractiveness to the companies and consequently to the country. The six techniques used in the worksheet are:
(a) Net Present Value (NPV); (b) Internal Rate of Return (IRR); (c) Analyzed Discounted Cash Flow (ADCF); (d) Simple Payback Period (SPP); (e) Discounted Payback Period (DPP); (f) Cost of Saved Carbon (CSC).
The “Cost of Saved Carbon”, or the marginal cost per unit of CO2 reduction, is defined as follows:
NPV (Cost – benefit). CRF CSC = Annual CO2 saving where, - NPV (Cost – benefit) is the net present value of the cash flow of the incremental costs over the lifetime of the option discounted to the base year (2001) at the specified discount rate.
- CRF is the capital recovery factor defined as:
i (1 + i )n CFR = i (1 + i )n - 1 where, i = discount rate n = number of years
The computation of the cash flow requires to identify the following items:
(a) Escalation Factors: To simplify the analysis, the escalation factors for all cases will be considered as shown in table 18, for the countries under consideration;
(b) Discount Rate: As the inflation will be considered in the computation of the cash flow, the cost of capital to the company will be almost the same as the nominal discount rate of which will be considered as 13.5% for Egypt, 10% for Lebanon and the Syrian Arab Republic;
(c) Depreciation: It will be assumed that the industrial company is subjected to a marginal tax rate of 0%, and zero depreciation will be used in calculations.
TABLE 18. FINANCIAL DATA Value Parameter Egypt Lebanon Syrian Arab Republic Discount rate 13.5% 10% 10% Fuel escalation rate 5% 5% 5% Electricity escalation rate 9% 5% 5% Labor wages annual growth rate 15.3 15.3 15.3 Material price index 5.4 5$ 5% Currency exchange rate 3.85 LE/$ 1500 LL/$ 50 SL/$ Project life 20 years for CHP
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10 years for WHR 12 years for boilers tune-up Depreciation Straight line
B. POTENTIAL REPLICATION OF SELECTED OPTIONS
For evaluating the potential replicability of each of the selected technology options for upgrading energy efficiency in the industrial sector, each selected technology option will be considered as a replicable module in the subsequent process of the estimation of the technology impact on energy efficiency improvement at the targeted sector, though several assumptions have to be considered in order to simplify the estimation. Such as (i) the incremental differences due to the diversity of equipment sizes, under the same module, will be neglected; (ii) the effectiveness of the module regarding the value of saved energy will be extended as an indicator for the diffusion of the selected technology options all-over the industrial sector. It is proposed that the energy saving potential on the sector level “ESP” will be calculated as “ESP/module resulted from the in depth evaluation of the technology option multiplied by N”, which can be calculated as:
N = Es / Em x F1 x F2 x …..x Fi x C, where;
Es = The annual energy consumption in the targeted sector.
Em = The average (over the working life) annual energy saving of the module using the same energy units.
F1, F2, ….., Fi are, respectively, fractions of the annual energy consumption of the targeted output in the sector with respect to Es , energy losses from the considered units, ...etc., depending on the technical characteristics of the technology option considered.
C is a correction factor to consider some engineering limitations and conditions affecting the promotion of the application over the whole targeted output of the option.
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Annex II
A BRIEF ON COMBINED HEAT AND POWER AND WASTE HEAT RECOVERY DEMONSTRATION PROJECTS IN EGYPT
As a result of the intensive energy audit programme in Egyptian industry conducted by OEP and ECEP project, demonstration projects were designed, built and operated in more than 30 sites. The implemented demonstrations covered different energy conservation technologies including the three technologies identified as priority options for ESCWA MCs. The following is a brief of three demonstration projects for CHP and WHR systems that have been implemented during the period (1993-1997) and have been operative since then. The data collected through these projects represent a base for evaluation of other potential projects.
A. THE COMBINED HEAT AND POWER DEMONSTRATION PROJECT AT ABU-ZAABAL FERTILIZERS
Reference: ECEP/TMS Case Studies, Vol. 1, No. 14, September 1996, CD-ROM.
Abu-Zaabal Fertilizers and Chemical Company is a typical chemical industry factory. Sulfur is melted and combusted for the sake of oxidation to produce sulfur dioxide. Combustion heat is used to produce super-heated steam at 61 bar and 4500C. This heat is a residue of the chemical reaction. A CHP, cogeneration project was implemented in 1996, where it is energized by the waste heat recycled from the chemical process to achieve a condensing steam turbine coupled with a combustion air fan.
The following summarizes the projects main features:
(a) The power produced by the CHP system is equivalent to 9500 MWe.hr per year. The simple payback period is 1.6 years; (b) The prime mover used in the CHP unit is a condensed steam turbine of capacity 1.8 Mwe; (c) The steam turbine is used to drive a combustion air fan; (d) The total project cost is US$ 886,858 with a simple payback period of 1.6 years; (e) The amount of electrical energy saved per year for the company is 9,500 MWh.
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B. THE COMBINED HEAT AND POWER PACKAGED DEMONSTRATION UNIT AT ALUMISR COMPANY
Reference: ECEP/TMS Case Studies, Vol. 1, No. 14, September 1996, CD-ROM.
The Egyptian Company for Aluminum Products, ALUMISR, is pioneering the use of packaged cogeneration in medium-sized industries. Early in 1993, in cooperation with the ECEP project, the company completed the commissioning of a system, which simultaneously produces electricity and steam. The installed natural gas fired cogeneration unit enables the company to shut down its existing boiler plant and reduce its electrical demand by up to 525 kW. After start up of the unit, energy costs were expected to be cut by 30%.
The packaged cogeneration system consists of two major components: a natural gas fired reciprocating engine/electrical power generator capable of generating 525 kW and a total recovery package (TRP) which generates process steam for the plant at a 1.2 tons/hr capacity for anodizing paths, thereby eliminating the need for the existing boilers.
The unit is operating almost trouble free since April 1993 and the existing original boiler is now used as a standby. Investment cost is US$540,000 with a simple payback period of 3.5 years.
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C. THE WASTE HEAT RECOVERY DEMONSTRATION PROJECT AT MISR ALUMINUM IN 1997
Reference: ECEP/TMS Case Studies, Vol. 1, No. 14, September 1996, CD-ROM.
Misr Aluminum is one of the largest aluminum producers in the Middle East. Prior to this project, the industrial furnaces produces exhaust gases at 11000C and used unheated (150C) combustion air. In this case, only 30% of the fuel burns is doing productive work. The remaining 70% of the heat input purchased fuel exits out of the flue without doing any work. Also, a considerable portion of energy is lost due to the uncontrolled excess air within the furnace. The specific fuel consumption of the furnace (SFC) was 168.8 litre/ton, which is very high for this type and size of furnace.
Through the implemented project, Self Regeneration Burners (SRB), coupled with an automatic control system installed are used for heat recovery and combustion control. The SRB bet extracts and stores heat, preparatory to having combustion air passing through it during the next firing. Firing and exhaust/storage intervals are very short, no more than 90 seconds. This reduces the wide swing in air preheats, typical of traditional regenerators. The automatic control system enables operators to measure and monitor the furnace conditions continuously and make the necessary changes to optimize the efficiency and effectiveness of the combustion process gases. The project start up and commissioning were completed in June 1997.
The system lowers the exhaust gas temperature to near the dew point (100-1300C), well below the pre- project level of 11000C. This signifies superior fuel efficiency but also allows the use of common inexpensive materials in exhaust fans and ducts. The main performance features of the WHR system are:
(a) Reclamation of waste heat: The use of these burners has resulted in a dramatic net savings of about 40 per cent while the durability of the furnaces life has been doubled;
(b) The new system also improves the environment, reducing annual emissions by 14,400 million ton, including 3240 million ton of carbon dioxide, 200 million ton of carbon monoxide and 20 million ton of nitrogen oxides;
(c) The energy savings were expected to be about 700,000 liters of oil equivalent. Actual savings exceeded one million liters of oil equivalent (926,073 liters of diesel oil) representing fuel saving of 36.84%, exceeding expectations by 40 per cent. The simple payback period is about 2.34 years.
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Annex III
SAMPLES OF THE FINANCIAL EVALUATION OF THE HIGH PRIORITY OPTIONS FOR EFFICIENT USE OF ENERGY IN THE ESCWA INDUSTRIAL SECTOR
INTRODUCTION
This annex presents samples of the financial analysis of the three selected energy efficiency measures in the three selected countries, Egypt, Lebanon and the Syrian Arab Republic.
Section A (8 sheets) presents samples of the financial evaluation of the CHP technology applications. Section B (2 sheets), shows two samples of the financial evaluation of two WHR options, one for Egypt and the other for Lebanon. Section C (2 sheets), presents the evaluation sheets of the boiler tune-up programme in both Egypt and Lebanon.
A. COMBINED HEAT AND POWER
The eight sheets presented in this section include samples of the CHP performance characteristics, cost estimates and cash flow calculations. Financial indicators, such as net present value (NPV), internal rate of return (IRR), saved CO2 and other relevant figures are shown for each option. Sheets 1, 2 and 3 for the case of Egypt, show examples for evaluating a 5 MW, CHP module, of the back pressure steam turbine option. Similarly, sheets 4, 5 and 6 for the case of Lebanon, shows examples with module rated 800 MW, reciprocating engine. The engine, in this case, has to be operated on a dual fuel system, including NG, since NG may be available by 2005 in Lebanese industry. The last two sheets (7 and 8) illustrate the potential viability of CHP systems for a typical plant in the Syrian food industry, specifically “The Syrian Company for Dairy—Damascus”. Sheet 7 shows the performance indicators with the plant’s actual annual consumption figures. It is clear from this sheet that, the application of CHP options in such conditions (very low electricity tariffs and relatively low annual operating hours) is not viable. By adjusting electricity cost from 1.8¢/kWh to 5¢/kWh and increasing the annual operating hours to 8400 hours, sheet 8 shows remarkable improvement in financial indicators, for example, the simple payback period became 3.1 years instead of 62 years, in the first case.
B. WASTE HEAT RECOVERY
Two samples of financial evaluation sheets of the waste heat recovery (WHR) option are presented in this section. The first sheet (9) is a typical example of the WHR option implemented successfully in Egypt in 1996 (see table 20, Chapter IV). Sheet 10 illustrates the anticipated financial indicators, by the implementation of an economizer (WHR option No.3), in the Lebanese industry. It was assumed, in this case, that the capital costs and fuel savings are the same as the similar project in the case of Egypt.
C. TUNE-UP OF BOILERS
Two samples are demonstrated for the application of the boiler tune-up programme. Sheet 11 shows the resulting cost-benefits since 1991 when this programme was implemented. Sheet 12, shows an evaluation summary sheet, in which the major expected financial indicators are estimated, by implementing a similar tune-up programme in Lebanon.
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Annex III (sheet 1)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF EGYPT)
Option 1: Back pressure steam turbine
Module 2: 5000 kW Installed Capacity
PERFORMANCE CHARACTERISTICS: COST ESTIMATES:
Plant Operating Hours : 8760 hr Total Cost of Back Pressure Turbine : 550 US$/kW Fuel Used : Any Cost of new Boiler : 400,000 US$ Availability : 98% O & M (Material Cost) : 0.003 US$/kWh CHP Operating Hours : 8584.8 hr O & M (Labor Cost) : 1.3 US$/hr Loading Ratio : 90% Utility distribution losses : 14% Plant Steam Demand : 40 ton/hr Cost of Electrical Energy : LE 0.1535/kWh Turbine Specific Steam Consumption : Fixed Charge for Electrical Demand : LE 87.6/kW (Turbine efficiency 80%) : 12 kg/kWh Currency Conversion Factor : 3.85 LE/US$ Equipment Life Time : 20 Years Utility Rate of Fuel Consumption : 224 gr.of fuel oil/kWh
RESULTS OF PRELIMINARY FINANCIAL ANALYSIS
Electrical Output Plant Steam Annual Electrical Total Annual O & M Savings Due to Net Annual Savings Total Equipment Cost (kW) Consumption Energy Generated Costs (US$) CHP Generated (US$) (US$) (ton/hr) (MWh) Energy (LE) (Turbine only) 4 500 40 38 632 127 056.24 5 930 012 1 413 206.62 2 750 000 Total Equipment Cost Simple Payback Period Simple Payback Annual Electricity Annual Fuel Annual CO2 Reduction. CO2 Reduced per (US$) (Turbine Only) Period (Turbine + Saved at Utility Saved by Utility With fuel used: MWh Generated (Turbine + new Boiler) (MWh) (ton) Residual fuel oil (ton) (kg/MWh) boiler) 3 150 000 1.95 2.23 44 041 8 654 26 913 611.1
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Annex III (sheet 2)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF EGYPT) Option 1: Back pressure steam turbine
Module 2 (b): 5000 kw installed capacity (with new boiler)
Cash outflows ($) Cash Inflows ($) Net cash Capital cost O & M costs Depreciation Income Total cash Other Total cash flow ($) Year US$ Labor Material Tax outflows Energy savings benefits inflows after tax 0 -3 150 000 -3 150 000 1 -11 160.500 -115 896.000 -157 500 0 -284 556.500 1 540 263.000 0 1 540 263.000 1 255 706.500 2 -12 868.057 -122 154.384 -157 500 0 -292 522.441 1 678 886.670 0 1 678 886.670 1 386 364.230 3 -14 836.869 -128 750.721 -157 500 0 -301 087.590 1 829 986.470 0 1 829 986.470 1 528 898.880 4 -17 106.910 -135 703.260 -157 500 0 -310 310.170 1 994 685.253 0 1 994 685.253 1 684 375.083 5 -19 724.267 -143 031.236 -157 500 0 -320 255.503 2 174 206.925 0 2 174 206.925 1 853 951.422 6 -22 742.080 -150 754.922 -157 500 0 -330 997.003 2 369 885.549 0 2 369 885.549 2 038 888.546 7 -26 221.619 -158 895.688 -157 500 0 -342 617.307 2 583 175.248 0 2 583 175.248 2 240 557.941 8 -30 233.526 -167 476.055 -157 500 0 -355 209.582 2 815 661.020 0 2 815 661.020 2 460 451.439 9 -34 859.256 -176 519.762 -157 500 0 -368 879.018 3 069 070.512 0 3 069 070.512 2 700 191.494 10 -40 192.722 -186 051.830 -157 500 0 -383 744.551 3 345 286.858 0 3 345 286.858 2 961 542.307 11 -46 342.208 -196 098.628 -157 500 0 -399 940.837 3 646 362.676 0 3 646 362.676 3 246 421.839 12 -53 432.566 -206 687.954 -157 500 0 -417 620.520 3 974 535.316 0 3 974 535.316 3 556 914.796 13 -61 607.749 -217 849.104 -157 500 0 -436 956.853 4 332 243.495 0 4 332 243.495 3 895 286.642 14 -71 033.734 -229 612.955 -157 500 0 -458 146.690 4 722 145.409 0 4 722 145.409 4 263 998.720 15 -81 901.896 -242 012.055 -157 500 0 -481 413.951 5 147 138.496 0 5 147 138.496 4 665 724.545 16 -94 432.886 -255 080.706 -157 500 0 -507 013.592 5 610 380.961 0 5 610 380.961 5 103 367.369 17 -108 881.117 -268 855.064 -157 500 0 -535 236.181 6 115 315.247 0 6 115 315.247 5 580 079.066 18 -125 539.928 -283 373.238 -157 500 0 -566 413.166 6 665 693.620 0 6 665 693.620 6 099 280.454 19 -144 747.537 -298 675.392 -157 500 0 -600 922.930 7 265 606.045 0 7 265 606.045 6 664 683.116 20 -166 893.910 -314 803.864 -157 500 0 -639 197.774 7 919 510.589 0 7 919 510.589 7 280 312.815 Total -3 150 000 -1 184 759.338 -3 998 282.818 -3 150 000 0 -8 333 042.156 78 800 039 0 78 800 039 70 466 997.204
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Annex III (sheet 3)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF EGYPT) Option 1: Back pressure steam turbine Module 2 (b): 5000 kw installed capacity (with new boiler) Cash flow Commu.cash F. Present Commu. Capital Annualized Financial Indicators: after tax + after tax + worth Discounted discounted recovery equiv. cash Year depreciation depreciation factor cash flow cash flow factor flow Net Present Value 20 yrs $14,620,801.34 0 -3 150 000 -3 150 000 1.000 -3 150 000 -3 150 000 0.147 -463 050.000 Internal Rate of Return (IRR) 36% 1 1 413 206.500 -1 736 793.500 0.881 1 245 034.927 -1 904 965.074 0.147 183 020.134 Simple Payback Period (yrs) 1.59 2 1 543 864.230 -192 929.271 0.776 1 198 287.204 -706 677.869 0.147 176 148.219 Discounted Payback Period 1.84 3 1 686 398.880 1 493 469.610 0.684 1 153 155.913 446 478.044 0.147 169 513.919 Annualized Equiv. Cash Flow $ 2,149,257.80 4 1 841 875.083 3 335 344.693 0.602 1 109 593.251 1 556 071.295 0.147 163 110.208 Average Annual Saved CO2 (Ton) 26,913 5 2 011 451.422 5 346 796.115 0.531 1 067 552.128 2 623 623.423 0.147 156 930.163 SCI ($/Ton) (Negative) 79.86
6 2 196 388.546 7 543 184.661 0.468 1 026 986.230 3 650 609.653 0.147 150 966.976 7 2 398 057.941 9 941 242.602 0.412 987 850.061 4 638 459.715 0.147 145 213.959 8 2 617 951.439 12 559 194.041 0.363 1 078 432.445 5 716 892.160 0.147 158 529.569 9 2 857 691.494 15 416 885.535 0.320 913 689.255 6 630 581.415 0.147 134 312.321 10 3 119 042.307 18 535 927.842 0.282 878 578.052 7 509 159.467 0.147 129 150.974 11 3 403 921.839 21 939 849.681 0.248 844 723.491 8 353 882.958 0.147 124 174.353 12 3 714 414.796 25 654 264.477 0.219 812 084.650 9 165 967.608 0.147 119 376.444 13 4 052 786.642 29 707 051.119 0.193 780 621.575 9 946 589.183 0.147 114 751.372 14 4 421 498.720 34 128 549.839 0.170 750 295.292 10 696 884.475 0.147 110 293.408 15 4 823 224.545 38 951 774.384 0.149 721 067.808 11 417 952.284 0.147 105 996.968 16 5 260 867.369 44 212 641.753 0.132 692 902.116 12 110 854.400 0.147 101 856.611 17 5 737 579.066 49 950 220.819 0.116 665 762.189 12 776 616.589 0.147 97 867.042 18 6 256 780.454 56 207 001.273 0.102 639 612.979 13 416 229.567 0.147 94 023.108 19 6 822 183.116 63 029 184.389 0.090 614 420.408 14 030 649.975 0.147 90 319.800 20 7 437 812.815 70 466 997.204 0.079 590 151.361 14 620 801.335 0.147 86 752.250 Total 73 616 997.204 1 462 0801.335 2 149 257.796 36% Assumptions: Project Life (yrs) 20 Energy Escalation 9.00% Discount Rate 13.50% Labor Escalation 15.30% Tax Rate 0% Material Escalation 5.40% Currency Egyptian Pounds Depreciation St. Line Exchange Rate: 3.85 LE/$
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Annex III (sheet 4)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF LEBANON)
Option 5: reciprocating engine Module 9: 800 kw installed capacity
PERFORMANCE CHARACTERISTICS: COST ESTIMATES:
Plant Operating Hours : 8500 hr Total Cost of Turbine : 950 US$/kW Fuel Used : dual fuel O & M (Material Cost) : 0.005 US$/kWh Availability : 90% O & M (Labor Cost) : 1.3 US$/hr CHP Operating Hours : 7820 hr Utility distribution losses : 15% Load Factor : 80% Cost of Electrical Energy : US$ 0.08 /kWh Electric Heat Rate (kJ/kWh), HHV : 10,712 Currency Conversion Factor : 3.85 LE/US$ Overall Efficiency : 65% Utility Rate of Fuel Consumption : 270 gr.of fuel oil/kWh Equipment Life Time : 20 Years Fuel Cost : 163 US$/ton
Fuel Heating Value, HHV (Diesel), kJ/kg : 44,633 Electrical generating Efficiency : 33.6% Fuel Input (GJ/hr) : 4.285 Steam Output (GJ/hr) : 1.345 Steam Output/Fuel Input : 31.4% Useful Thermal-to-Electric Ratio : 0.86
RESULTS OF PRELIMINARY FINANCIAL ANALYSIS
Annual electrical Cost of CHP Fuel annual Electrical output Plant thermal-to- energy generated total annual O & M generated Total equipment cost consumption by (kW) electric ratio (MWh) costs (US$) energy (US$) (US$) CHP module (ton) 640 0.8 5 419.7 64 642.5 480 142 760 000 750.726 Annual fuel saved by Annual cost of Net annual savings Simple payback Annual Average annual saved CO2 using HRSG (tons) additional fuel used (US$) period electricity saved (Ton) (US$) at utility (MWh) 959 156 382 174 549.5 4.35 6 233 920
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Annex III (sheet 5)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF LEBANON)
Option 5: reciprocating gas engine Module 9: 800 kw installed capacity
Cash outflows ($) Cash Inflows ($) Net cash Year Capital Cost O & M Costs Cost of additional Income Total cash Energy Other Total cash flow ($) US$ Labour Material Depreciation fuel tax outflows savings benefits inflows after tax 0 -760 000.000 -760 000.000 1 -9 562.500 -55 080.000 -38 000.000 -156 382.000 0 -259 024.500 433 574.000 0 433 574.000 174 549.500 2 -11 025.563 -57 834.000 -38 000.000 -164 201.100 0 -271 060.663 455 252.700 0 455 252.700 184 192.038 3 -12 712.474 -60 725.700 -38 000.000 -172 411.155 0 -283 849.329 478 015.335 0 478 015.335 194 166.006 4 -14 657.482 -63 761.985 -38 000.000 -181 031.713 0 -297 451.180 501 916.102 0 501 916.102 204 464.922 5 -16 900.077 -66 950.084 -38 000.000 -190 083.298 0 -311 933.459 527 011.907 0 527 011.907 215 078.447 6 -19 485.789 -70 297.588 -38 000.000 -199 587.463 0 -327 370.840 553 362.502 0 553 362.502 225 991.662 7 -22 467.114 -73 812.468 -38 000.000 -209 566.836 0 -343 846.419 581 030.627 0 581 030.627 237 184.209 8 -25 904.583 -77 503.091 -38 000.000 -220 045.178 0 -361 452.852 610 082.159 0 610 082.159 248 629.306 9 -29 867.984 -81 378.246 -38 000.000 -231 047.437 0 -380 293.667 640 586.267 0 640 586.267 260 292.600 10 -34 437.785 -85 447.158 -38 000.000 -242 599.809 0 -400 484.752 672 615.580 0 672 615.580 272 130.827 11 -39 706.766 -89 719.516 -38 000.000 -254 729.800 0 -422 156.082 706 246.359 0 706 246.359 284 090.277 12 -45 781.902 -94 205.492 -38 000.000 -267 466.290 0 -445 453.683 741 558.677 0 741 558.677 296 104.994 13 -52 786.533 -98 915.766 -38 000.000 -280 839.604 0 -470 541.903 778 636.611 0 778 636.611 308 094.708 14 -60 862.872 -103 861.555 -38 000.000 -294 881.584 0 -497 606.011 817 568.441 0 817 568.441 319 962.430 15 -70 174.892 -109 054.632 -38 000.000 -309 625.663 0 -526 855.187 858 446.863 0 858 446.863 331 591.676 16 -80 911.650 -114 507.364 -38 000.000 -325 106.947 0 -558 525.961 901 369.206 0 901 369.206 342 843.246 17 -93 291.132 -120 232.732 -38 000.000 -341 362.294 0 -592 886.159 946 437.667 0 946 437.667 353 551.508 18 -107 564.676 -126 244.369 -38 000.000 -358 430.409 0 -630 239.453 993 759.550 0 993 759.550 363 520.097 19 -124 022.071 -132 556.587 -38 000.000 -376 351.929 0 -670 930.587 1 043 447.528 0 1 043 447.528 372 516.940 20 -142 997.448 -139 184.417 -38 000.000 -395 169.525 0 -715 351.390 1,095,619.904 0 1,095,619.904 380 268.514 Total -1 015 121.291 -1 821 272.752 -760 000.000 -5 170 920.035 0 -8 767 314.077 14,336,537.984 0 14,336,537.984 4 809 223.907
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Annex III (sheet 6)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF LEBANON)
Option 5: Reciprocating gas engine
Module 9: 800 kw installed capacity Cash flow Commu.cash F. Present Discounted Commu. Capital Annualized Financial Indicators: after tax + after tax + worth cash discounted recovery equiv. cash Net Present Value 20 yrs 1 648 252.89 Year depreciation depreciation factor flow cash flow factor flow Internal Rate of Return (IRR) 20.03% 0 -760 000.000 -760 000.000 1.000 -760 000.000 -760 000.000 0.11746 -89 269.315 Simple Payback Period (yrs) 3.38 1 212 549.500 -547 450.500 0.9091 193 226.818 -566 773.182 0.11746 22 696.350 Discounted Payback Period 4.27 2 222 192.038 -325 258.463 0.8264 183 629.783 -383 143.399 0.11746 21 569.085 3 232 166.006 -93 092.456 0.7513 174 429.757 -208 713.642 0.11746 20 488.454 Annualized Equiv. Cash Flow $ 193,603.17 4 242 464.922 149 372.466 0.6830 165 606.804 -43 106.838 0.11746 19 452.113 Average Annual Saved CO2 (Ton) 919.7 5 253 078.447 402 450.913 0.6209 157 141.804 114 034.967 0.11746 18 457.817 CSC $/Ton 210.51 6 263 991.662 666 442.575 0.5645 149 016.411 263 051.378 0.11746 17 503.412 7 275 184.209 941 626.784 0.5132 141 213.011 404 264.388 0.11746 16 586.827 8 286 629.306 1 228 256.090 0.4665 133 714.687 537 979.075 0.11746 15 706.077 9 298 292.600 1 526 548.690 0.4241 126 505.181 664 484.256 0.11746 14 859.251 10 310 130.827 1 836 679.518 0.3855 119 568.859 784 053.116 0.11746 14 044.513 11 322 090.277 2 158 769.795 0.3505 112 890.677 896 943.793 0.11746 13 260.097 12 334 104.994 2 492 874.788 0.3186 106 456.147 1 003 399.940 0.11746 12 504.299 13 346 094.708 2 838 969.496 0.2897 100 251.309 1 103 651.249 0.11746 11 775.481 14 357 962.430 3 196 931.926 0.2633 94 262.696 1 197 913.945 0.11746 11 072.061 15 369 591.676 3 566 523.602 0.2394 88 477.309 1 286 391.253 0.11746 10 392.511 16 380 843.246 3 947 366.848 0.2176 82 882.586 1 369 273.840 0.11746 9 735.358 17 391 551.508 4 338 918.356 0.1978 77 466.378 1 446 740.218 0.11746 9 099.172 18 401 520.097 4 740 438.453 0.1799 72 216.919 1 518 957.137 0.11746 8 482.572 19 410 516.940 5 150 955.393 0.1635 67 122.800 1 586 079.937 0.11746 7 884.219 20 418,268.514 5 569 223.907 0.1486 62 172.949 1 648 252.887 0.11746 7 302.811 Total 5 569 223.907 1 648 252.887 193 603.166 Assumptions: Fuel Escalation 5.00% Project Life (yrs) 20 Energy Escalation 5.00% Discount Rate 10.00% Labor Escalation 15.30% Tax Rate 0% Material Escalation 5.00% Currency Lebanese Lire Exchange Rate: 1500 LL/$
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Annex III (sheet 7)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF THE SYRIAN ARAB REPUBLIC)
Plant Name: The Syrian Company for Dairy – Damascus
CHP option: Back Pressure Steam Turbine (With Actual Plant conditions)
CHP size: 800 kw Installed Capacity
PERFORMANCE CHARACTERISTICS: COST ESTIMATES:
Plant Operating Hours : 4200 hr Total Cost of Back Pressure Turbine : 600 US$/kW
Fuel Used : Any Cost of new Boiler : 350,000 US$
Availability : 98% O & M (Material Cost) : 0.003 US$/kWh
CHP Operating Hours : 4116 hr O & M (Labor Cost) : 1.25 US$/hr
Loading Ratio : 40% Utility distribution losses : 16%
Efficiency of the Steam Turbine : 80% Cost of Electrical Energy : SL 0.9 /kWh
Plant Steam Demand : 8 ton/hr Currency Conversion Factor : 50 SL/US$
Electrical Efficiency : 20% Utility Rate of Fuel Consumption : 259 gr.of oil eq./kWh
Thermal to electric ratio : 5 : 1
Equipment Life Time : 20 Years
RESULTS OF PREFEASIBILITY ANALYSIS
Annual electrical Total equipment cost Plant thermal-to- energy generated Total annual O & Savings from CHP Net annual savings (without boiler) Electrical Output (kW) electric ratio (kWh) M costs (US$) generated energy (SL)1 (US$) (US$) 320 5.0 1 317 120 9 096.4 1 119 837 13 300 480 000 Total Equipment Cost Simple Payback Annual Electricity Annual Fuel Annual CO2 Reduction CO2 Reduction per Cost of Saved CO2 (With new boiler) (US$) Period (Turbine + Saved at Utility Saved by Utility With fuel used : Fuel oil MWh (ton/MWh) (US$/ton) Boiler) (kWh) (toe) (ton) 830 000 62.4 1 527 859 441.55 1 412 1.07 -9.42 1 Based on actual consumption of electricity and diesel oil for standby generator.
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Annex III (sheet 8)
FINANCIAL ANALYSIS FOR CHP OPTIONS (CASE OF THE SYRIAN ARAB REPUBLIC)
Plant name: The Syrian Company for Dairy - Damascus CHP option: Back Pressure Steam Turbine (Proposed Viable Conditions Of Operation) CHP size: 800 kW Installed Capacity
PERFORMANCE CHARACTERISTICS: COST ESTIMATES:
Plant Operating Hours : 8400 hr Total Cost of Back Pressure Turbine : 600 US$/kW
Fuel Used : Any Cost of new Boiler : 350,000 US$
Availability : 98% O & M (Material Cost) : 0.003 US$/kWh
CHP Operating Hours : 8232 hr O & M (Labor Cost) : 1.25 US$/hr
Loading Ratio : 90% Utility distribution losses : 16%
Efficiency of the Steam Turbine : 80% Cost of Electrical Energy : 5 ¢ /kWh
Plant Steam Demand : 8 ton/hr Currency Conversion Factor : 50 SL/US$
Electrical Efficiency : 20% Utility Rate of Fuel Consumption : 259 gr.of oil eq./kWh
Thermal to electric ratio : 5:1
Equipment Life Time : 20 Years
RESULTS OF PREFEASIBILITY ANALYSIS
Annual electrical Savings From CHP Total Equipment Cost Plant thermal-to- energy generated Total annual O & Generated Energy Net Annual Savings (Without boiler) Electrical output (kW) electric ratio (kWh) M costs (US$) (US$) (US$) (US$) 320 5.0 5 927 040 28 071 269 352 268 281 480 000 Total Equipment Cost Simple Payback Annual Electricity Annual Fuel Annual CO2 Reduction CO2 Reduction per (With new boiler) (US$) Period (Turbine + Saved at Utility Saved by Utility With fuel used : Fuel MWh (kg/MWh) Boiler) (kWh) (toe) oil (ton) 830 000 3.1 6 875 366 1 781 5 697 961
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Annex III (sheet 9)
FINANCIAL EVALUATION OF WHR OPTIONS (CASE OF EGYPT)
TYPICAL APPLICATION: OPTION 1: REGENERATIVE BURNER FOR W.H.R. COMPANY NAME: MISR ALUMINUM (NAGA HAMADI) DATE OF IMPLEMENTATION: 1996
I. CAPITAL COSTS:
Total Equipment Cost $211 021.69 Cost of Studies, Planning, Engineering and Design $10 000 Total Installation Costs $24 000
TOTAL CAPITAL COSTS $245 021.69 TOTAL ANNUAL MATERIAL COST $16 626.80 TOTAL ANNUAL LABOR COST $2 600
ENERGY SAVINGS:
Net energy savings in Tons of gas oil (grade 2) over the project working life: Note that the incremental energy use for the operation of the new system had been subtracted from the annual fuel savings.
ENERGY SAVINGS CALCULATIONS
Saved fuel Saved energy Year (Ton/Year) (US$) 1 1995/96 780 109 980 2 1996/97 840 118 440 3 1997/98 840 129 100 4 1998/99 840 140 719 5 1999/00 820 149 731 6 2000/01 820 153 340 7 2001/02 800 149 600 8 2002/03 800 149 600 9 2003/04 780 145 860 10 2004/05 780 145 860 Total 8 100 1 392 230
Simple payback period: 21 months Discounted payback period: 8.7 months
Project life-years 10 Cost of saved carbon (CSC) Discount rate 13.50% Annualized Eq. Cash flow (US$) 63 895 Tax rate 0% Average annual saved carbon (tons) 2 600 Escalation-energy 9% CSC ($/ton CO2) 25 Escalation-labor 15.30% Escalation-material 5.40%
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Annex III (sheet 10)
FINANCIAL EVALUATION OF WHR OPTIONS (CASE OF LEBANON)
TYPICAL APPLICATION: OPTION 3: ECONOMIZERS FUEL USED: FUEL OIL
I. CAPITAL COSTS:
Total Equipment Cost $226 000.00 Cost of Studies, Planning, Engineering and Design $10 000 Total Installation Costs $24 000
TOTAL CAPITAL COSTS $260 000.00 TOTAL ANNUAL MATERIAL COST $1 000.00 TOTAL ANNUAL LABOR COST $0
ENERGY SAVINGS
Net energy savings in Tons of residual fuel oil over the project working life:
ENERGY SAVINGS CALCULATIONS
Saved fuel Saved energy Year (Ton/Year) (US$) 1 500 81 500 2 550 89 650 3 550 89 650 4 550 89 650 5 550 89 650 6 500 81 500 7 480 78 240 8 480 78 240 9 450 73 350 10 450 73 350 Total 5 060 824 780
Simple payback period: 3.15 years Discounted payback period: 12.6 months
Project life-years 10 Cost of saved carbon (CSC) Discount rate 10.00% Annualized Eq. Cash flow (US$) -177 294 Tax rate 0% Average annual saved carbon (tons) 1 573 Escalation-energy 5% CSC ($/ton CO2) -112.71 Escalation-labour 15.30% Escalation-material 5.00%
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Annex III (sheet 11-a)
FINANCIAL ANALYSIS FOR GAS ANALYSERS BOILERS TUNE-UP PROGRAMME (CASE OF EGYPT)
(Tune-up programme under implementation)
Cash Outflows ($) Cash inflows ($) Net cash Year Capital cost O & M costs Income Total cash Energy Other Total cash flow ($) US$ Labour Material Depreciation tax outflows savings benefits inflows after tax 0 1992 -134 605 -134 605 0 0 0 -134 605 1 1993 -292 125 -37 500.00 -6 000.00 -11 217 0 -346 842.00 3 501 781.00 0 3 501 781.00 3 154 939.000 2 1994 -323 179 -112 500.00 -12 000.00 -37 774 0 -485 453.00 3 526 269.00 0 3 526 269.00 3 040 816.000 3 1995 -187 500.00 -18 000.00 -70 092 0 -275 592.00 3 575 245.00 0 3 575 245.00 3 299 653.000 4 1996 -216 187.50 -18 972.00 -70 092 0 -305 251.50 3 824 239.00 0 3 824 239.00 3 518 987.500 5 1997 -249 264.19 -19 996.49 -70 092 0 -339 352.68 4 571 308.00 0 4 571 308.00 4 231 955.325 6 1998 -287 401.61 -21 076.30 -70 092 0 -378 569.91 4 982 726.00 0 4 982 726.00 4 604 156.093 7 1999 -331 374.05 -22 214.42 -70 092 0 -423 680.47 5 431 171.00 0 5 431 171.00 5 007 490.527 8 2000 -382 074.28 -23 414.00 -70 092 0 -475 580.28 10 976 581.00 0 10 976 581.00 10 501 000.718 9 2001 -440 531.65 -24 678.35 -70 092 0 -535 302.00 10 976 581.00 0 10 976 581.00 10 441 278.997 10 2002 -507 932.99 -26 010.98 -70 092 0 -604 035.98 10 976 581.00 0 10 976 581.00 10 372 545.024 11 2.003 -585 646.74 -27 415.58 -70 092 0 -683 154.32 10 976 581.00 0 10 976 581.00 10 293 426.683 12 2004 -675 250.69 -28 896.02 -70 092 0 -774 238.71 10 976 581.00 0 10 976 581.00 10 202 342.290 Total -749,909 -4 013 163.71 -248 674.13 -749 911 0 -5 761 657.84 84 295 644.00 0 84 295 644.00 78 533 986.157
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Annex III (sheet 11-b)
FINANCIAL ANALYSIS FOR COMBUSTION IMPROVEMENT OPTIONS (CASE OF EGYPT)
(Tune-up program under implementation)
Cash flow Commu. cash F. Present Discounted Commu. Capital annualized Financial Indicators: after tax + after tax + worth cash discounted recovery equiv. cash Year depreciation depreciation factor flow cash flow factor flow Net Present Value 12 yrs $31,545,754.34 0 -134 605.00 -134 605.00 1.000 -134 605.00 -134605.00 0.1728 -23 259.74 Internal Rate of Return (IRR) 2058% 1 3 166 156.00 3 031 551.00 0.881 2 789 383.44 2654778.44 0.1728 482 005.46 Simple Payback Period (days) 40 2 3 078 590.00 6 110 141.00 0.776 2 389 481.49 5044259.93 0.1728 412 902.40 Discounted Payback Period (days) 45 3 3 369 745.00 9 479 886.00 0.684 2 304 224.36 7348484.28 0.1728 398 169.97 4 3 589 079.50 13 068 965.50 0.602 2 162 154.44 9510638.73 0.1728 373 620.29 Annualized Equiv. Cash Flow $ 5,451,106.35
5 4 302 047.32 17 371 012.82 0.531 2 283 256.62 11793895.35 0.1728 394 546.74 Average Annual Saved CO2 (Ton) 231,909 6 4 674 248.09 22 045 260.92 0.468 2 185 582.53 13979477.87 0.1728 377 668.66 SCI $/Ton (Negative) 23.51 7 5 077 582.53 27 122 843.45 0.412 2 091 646.80 16071124.67 0.1728 361 436.57 8 10 571 092.72 37 693 936.16 0.363 4 354 629.81 20425754.48 0.1728 752 480.03 9 10 511 371.00 48 205 307.16 0.320 3 360 799.01 23786553.48 0.1728 580 746.07 10 10 442 637.02 58 647 944.18 0.282 2 941 502.80 26728056.29 0.1728 508 291.68 11 10 363 518.68 69 011 462.87 0.248 2 571 829.82 29299886.11 0.1728 444 412.19 12 10 272 434.29 79 283 897.16 0.219 2 245 868.24 31545754.34 0.1728 388 086.03 Total 79 283 897.16 31 545 754.34 5 451 106.35 2058% Assumptions: Project Life (yrs) 20 Energy Escalation 9.00% Discount Rate 13.50% Labor Escalation 15.30% Tax Rate 0% Material Escalation 5.40% Currency Egyptian Pounds Depreciation St. Line Exchange Rate: 3.85 LE/$
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Annex III (sheet 12)
EVALUATION SHEET (CASE OF LEBANON)
Technical Application: TUNE-UP OF BOILERS
Project Name: GAS ANALYZERS PROJECT
Total Capital Costs: ($78 000) Annual Material Costs: ($3 000) Annual Labor Costs: ($15 000) Energy Savings (T.O.E./year): 5 920 Total Cost of Saved Fuel: $ 709 050
Financial Indicators:
Net Present Value (12 years) $1 255 699 Internal Rate of Return (IRR) 1 424% Payback Period (days) 32
Saved Carbon Index (SCI):
Annualized Discounted Cash Flow $1 255 699
Average Annual Saved CO2 (TON) 18 940 SCI* $/TON 66.30
Where: Project Life (years) 12 Discount Rate 10.0% Tax Rate 0% Energy Escalation 5.0% Labor Escalation 15.3% Material Escalation 5.0% Depreciation Straight-Line
* SCI = Annualized Discounted cash Flow / Average Annual Saved CO2.
111