REQUIREMENTS FOR RESOURCE NETWORKS COMPARED TO THE STATE OF THE ART Deliverable nº: D4.2 WP4, Task 4.2 October, 2015 (M24)

EC-GA Number: 608977 FoF.NMP.2013-1 Improved use of renewable resources at factory level

D4.2: Requirements for Resource Networks compared to the state of the art 2/127

Work Package: WP4 Type of document: Deliverable Diss. Level: PU1

Date: 03/11/2015

Grant Agreement No 608977

Partners: IWU, CARTIF, AENOR, JER, DMU, IKERLAN

Responsible: IWU D4.2. Requirements for Resource Title: Networks compared to the state of the Version: 1.0 Page: 2 / 127 art

Deliverable D4.2 Requirements for Resource Networks compared to the state of the art

DUE DELIVERY DATE: M24

ACTUAL DELIVERY DATE: M25

1 PU = Public PP = Restricted to other programme participants (including the Commission Services). RE = Restricted to a group specified by the consortium (including the Commission Services). CO = Confidential, only for members of the consortium (including the Commission Services). REEMAIN

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Document History

Vers. Issue Date Content and changes Author

0.1 30/07/2015 First version (Introduction) Johannes Stoldt

0.2 15/09/2015 Version for 1st status telcon; Johannes Stoldt Integration IKERLAN contrib. (section 3.2)

0.3 16/09/2015 Integration of JER contrib. (section Johannes Stoldt 3.1)

0.4 27/09/2015 Integration of CARTIF (sections 1.2, Johannes Stoldt 4.3 & 5.2) and updated AENOR contrib.; final sections 4.3 & 3.3 added

0.5 23/10/2015 Final sections 4.2 & 5.1 added Johannes Stoldt

0.6 26/10/2015 Final sections 4.1, 6 & 7 added Johannes Stoldt

0.7 27/10/2015 Formatting of headings, references, Johannes Stoldt tables and captions; added introductory paragraphs; version for review

0.8 28/10/2015 Executive summary; summary; Johannes Stoldt partially added missing references; removed level 5 headings; added missing section 4.2.1.5

0.9 02/11/2015 Integrated reviewer suggestions Johannes Stoldt

1.0 30/10/2015 Updated directories (TOC, Figures, Johannes Stoldt Tables, Acronyms), Integrated further reviewer suggestions

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Document Authors

Partners Contributors

IWU Johannes Stoldt, Enrico Franz, Corina Melzer, Marian Süße

CARTIF Francisco Morentin, Freddy Velez, Luis A. Bujedo, Alberto Moral

AENOR Rafael Postigo Sierra

JER Uli Jakob, Johannes Steinbeißer

IKERLAN Inigo Gandiaga

Document Approvers

Partners Approvers

CARTIF Anibal Reñones

DMU Rick Greenough

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Executive Summary

The primary aim of work package 4 is the development of methods supporting the concept of “Energy Efficiency 2.0”. This is a term coined for an approach which goes beyond the current effort to energy efficiency: introduction of technically efficient equipment, reduction of energy waste and mitigation of environmental pollution according to legislative requirements. “Energy Efficiency 2.0” is meant for companies which take a proactive approach in their management towards ecology and sustainability in general. A special concern in the matter is the integration of Sources (RES) immediately in the production environment of manufacturing companies. For this purpose, a Resource Networks Methodology (RNM) is developed which is aimed to provide an approach which integrates all the different resources (as in requirements for a production operation) into factory planning and control methods. This deliverable details the theoretical background for the RNM and details the exact need for action as well as the requirements for development of the methodology. It discusses the motivation behind the push towards “Energy Efficiency 2.0” from a point of view of the European legislative, European standardisation bodies and the European markets. As RES and energy storages will be a major enabler or even requirement of the RNM, the available technologies and there characteristics are discussed. Furthermore, the state of the art on smart grids and micro grids is presented to give some background on other approaches which are being researched. The deliverable further summarises the state of the art in both science and practice on energy efficiency in production as one of the aspects to be integrated in the RNM. As flexibilities and volatilities are a prime concern of the RNM, a review of these in production systems has been made and is complemented with an overview of other projects considering the issue in relation with the integration of RES. Lastly, the need for action and the requirements for the further developments in Tasks 4.2 and 4.3 of the REEMAIN project are introduced. One example for such requirements is the placement of the RNM in the production system planning process (see Figure 1).

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FIGURE 1: INDICATION OF THE RESOURCE NETWORKS PLANNING METHOD IN THE FACTORY PLANNING PROCESS.

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TABLE OF CONTENTS

Executive Summary ...... 5 1. Introduction ...... 9 2. Motivation ...... 11 2.1 EUROPEAN LAWS AND STANDARDS ...... 11 2.1.1 EUROPEAN LAWS/INICIATIVES ...... 11 2.1.2 STANDARDS...... 14 2.2 CHANGES IN EUROPE’S ENERGY MARKETS ...... 15 2.2.1 EVOLUTION OF THE ENERGY MARKETS (ELECTRICITY AND FUELS) ...... 16 2.2.2 EXAMPLES ...... 32 3. Renewable Energy Sources – Importance for the Future Energy System ...... 38 3.1 RENEWABLE ENERGY SOURCES ...... 38 3.1.1 DEFINITION AND APPROACHES ...... 38 3.1.2 TECHNOLOGIES ...... 39 3.1.3 SOLAR PROCESS HEAT ...... 39 3.1.4 APPLICATION EXAMPLES ...... 45 3.1.5 MARKET PENETRATION ...... 48 3.2 STORAGE TECHNOLOGIES ...... 49 3.2.1 DEFINITION AND APPROACHES ...... 49 3.2.2 ELECTROCHEMICAL STORAGE TECHNOLOGIES ...... 51 3.2.3 APPLICATION EXAMPLES ...... 54 3.2.4 MARKET PENETRATION ...... 57 3.3 MANAGEMENT APPROACHES ...... 58 3.3.1 SMART GRIDS ...... 58 3.3.2 MICRO GRIDS ...... 62 3.3.3 PROJECTS / EXAMPLES ...... 64 3.3.4 RESTRICTION ...... 70 4. Energy Efficiency in Production ...... 72 4.1 MODEL OF SAVING APPROACHES IN FACTORIES ...... 72 4.2 FACTORY PLANNING ...... 74 4.2.1 GENERAL FACTORY PLANNING PROCESS ...... 74 4.2.2 CONSIDERATION OF ENERGETIC ASPECTS ...... 77 4.3 FACTORY OPERATION ...... 79 4.3.1 (SHORT-TERM-) MACHINE STEERING AND CONTROL ...... 81 4.3.2 SCHEDULING ...... 84 4.3.3 SOFTWARE/SYSTEMS ...... 84 4.3.4 ALGORITHMS/METHODS ...... 85 4.3.5 DEFICITS AND POTENTIALS ...... 86 4.4 STATE OF THE ART IN PRACTICE ...... 87 5. Flexibilities in Factories ...... 94 5.1 OVERVIEW OF OF FLEXIBILITIES AND VOLATILITIES ...... 94 5.1.1 HIERARCHICAL ORGANISATION...... 94 5.1.2 PERIPHERAL AREAS ...... 96 5.1.3 FUNCTIONAL ORGNISATION ...... 98 5.2 CURRENT EUROPEAN PROJECTS...... 98 6. Need for Action ...... 104 7. Definition of Requirements for Modelling and Operating Resource Networks ...... 105 7.1 DEFINITION AND FUNCTIONALITY OF RESOURCE NETWORKS ...... 105 7.2 APPLICATION AREAS OF THE PLANNING METHOD ...... 106 7.2.1 PLANNING CASES ...... 106 7.2.2 PLANNING LEVEL WITHIN FACTORY PLANNING ...... 107 7.2.3 PHASES WITHIN THE PLANNING PROCESS ...... 107

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7.2.4 PLANNING METHDOLOGY WITHIN THE FACTORY PLANNING PROCESS ...... 108 7.3 RESULTS AND FUNCTIONALITY FOR THE METHODOLOGY ...... 109 7.3.1 RESULT OF THE IMPLEMENTED PLANNING METHOD ...... 109 7.3.2 FUNCTIONS OF THE RESOURCE NETWORKS PLANNING METHOD (RNPM) ...... 110 7.4 OPERATION OF RESOURCE NETWORKS...... 111 8. Summary ...... 112 Acronyms ...... 113 References ...... 115 List of Figures ...... 124 List of Tables ...... 127

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1. Introduction

The work in the REEMAIN work package 4 is directed towards the development of a scientific and technical methodology which ensures the seamless implementation of both energy efficiency measures and advanced energy technologies in the production environment. This effort will result in the so called Resource Networks Methodology (RNM) and this deliverable is aimed at providing the background for and defining the requirements for the methodology. The term RNM covers a variety of methods and approaches which all have the common aim and use the same basic approach to assist the immediate use of renewable energy sources (RES) in production systems and improve their general eco-efficiency. A fundamental assumption is that most of the actions undertaken by production companies regarding their environmental impact focus either on protecting their business by abiding the law and changing according to economic conditions (a defensive environmental strategy) or on tentatively changing their processes to reflect some environmental awareness without questioning their core business and revenue logic (an accommodative environmental strategy) (Schaltegger, Freund & Hansen, 2011). This is what could be labelled ‘traditional energy efficiency’ or ‘Energy Efficiency 1.0’. The RNM is suggested to support a proactive environmental strategy (Schaltegger, Freund & Hansen, 2011) which redefines the “core business logic in order to contribute to sustainable development of the economy and society.” Hence, it could be labelled as ‘Energy Efficiency 2.0’. Simply put, the RNM (Stoldt, Franz & Schlegel, 2014) provides a variety of methods for planning and controlling production systems by breaking it down into multiple overlapping and interlinked networks. These are self-reliant in the sense that they include any source, converter, infrastructure or sink, which is required to make a defined production area operate efficiently. Within individual networks, volatilities are identified and exploited as well as possible to increase the efficiency of the operation without endangering the planned production output. The planning methods are aimed at designing the scope of Resource Networks (RN) in a production system and to choose as well as size the best available energy sources, storages and infrastructure equipment, within technical, environmental, social and business constraints. Methods aimed at controlling RN, on the other hand, are focussed on exploiting volatilities and flexibilities in the energy supply and demand, to increase the efficiency in use within the same constraints as before. This deliverable provides the background for deciding on the requirements for the planning methods, in particular. For this purpose, the state of the art in key topics areas is reviewed to provide a wide knowledge base for this. The analysis of the state of the art emphasises the sectors and factories of the three REEMAIN demo sites.

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The deliverable starts with some insights into the motivation behind the RNM and ‘Energy Efficiency 2.0’. Chapter 3 gives background information on RES and technologies, which could be used when applying the RNM planning methods, as well as the research on smart grids and micro grids, which helped to inform the derivation of the RN concept. The scope of chapter 4 is the current practice of ‘Energy Efficiency 1.0’ in both practice and theory, looking at a general model for energy savings in factories and approaches for increasing the eco-efficiency during production planning and control. In order to define requirements, concerning the use of flexibilities and volatilities, chapter 5 investigates potentials as well as state of the art approaches for this. Summarising the previous chapters, chapter 6 explains the need for action concerning the development of the RNM based on the state of the art. Chapter 7 then states the requirements for the planning methods and procedures.

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2. Motivation

The two major motivators for the ‘Energy Efficiency 2.0’ and the Resource Networks Methodology (RNM) are legislation and market forces. The following sections give an overview of laws, standards and market developments that were essential in the conception of the RNM.

2.1 EUROPEAN LAWS AND STANDARDS The aim of this clause of D4.2 is to show how both the law and the standards push and guide companies in general to implementation energy efficiency measures and technologies but also in the production environment. From the basis summarised here, REEMAIN project will contribute to go further than the mentioned basis.

2.1.1 EUROPEAN LAWS/INICIATIVES More and more European laws and/or public initiatives stress the importance of energy efficiency in organizations in order to obtain not only environmental benefits but financial/economical profits and socially responsible behaviour. The following paragraphs describe three of these European initiatives which are linked under the same axis of efficiency:

2.1.1.1 ENERGY EFFICIENCY DIRECTIVE The 2012 Energy Efficiency Directive (Directive 2012/27/EU) establishes a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. Under the Directive, all EU countries are required to use energy more efficiently at all stages of the energy chain from its production to its final consumption. Moreover, EU countries were required to transpose the Directive's provisions into their national laws by 5 June 2014. This has been totally implemented with varying success and/or fidelity depending on the country. According to the Directive (Article 8), among of other measures for energy consumers, it is stated that each Member State should ensure that large companies (with more than 250 employees) undergo energy audits carried out by qualified and/or accredited experts or implemented and supervised by independent authorities and then on a regular basis (at least once every four years). In fact, it is mentioned that a way to comply with the directive’s requirements is by implementing an Energy Management System (in line with the European/International Standard EN ISO 50001) or an Environmental Management System (in line with the European/International Standard EN ISO 14001). The Directive states that if a company is implementing an Energy or Environmental Management System, which has been "certified by an independent body according to the relevant European or International Standards", and which also includes an energy audit that respects the

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National measures should undergo to ensure major energy savings for consumers and industry alike. For example:  empowering energy consumers to better manage consumption  introducing national incentives for SMEs to undergo energy audits  in the case of large companies, auditing their energy consumption to help them identify ways to reduce it  monitoring efficiency levels in new energy generation capacities  setting national energy efficiency targets

To reach the EU's 20% energy efficiency target by 2020, individual EU countries have set their own indicative national energy efficiency targets. Depending on country preferences, these targets can be based on primary or final energy consumption, primary or final energy savings, or energy intensity.

Table 1 shows the total target for the EU as well as Spain’s an Italy’s targets, as these are two of the countries where REEMAIN improvements are going to be proved. TABLE 1: ENERGY EFFICIENCY TARGETS FOR TWO REEMAIN COUNTRIES AND THE EU28. EU Member State Absolute level of energy consumption in 2020 [Mtoe] as notified from Member States in 2013, in the NEEAP 2014 or in a separate notification to the European Commission in 2015 Primary energy consumption Final energy consumption Italy 158.0 124.0 Spain 119.8 80.1 EU28 Target 2020 1483 1086.0

EU countries may also implement alternative policy measures which reduce final energy consumption. These measures could include: energy or CO2 taxes, financial incentives that lead to an increased use of energy efficient technology, regulations or voluntary agreements that lead to the increased use of energy efficient technology, energy labelling schemes beyond those that are already mandatory under EU law, training and education, including energy advisory programs.

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2.1.1.2 ECO-MANAGEMENT AND AUDIT SCHEME (EMAS) The EU Eco-Management and Audit Scheme (EMAS) is a management instrument developed by the European Commission for organizations to evaluate, report, and improve their environmental performance. It is open to every type of organization which wants to improve its environmental performance. More than 3,300 organizations and approximately 10,500 sites were EMAS registered in 2015 (EMAS, 2015). In consequence, EMAS is a premium environmental management tool for organizations in order to achieve a proactive approach to environmental challenges look for ways to continually improve their environmental performance This European scheme is voluntary and available for any kind of organization and its aim is to improve an organisation’s environmental and financial performance and communicate its environmental achievements to stakeholders and society in general. The scheme is continuously updated and reviewed with the aim to keep a more reliable and credible scheme obtaining a better visibility and strengthen its outreach

2.1.1.3 CIRCULAR ECONOMY The European Commission is working on a circular economy strategy to transform Europe into a more competitive and resource-efficient economy, addressing a range of economic sectors, including waste (European Commission, 2015). This strategic view takes into consideration that the sources of future economic growth where more products are made out of secondary raw materials, waste is considered a valuable resource, and where innovative business models retain physical goods longer and more efficiently in productive use. A ‘circular economy’ aims to maintain the value of the materials and energy used in products in the value chain for the optimal duration, thus minimising waste and resource use. By preventing losses of value from materials flows, it creates economic opportunities and competitive advantages on a sustainable basis. Moving towards this direction can promote competitiveness and innovation, a high level of protection for humans and the environment, and bring major economic benefits, thus contributing to job creation and growth. A circular economy fosters sustainable development in which environmental, economic and social dimensions go hand in hand. It can also provide consumers with longer-lasting and innovative products that save them money and improve their quality of life. A successful transition towards a circular economy requires action at all stages in the value chain: from the extraction and transportation of raw materials, through material and product design, production, distribution and consumption of goods, repair, remanufacturing and reuse schemes, to waste management and recycling.

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At his moment Inputs from stakeholders and the public are being abtained for preparation of this strategy. In particular to help the Commission to pinpoint and define the main barriers to the development of a more circular economy and to gather views regarding which measures could be taken at EU level to overcome such barriers.

2.1.2 STANDARDS Aside of the legislative efforts, companies, academics and politicians support the development of standards concerning energy and eco efficiency. This is detailed below.

2.1.2.1 INTRODUCTION The benefits of standards for European industry are extensive. Standards help manufacturers reduce costs, anticipate technical requirements, and increase productive and innovative efficiency. The European Commission recognizes the positive effects of standards. Additionally, standards bring easier introduction of innovative products by ensuring interoperability between new and existing products, services, and processes. These are examples of such standards in the fields of eco-design, smart grids, energy efficiency of buildings, nanotechnologies, etc. In a Research, Development & Innovation (RDI) context, standards help to bridge the gap between research and marketable products or services. The development of standards can make important contributions to the development of sustainable industrial policy, unlock the potential of innovative markets, and strengthen the position of the EU economy. It brings a solid foundation to build and disseminate innovative technologies and enhance business practices. Finally, standardisation and the defence of intellectual property rights (IPRs) encourage innovation and facilitate the dissemination of technology. The European Commission supports the view that standards should be open for access and implementation by everyone. Therefore, IPRs relevant to the standard should be taken into consideration in the standardisation process. This would help ensure a balance between the interests of the users of standards and the rights of owners of intellectual property.

2.1.2.2 STANDARDS FOR ENERGY EFFICIENCY In the European context, ISO 50001, Energy management systems -- Requirements with guidance for use, has been adopted as identical standard EN ISO 50001 being a reference for large organizations in their schemes for managing the energy which they consume. In addition, as is shown above, its implementation helps them to comply with requirements established in the EED. In the same way, the implementation of EN ISO 14001 is another way to demonstrate the conformance of an enterprise with the Directive’s requirements. In both cases an energy audit should be done.

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In order to help companies in the implementation of these energy audits and also for complying with requirements of the EU Energy Efficiency Directive, the EN 16247 series of standards has been developed by the European Committee for Standardization (CEN).

The first standard in the series (EN 16247-1), specifying the general requirements, common methodology and deliverables for energy audits was adopted on 2012. Later on, 2014, three further standards, addressing the specific requirements, methodology and deliverables of energy audits in relation to buildings (EN 16247-2), processes (EN 16247-3) and transport (EN 16247-4), were adopted by CEN. Finally, the fifth and final standard in the series (EN 16247-5), which relates to the competences of energy auditors and will support the development of national qualification schemes for energy auditors, was approved by in March 2015.

As successful cases of implementation two examples of implementation of EN ISO 50001 has been reported when it was launched. At first a plant of the chemical sector was decreased by 17.9 % over two years. At the same time, ISO 50001 principles were also successfully implemented by a small business. In two years, it achieved energy savings of 14.9 %, worth USD 250 000 a year with zero capital investment.

At International level, in the International Standardization Organization (ISO) environment, a related with or supporting ISO 50001, a set of standards has also been adopted. They are the following:  ISO 50002:2014, Energy audits -- Requirements with guidance for use  ISO 50003:2014, Energy management systems -- Requirements for bodies providing audit and certification of energy management systems  ISO 50004:2014, Energy management systems -- Guidance for the implementation, maintenance and improvement of an energy management system  ISO 50006:2014, Energy management systems -- Measuring energy performance using energy baselines (EnB) and energy performance indicators (EnPI) -- General principles and guidance  ISO 50015:2014 Energy management systems -- Measurement and verification of energy performance of organizations -- General principles and guidance

2.2 CHANGES IN EUROPE’S ENERGY MARKETS European energy markets continue to see a significant push towards energy efficiency and renewable energy generation. The following sections discuss the associated changes in the energy markets and in production as well as utility companies.

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2.2.1 EVOLUTION OF THE ENERGY MARKETS (ELECTRICITY AND FUELS) There are several aspects that might increase or reduce the speed of the integration of renewable energy into industrial processes. One of the stronger influences is likely to be the impact on energy prices. The first issue to be analyzed will be world energy production as well its main final usages and transportation losses related aspects. This report will then analyse the global evolution of the main fossil fuel energy prices, oil and gas. The electricity market will also be considered in the European scenario. According to the International Energy Agency2 the global world energy production was 14.897 MTOE in 2012. Table 2 shows the split distribution into its main components. • Refinery feedstocks: This definition covers those finished products imported for refinery intake and those returned from the petrochemical industry to the refining industry. • If electricity is "wheeled" or transited through a country, the amount is shown as both an import and an export. TABLE 2: 2012 WORLD ENERGY PRODUCTIONS (SOURCE: INTERNATIONAL ENERGY AGENCY, 2015).

Production Mtoe TWh % Oil Production 4.205 48.904 28,23% Oil imported 2.292 26.656 15,39% Oil products imported 1.137 13.223 7,63% Coal Production 3.967 46.136 26,63% Coal imported 779 9.060 5,23% Bio/waste production 1.341 15.596 9,00% Bio/waste imported 16 186 0,11% Electricity imported 59 686 0,40% Heat production 1 12 0,01% Geoth production 67 779 0,45% Other production 75 872 0,50% Hydro production 316 3.675 2,12% Nuclear production 642 7.466 4,31% 14.897 173.252

It is important to remark that only 8.980 Mtoe of the global energy production is resourceful, the remaining 5.917 Mtoe are wasted in the production and transportation processes.

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TABLE 3: WORLD ENERGY DEMAND: MAIN SECTORS SPLIT (SOURCE: INTERNATIONAL ENERGY AGENCY, 2015).

Sectors Mtoe TWh % Industry 2.542 29.563 28,31% Transport 2.507 29.156 27,92% Other 3.122 36.309 34,77% Non-Energy uses 809 9.409 9,01% 8.980 104.437

Focusing on the useful energy, industrial sector is responsible of 28% of the total value and transport requires another 27%. This picture reinforces the importance of projects for reduction of the energy consumption in the industry. Regarding the origins of this energy production, next table shows how fossil fuels (oil, coal and natural gas) produce more than 65% of the global energy production. TABLE 4: 2012 WORLD ENERGY PRODUCTIONS: ORIGIN SPLIT (SOURCE: INTERNATIONAL ENERGY AGENCY, 2015).

Origin Mtoe TWh % Oil 19 221 0,21% Oil products 3.635 42.275 40,48% Coal 908 10.560 10,11% Natural gas 1.366 15.887 15,21% Biofuels and waste 1.111 12.921 12,37% Geothermal 8 93 0,09% Solar/tide/wind 20 233 0,22% Electricity 1.626 18.910 18,11% Heat 287 3.338 3,20% 8.980 104.437

The main origin of energy corresponds to oil. Global economic development has been based on oil as all the petroleum derivatives have been intensively used in transport, heating and electricity generation. Figure 2 shows the evolution of the West Texas Intermediate (WTI) crude oil barrel price in S per barrel (West Texas Intermediate equivalent to 142 litres) from 1986 to nowadays.

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FIGURE 2: 1986 TO 2015 OIL PRICE EVOLUTION (SOURCE: EIA, 2015). As can be seen, oil prices are highly volatile, but there is a clearly increasing price trend. However, today (2015), oil prices have decreased significantly due to a mismatch between production and demand. It is expected, that in the future oil prices will increase again following the established trend. Along 2007 and first semester of 2008 oil prices suffered a huge increase due to political tensions in the Middle East and Libya until reaching historical maximum of 144 $ per barrel. During second semester of 2008 prices sharply fell until a minimum value of 46 $. This decrease was due to two causes: word economic crisis had decreased the oil demand and the USA Administration announced the future possibility of extracting oil from the US. Actual 2015 oil prices fall is not due to a reduction in the demand but an increase in the production due to increase in the US oil production. Natural gas is a key element for the industrial sector. It is used in industrial thermal processes, surface heating, ovens and even industrial CHP systems. It requires big economic investments in storage and distribution infrastructures like gas pipelines, surface and underground reservoirs and pressure transformation stations. But once this infrastructure is available, natural gas provides a cheaper energy than petroleum derivatives for its direct use in industrial processes. Even thermal electricity generation based on fuel-oil generators are progressively replaced by natural gas based (classical or Combined Cycle Turbines) thermal electricity generation plants. However, for the transport sector, natural gas has not any substantial presence due to the fact that internal combustion engines work mainly with petroleum derivatives. There are only two main indicators of oil prices: West Texas barrel price and the Brent barrel price. Both indicators are almost equivalent in order to study long term prices evolution. However, in the natural gas case, global natural gas prices vary considerably from one region to another. As with other commodity prices, gas prices are mainly driven by supply and demand fundamentals. However, natural gas prices may also be linked to the price of crude oil and/or petroleum products, especially

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FIGURE 3: INTERNATIONAL NATURAL GAS PRICES EVOLUTION (SOURCE: EIA, 2011). Focusing on the European market, the 2004-2015 evolution of the end user natural gas prices show a clear rising trend for the both user profiles: medium size household (Figure 4) and medium size industries (Figure 5). In both graphs, prices are showed in euros per Giga-Joule.

FIGURE 4: MEDIUM SIZE HOUSEHOLD GAS PRICES EVOLUTION 2004-2015 (SOURCE: EUROSTAT, 2015).

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FIGURE 5: MEDIUM SIZE INDUSTRIES GAS PRICES EVOLUTION 2004-2015 (SOURCE: EUROSTAT, 2015). On the other hand, representing average prices sorted in decreasing order can help see the big differences in price from one country to another.

FIGURE 6: MEDIUM SIZE HOUSEHOLD 2004-2015 AVERAGE GAS PRICES COMPARISON (SOURCE: EUROSTAT, 2015).

FIGURE 7: MEDIUM SIZE INDUSTRIES 2004-2015 AVERAGE GAS PRICES COMPARISON (SOURCE: EUROSTAT, 2015).

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Finally, Figure 8 shows the direct quotient of domestic gas prices versus industrial gas prices for all the European countries. The quotient is a dimensionless number. The bigger this number is the more difference in both prices will occur (domestic and industrial). Industrial prices are always lower than domestic ones, but big differences might suggest some kind of subsidy for industry. This situation might become a barrier to the introduction of renewable energies in the industrial sector while the same renewable energies are widely used in the domestic scenario.

FIGURE 8: DOMESTIC GAS PRICES VERSUS INDUSTRIAL GAS PRICES (AVERAGES 2004-2015) (SOURCE: EUROSTAT, 2015).

As can be seen in Figure 8, the countries with the most unbalanced situation are Denmark and Sweden. Italy and Spain are also above the average, which means industries in these countries are paying a significantly lower price for their gas than domestic consumers. On the other hand, Turkey has a value much lower than the average, which means there are not such big differences between industrial and domestic gas prices. Forecasting future values of global energy demand, the International Energy Agency (EIA) published its study World Energy Outlook (WEO) Special Report. This report established the WEO practice of using scenarios to illustrate the implications of different policy choices on energy markets (OECD/IEA, 2015). Three scenarios, differing in their assumptions about the evolution of government policies, are presented: the Intended Nationally Determined Contributions (INDC) Scenario, the Bridge Scenario and the 450 Scenario The INDC Scenario represents a preliminary assessment of the implications of the submitted INDCs and statements of intended INDC content for some countries (Switzerland, European Union, Norway, Mexico, United States, Gabon, Russia, Liechtenstein and Andorra). Total primary energy demand (TPED) is equivalent to power generation plus other energy sector excluding electricity and heat, plus total final consumption (TFC) excluding electricity and heat. TPED does not include ambient heat from heat pumps or electricity trade. Sectors comprising TFC include

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FIGURE 9: GLOBAL PRIMARY ENERGY DEMAND AND RELATED CO2 EMISSSIONS BY SCENARIO (SOURCE: OECD/IEA, 2015).

As depicted in Figure 9, it is predicted that global energy demand will increase in both scenarios. However, this increase will not be equally distributed. While in Europe a reduction in energy demand is expected, in the emerging economies like China, India and South America, a slight increase is expected.

Today, electricity is the now biggest energetic vector. Progressively more and more fossil fuel based systems are being “electrified”. Electricity has some future challenges and opportunities ahead including: energy storage, electric vehicles, distributed generation and small storage, etc. Global electricity demand, as with oil and gas, has been increasing with time. Electricity mix and electricity prices vary significantly from one country to another. Because of this, the study of the electricity market will be centred on the European market. The IEA statistics shows how the total electricity demand for the OECD European countries during the last four years have been slightly oscillating around a value of 3.400 TWh as can be seen in Table 5.

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TABLE 5: EUROPE ELECTRICITY DEMAND (SOURCE: INTERNATIONAL ENERGY AGENCY, 2015A).

Electric Demand Europe OCDE [TWh] 2014 2013 2012 2011

+ Combustible Fuels 1 565 1 649 1 739 1 791 + Nuclear 831 831 834 857 + Hydro 589 597 582 527 + Geoth./Wind/Solar/Other 363 332 287 237 = Indigenous Production 3 348 3 409 3 442 3 412 + Imports 397 366 371 350 - Exports 395 357 377 344 = Electricity Supplied 3 350 3417 3 436 3417

As regards the different sources of electricity generation, fossil fuels continue to provide almost 50% of the total electricity production. However, comparing the evolution of the different components, it can be seen how fossil fuels are slowly but constantly reducing their contribution to the electricity mix. This reduction is being compensated with a constant and also slow increase of the renewable energies like geothermal, wind and solar. Nuclear energy is also reducing its contribution but only slowly.

FIGURE 10: GRAPHICAL REPRESENTATION OF ELECTRICITY PRODUCTION ORIGINS (SOURCE: INTERNATIONAL ENERGY AGENCY, 2015A). Like the gas price evolution, the 2004 to 2015 electricity price evolution shows a clearly rising trend in all the European countries in both profiles of household and medium size enterprises. Figures 11 and 12 show the evolution of the energy prices for both profiles in euros per kWh.

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FIGURE 11: MEDIUM SIZE HOUSEHOLD ELECTRICITY PRICES EVOLUTION 2004-2015 (SOURCE: EUROSTAT, 2015A).

FIGURE 12: MEDIUM SIZE INDUSTRIES ELECTRICITY PRICES EVOLUTION 2004-2015 (SOURCE: EUROSTAT, 2015A). Again, representing average prices sorted in decreasing order can help in order to see the big differences in price from one country to another.

FIGURE 13: MEDIUM SIZE HOUSEHOLD 2004-2015 AVERAGE ELECTRICITY PRICES COMPARISON (SOURCE: EUROSTAT, 2015A).

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FIGURE 14: MEDIUM SIZE INDUSTRIES 2004-2015 AVERAGE ELECTRICITY PRICES COMPARISON (SOURCE: EUROSTAT, 2015A). Considering only electricity prices, Denmark and Germany would be the most suitable countries for the development of electricity efficiency measures or the introduction of renewable electric energies in the domestic arena. However, the REEMAIN project is focused on industry, and here the countries with better perspectives would be Cyprus, Liechtenstein, Malta, Ireland, Slovakia, United Kingdom and Spain. Again, as in the natural gas case, comparing domestic price versus industrial price in its corresponding graphical representation is showed in Figure 15. The biggest values might suggest that somehow, the domestic sector is subsidizing the industrial sector electricity prices.

FIGURE 15: DOMESTIC ELECTRICITY PRICES VERSUS INDUSTRIAL ELECTRICITY PRICES (SOURCE: EUROSTAT, 2015A).

As can be seen in Figure 15, the countries with the most unbalanced electric prices situation correspond to Denmark, Italy, Germany and Sweden. In these countries, industries are paying a significantly lower price for the electricity. Spain is also above the average, but unlike the gas case, this time with a value closer to the average EU values. On the other side, Turkey has value lower than the average which means there are not so big differences between industrial electricity prices and domestic electricity prices.

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The renewable energies are without any doubt ‘the future’ of the 21st Century. Nobody doubts that the present energetic economy based on the oil and other fossil fuels will soon or later be replaced by an energetic economy based on greener sources of energy. However, scientists and economists do not agree in when this transition will be fully achieved. They also do not agree in which will be the green energies of the ‘future’. It is out of this document scope, speculate about when and how the full transition to renewable energies will be achieved. In this document, the world global time evolution of the most ‘popular’ renewable energies will be studied.

Starting with the thermal renewable energies, there are two renewable sources competing against oil and gas. They are biomass and solar thermal. Considering biomass, this study focuses on wood biomass used for direct thermal applications in the industrial sector. Liquid fuels used in the transport sector like ethanol and biodiesel are out of scope of this study. Nowadays the price of biomass fuel is lower than its non-renewable competitors. However, from the point of view of the required investments, biomass boilers are actually bigger, heavier and more expensive than their natural gas or fuel-oil equivalent boilers. Biomass technology is constantly increasing its penetration in the global market. The EU is leading the introduction of wood pellets heating systems, followed by the North America market as can be seen in the Figure 16. The global production is constantly increasing and nothing indicates this trend is going to change. Biomass thermal systems are supposed to reduce its price with the development of the technology. On the other hand, EU policies are encouraging its deployment in order to reduce the dependence of part of the EU versus external natural gas suppliers like Russia. However, biomass boilers require a much bigger dedicated area and infrastructure for the boiler and the biomass storage silo. Because of this, replacing existing natural gas boilers with biomass boilers will not be as fast as the EU policies makers would like.

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FIGURE 16: WOOD PELLETS GLOBAL PRODUCTION (SOURCE: REN21, 2014). Focusing on the solar heating and cooling technologies, note that China is definitely leading the market with the highest production but also with the highest trend evolution. In the EU market, only Germany seems to have an important deployment of these technologies.

FIGURE 17: 2013 SOLAR WATER HEATING COLLECTORS BY COUNTRY (SOURCE: REN21, 2014).

About world global values, as can be seen in the Figure 18, global trend is clearly rising and in the 10 years period time from 2004 to 2014, world solar thermal production time has increased fourfold to 406GW.

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FIGURE 18: SOLAR WATER HEATING COLLECTORS GLOBAL CAPACITY (2004-2014). (SOURCE: REN21, 2014). Renewable electricity generation is mostly based on two dominant technologies: solar photovoltaic (PV) panels and wind turbines.

As can be seen in Figure 19, photovoltaic electric generation has experienced an exponential increase in recent years. Swanson’s Law notes that the price of solar photovoltaic modules tends to drop 20 percent for every doubling of cumulative shipped volume, and that at present rates costs halve about every 10 years. The photovoltaic cells that make up solar panels have increased their efficiency over four successive technological generations, falling from $76.76 per watt in 1977 to $0.36 per watt in 2014. This has produced a virtuous cycle whereby the falling price is driving the growth of installed capacity, which is increasing demand, and which is driving prices down. Initially PV installations had two possible uses: ultra-low power self-consumption installations for remote systems with no electricity grid supply or low or medium power generation stations for selling electricity to the grid with highly subsidized prices. However, due to continuous decrease of this technology price, right now PV generation plants are able to compete in price with the large-scale generation market in some countries that have high levels of solar radiation and high electricity prices.

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FIGURE 19: EVOLUTION OF GLOBAL SOLAR PV CUMULATIVE INSTALLED CAPACITY 2000-2014 (SOURCE: SOLAR POWER EUROPE, 2015).

Figure 19 shows the PV cumulative installed power in the last 14 years and how the deployment speed highly increased after year 2008. Actually Europe is still leading the PV market but China is increasing its contribution faster than any other region.

FIGURE 20: SOLAR PV CAPACITY AND ADDITIONS, TOP 10 (SOURCE: REN21, 2014).

Figure 20 shows the actual situation regarding PV capacity in the top 10 global countries. Europe’s leading position is due to the German position and evolution. However, with the exception of the UK, the other European countries like Italy, France and especially Spain are slowing their installation of new PV capacity. In a few years, Europe leadership may be lost. China, Japan and the USA are the countries with a greater number of PV installations.

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In the case of PV, the REN21 Renewables 2014 Global Status Report makes a forecasting exercise about the future evolution of the photovoltaic energy in the next five years until 2019. Figure 21 shows the foreseen values.

FIGURE 21: GLOBAL SOLAR PV CUMULATIVE MARKET SCENARIOS UNTIL 2019 (SOURCE: SOLAR POWER EUROPE, 2015). This study considers two possible scenarios, low and high with final PV power values of 396 and 540 MW in that order. So, even in the conservative scenario, in five years the installed PV power will be double today’s value. The other renewable source for electricity generation is . This energy source has increased its deployment constantly. However, the price reduction of this technology is based on an increase of the size and power of the wind turbines. That is, the bigger the , the cheaper the energy that it generates. Because of this, the deployment of wind power is mainly due to the increase in number and power of wind power generation plants. These power plants inject their electricity into the national grids so this technology is being used for grid power generation rather than for self-consumption. However, in 2014 wind generated more than 20% of electricity demand in several countries, including: Denmark, Nicaragua, Portugal and Spain. Figure 22 shows the evolution of the wind power global capacity for the period 2004 to 2014.

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FIGURE 22: WIND POWER GLOBAL CAPACITY, 2004-2014 (SOURCE: REN21, 2014). The next four tables show the average prices of the analysed renewable sources. TABLE 6: STATUS OF BIOMASS TECHNOLOGIES: CHARACTERISTICS AND COSTS (SOURCE: REN21, 2014). Typical Energy Technology Typical Characterisitics Capital cost costs Plant size: 0.1–15 MWth 4.7–29 Biomass heat : ~50–90% 400–1,500 plant Conversion efficiency: 80–90% Plant size: 0.5–100 kWth 4.3-12.6 Capacity factor: ~60–80% Biomass CHP 600-6000 Conversion efficiency: 70–80% for heat and power

TABLE 7: STATUS OF SOLAR THERMAL TECHNOLOGIES: CHARACTERISTICS AND COSTS (SOURCE: REN21, 2014). Typical Energy Technology Typical Characteristics Capital cost [$/kW] costs [c$/kWh] 470–1,000 (without storage) 4–16 (Global) 265–1,060 (Europe) 2.6–8.5 (Europe) 210–320 (India, Turkey, South Africa, Mexico) Concentrated Collector type: systems: Solar thermal flat-plate, evacuated tube, Concentrated systems: 6.4–9.6 Industrial parabolic trough, linear Fresnel 420–1,900 (parabolic dish, India) process heat Plant size: 100 kWth–20 MWth 640–2,120 (parabolic trough) Temperature range: 50–400 °C 1,270–1,900 (linear Fresnel)

Solar concentrated systems: 980–1,400 (China) 1,800 and up (Germany) Capacity: 10–1,000 kW Not available (absorption chillers) 5–430 kW (adsorption chillers) Solar thermal: Efficiency: 50–75% (single-effect 1,600–3,200 Cooling absorption/adsorption chiller) 120–140% (double-effect absorption chiller)

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TABLE 8: STATUS OF PHOTOVOLTAIC TECHNOLOGIES: CHARACTERISTICS AND COSTS (SOURCE: REN21, 2014). Typical Energy Technology Typical Characteristics Capital cost [$/kW] costs [c$/kWh] Peak capacity: 21–44 (OECD) 2,200 (Germany); Solar PV: 500 kW (industrial) 28–55 (non- 3,800 (United States); 2,900– Rooftop Capacity factor: 10–25% OECD) 3,800 (Japan) (fixed tilt) 16–38 (Europe) 1,200–3,000 (Global) 10–38 (OECD) Weighted capital costs (2014): 7–40 (non-OECD) Solar PV: 1,670 (China), 2,710 (Japan) 14–34 (Europe) Ground- Peak capacity: >1–250+ MW 1,495 (Germany) 11 (China) mounted Capacity factor: 10–25% (fixed tilt) 2,080 (United Kingdom) 25 (Japan) utility-scale 2,218 (United States) 11 (United Concentrating PV (CPV): States) 1,480–2,330 (10 MW) CPV: 10–15

TABLE 9: STATUS OF WIND POWER TECHNOLOGIES: CHARACTERISTICS AND COSTS (SOURCE: REN21, 2014). Typical Energy Technology Typical Characteristics Capital cost [$/kW] costs [c$/kWh] 4–16 (Global) 6–7 (Asia, 925–1,470 (India) Eurasia, Wind Turbine size: 1.5–3.5 MW 660–1,290 (China) North America) Onshore Capacity factor: 20–50% 2,300–10,000 (United States) 5–10 (Central 5,873 (United Kingdom) and South America) Turbine size: up to 100 kW 15–20 (United Average: States) Wind: 2,300–10,000 (United States) 0.85 kW (global) Onshore small- 1,900 (China) 0.5 kW (China) scale 5,870 (United Kingdom) 1.4 kW (United States) 4.7 kW (United Kingdom)

2.2.2 EXAMPLES To further illustrate the changes in the market, the following sections present some examples from various industries.

2.2.2.1 INDUSTRIAL SECTORS All industry sectors are concerned with improving their energy environmental indicators. Three examples of important industrial sectors roadmaps are shown, including measures to minimize the environmental impact of their energy consumption:

Cement The cement sector is concerned about the needs to decrease CO2 emissions in cement production. The International Energy Agency and the World Business Council for Sustainable Development (WBCSD) Cement Sustainability Initiative (CSI) have worked together in order to develop a new road map for the cement sector. Representing 5% of global CO2 emissions, the sector is focused on

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- Thermal and electric efficiency: technological uptake. - Alternative fuels: including the use of less carbon-intensive fossil fuels and alternative fuels and biomass in the production process.

- Carbon capture and storage (CCS): capturing and storing CO2 emissions from cement production. Chemical industry The chemical industry is the largest industrial sector in energy consumption (10 % of energy use and 7 % of GHG emissions). The roadmap concerning energy developed by this sector includes the collaboration of the chemical industry, policymakers, investors and academia to press on with catalysis technology, the key element that will facilitate a decrease in energy consumption. It is expected that the improvement in the use of catalyst will reduce, by 2050, the energetic needs of the sector in 13 EJ, equivalent to the current annual primary energy use of Germany.

Food and drink In the UK, the report ‘Industrial Decarbonisation & Energy Efficiency Roadmaps to 2050’ for the food and drink sector was published in 2015. Main efforts will be focused in:

- Electricity Grid Decarbonisation - Electrification of Heat - Energy Efficiency and Heat Recovery Technology

2.2.2.2 COMPANIES IKEA has presented a sustainability plan, “People & Planet Positive. IKEA Group Sustainability Strategy for 2020” (edie newsroom, 2015), describing the objective of being 100 % renewable in 2020. The way to do this is producing the same amount of energy that IKEA consumes by renewable energies, as wind and sun. IKEA has committed €1.5 billion to invest up until 2015 (mainly in wind and solar power) to reach the goal of energy independence. More information can be found in ikea (2012).

L’Oréal USA announced in July 2015 that will join the Business for Innovative Climate & Energy Policy (BICEP) coalition, involved in clean energy policies. The company is compromised with social and environmental impacts of its products, with its own roadmap “Sharing beauty with all” (L’Oréal, 2015). L’Oréal compromises to diminish water and carbon footprint 60 %. A decrease of 57 % of L’Oréal CO2 emissions was obtained in 2015, compared with the results of 2005, avoiding the emission of 60.000 tons of CO2. The companies has also make a great investment (more than 35 M$ in renewable energy use. More information can be found in Wilcox (2015).

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Coca Cola is also actively seeking new ways to provide cleaner and more efficient power and to reduce carbon emissions, according to its roadmap “Coca Cola. Our 2020 Environmental Goals” fuel test cells, without combustion, turning natural gas and other hydrocarbons into usable forms of energy like heat and electricity. Also fuel cells that will run on redirected biogas are being developed, which are expected to provide 30 % of a plant’s power needs while reducing the plant’s carbon footprint by an estimated 35 %. More information can be found in Coca-Cola Company (2015).

Google is also developing actions related to sustainability and green powering. “Google green” (Google, 2015) is the initiative developed by Google, describing energy actions as 50% improvement in the efficiency of Google data centers, funding programs in energy over $2 Billion and developing activities focused on renewable energies, especially photovoltaic.

McDonald’s has identified an opportunity in reducing its carbon footprint by the use of renewable energies. In this case “Powered by the Sun” initiative is promoting the installation of solar panels in 12 restaurants located in Portugal with a global production of 84 MWh per year. Some estimation proves that the payback time will be 7 years. More information can be found in McDonald’s (2015).

2.2.2.3 CONSUMERS The perception of many products or companies by consumers is affected by a large amount of factors and conditions.

A good impression may result in an increase in sales (depending on the product price), an eco- friendly image of the company or the product (green marketing, eco-labeling) or a sustainable perception by society. There are several schemes regulated by international standards (environmental product declaration, carbon footprint, etc.) that describe how companies can communicate the environmental results of their activity or their products, including raw materials consumption, transportation, manufacturing, use and end of life of the products. On the other hand, environmental concerned consumers or associations dedicated to watch over the environmental- social impact of companies can organize protest campaigns or boycotts with high repercussion and severe consequences for the companies. The most common reasons are usually related to social issues, exemplified with companies which – in the past – dealt with these issues:

- Animal rights (animal testing, animal conditions on farms, animal skin use for clothing, etc.) Adidas, Air France, Burberry, Kentucky Fried Chicken - Politics (Arms and military supply, mostly due to the political ideals of the buyers) Nokia, Caterpillar, LV, Motorola - Human rights (child exploitation, low salaries, low safety, excessive hours of work, worker rights) Coca Cola, Hyatt Hotels, Shell, Starbucks In terms of the environmental perception of the consumer, the most common issues are:

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- Location of factories close to high value nature environments - Location of high intensity processes near population areas - Companies with high risk in waste storage (open air mining) - High risk of environmental disaster (BP Gulf of Mexico) - Sectors with a high visual impact on the environment (mining processes) - Unknown source and origin of raw materials, mainly wood (Tarkett) Considering the energy use, two different perspectives can be considered: There is no significant attitude from consumers versus companies in terms of electricity consumption. Companies are not usually responsible of the electricity mix that they use. There is no visual or physical impact of electricity consumption in the factory area. The electricity generation plants are, in many cases, far away from the company location. Problems with environmental collectives or associations are not focused Consumer vs. Company, but Consumer vs. some electricity generation models (e.g. fossil fuel combustion or nuclear)

On the opposite side, citizens and consumers are more concerned and worried about energy supply form combustion processes. High energy intensity sectors, as crude, cement, clinker, paper or iron are considered unfriendly from the environmental point of view. In conclusion, the consumer disquiet increases when the emitting source clearly located in the factory.

Some examples of boycotts developed by consumers and environmental groups against companies are given in Table 10:

TABLE 10: BOYCOTTS OF COMPANIES DUE TO ENVIRONMENTAL ISSUES (SOURCE: ETHICALCONSUMER, 2014). Group that promoted the Company Cause boycott According to Greenpeace, Bluefin tuna is an endangered Bluefin Tuna Greenpeace species could soon be extinct. Despite this it is still being served in sushi restaurants in the UK. The company has come in for a boycott call thanks to one of the worst environmental disasters ever to befall BP Boycott BP the United states, the Deepwater Horizon oil spill in the Gulf of Mexico Campaigners say the industry is posing a massive risk to the environment surrounding the fisheries. Organizers of the boycott say that with no barriers Canadian around farms to protect the surrounding area, pollution Farmed Salmon feed lot boycott and water-borne diseases contaminate the ocean Salmon environment. The campaign website says that the intensive livestock sea-based enclosures can contain up to a million fish.

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Chevron Toxico boycott call for dumping billions of gallons of toxic waste in the Ecuadorian Amazon and Chevron Chevron Toxico and failing to clean it up. Texaco Avaaz.org Avaaz.org are also calling for a global boycott of Chevron and all its subsidiaries over its involvement with Burma. Kick Nuclear have called a boycott of EDF for its EDF Energy Kick Nuclear involvement in the planned building of a new generation of nuclear power stations across the UK. Junckers is on the boycott list due to selling Indonesian merbau flooring despite confirming that it is of unknown Environmental Junckers source. Without guarantees of the wood's origin, it's Investigation Agency likely that merbau wood flooring could have come from Indonesia's last remaining rainforests. Kahrs is on the boycott list due to selling Indonesian merbau flooring despite confirming that it is of unknown Environmental Kahrs source. Without guarantees of the wood's origin, it's Investigation Agency likely that merbau wood flooring could have come from Indonesia's last remaining rainforests. Organic Consumers For using sugar from genetically engineered sugar beets Kellogg's Association in its products This company group is under a boycott call for their LG SAVE RAPU-RAPU involvement in a mining project in Rapu-Rapu. This company is on the list for refusing to provide evidence to prove the legal source of their merbau Tarkett Environmental flooring. Without guarantees of the wood's origin, it's Investigation Agency likely that merbau wood flooring could have come from Indonesia's last remaining rainforests. The world's second largest discount supermarket, made Lidl Greenpeace a commitment to eliminate all hazardous chemicals from its textile production by 1 January, 2020 committed to eliminate all releases of hazardous chemicals throughout its entire supply chain and Levi’s & ZARA Greenpeace products by 2020, following public pressure in response to Greenpeace’s global Detox campaign Danone The statement confirms that the companies intend to Nestle, Kraft, develop a zero deforestation policy, which will cover all Greenpeace Unilever, of the commodities it buys that could be linked to Adidas deforestation.

Nevertheless, companies take a variety of approaches for communicating to consumers that their products are made with renewable energy. The beauty product company Aveda, for example, uses some on-product messaging but also advertises its commitment to renewable energy through outlets including its website, Facebook, salons, and stores. They are also certificated in Green-e.org (On December 2, Green-e launched a new Green-e Direct renewable energy certification option that allows organizations contracting directly for renewable energy or installing on-site generation to have their renewable energy Green-e certified).

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FIGURE 23: AVEDA’S WEBSITE CONTENT ON RENEWABLE ENERGY (SOURCE: HTTP://WWW.GREEN-E.ORG). 33 PWh are under Green –e certification in 2013 in the U.S. Although most of the actors involved in Green e are energy supplying companies, 47 product manufacturing companies are involved certifying 100 % renewable energy consumption. New logos are continuously entering the marketplace. Recently, the non-profit organization WindMade published the first global renewable energy label for companies using wind power in their operations

FIGURE 24: WINDMADE SAMPLE LOGO FOR BUSINESS USE(SOURCE: WINDMADE). The main motivations of companies in order to communicate the consumer the use of renewable energy are:

- Enhance the Image of the Brand - Product Differentiation - Targeting Environmentally Conscious Consumers - Following an Existing Industry Trend - Price Premium

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3. Renewable Energy Sources – Importance for the Future Energy System

In order to incorporate new technologies and solutions for the generation, storage and management of renewable energy into the Resource Networks Methodology (RNM), the following sections discuss basics as well as available solutions. This is intended to also produce some insights into the need for action concerning the management of such resources in a production environment. The material is, in part, taken from Deliverable 3.1 (REEMAIN, 2014a), which is confidential and is thus reiterated in short here.

3.1 RENEWABLE ENERGY SOURCES Renewable energy sources are a very important market. There is a lot of current research in this field. Technologies become more efficient. Wide application in industry and private sector is possible. However, Wind and PV are currently mostly not used directly but supply generated energy to the net.

3.1.1 DEFINITION AND APPROACHES (RES) are defined as technical systems which use renewable energy resources to generate heat, cold or electricity. These sources are basically the sun and geothermal heat and derive in more specific resources such as sunlight, wind, hydropower, tides, waves, geothermal resources and biomass. The International Energy Agency (IEA) describes renewable energy as “energy that is derived from natural processes […] that are replenished at a higher rate than they are consumed” (International Energy Agency, 2015b). The use of energy has been 100% renewable in the past until the growth of coal in the 19th century. The oldest forms of renewable energy include biomass for fire and wind for driving ships. RES offer lots of opportunities for replacing conventional energy systems: Solar and geothermal energy can be used for heating or cooling purposes as well as for generating electricity. Furthermore electricity can be produced by wind, biomass and hydro energy. Biomass is also used for heating. The most significant advantages of renewable energy resources over other energy sources are the almost unlimited availability of renewable resources in geographical areas and their off-grid opportunities especially in developing countries or rural areas. Whereas sources like coal or oil on the other hand are only available in a specific number of countries and need big infrastructure requirements. Therefore renewable energy can highly increase energy security and economic benefits. One of the most important advantages is their possibility to mitigate climate change. There is also strong public support for renewable sources like wind and solar power. Costs of RES decreased drastically in recent years therefore most of renewable energy technologies are already competitive

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or close to being so. Furthermore governmental support for RES through incentives makes them an even better choice for investors. The following presents an overview of RES technologies.

3.1.2 TECHNOLOGIES This chapter aims to give an overview on market available renewable energy systems with brief characteristics. In Table 11 the available technologies taken from Deliverable 3.1 (REEMAIN, 2014a) in the different energy generation categories are listed. TABLE 11: RENEWABLE ENERGYg SeYSTEMSneratio TnECHNOLOGIES clusters (SOURCE: DELIVERABLE 3.1, CF. REEMAIN, 2014A).

electricity heat cold

PV solar process heat solar cooling s

m CSP solar thermal collectors

e

t s

y wind turbines solar concentrators

s

y

g hydro electricity air collectors

r e

n geothermal

e

e

l biomass

b a

w PVT collectors

e

s

n r

e CHP ( biogas)

r

e t

s CHP (wood pellets/chips)

u

l

c

y

r

e ORC heat pump thermal cooling

n

e

t

s

v

o

a

i

o

t

c

w e

a The technologies strongly depend on the available temperature level and application. Hybrid systems

r WHP system heat exchanger

c

i

f i

s like combined heat and powerdistr ic generationt heating (CHP) or d combinedistrict coolin g heat, power and cold generation

s

t

s

a

y

n

l

m

g e

c CHP (natural gas/oil) r

i (CHPC) are highly efficient if the heating and cooling energy and the electricity can be used

e

c

t

e

i

s

f

n f

y CHP (fuel cell)

e s e simultaneously in the connected processes. Also on a larger scale the CHPC are interesting options to CHPC (combined heat, power and cold) significantlbattery stoyr adecreasege the COt2h emissionsermal (hot w aofte rproduction) iprocessesce storage if the required heating and cooling

energy is delivered to the productionthermal (s tprocesseam) by heating / cooling networks. e

g thermal (oil)

a

r o

t thermal (concrete / rocks) s 3.1.3 SOLAR PROCESS HEAT thermal (steel) Currently solar thermal systems are still mainly used in the fields of domestic hot water generation PCM and supporting space-heating systems in residential buildings. Meanwhile these systems are nearly state of the art and widespread in the building sector. The potential analysis for solar heat in industrial processes within Task 33 of the IEA showed that in most industrial processes low and medium temperature is needed. More than 60 % of the industry uses process heat with temperatures below 250°C. For solar process heat applications different collector types are used and available on the market. The temperature range of the process decides whether concentrating or non-concentrating collectors are required. Movable concentrating collectors mainly use the direct radiation of the sun. By concentrating the sunlight, high energy density – and therefore high temperatures (up to 450°C) can be reached. The most significant applications at low to medium temperature level are in the

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D4.2: Requirements for Resource Networks compared to the state of the art 40/127 fields of food and beverage industries (European Solar Thermal Industry Federation, 2006; Lauterbach, Schmitt, Jordan & Vajen, 2010). The advanced flat plate collector is appropriate for most of these processes, because they are very efficient in this temperature range (SO-PRO, 2011). While high temperature collectors, like the Fresnel and Parabolic through collector, were mainly used for processes in the chemical industry or where steam is required. Solar thermal systems have the potential to provide renewable industrial process heat. When correctly integrated within an industrial process, they can provide significant progress towards both increased energy efficiency and reduction in emissions (Atkins, Walmsley & Morrison, 2010).

3.1.3.1 SOLAR COOLING Solar thermal cooling technology is using solar energy as energy source to run an air-conditioning system, which is a combination of thermally driven heat pumps/chillers with solar thermal collectors. Instead of conventional electricity driven compression chillers sorption chillers are using environmentally friendly refrigerants (water or ammonia) and they have a very low electricity demand for the chiller itself. Solar cooling systems either produce chilled water (so-called closed systems using absorption or adsorption chillers) or conditioned air (so-called open systems, DEC or liquid sorption systems). Nevertheless, maximum operation time and low-cost driving heat for sorption chillers are the key for economic efficiency of solar thermal cooling systems. Solar cooling systems can be characterized by the electrical Coefficient of Performance (COP) of the system

(COPel), which is the ratio of the electricity consumption of the complete system divided by the supplied cooling capacity of the system. Such COPel for solar thermal cooling systems are usually between 6 and 15 depending on the used chiller and heat rejection technology as well as the location (e.g. hot and wet climate or moderate climate). As solar cooling systems are supplying either chilled water at 6-19°C (depending on cold distribution system, e.g. fan coils or ceilings panels) or conditioned air at 16-20°C this systems can be easily integrated in conventional air-conditioning systems.

3.1.3.2 PHOTOVOLTAICS The photovoltaic technology consists in using the solar energy as an energy source in order to generate electricity thanks to the photovoltaic effect, which is the working principle of this technology. The PV effect of the PV solar cells consists of two different (or differently doped) semi-conducting materials (e.g. silicon, germanium) in close contact each other, that generate an electrical current when exposed to sunlight. Sunlight provides electrons with the energy to move cross the junction between the two materials more easily in one direction than in the other. This gives one side of the

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D4.2: Requirements for Resource Networks compared to the state of the art 41/127 junction a negative charge with respect to the other side (e.g. p-n junction) and generates a voltage and a direct current (DC) (International Renewable Energy Agency, 2014). The basic installation needed for the abovementioned purpose has: . PV panels: formed by the solar cells . Inverters: to turn the DC power into alternating current (AC) power (230 V) compatible with the grid. . Solar power meters: to measure the electricity generated by the plant . Monitoring system: a device to control the installation The installations can be connected to the electricity network (“on grid systems” where all the electricity is delivered to the grid or just one part, and the rest is consumed. A battery is normally not needed) or not connected to the electricity network (“off grid systems” where all the generated energy is used to meet the electricity consumption in the same place where the demand is produced. A battery is normally needed).

3.1.3.3 PHOTOVOLTAIC-THERMAL COLLECTORS Photovoltaic-Thermal (PVT) collectors are combined modules, which uses sun energy to produce electricity and heat energy. PVT consists of Photovoltaic modules on the topside and solar flat collectors on the bottom side. There are so called ‘covered modules’ with high efficient solar heat production and ‘uncovered modules’, which more concentrate on PV-electricity production. The problem of the combined collectors is that both users may interfere with each other in the effectiveness. The solar cells are most effective at low temperatures. Benefits decrease when temperature increases. Design and size of a hybrid system must consider that on one site the PV- value/ benefit increase as much as the modules are cooled down but on the other site a more effective solar thermal system reaches higher temperatures and suites a broader number of production processes. The aim is a compromise, which will produce most effective result for both users. Under the subject ‘combination usage’ (PVT) many research and development is ongoing. Nevertheless some products and brands are already on the market. The installations can be connected to the electricity network or not connected to the electricity network. Additional thermal heat can be supplied by the PVT collector to any manufacturing process which needs temperatures of about 40-70°C.

3.1.3.4 CONCENTRATED SOLAR POWER (CSP) The working principle is the concentration of the direct solar radiation onto an absorber tube, in which a heat transfer fluid (thermo oil or steam) is pumped through, operating both technologies at its highest temperatures (up to 400°C or higher) but in this case, with the aim of obtaining steam to

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D4.2: Requirements for Resource Networks compared to the state of the art 42/127 feed a steam turbine and generate electricity. Regarding the thermodynamic power cycle possibilities for CSP, the possible alternatives are the Brayton and the Stirling cycle. There are two other technologies of concentrated solar power in order to generate electricity: the parabolic dish and the central receiver systems (solar power tower). These two technologies have two tracking axes, use direct and diffuse radiation, concentrating it in a point (not in an absorber tube line) and reach higher temperatures (>450°C und up to 1,000°C). Large ground areas are required for CSP systems. The installations can be connected to the electricity network. Due to the high investment costs at present neither the parabolic dish nor the central receiver systems should be considered for industrial applications.

3.1.3.5 WIND TURBINES

Most modern wind turbines convert the kinetic energy in a moving mass of air into electrical energy that can be used locally or fed into the electricity grid to generate revenue. Wind power is one of the oldest forms of renewable energy, and was originally used to do mechanical work directly for example grinding corn or lifting water. In remote locations, wind power is still used in this way today, but it is much more common to use wind turbines to generate electrical energy. The two basic designs are horizontal axis wind turbines (HAWT) and vertical axis (VAWT). The latter have the advantage that the does not need to be turned to face the wind, but the former are capable of much higher power outputs. Wind turbines do not suit any particular industrial process more than any other. They should be regarded as a source of renewable electrical energy and/or a source of revenue when supplying the grid.

The power extracted from the wind is limited by the aerodynamic efficiency of the blades, the electrical efficiency of the generator and a fundamental physical limit known as the Betz limit. Another significant limit on the energy delivered over time is the variability of the wind speed. The ratio of the average power output and the rated power (the capacity factor) is typically only 35 % for an onshore turbine.

3.1.3.6 HYDRO ELECTRICITY

Hydropower systems are characterised by the head and the flow rate of water available at the turbine. Head is the energy per unit mass of water, and it may be the result of height difference between stationary water in a dam and the turbine (static head), the difference in water velocity upstream and downstream of the turbine (dynamic head) or in some cases a combination of the two. The turbine extracts energy from flowing water by reducing its head, but where the available head is low the turbine may be designed for high flow rates to maximise power output.

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Like wind power, hydropower is a very old form of renewable energy in which energy extracted from moving water used to be used directly to drive industrial processes such as grinding corn, irrigation, forging, timber cutting or textile spinning and weaving. In developed countries, such applications have almost disappeared and hydropower is now used to generate electricity for local use or to generate revenue by supplying the grid. There are many large, high head hydro schemes at purpose built dams, which have existed for many decades. For industrial premises located near to a river, the potential use of hydropower is limited by the availability of the required combination of head and flow rate and also by the variability of flow.

Even though they are often very cost-effective, large scale hydropower schemes are so expensive that they are usually considered to be national infrastructure projects. The cost per kWh of energy for smaller hydropower systems decrease significantly with scale, due to the large fixed-cost element of design, consenting and installation.

3.1.3.7 GEOTHERMAL

Utilising low enthalpy geothermal energy, it is intended to exploit the ground as a source/sink for thermal energy exchange employing a heat pump (possibly switched off in cooling mode) for the thermal conditioning of buildings. A certain number of vertical holes (boreholes) is drilled in the ground. Within the holes, a closed network of polyethylene pipes is installed. The undisturbed temperature of the ground below 15 m of depth is not affected by seasonal variations and is of the order of the mean annual external temperature at the given geographical site.

The sizing of the plant is typically done to cover about 60-70 % of peak power (heating), while the rest is typically obtained with a back-up boiler. The energy which can be extracted from the ground is of the order of 50 W/m, in terms of borehole length. For the positioning of the boreholes at the correct distance, a certain amount of free ground is needed (≤ 30 m2 per borehole). After deployment, the ground is however again available for other purposes.

Economic costs. Installation costs are mainly due to drilling costs and heat pump costs. Other installation costs are given by piping costs, hydraulic pumps costs, thermal storage costs, heat exchangers costs. Real operation data show that the typical COP for actual applications is closer to 3 than to 4. Operation costs are mainly due to the electric consumption of the heat pump. The system’s life expectancy is very long. The network of polyethylene pipes is expected to last at least 50 years. For mechanical and electric components one should instead consider the usual lifetime for these objects.

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3.1.3.8 BIOMASS Different conversion processes and technologies can be used to produce heat, electricity, combined heat and power, chemicals or liquid fuels for transport from biomass: . Thermal conversion: combustion, gasification and pyrolysis. . Biological conversion: fermentation, digestion, etc. . Mechanical conversion: compression and pressing, chipping, etc. The selection of one or another needs to be aligned to the nature and structure of the biomass feedstock and the desired project outputs. Combustion technologies convert biomass fuels into several forms of useful energy for industrial uses (hot and superheated water, saturated and superheated steam and thermal oil). Direct combustion is the best-established and most commonly used technology for converting biomass to heat. Gasification is the thermal conversion of biomass into a low calorific to medium ‐ calorific value combustible gas. Direct combustion and gasification can be easily integrated in many industries with high demand of heat or electricity, especially in which there are biomass residues (agriculture, wood, paper and pulp, food-processing, etc.) taking advantage of these residues of the production process. This has the dual benefits of lowering fuel costs and solving waste disposal issues. The costs of these systems depend mainly on the technology, which is going to be implanted in the industry. The selection of one or another will be according the needs of the industry (power and thermal needs, budget available, etc.) and the availability and kind of biomass, space for both, storage and installation, etc.

3.1.3.9 COMBINED HEAT AND POWER / CHP (BIOGAS) Combined Heat and Power (CHP) plants also named cogeneration produce electricity and useful heat from different energy sources, in this case “biogas”. It represents a highly efficient method of generating renewable energy. A cogeneration system is the sequential or simultaneous generation of multiple forms of useful energy (usually mechanical and thermal) in a single, integrated system. CHP systems consist of a number of individual components – prime mover (heat engine), generator, heat recovery, and electrical interconnection – configured into an integrated whole. Although mechanical energy from the prime mover is most often used to drive a generator to produce electricity, it can also be used to drive rotating equipment such as compressors, pumps, and fans. Thermal energy from the system can be used in direct process applications or indirectly to produce steam, hot water, hot air for drying, or chilled water for process cooling. The biogas is introduced to an engine or turbine to generate electricity. These technologies can be easily integrated in many industries with high demand of both electricity and heat, especially in which there are organic residues (farms, food-processing, sewage, etc.) taking

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D4.2: Requirements for Resource Networks compared to the state of the art 45/127 advantage of these residues (animal manures, agricultural residues, waste water and other organic materials) of the production process. This has the dual benefits of lowering fuel costs and solving waste disposal issues. The costs of these systems depend mainly on the technology which is going to be implanted in the industry. The selection of one or another will be according the needs of the industry (power and thermal needs, budget available, etc.) and the availability and kind of organic material, space, etc.

3.1.3.10 CHP (WOOD PELLETS/CHIPS) Combined Heat and Power (CHP) plants (also named cogeneration) produce electricity and useful heat from different energy sources, in this case solid biomass (e.g. wood pellets). It represents a highly efficient method of generating energy. A cogeneration system is the sequential or simultaneous generation of multiple forms of useful energy (usually mechanical and thermal) in a single, integrated system. CHP systems consist of a number of individual components – prime mover (heat engine), generator, heat recovery, and electrical interconnection – configured into an integrated whole. Although mechanical energy from the prime mover is most often used to drive a generator to produce electricity, it can also be used to drive rotating equipment such as compressors, pumps, and fans. Thermal energy from the system can be used in direct process applications or indirectly to produce steam, hot water, hot air for drying, or chilled water for process cooling. These technologies can be easily integrated in many industries, especially in which there are biomass residues (agriculture, wood, paper and pulp, food-processing, etc.) taking advantage of these residues of the production process. This has the dual benefits of lowering fuel costs and solving waste disposal issues. Large production plants will likely be required to obtain favourable economy-of-scale effects and reasonable production cost. Integrating biomass CHP processes for large-scale production processes in existing industries may result in technical, energy-related and economic benefits. The costs of these systems depend mainly on the technology, which is going to be implanted in the industry. The selection of one or another will be according the needs of the industry (power and thermal needs, budget available, etc.) and the availability and kind of biomass, space, etc.

3.1.4 APPLICATION EXAMPLES This chapter shows brief exemplary applications of selected technologies in factory environments.

Photovoltaic Plants in UK bakeries: Greggs is a large-size UK bakery, which has installed a total of 1.28 MW capacity on 10 of their bakeries’ roofs. This energy produced is sold back into the grid. This has a direct impact on carbon

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Solar PV installed in textile industries: Meiser-Soltex, installed a photovoltaic plant before integrating parabolic trough collector for process heat. The company is a pioneer in renewable technologies and especially solar technologies. The company uses the PV plant for own consumption but sells the over-produced energy to the grid. The PV plant has an annual output of 68 MWh, which has a relevant impact on the environment. Since the beginning of the plant a total amount of 318.55 t of CO2 emissions have been avoided (Solera, 2015).

FIGURE 25: ROOF IMAGE OF SOLAR PV SYSTEM MEISER-SOLTEX (GERMANY) (SOURCE: SOLERA GMBH).

Flat plate collectors for fruit pasteurization The Krispl Fruit Juice Company in Austria uses 112 m2 of flat plate collectors and a 20 m3 short-term storage tank to supply a process temperature of 80°C for fruit pasteurization. The installed nominal solar thermal power is about 78.4 kWth. It is thought that the installation can reach an annual useful solar heat delivery of 38MWh/a.

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FIGURE 26: KRISPL FRUIT JUICE ROOFTOP INSTALLATION (SOURCE: AEE INTEC).

CSP technology for bakery and other food sectors Parabolic trough collectors (PTC) are ready to be used in the industrial bakery sector and other foods sector with similar temperature processes. An example of this is the Frito-Lay USA, which in 1999 made an ambitious commitment to save energy and lower the impact on the environment. Since 2008, a field of parabolic trough collectors was installed at Modesto, California, where SunChips® and other snacks are made. Over 5,016 m2 of concave mirrors make up the 384 solar collectors that help reduce the amount of natural gas used at the plant, which means that more than 717 tons of CO2 emissions are avoided every year, while producing more than 145,000 bags of SunChips® every day. This system operates at temperatures up to 240°C to produce 20 bar steam. The steam heats the thermo oil used for cooking corn and potato chips. This is the largest operating solar process heat system in the USA.

FIGURE 27: GROUND MOUNTED PARABOLIC TROUGH COLLECTOR AT FRITO LAY FACTORY (SOURCE: FRITOLAY).

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Biogas and biomass plant installed in Italian food industries Industries use biogas to produce both thermal and electric energy. For instance, New Foods, based in Italy produces 1.000 kW electric and 1.300 kW of thermal energy with a biogas plant thanks to the use of a sludge slaughter. Another case study is Tenuta Pule, which takes advantage of biomass to produce thermal energy, by burning the wine pruning in order to produce 165 kW thermal.

Biomass ovens for the bakery sector HornosSaturnino is a Spanish oven producer for Bakeries. They recently proposed on the market a new type of industrial oven, using biomass as fuel. Although the technology is ready, implementation is yet low.

FIGURE 28: BIOMASS BAKERY OVEN BY HORNOS SATURNINO (SOURCE: HORNOSSATURNINO).

3.1.5 MARKET PENETRATION RES are becoming increasingly more competitive on the market. The following discusses their strengths and weaknesses and compare them in respect of market penetration. As previously mentioned most renewable energy resources are independent of energy markets (e.g. solar power such as CSP). Renewable energy systems have positive environmental profiles and mitigate CO2 and therefore are often well supported by the public. Lots of RES use state of the art equipment in the systems and are commercially available. There are already numerous existing installations as best practices of nearly every RES. RES are commercially available and have proven to be competitive with traditional technologies, especially technologies like solar thermal collectors with low temperature, concentrated collectors and air collectors, as well as photovoltaics, wind generators, geothermal and biomass. However innovative technologies like photovoltaic-thermal collectors are currently quite limited in terms of market applications. For complex technical solutions like CSP (concentrating solar power) or CHP (combined heat and power) adequately trained technical personnel is needed. This often opens job opportunities but also

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D4.2: Requirements for Resource Networks compared to the state of the art 49/127 requires lots of training. The number of businesses and companies for photovoltaics, solar cooling, solar process heat, CSP and geothermal increases and has lots of opportunities especially outside EU. Considering emerging markets also biomass and chp with biogas or wood are in an expansion phase. Hydro power plants are often only considered for big governmental infrastructure projects due to extremely high cost of engineering work. Initial costs for technologies like CHP are often quite high. That is why governmental incentives are often provided to generate short payback times. Especially the EU is firmly committed to renewable energy. If fossil fuel prices increase RES have huge opportunities to be even more economically feasible.

3.2 STORAGE TECHNOLOGIES The electricity storage is a key feature to help making the electric power system more efficient and reliable. Due to the high variability of the consumption and the rapid increase of variable and not predictable energy sources as the Renewable Energy Sources (RES), the actual electricity grid is submitted to a continuous state of stress.

3.2.1 DEFINITION AND APPROACHES In this section, a basic definition and purpose of the different storage technologies is given, as well as the main characteristics of each one. In Figure 29, a classification of different energy storage technologies is shown classified by their work principle (Fuchs, Lunz, Leuthold & Sauer, 2012).

Electrical Energy Storage Systems

Mechanical Thermal Electrical Chemical

-Li-ion Battery -Pumped Hydro -Lead-Acid Battery Power -Thermoelectris -EDLC -Niquel Based Battery -CAES storage -SMES -NAS -Flywhells -Flow Batteries -Hydrogen Storage

FIGURE 29: ENERGY STORAGE TECHNOLOGIES CLASSIFICATION (SOURCE: FUCHS, LUNZ, LEUTHOLD & SAUER, 2012).

3.2.1.1 MECHANICAL ENERGY STORAGE SYSTEMS Pumped hydro energy storage system is the most used mechanical energy storage system. It consists of two interconnected water reservoirs located at different height. While on peak demand periods the stored water is lead from the upper reservoir into a hydraulic turbine producing electricity that is

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D4.2: Requirements for Resource Networks compared to the state of the art 50/127 fed into the grid, during off-peak periods, the water is pumped up to recharge the upper reservoir acting the power plant like a load. The transition time between the generation and accumulation states have to be short to respond to sudden changes in power requirements. Compressed Air Energy Storage (CAES) is another mechanical storage system. The off-peak power is used to pressurize air into an underground reservoir, usually in underground caverns. The stored energy is released during peak demand periods, expanding the air through a turbine. Flywheel systems store energy mechanically through kinetic energy. Accumulators have two main elements: a motor-generator and special brackets (often magnetic). On charging process, the flywheel is accelerated by the motor and the disc has to remain spinning until energy is requested. In discharge mode, the generator extracts the stored energy decelerating the rotating mass.

3.2.1.2 THERMAL ENERGY STORAGE (TES) This technology stocks thermal energy by heating or cooling a storage medium so that the stored energy can be used later for electricity generation using heat engine cycles. There are two types of TES systems depending on whether the operating temperature of the energy storage material is higher than the room temperature: low temperature TES and high temperature TES. These systems are used particularly in buildings and industrial processes.

3.2.1.3 ELECTRICAL ENERGY STORAGE SYSTEMS Electrochemical double layer capacitor (EDLC) stores electricity between two conductor plates when a voltage differential is applied across the plates, separated by a dielectric or insulator. As like battery systems, capacitors work in direct current. As their cycle life and power density is very high, but the energy density low, they are used in short-term and high power applications, as power back-up for uninterruptible power supply (UPS), transmission line stability and spinning reserve provision. Superconductive Magnetic Energy Storage (SMES) stores energy in a magnetic field. In order to charge the SMES systems, the inverter supplies DC current to the superconducting coil inducing a constant magnetic field in which the energy is stored. In the discharging process, the coil is connected to an external load and the energy is supplied by the magnetic field. They are ideal for regulating network stability because of their fast response time (under 100 ms) providing high power output for a brief period of time.

3.2.1.4 CHEMICAL ENERGY STORAGE Chemical energy storage systems store electricity through a reversible chemical reaction and are divided in two main groups, Hydrogen-based energy systems (HES) and electrochemical batteries. HES, also known as fuel cell, use excess electricity to produce hydrogen via water electrolysis. The system includes three key components: electrolyser unit, the fuel cell and a hydrogen buffer tank.

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The first component is used to produce hydrogen with the off-peak electricity and the second one uses that hydrogen combined with oxygen to generate electricity. HES can produce electricity continuously for as long as fuel and oxygen or air is supplied. An electrochemical battery convert’s stored chemical energy into electrical energy. In is composed of two electrodes, the positive electrode (cathode) is at a higher electrical potential energy than negative (anode). The electrolyte allows moving ions within, completing the chemical reactions at the separate terminals and so delivering energy. Figure 30 shows different battery technologies classified in function of specific power and energy (EDLC: Electric Double-Layer Capacitors; Li-Cap: Lithium-

Carbon Capacitor; NiCd: Nickel-Cadmium; NiMH: Nickel-Metal Hydride; NaNiCl2: Sodium-Nickel Chloride; Li-ion: Lithium-Ion). In the next section those systems are analysed in deep.

FIGURE 30: DISTRIBUTION OF VARIOUS BATTERY TECHNOLOGIES ACCORDING TO THEIR ENERGY AND POWER DENSITIES. (SOURCE: SARASKETA-ZABALA, 2014).

3.2.2 ELECTROCHEMICAL STORAGE TECHNOLOGIES The previous section 3.2.1.4 and Figure 30 in particular showed that a wide variety of electrochemical storage technologies exist. Their characteristics differ significantly which has to be taken into account when planning their application. Hereafter, the most prominent technologies are elaborated some more.

3.2.2.1 LEAD ACID Lead acid batteries are one of the most developed battery technologies, which are used in both mobile and stationary applications. Due to their favourable cost/performance ratio and low investment costs lead-acid batteries can be a significant technology for the near- and mid-term

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3.2.2.2 NICKEL-BASED Nickel-based batteries (nickel cadmium NiCd and nickel metal hydride NiMH) have high power and energy density and high number of charging-discharging cycles. One of the main advantage of NiCd batteries is that they are able to work at low temperatures (-20 °C to -40 °C), but concerning the toxicity of cadmium, their usage is prohibited for consumer use. In order to replace these batteries, NiMH, without toxic materials, was developed with similar properties but higher self-discharge. By contrast, as the energy density is higher, they are used in portable applications such as hybrid vehicles and also in UPS, stand-alone systems with PV and grid power quality applications.

3.2.2.3 LITHIUM ION Lithium ion batteries have become the most important storage technology in the areas of portable and mobile applications. These batteries have high energy density, a very high efficiency, fast charging properties and light weight. What makes them flexible and universal storage technology is the wide range of discharge time from seconds to weeks. The main drawback is their high cost because of the need of a cell level internal protection circuit. In addition, safety and robustness is an issue that needs to be taken into account as most of the metal oxide electrodes are thermally unstable and can decompose at elevated temperatures.

3.2.2.4 SODIUM SULPHUR Sodium sulphur batteries (NaS) are high-temperature batteries where the temperature is kept between 300 °C and 350 °C to keep the electrodes molten. NaS batteries are used in power quality and time shift applications where high energy density is demanded. The main drawback is that a heat source is required to keep operating temperatures using the stored energy in the battery and reducing the battery efficiency.

3.2.2.5 FLOW BATTERY In flow batteries the energy is stored in electro active species which are dissolved in liquid electrolytes. The storage power and capacity can be enlarged by adding electrolytes combined in series or in parallel. As flow batteries could be easily scaled up those are most used in stationary applications where energy is stored for hours or days with a power of up to several MW. The redox flow battery (RFB) can be charged within a few minutes replacing it with recharged electrolyte. However, their energy density is too low for electric vehicles. As resume Table 12 shows the suitable applications for each technology and the main advantages/disadvantages of each storage technology.

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TABLE 12: SUITABLE APPLICATION FOR EACH TECHNOLOGY (U.S. DEPARTMERNT OF ENERGY, 2013).

Technology Advantages Disadvantages Main applications -Very long lifetime -High investment cost -Energy management Pumped Hydro -Low self discharge -Low energy density -Backup / seasonal reserves -Mature technology -Regulation service -Large capacity -Geological restrictions -Energy management -Fast response -High investment cost -Backup / seasonal reserves CAES -Low self discharge -Low efficiency -Renewable integration -Long life time -High power density -Safety risks -Frequency regulation Flywheel -Long life time -High self discharge -Peak shaving / time shifting -Low maintenance -Low energy density -UPS -High energy density -High self discharge -Load levelling / regulation TES -Large capacity -Low efficiency -Grid stabilization -High power density -Low energy density -Power quality EDLC -Long cycle life -High energy cost -Frequency regulation -High efficiency -Peak shaving -High power density -Cooling needed -Power quality SMES -Long cycle life -High cost -Frequency regulation -Large capacity -High cost -Seasonal storage HES -High Energy Density -Low efficiency -Renewable integration -Low Self-discharge -Long-term storage -Mature technology -Ventilation required -Load levelling / regulation Lead acid -Large capacity -Limited cycle life -Grid stabilization -Low investment cost -Low energy density -High energy density -Limited cycle life -Power quality Nickel Based -Low investment cost -Memory effect -Portable applications -Energy efficiency -High cost -Power quality -Long lifetime -External protection -Frequency regulation Li-Ion -High energy and circuit needed -Portable applications power density -Renewable integration -Long life time -High self discharge -Power quality -High specific energy -High operating -Congestion relief NaS temperature -Renewable integration -High cost -High cycle life -High cost -Long-term storage -Large capacity and -High maintenance -Peak shaving / time shifting Flow batteries power -Short life time -Frequency regulation -Renewable integration

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3.2.3 APPLICATION EXAMPLES In this section, applications of the different energy storage systems, mentioned in the previous section, are going to be explained. Due to the numerous different manufacturing scenarios, the study of the applications is mainly focused in applications. Figure 31 offers a view of where are the technologies applied in either grid use-cases or production use cases (Eyer & Corey, 2010).

Grid Energy Storage Services

Transmission & Customer Energy Renewable Electric Supply Ancillary Services Distribution Management integration infrastructure

 Electric Energy  Area Regulation  Transmission and  Power Quality  Renewable Energy Time-Shift  Electric Supply distribution  Power Reliability Time-Shift  Electric Supply Reserve Capacity Upgrade Deferral  Retail Electric  Renewable Capacity  Voltage Support  Transmission Energy Time-Shift Capacity Firming  Black-Start Congestion Relief  Demand Charge  Wind Generation  Load Following  Transmission Management Grid integration  Frecuency Support Regulation  Distribution Voltage Support

FIGURE 31: CLASSIFICATION OF THE GRID ENERGY STORAGE SERVICES (SOURCE: EYER & COREY, 2010). Although all possible applications are shortly introduced, the attention will be specially focused on the last two categories (Customer Energy Management and Renewable Integration) as those are the most suitable for factory environment.

3.2.3.1 ELECTRIC SUPPLY Electric supply applications are controlled by the energy generation company. The main electric supply applications are the energy time-shift and supply capacity. On the one hand, electric energy time-shift consists on storing the energy production excess and providing it afterwards when energy peaks are demanded. On the other hand, the storing devices can be used as electric supply capacity reducing the need of combustion turbines as a proxy for additional peaking capacity.

3.2.3.2 ANCILLARY SERVICES Ancillary services are those services provided by the electric grid that make possible to meet the energy supply and the demand with a continuous electric flow. The area regulation is used to compensate momentary differences between the generation and the demand, this functionality could be a profitable application for the grid operator. Moreover, an Energy Storage System (ESS) could be used as electric supply reserve capacity which is used when the normal electric supply resources are unexpectedly unavailable. In the case of the voltage support,

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D4.2: Requirements for Resource Networks compared to the state of the art 55/127 the store technology acts as a reactance management system at grid level so that the grid voltage can be maintained within the required limits.

3.2.3.3 TRANSMISSION & DISTRIBUTIONINFRASTRUCTURE The transmission is referred to the transmission of electrical energy from the energy supply plant to the electricity high voltage substations which are installed in the surroundings of the customers. The distribution infrastructure is the network between the high voltage substations and the end user. The direct beneficiary of the transmission application will be the system operator, while in the case of the distribution will be a private company. Transmission and distribution upgrade deferral consists of evading the investment the system upgrading using an electrical energy storage system. Furthermore, as in other phases of the electric grid, the storage device can be used as transmission congestion relief storing electricity during off-peak periods to deliver it at high demand periods. In the transmission support an ESS compensates the electric disturbances and improves the performance of the system. Lastly, distribution voltage support focuses on adapting its output voltage through mechanical tap-changers.

3.2.3.4 CUSTOMER ENERGY MANAGEMENT AND RENEWABLE INTEGRATION Renewable energy variability smoothing, factory demand response, isolated grid, and frequency and voltage regulation are the most realistic and viable applications for factory environment based on the Li-ion technology. These applications were considered after assessing their technologic and economic benefits. RES variability smoothing Due to their special characteristics RES exhibit a considerably variable power generation. For example, the output power of PV panels and wind turbines can present variations of up to 70% and 90% per minute, when the plant operates at maximum power point. The output power variation of RES must be somehow shaved for being able to integrate those in the grid. The integration of an ESS could compensate the difference between the RES output and the ramp rate limits, however the ESS must be have a very high ramp rate capability.

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FIGURE 32: HAMPTON POWER SMOOTHING AND RAMP RATE REDUCTION (WOOD, 2012). FACTORY demand response The objective of integrating batteries in a demand response application is to minimize the electricity bill of the consumer. For example, installing a PV system with an ESS connected to the grid will offer a backup service to the factory and will also reduce the electricity consumption costs due to an optimised control strategy. The electric diagram of this example is shown in Figure 33. Reducing the electricity bill will be subjected to a trade-off between the installation of a larger photovoltaic panel and a larger storage system. This involves on the one hand, a higher initial investment cost and on the other hand, the possibility to use the own produced energy reducing the use of the when it is at a higher price.

FIGURE 33: FACTORY DEMAND RESPONSE APPLICATION ELECTRIC DIAGRAM (RIFFONNEAU, BACHA, BARRUEL & PLOIX, 2011). Isolated grid The main objective of integrating an ESS in an isolated grid is to reduce the size and dependence of the grid on the power generator systems. The use of batteries and RES reduces the overall operation

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3.2.4 MARKET PENETRATION Each storage technology has unique features that make them suit optimally to certain network services. However, the vast difference in terms of maturity level of them has become in a different deployment of what would be an optimal situation from the energy point of view form. As an example, in Figure 34 the market penetration of the different storage technologies is shown in function of the rated power for grid applications of United States.

FIGURE 34: RATED POWER OF US GRID STORAGE (U.S. DEPARTMENT OF ENERGY, 2013) Pumped Hydro storage is one of the oldest and most mature energy storage technologies and represents 95% of the installed storage capacity. Other storage technologies, such as batteries, flywheels, CAES and TES, make up the remaining 5% of the installed storage base. These ones are not so advanced in their deployment cycle and have likely not reached the full extent of their deployed capacity. Below, in Figure 35, the percentage of each type of battery energy storage system is deployed in order to see and compare which ones are the most used ones. Recent deployment on lithium-ion batteries has overcome the use of lead acid batteries, one of the oldest electrochemical storage system.

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FIGURE 35: BATTERY ENERGY STORAGE SYSTEMS DEPLOYED (U.S. DEPARTMENT OF ENERGY, 2014).

3.3 MANAGEMENT APPROACHES Considering the integration of RES and storages into the energy grids as well as production companies requires change in the management of either. The following sections summarise the state of the art on this to set a basis for the RNM.

3.3.1 SMART GRIDS The acceleration of the energy transition and the increasing of resource efficiency is a key issue in our society. The power grid of the future must learn to think.

3.3.1.1 DEFINITION Smart grid provide the network operator with the necessary information to optimize the power supply and the power input. Power producers are strongly linked to electricity consumers, therefor the network operator can distribute the unequal consumers and producers better, the network remains stable and the energy is used more efficiently. For this reason, the network operator needs information on the power consumption of the individual consumer and a prediction of the amount of current on the net. To accomplish this, all consumers and producers have to be interconnected. In short, a smart grid is an electricity network that provides sustainable, economic and secure electricity supplies (Harris, 2009; Grids European Technology Platform, 2010), while all actions of users (generators, consumers and those that do both) are integrated and efficiently connected. Various intelligent and automated applications such as smart metering (Aziz, Khalid, Mustafa, Shareef & Aliyu G, 2013; Chou & Yutami, 2014), demand side management (Siano, 2014; Xue, Wang, Sun & Xiao, 2014), smart sales management (Song, Jung, Kim, Yun, Choi & Ahn, 2013; Ghazvini, Morais & Vale, 2012) intelligent energy storage (Suberu , 2014; Fares & Webber, 2014), extended current marketing (Bae, Kim, Kim, Chung, Kim & Roh, 2014), emissions trading (Wang, Conejo, Wang

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& Yan, 2012) and the integration of electric vehicles (Mwasilu, Justo, Kim, Do & Jung, 2014; Boynuegri, Uzunoglu, Erdinc & Gokalp, 2014) are activated. In addition, due to the hierarchical topology of its assets the existing electricity network is afflicted with the domino effect precipitation. From the next generation of the power grid, known as the ‘smart grid’ or ‘intelligent grid’, will be expected to work up the main scarcities of the existing network. Essentially, the smart grid must provide the power companies with full transparency and pervasive control over their assets and services. The smart grid must be self-healing and be resilient to system anomalies (Farhangi, 2010). The business processes, goals and needs of all stakeholders are aided by the efficient exchange of data, services and transactions in an organic intelligent, fully integrated environment. Therefore, a smart grid is described as a grid that includes a variety of generation options, such as central, distributed, periodically and mobile. It entitles the consumer to interact with the energy management system in order to adapt their energy consumption and to reduce their energy expenses. As mentioned, a smart grid is a self-healing system, it forecasts impending failures and takes corrective actions to prevent or mitigate the effects of system problems automatically. A smart grid uses IT to frequently optimize and utilise capital assets, while operation and preservation costs are minimized (Farhangi, 2010). A smart grid is not a substitute for an existing power grid, but an addition to it. It exists side by side, capabilities, functions and capacities in an evolutionary manner are added.

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TABLE 13: COMPARISON OF EXISTING GRIDS AND SMART GRIDS (SOURCE: FARHANGI, 2010). Existing Grid Smart Grid

Electromechanical Digital

One-Way Communication Two-Way Communication

Centralized Generation Distributed Generation

Hierarchical Network

Few Sensors Sensors Throughout

Blind Self-Monitoring

Manual Restoration Self-Healing

Failures and Blackouts Adaptive and Islanding

Manual Check/Test Remote Check/Test

Limited Control Pervasive Control

Few Customer Choices Many Customer Choices

3.3.1.2 CONCEPT/GOAL In order to take power from regional production and renewable energy the power grid in the future must be capable of learning. This is one of the biggest challenges to the electricity grid since its creation. In addition to the mains a data network is developed, which adapts the generation, distribution and storage of energy with one another. Smart grids use information and communication technologies to direct the power supply of countless regional resources. The changes do not stop at the power grids; the households are also becoming smarter. In the smart home of the future all devices will be interconnected, therefore an ideal requirements analysis of each occupant can be made. In order to transmit all relevant consumption data to the network operator and the energy suppliers an intelligent electricity meter (smart meter) will be attached (EurA Consult AG, 2015; E.ON, 2015).

3.3.1.3 IMPLEMENTATION The measures that are described in the BDEW (Bundesverband der Energie- und Wasserwirtschaft e.V.) roadmap in order to implement the intelligent energy supply in Germany must be carried out by 2022. The decade is divided into three phases: the construction and pioneering phase (2012 to 2014),

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D4.2: Requirements for Resource Networks compared to the state of the art 61/127 establish and design phase (2014-2018), as well as the implementation and market phase (from 2018 to 2022). Based on the principles that need to be quickly put into action, improving the infrastructure will be built. (EurA Consult AG, 2015) Control Principle The BDEW and various stakeholders in the energy market developed the BDEW-Roadmap - realistic steps to implement smart grids in Germany. The following steps are included: Construction and pioneering phase Step 1 Selection and interaction of market and network The basis for smart grids is the legal and regulatory framework. The so-called traffic light concept keeps track that the fundamental interaction of market and network with the help of the system states "green", "yellow" and "red" are regulated. Step 2 Legal and regulatory framework The federal government and the EnWG (Energiewirtschaftsgesetz) amendment made first decisions for the implementation of smart grids in Germany, in the summer of 2011. In the coming months, these must be concretized market regulations. Step 3 Research and development, pilot and demonstration projects Harmonization and connection of the various projects on the basis of a single R & D strategy should take place in the field of research and development. Step 4 Standards, norms, data protection and security The social acceptance of smart grids is of particular importance. Privacy and data security are fundamental prerequisites for acceptance. The BDEW proposes the implementation and ongoing development of data protection in the smart grid in its own data protection regulation. Establishment and design phase Step 5 Measuring Sensors in the network; Roll-out of smart metering systems In the energy system control and regulation of actions must be measured for a stable grid operation as well as for invoicing and accounting. Step 6 Controlling and regulating, automating of networks The automation of the networks will be necessary in many distribution networks. Technologies to automate must be installed by an economic cost-benefit point of view in response to the challenges in the respective distribution. Step 7 Local & global optimization in the energy system The mutual information and data exchange between the network operators must be reinforced in order to achieve the efficient interplay between global and local technical optimization (distributed

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D4.2: Requirements for Resource Networks compared to the state of the art 62/127 network management). This requires establishing an efficient Data economical energy information network. Step 8 Storage and electro-mobility, hybrid networks Developing a concept to describe how energy storage can participate in interdisciplinary flexibility markets. Optimal locations for storage can be generating units, network bottlenecks and / or locations with heat networks, gas pipelines and if applicable CO2 sources. Steps 9 and 10 Variable production and consumption In future there will be an interaction between intelligent generation and load management on the market. In order to offer ancillary services frameworks must be developed to guarantee the transparency of the proposal of ancillary services. (BDEW) Voltage Level The control of the power supply takes place at different levels. Network operators and energy suppliers communicate depending on the voltage level with power plants (high voltage), conurbation and industrial areas (high voltage), regions (medium voltage) or smaller companies and households (low-voltage). Therefore a so-called (combined) vote power plant within the low-voltage network can coordinate the smart grid total consumption and generation and compensate the stochastic fluctuations in energy production from renewable sources. (IBC, 2014)

3.3.1.4 ADVANTAGE Why do we need smart grids? A main reason why information and communication technologies in the electricity system gain importance is the integration of renewable energies. These are, on the one hand, challenges for the distribution networks, which have to absorb a large part of these new producers. On the other hand the compensation of production and consumption mainly by wind and PV power gets more difficult. In both cases, smart grids can contribute to system integration of renewable energies. In the E-Energy Project, called "eTelligence", sponsored by the Federal Ministry of Economics and Technology currently both aspects are analysed and evaluated. (Bauknecht, Koch, Illing, Ritter & Rüttinger, 2011)

3.3.2 MICRO GRIDS A development and organic growth of the smart grid will be achieved by the plug-and-play integration of prescribed basic structures. These are called smart micro grids.

3.3.2.1 DEFINITION In future, one element of the smart grid will be a mini or micro grids.

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What are micro grids and what is the difference between them and smart grids? Functionally they grids, micro grids are closed intelligent electricity distribution networks on a regional base. The energy consumers, energy producers and the energy storage are directly connected and work hand in hand, in order to work, less power from higher power levels must be supplied. Examples of regional energy producers include photovoltaic systems, wind turbines or biogas plants, whose energy is mostly used directly by consumers. The micro grids are connected to smart grids, they can restore excessive energy or extract missing energy. Components of micro grids are consumer provided smart meters, an intelligent counter for energy, load management and the distribution management system (DMS). (ITWissen, 2015; Rüdiger, 2012) Micro grids are described as interconnected networks of distributed energy systems (loads and resources). They always work, regardless of whether they are connected to the power grid or not. An intelligent micro-grid network can be operated as a grid-connected network or as an island mode. smart grid are well planned plug-and-play integration of intelligent micro grids incurred by interconnected dedicated highways for commands, data and power exchange. (Farhangi , 2010) The emergence of these smart micro grids and the dimension of the interaction and integration is a function of the gradual increase of the smart grid functions and requirements.

FIGURE 36: MICROGRIDS ARE CONSTRUCTED WITH DIFFERENT SKILLS, EQUIPMENT AND STRUCTURES (SOURCE: FARHANGI, 2010).

3.3.2.2 CONCEPT/GOAL The aim of the development of micro grids is the self-sufficient energy supply of consumers in a regional area, in case the power in a higher-level network is not available. If there should be problems in this restricted area, the micro grid can also be separated temporarily to prevent failures due to local errors. The local solution to the energy supply should reduce the need for power supply lines in the future, therefore local energy storage, networking standards and bidirectional chargeable electric cars are still missing. (Rüdiger, 2012)

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3.3.2.3 IMPLEMENTATION Currently, the main problems are the high investment costs and the lack of uniform rules. Financial support, legal requirements and transnational policies are indispensable. Step-by-step the EU starts a specific investigation of the technology with the project "More Micro Grids". At places that are bound to autonomous supply, such as Crete, the capabilities and shortcomings of smart grids are tested. (Sieg, 2012; Rüdiger, 2012) The Control and regulatory principles of the voltage level are low- voltage networks of several power generators (e.g. geothermal energy, photovoltaic cells), energy storage and consumer. If necessary, micro grids can be separated from the main power grid and then stock up on energy from local generators. Micro Grits are considered as a single controlled unit, since they are consumer and supplier. (Bruggmann, 2010)

3.3.2.4 ADVANTAGE An important advantage of micro grids is the support of the decentralized cogeneration. With pure power generation only 20 to 40 percent of the used energy can be converted into electricity. The rest is lost as unused wasted heat and unlike electricity they cannot be transported over longer distances. In local electricity production, however, the wasted heat can be used for water heating. Therefore, the power generation should take place where heat is needed. The residual heat can also cool or dehumidify a building. This reduces the cooling load that would otherwise make demands on the electricity. Micro grids can feed abound electricity into the national grid, thereby facilitating the supply. The transition to micro grids does not come overnight. Along with higher efficiency, better transmission lines and renewable energy they contribute to the transition from a centralized generation of electricity to a new era of flexible, decentralized and environmentally friendly power generation. "

3.3.3 PROJECTS / EXAMPLES The objectives of the EU in terms of smart grids is the need for - a reduction of carbon dioxide emissions - the request to raise energy independence - increasing the energy efficiency - an increase of the renewable energy percentage, which must be integrated into the European energy networks.

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3.3.3.1 EUROPE Smart grids are one of the major topics of European research and funding over the last decade. A total of 459 smart grid projects from over 28 countries were funded or supported from 2002 up to 2014 with the overall investment amounted to €3.15 billion (Smart Grid Projects Outlook, 2014). The tool for monitoring, analysis and centralized collection of insights was created by the European Commission Joint Research Centre (JRC) in tight cooperation with the European Commission Directorate-General for Energy (ENER). Together they developed a comprehensive database of smart grid projects across Europe. This database and the publication "Smart Grid Projects Outlook 2014" provided the basis for an overview on the research activities and a state of the art on the subject of smart grids. The figure below contains key facts about the research situation.

FIGURE 37: QUICK FACTS: SMART GRIDS PROJECTS (SOURCE: SMART GRID PROJECTS OUTLOOK, 2014). A summary of the above-mentioned report was carried out in the publication of Colak et al. (2015). The following describes the crucial achievements and referred to some sample projects. Germany and Denmark perform the biggest number of national project. In addition, Germany also handles most multinational collaborations, followed by Spain, Italy and France. According to the project maturity, defined by the stage in the innovation chain (Giordano, Meletiou, Covrig, Mengolini, Ardelean, Fulli, Sánchez Jiménez & Filiou, 2012), smart grid projects are categorized into Research & Development (R&D) and Demo & Deployment (D&D) projects. The R&D projects are handling the increase of the available knowledge or develop novel applications (Frascati, 2002). The D&D projects illustrate, implement or examine comprehensively the R&D technologies under realistic conditions within the geographical boundaries (Brown & Hendry, 2009; Sagar & Zwaan, 2006). The ratio between performed R&D and D&D project in participating countries is commonly balanced, excluding Denmark with three times larger proportion of R&D than D&D projects. Denmark and Germany are the leading countries by number of R&D and D&D projects (Colak, Fulli, Sagiroglu, Yesilbudak & Covrig, 2015). The transition from the R&D to the D&D phase indicates the maturity and

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D4.2: Requirements for Resource Networks compared to the state of the art 66/127 condition of the smart grid technologies and applications in the specific sector and the country. First countries to transfer to the D&D were Germany, Portugal and Greece in 2007–2008, Spain, Italy, Netherlands, Austria and Ireland transitioned in 2009–2010 followed by United Kingdom, Belgium, Czech Republic, France, Sweden and Slovenia in 2011–2012. Since 2004, the D&D budget had an annual average growth of 73%. In 2014 it was approximately four times higher than the R&D budget. The majority of the western European countries is already getting out from the R&D phase and transfer to the D&D phase in specific sectors. (Colak et al. 2015). All in all the financing of smart grid projects, both R&D and D&D, is coming to an end. Most of the projects will be completed by the end of 2016 and the financing of 2017-2019 is similarly low just as the first years 2004-2007 of research. It can be concluded that smart grids research will be completed and state of the art by 2020. Besides the categorization in R&D and D&D, projects can be break down by the application sectors. Smart network management is a category focused on increasing the operational flexibility of the electricity grid. The main approaches are grid monitoring, control strategies and substation automation to improve the transparency and controllability of the networks in large scales.

3.3.3.2 PROJECTS To name two of the biggest projects, Arrowhead and Green eMotion are the most prominent with 77 and 59 participants from 15 and 13 different countries (Smart Grid Projects Outlook, 2014). Arrowhead’s main objective is to demonstrate and validate a virtual market of energy. This will be accomplished through Arrowhead pilot demonstrations including a setup with 50 private Danish homes acting as prosumers and also laboratory setup with a micro grid and experimental building, as well as through service integration with selected pilot demonstration from Arrowhead. Green eMotion joined forces to explore the basic conditions that need to be fulfilled for Europe-wide electro mobility. The main objectives of Green eMotion were: setting a commonly accepted, user-friendly and scalable framework for pan-European interoperable electro mobility. Integrate smart grid developments, innovative information and communication technology (ICT) solutions and different types of EUs various urban mobility concepts and enable a European wide market place for electro mobility to allow for roaming. In the table below is an overview of all projects.

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TABLE 14: OVERVIEW OF SMART/MICRO GRIDS PROJECTS. Arrowhead The main objective is to demonstrate and validate a virtual market of energy whose concept. This will be accomplished through Arrowhead pilot demonstrations including a setup with 50 private Danish homes acting as prosumers and also laboratory setup with a microgrid and experimental building, as well as through service integration with selected pilot demonstration from Arrowhead. Green They have joined forces to explore the basic conditions that need to be fulfilled eMotion for Europe-wide electromobility. Main objectives of Green eMotion were: Setting a framework for pan-European interoperable electromobility which is commonly accepted, user-friendly and scalable. Integrate smart grid developments, innovative ICT solutions and different types of EUs various urban mobility concepts. Enable a European wide market place for electromobility to allow for roaming. eSESH project aims to design, develop and pilot new solutions to enable sustained reductions in energy consumption across European social housing. This is to be accomplished by providing usable ICT-based services for Energy Management (EMS) and Energy Awareness (EAS) directly to tenants. By providing effective ICT monitoring and control of local generation of power and heat and by providing social housing providers, regional and national government with the data they need to optimise their energy-related policy and investment decisions at national, regional and organisational level EU-DEEP Firstly, the project has identified the current “hosting capacity” of the electrical power system and the conditions that will enable this to be increased at an acceptable cost. Following this, an in-depth economic analysis of DER reveals that they can provide significant added value for the electrical system when they comply with network design constraints and contribute, in a reliable way, to better management of peak consumption. Using three aggregation business models extensively tested in the field, the project highlights the most promising directions to take from now on, to ensure efficient and sustainable integration of DER in the current electrical power system.

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IoE is focusing on opportunities from smart-grid developments to enable and support the large-scale uptake of electric mobility in Europe. The Internet will be connected with the energy grids to enable intelligent control of energy production, storage and distribution; these are all key infrastructure enablers for the widespread use of electric vehicles. The IoE project is proposing an architecture and distributed embedded systems to implement the Real-Time interface between the smart energy grid (infrastructure) and devices/loads in large numbers at the edge (users). Dispower Within the DISPOWER framework we engage especially on the development of an energy management system for controlling generators, storage systems and loads on the basis of schedules. These schedules achieve an operation optimization in accordance to criteria defined by the grid operators or plant owners. For this we can integrate also generation forecasts of fluctuating generators as well as varying electricity prizes on the electricity stock markets. Furthermore we are responsible for the development of monitoring concepts and the realization of scientific monitoring for test installations in existing low voltage grid segments of the project partner and utilities Iberinco/Iberdrola Spain, MVV Mannheim and Stadtwerke Karlsruhe, Germany. On the basis of the scientific monitoring we are able to study and describe the influence of a large number of decentralized energy components on low voltage grids and to evaluate the effectiveness of measures to optimize the grid management, like for instance the application of the energy management system described above. More This project aims at the increase of penetration of microgeneration in electrical Microgrids networks through the exploitation and extension of the Microgrids concept, involving the investigation of alternative micro generator control strategies and alternative network designs, development of new tools for multi-micro-grids management operation and standardisation of technical and commercial protocols.

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SmartSpaces Buildings owned and/or managed by the public sector make up more than 10% of the overall EU building stock and around 40% of the construction turnover is public. The SMARTSPACES service will enable public authorities in Europe significantly to improve their management of energy in the buildings they occupy. The implementation of operational services includes 11 pilot sites with more than 550 buildings in 8 countries (United Kingdom, France, Germany, Italy, Spain, Netherlands, Turkey, Serbia) with almost 20,000 professionals and staff users and reaching more than 6,000,000 visitors annually. The SMARTSPACES energy optimisation service is a comprehensive approach to exploiting the potential of ICT including smart metering for significant energy saving in public buildings. With its aim to reduce energy consumption of the public sector by a very significant amount to meet overall emission reduction targets, the project will build on existing services to develop a comprehensive SMARTSPACES service providing feedback on energy consumption. The range of public building where the SMARTSPACES service will be implemented and operated is wide and includes city administration buildings, office buildings, museums, university buildings but also schools, nurseries and sports and event centres. Twenties ‘Transmission system operation with a large penetration of wind and other renewable electricity sources in electricity networks using innovative tools and integrated energy solutions The aim of the TWENTIES project is to advance the development and deployment of new technologies which facilitate the widespread integration of more onshore and into the European electricity system by 2020 and beyond. TWENTIES is one of the largest renewable energy demonstration projects funded by the European Commission’s Directorate- General for Energy under its seventh Framework Programme Urb. Energy BEEN - Baltic Energy Efficiency Network for the Building Stock. It combines the approach of energy efficient refurbishment of residential buildings with integrated urban development concepts, the modernisation of the energy supply infrastructure, the revaluation of the residential environment and the identification of innovative financing instruments.

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3.3.3.3 CATEGORIES Smart grid application projects can be categorized in seven main categories. Most of the EU countries implement three main application types considering the local competence and national priorities. These are smart network management, smart customer & smart home and integration of DER applications. Italy, Spain and Germany focus strongly on smart network management. These countries are also predominant on smart customer & smart home and integration of DER applications. A smart network management is focusing on increasing the operational flexibility of the electricity grid, like substation automation, grid monitoring and control, etc. Typically, the goal is to improve the observability and controllability of the networks Smart customers and smart home are testing smart appliances and home automation together with new tariff schemes. Such projects typically require the active participation of consumers or aim at analysing consumer behaviour and fostering consumer involvement. Integration of DERs are concentrating on new control schemes and new hardware/software solutions for integrating DERs while assuring system reliability and security. Project results show that technical solutions for the integration of DERs are becoming quite consolidated. It should be noted that our catalogue includes only projects focusing on the integration of storage in the grid, not those focusing on the development of storage technology.

3.3.4 RESTRICTION There are certain problems that most utility providers across the globe face. For instance the measurement information is only available to the energy suppliers and they must not be made freely available, especially not to a competitor. Furthermore, data protection of obtained data has to be respected. There are no accepted standards of what will be measured and how the data is transmitted to a destination. Possibly, after the introduction of standards, an expensive change of systems is necessary. The following table shows all the challenges and aspects in detail.

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TABLE 15: CHALLENGES AND ISSUES (SOURCE: MAHMOOD, JAVAID & RAZZAQ, 2015).

Challenge/issue Aspects Complexity  Modelling, analysis and design of smart grid  Interdependence between different infrastructures  Distributed nature of monitoring and control functions Efficiency  Optimization of network parameters  Accurate time measurements  Faster control messaging  Integrated communications devices  Enhanced computing  Appropriate network topologies Consistency  Consistent demand response  Quality monitoring  Robust communications infrastructure required to tackle disasters and power outages etc. Security  Interconnection of various domains  Ease of security breach in user premises  Virus and hacking attacks Standardization  Design, development and provision of common standards worldwide  Uniformity among various standard organizations  Regional and international concerns Scalability  Accommodation of more and more devices like smart meters  Bandwidth adjustments according to additional users Interoperability  Ability of various systems or components to work with each other in a smooth manner  Different domains of smart grid like generation, transmission, distribution, customers, operations, markets and Independent System Operators are needed to be interoperable and compatible from older to the newest versions Self healing  To avoid system breakdown  Must start self-healing actions within a small period of time after any contingency  Fast control signaling

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4. Energy Efficiency in Production

Section 2.2 showed that energy efficiency is already a concern for European companies. The first wave of energy efficiency in production began approx. in the late 1990’s and intensified from 2000 onward. Most of the innovations from this wave had a focus on technological improvements, many of which still await implementation in real factories. This work was enhanced in the late 2000s and early 2010s by a growing number of approaches, which were intended to plan and operate production sites for more energy efficiency. The following sections detail a basic model which describes existing levers for increasing the energy productivity in a factory in (re-)planning projects of production systems. Thereafter the general factory planning process and approaches for fostering energy efficiency within it are detailed. Section 4.3 extends these considerations to the operation phase, investigating the state of the art for energy-efficient or energy-sensitive production planning and control (PPC). Lastly, the state of the art in practice, as opposed to that in science, is discussed.

4.1 MODEL OF SAVING APPROACHES IN FACTORIES The identification of levers for saving energy in a factory can be simplified if the production system is modelled as a black box which realises a production task (i.e. material flow) and uses energy to realise it (i.e. energy flow). This helps to decrease the complexity of the investigation and to focus on abstracted heuristics for improving the situation. Müller, Engelmann, Löffler & Strauch (2009) suggest the black box model presented in Figure 38.

FIGURE 38: HEURISTICS FOR FINDING IMPROVEMENTS OF THE ENERGY EFFICIENCY IN MANUFACTURING SYSTEMS (SOURCE: MÜLLER & LÖFFLER, 2009; CITED FROM: MÜLLER, ENGELMANN, LÖFFLER & STRAUCH, 2009).

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The suggested heuristics are (cf. Müller et al., 2009):  Substitution of Energy Sources: Energy sources may be substituted with a more economic or environmentally benign alternative. For the latter the primary energy consumption needs to be investigated.  Reduction of Energy Demand, for instance through: o Energy-optimised Product Design: The design of parts and products has severe implications on their production. Accordingly, Müller et al. suggest a few approaches for improving the design: decreased mass; shaping which allows for energy-efficient manufacturing and cleansing (during production); energy-efficient design of joints (e.g. smaller welding profiles); and sensible material and surface requirements (to decrease effort spent on curing). o Energy-optimised Capacity Balance: The reduction of security allowances during the dimensioning of equipment prevents less energy-efficient operating states with partial load. Accordingly, an energy-optimised capacity balance aims to match the actual demand with the provided capacity as best as possible. o Energy-saving Operation Mode: Energy efficient operation of production equipment is possible by adjusting the production planning and control as well as the equipment control systems (e.g. the programmable logic controller (PLC)). The authors suggest, for instance, block-wise use of equipment to prevent partial load or idle time and coupling of exhaust air systems to the production facilities PLC.  Increased Efficiency of Equipment: Improved manufacturing processes can serve to improve the ratio between useful and consumed energy in a production machine. Useful, in this sense, means the amount of energy which actually goes into the production process. The authors suggest process integration, substitution, increased failure robustness and sophistication (intelligent use of “free” energy, such as potential energy) as a basis for achieving higher efficiency.  Reduction of Process Losses: Energy losses can be decreased by a number of methods. Müller et al. (2009) distinguish between losses involving matter directly or indirectly or diffuse losses. These can be reduced by, for instance, reducing process temperatures, improving heat transmission processes or isolation, decreasing idle time in energy-intensive operating states, reducing friction or avoiding leakages.  Energy Recovery: Waste energy can potentially be used in other processes. Examples are the use of process waste heat for pre-heating of cleaning baths or the recuperation of break energy in electric engines.

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 Direct Use of Heating: Waste heat which cannot be recovered for other processes can potentially be used to heat the factory building. Accordingly, this should be considered during the factory planning process. The above shows a wide array of possible approaches for improving the energy efficiency of a production site. The following two sections focus on those heuristics which are connected to the immediate factory planning or the control of production systems. Using efficient product designs and equipment is always an imperative when striving for more energy efficiency. Thus, technical possibilities and needs for actions are not in the focus of this deliverable or the RNM but are expected to be available for both the planning phase and the operation phase.

4.2 FACTORY PLANNING Within the planning phases there are five planning stages. Each builds on one another and process the configuration steps consecutively. These configuration steps are (Wirth & Gaese, 2003): 1. Preparation of the Production program / Performance program, 2. Function and Process determination 3. Dimensioning 4. Structuring 5. Design

4.2.1 GENERAL FACTORY PLANNING PROCESS The generally accepted configuration steps can be resolved into a series of sizing and patterning steps. These need to be gradual, mutually and simultaneously completed. First of all, the technological processes must be configured based on the production / performance program. These are located within the object and hierarchical levels of production (e.g. as production space, production area, etc.). Only then the other flow systems will be planned in the order of material, information and energy. Within the material flow the product/workpiece flow (production, storage device, and transport and transfer device) is developed first, followed by the flow of jigs and fixtures, tools and testing equipment and flow of waste and operating materials. All factory processes that are necessary for the economic functioning of the production system need to be planned. The following figure shows the basic procedure of factory planning.

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FIGURE 39: GENERAL FACTORY PLANNING METHODOLOGY.

4.2.1.1 MANUFACTURING & PERFORMANCE PROGRAM PROVISION

The production program defines the production according to objective (type, size) quantity (number, mass), value (price, cost) and temporal aspects (production period, planning period). The production program planning is subdivided according to the length of the planning period in: • short-term, operational planning with a duration of days and weeks, • medium-term, tactical planning with a planning horizon of months and years • long-term, strategic planning with a planning horizon of three years and more .

Usually the short-term, operational production planning takes place on the basis of customer application. The focus of the considerations is the minimization of the portfolio. For the long-term, strategic planning sales forecasts are developed.

4.2.1.2 FUNCTION DETERMINATION

The planning step function / process determination comprises all planning activities that lead to the statement about the process quantity P of a production system Σ = (M, P, S). The process quantity P includes the material, informational and energetic processes that provides the basis to the production, processing and handling of products. Functional designation is understood as the qualitative determination of the material, energy and informational flows and processes In the function or process determining these issues need to be clarified: • Which functions are to be fulfilled by the production system to be planned? • What processes takes place in the planned production system? • What elements perform the functions?

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4.2.1.3 DIMENSIONING

The planning step dimensioning includes all the planning activities that lead to conclusions about the amount of element M / Σ = (M, P, S). The element amount M includes the subsets resources, human and material resources (production factors). Under dimensioning is understood as the river system elements the workers, the land, the building in the planning object and determine the costs quantitation (number / size). In the dimensioning one question needs to be clarified: - How many function-fulfilling elements are needed? In course of planning the dimension comprises the quantitative determination of required resources, needed employees and required areas as well as for the future production system. The results are summarized in a table. These list are usually called ‘needs list’ for machinery, plant, equipment, land, storage facilities, funding, energy, media, staff, etc. Thus, the investment and cost decisions are well-founded and justified. Investment and cost decisions are for example necessary advertisement, the overhaul of offers, conversations, orders, etc. The basic calculation method for the dimensioning in the production planning system is the balance sheet approach. It assumes that the load capacity to be installed is equal to or greater than the expected load should be. If, over time, load changes are considered it is spoken of as dynamic dimensioning, otherwise static.

4.2.1.4 STRUCTURING

The planning step structuring covers all planning activities that lead to conclusions about the structure of a production system S = Σ (M, P, S). The structure S is represented by a sequence of tens of relations. These relations are of material, energy and informational nature. The structure is induced by processes. Structuring means the determination of the temporal and spatial relations of river system elements or process to each other. The Result is an optimal arrangement of the elements and systems. In structuring these questions must be answered: • What strength and what direction do the internal relations have? • In what internal structure takes the processes place?

Every manufacturing process has a spatial and temporal structure. Their combination results in the forms of organization of production. The spatial structures arise in the context of the construction planning the temporal structures through the schedule.

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To provide controllable subsystems is the aim of structuring. These subsystems have to be technically and organizationally feasible under the given conditions. The correct determination of the organizational form of production based on the given production conditions substantially affects the effectiveness of the planned solution.

The following factors influence the organizational form:  Manufacturing and assembly orders (quantities, times, places)  Diversity of products  Number of operations per product (technology)  Spatial connections of jobs.

4.2.1.5 DESIGN The planning step design is understood as the detailed planning of special project areas (peripheral areas). This plan includes a ready for implementation, spatial-functional classification of the river system elements / river systems with special attention to the restrictions and demands of economy, ecology and occupational health and safety. The relationships between the spatial-functional classification of functional and structural units (manufacturing, assembly, warehousing, and transport units) and linking them are the subject of design. As a result of the eradication of these planning steps the layout is created. The layout is distinguished regarding to the accuracy of the statement in coarse and fine layout or with respect to the quality details in ideal and real layout.

4.2.2 CONSIDERATION OF ENERGETIC ASPECTS In latest research it is stated that the majority of energy saving activities and methods often focusses on existent procedures and operations of single machines or production elements in factories. This implicates the necessity of holistic methods and approaches for the integration of energy efficiency in conceptual phases of a factory (Hopf & Müller, 2014). A broad implementation of energy aspects in the process of factory planning requires various competences and sufficient knowledge of the participants. Especially constant adaptation and self- improvement are demanded which leads to new learning concepts and methods, also in the topic of energy efficiency (Poller et al., 2013). With regard to energy efficiency and flexibility Müller et al. extend the content of the particular factory planning steps by a wide range of aspects. The next sections deliver an overview of possible energy related topics that are taken into account during factory planning.

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FIGURE 40: STEPS OF FACTORY PLANNING PROJECTS CONSIDERING ENERGY.

4.2.2.1 FUNCTION DETERMINATION Based on choice of machinery and processes several energy-related aspects are determined. Firstly it is necessary to gather the type of energy itself for every production process, starting with the main process and proceeding with the adhered processes. At this early planning stage there are several approaches to improve energy efficiency. For example reduction of useful energy is possible by scrutinizing product design regarding its mass, surface characteristics, conduits or structure. Moreover energy demand can be lowered by substitution of equipment and technology that provides higher efficiency. Secondly the appropriate providing of energy has to be coordinated with specialists for electric grids and components. Only by collaboration of all-rounders and experts the optimized result is possible. Thirdly the implementation of energy efficient equipment requires qualifications and certifications to handle operation and maintenance. Finally the overall necessary types of energy need to be calculated. Typically electric energy, natural gas, district heating and not grid-bounded fuels are determined.

4.2.2.2 DIMENSIONING In this step the beforehand acquired, qualitative components are specified regarding their amount and quantity. To be precise the quantity of machines, necessary equipment for energy supply, related staff and the overall amount of energy are calculated. With reference to energy efficiency it is of major importance that an oversizing is avoided to prevent from fixed costs and unused areas or machines. Typical reasons for oversizing are based on the fact

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D4.2: Requirements for Resource Networks compared to the state of the art 79/127 that equipment and production systems can only be implemented in whole numbers and that additional charges are calculated. Furthermore it should be taken into account that recovered and wasted energy are considered as influence for heating. Thus, it is useful to integrate machinery that can be switched on an off separately.

4.2.2.3 STRUCTURING Energy efficiency in this section is influenced in two different ways. On one hand the spatial structuring mainly influences energy losses, expenses on transport and flexibility in case of changing circumstances. Therefore an optimized structuring enables short distances between warehouse and several production areas. Moreover short supply lines lead to less wastage of compressed air or water temperature. Additionally a modular and flexible structure is a prerequisite to cope with fluctuations of energy demand in the short as well as the long term. On the other hand the temporal structuring focusses on process planning to minimize energy and material usage. So planning in this stage mostly refers to a useful integration of process-oriented idle times, for example in case of drying or deposit processes.

4.2.2.4 DESIGNING The last step of the factory planning process particularizes the results of the structuring process. It is important to mention that there are at least two different concepts of a layout that have to be assessed to make a final choice. Typically the decision is supported with a value benefit analysis where energy efficiency is of major importance. That means global results and requirements are implemented on a more detailed level. So especially components that use natural preconditions (e.g. gravity and daylight) are integrated. (Müller, Engelmann, Löffler & Strauch, 2009) A sophisticated approach that considers flexibility and energy efficiency during this stage is the ‘Flow System Theory’. Following that idea the factory is a system with different flows of elements that can be transported, transformed and stored. Thus, the energy flow is directly linked to the flow of materials as well as the flow in supply lines. This integrated perception enables a better reaction of energy supply and a lower wastage of energy. Additionally, coherences between areas, resources and the infrastructure become visible and build the base for further analysis and optimization. (Hopf & Müller, 2013).

4.3 FACTORY OPERATION In recent research the efficiency of a factory and the ability to react in case of short-term demands and excesses of energy receive a lot of attention. In addition to that there are several, holistic approaches that help raising a factory’s energy efficiency. Therefore the following section provides an overview of different strategies (Müller, Engelmann, Löffler & Strauch, 2009; see also section 4.1):

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 Substitution of implemented energy carriers with improvement of primary energy usage  Reduction of demand of useful energy (e.g. with optimised product design, efficient sizing of factory, optimisation of mode of operation)  Increase of efficiency factor and reduction of lost energy  Energy recovery  Further use of lost energy

At this point it becomes obvious that methods for an improved and energy-sensitive mode of operation can contribute significantly to the flexibility of factories. Some investigations even define an energy flexible production schedule as the major goal instead of energy efficiency in general. (Keller, Schönborn, & Reinhart, 2015)

All in all energy sensitive modes are connected to a factory’s material flow and can be separated into three basic methods:  Control of orders in accordance with energetic criteria implies the changes of order sequence, shutdown in case of load peaks and energy oriented scheduling (Bücker, & Deuse, 2012; Putz, Leischnig, Schlegel, Golle & Riedel, 2010)  Handling of orders in blocks which leads to a utilisation of energetic potentials based on combination of work contents (Klose & Petzold, 2008)  Extension of energy saving operating conditions for production plants which is connected to the energy oriented scheduling as well as a prolongation of breaks between operations (Pechmann, Schöler & Hackmann, 2012)

To precise the beforehand mentioned methods some recently researched and described approaches shall be illustrated in the following passage. The sequencing of orders can be oriented and optimised with reference to the specific process technologies. By changing various steps of the process it is possible to save energy and improve the technology at the same time. (Klose & Petzold, 2008) Another opportunity is the optimisation of batch sizes with integration of energy relevant values. This implies the regard of transport energy usage, overall transport costs, stock energy usage and warehousing. Moreover it is proposed that non-value-added time slices are joined and in this way production plants are already shut off before production breaks. (Putz et al., 2010)

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Further options of energy-sensitive production planning refer to early stages in the planning process. By implementing a modular simulation model it is possible to estimate resource and energy usage of distinct production processes. (Abele, Schrems, Eisele & Schraml, 2012) The implementation of energy data in production planning software in general offers further opportunities. In extension of the approaches above there are various ideas and methods implemented in current projects. Therefore a selection regarding the energy sensitive production is presented in the following classification:  (Short-Term-) Machine steering and control  Scheduling  (Long-Term-) Planning, algorithms and methods  Specific software and systems

4.3.1 (SHORT-TERM-) MACHINE STEERING AND CONTROL Frigerio and Matta (2013) describe four control policies to identify the most suitable energy state of machines during non-productive phases:

FIGURE 41: MACHINE STATES DURING NON-PRODUCTIVE PHASES (SOURCE: FRIGERIO & MATTA, 2013).

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 The always-on-policy is characterised by the constant on-service stat after departure of a part.  In the second type (switch off) machines are just switched off in a distinct time interval after the last departure.  With the switch-on-policy the machine is turned on in a distinct time after the last departure or when a part arrives in a defined interval.  When implementing the Off-policy the machine is shut off directly after the departure of a single part. As it becomes obvious the best policy selection is affected by the interarrival time distribution although machine characteristics are fixed. This leads to the conclusion that the current policy has to be changed according to the production performance and workload of a plant. In a further study they refer to the meaning of production breaks and present a numerical method to implement control policies that reduce power consumption when production is not needed (i.e. during machine idle periods). The control policy considers a warm-up duration that is time dependent in connection with stochastic arrival times. So they basically differentiate between two types of power requirements of machine tools: fixed power (for operational readiness, independent from process) and load dependent power (to operate components and execute the main process). Taking into account that there are only a few saving control systems available Frigerio and Matta (2014) propose a switch-off policy for an energy oriented control of machine tools in manufacturing. Basic assumptions are that an optimal switch-off time always exists and that equations for the numerical calculation are provided. Moreover they suppose that warmup duration often depends on the amount of times the machine is switched off. Besides several results they come to the conclusion that the machine should be switched off faster in case of short warm-up times. Weinert and Mose (2014) deliver an extension of this approach by investigating different types of stand by strategies for energy savings. Main occasion for their sophisticated reflection is the decision against switching off machines that prevails in reality due to fear of a proper restart afterwards. Often production equipment is not designed for repeatedly being switched on and off daily. This leads to the fact that unscheduled downtimes and production losses are more cost intensive than the energy that can be saved instead. Thus machinery is kept running in order not to risk any output. Those are reasons for the introduction of different stand by states.

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FIGURE 42: POSSIBLE ENERGY SAVING OPERATING STATES. During off mode the machines are separated from energy supply so hardware is completely switched off and has to be connected. In the so called sleep mode energy consumption is only occurs when leaving this non operative state. The standby mode is separated into two different versions that depend on the time horizon of production breaks. In both cases energy exists but is lower compared to the ready state. The transition to ready state requires a distinct amount of time. This state is characterised by the constant readiness to start production immediately. During the operation state energy consumption depends on the actual production process so it is not part of research in this section. A further reason for energy expenditure is the transition between those different states. Besides the focus on energy usage during non-productive phases further research concentrates on overall objectives for an energy-oriented production control. In this case it is the major target to meet production deadlines while deviations from an energy schedule are minimised. To reach this the investigation follows an energy oriented order release with the following steps: generating orders, releasing orders, controlling capacities and sequencing. By investigating different scenarios it becomes obvious that energy wastage due to production interruptions can be reduced by 30 %. Additionally, as a negative aspect, delivery reliability decreases in those scenarios of an energy oriented order release. (Schultz, Sellmaier & Reinhart, 2015) A further option is the use of heuristic approaches that approximate an ideal solution between the strategies of using stand by modes or switching on an off machines immediately before and after production. (Keller et al., 2015)

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Li et al. discuss the relevance of real-time production control for demand response in manufacturing. Based on this, Zhou & Li (2013) present shutdown strategies considering bottlenecks in manufacturing to meet demand response requirement.

4.3.2 SCHEDULING The operative production control strategies that are mentioned above focus on single machines and the opportunities to save energy by steering energy different stand by states of machinery. In contrast to this the following approaches illustrate methods and ideas to distribute orders between several machines and even factories. A current investigation focusses on the optimisation of factory schedules by batching and selecting a better product sequence based on predetermined pricing. The simulation implies time varying electricity prices with integration of time-of-use, real-time-price and critical-peak-price in high price and low price periods. This research of Zhang, Zhao, and Sutherland (2015) aims to find the global optimum of a manufacturing schedule by mixed integer programming. In case of scheduling for multiple factories two basic cases are possible:  Collaborative, when factories share their planned schedules  Non-collaborative, when factories create schedules independently The investigation comes to the conclusion that, under the aforementioned conditions, total electricity costs in the non-collaborative case are always higher. Artigues et al. discuss an energy scheduling problem representing electric power limitations in parallel machine scheduling. Their goal is to limit power consumption to a given value and thereby minimize energy costs for power overruns. (Artigues, Lopez & Hait, 2013)

4.3.3 SOFTWARE/SYSTEMS Implemented (software-) systems for production planning that integrate energy efficiency have to meet several requirements. Especially external turbulences caused by the volatile energy market need to be taken into account. Thus a model that assesses production and energy agility has to be dynamic and on a stochastic basis. (Kuhlmann & Bauernhansl, 2015) An inevitable prerequisite of these systems is the temporary as well as permanent energy monitoring. After acquisition it is necessary to generate and safe a database that can be used for further analysis, controlling and planning activities. Furthermore the communication between machinery and the control units demands a stable and standardised network. Müller and Löffler (2013) introduce a case study based approach that illustrates the implementation of these components.

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Additionally Pechmann, Schöler & Hackmann (2012) present a PPC software which incorporates an energy planning module.

4.3.4 ALGORITHMS/METHODS Besides concrete control and scheduling strategies there are further, abstracted approaches which provide basic methods to improve factories energy efficiency in production planning and control.

FIGURE 43: CLASSIFICATION OF MEASURES FOR RAISING ENERGY EFFICIENCY AND FLEXIBILITY IN FACTORIES. A common characeristic of the introduced methods is the adaptation of of the energy demand to the availability of energy in the grid. This so called ‘energy demand response’ is a useful concept and can be specified to cope with internal and external changes. (Graßl & Reinhart, 2014)

Further research concentrates on the opportunity to assess manufacturing processes regarding energy efficiency during a whole life cycle process from the perspective of production planning. Therefore several evaluation criteria in the categories human, machine, material, environment and logistics are identified and evaluated. As a result energy efficient production planning becomes possible by predetermination of the theoretical energy consumption. (Kreitlein, Schwender, Rackow, & Franke, 2015)

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Haag, Siegert, Bauernhansl, and Westkämper (2012) developed a model-based approach to reflect energy consumption of resources as well as peripheral systems, e.g. compressed air supply. They derive a KPI system to optimize energy efficiency in production planning and control. Weinert, Chiotellis, and Seliger (2011) propose a methodology called EnergyBlocks, which can be used to integrate energy-efficiency criteria with production planning and scheduling. Eberspächer and Verl (2008) developed a graph-based algorithm to minimize energy consumption during non- productive periods. Their method can be implemented into a machine tool to enhance its energy efficiency. Rager (2008) focusses on heuristic optimisation methods that are based on evolutionary algorithms. In this way he combines the energy supply system of a factory with the scheduling of parallel machines in a job shop production. For optimisation of the scheduling of hybrid flow shops Hao Luo et al. (2013) developed an ant colony algorithm that implies machine electricity consumption cost. The results are a guideline about the preference of multiple objectives as well as a parameter analysis that shows the influence of processing speed of machines and off-peak periods on scheduling. Shrouf, Ordieres-Meré, García-Sánchez & Ortega-Mier (2014) developed a mathematical model that minimizes energy consumption of a single machine during production processes by scheduling of launch times for job processing as well as idle times, turning on- and turning off times.

4.3.5 DEFICITS AND POTENTIALS It becomes obvious that that there is an amount of different approaches to reach an optimised production planning and steering that include various efficiency factors simultaneously. It is also a common attribute that the investigations mainly focus on energy and its impact on the ecologic balance sheet. This leads to the fact that the social dimension, as a basic pillar of sustainability, is sparsely documented in this topic. An example for the inclusion of social goal criteria is the minimisation of transport runs because of lower risks of crashes and disorders. (Battini, Persona & Sgarbossa, 2014; Bouchery, Ghaffari, Jemai, Dallery, 2012) Another approach to improve PPS with regard to social aspects is the inclusion of possible work monotony in scheduling of batches. (Jaber, Givi & Neumann, 2013) Further researchers introduce ergonomic and health findings that can be included in staff planning. (Beermann, 2005; Zhang and Kay, 2010) At the same time it has to be mentioned that the integration of social components into PPS systems and the IT infrastructure of factories is not much investigated so far.

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4.4 STATE OF THE ART IN PRACTICE The EU has set itself the objective of saving 20% energy until 2020 (compared to a business-as-usual scenario). Energy can be saved through increased energy efficiency throughout the whole chain from its generation to its transmission and distribution to more efficient end-use. Energy efficiency is the cross-cutting issue par excellence and as such is addressed by a number of European programmes and initiatives. The Energy Theme of the Research Framework Programme (FP7, 2007- 2013) focused on increasing the efficient energy use in the manufacturing industry. The Nanosciences, Nanotechnologies, Materials and New Production Technologies (NMP) Theme funds research for advanced materials, allowing more industrial processes that consume less energy. In the field of energy research alone more than EUR 180 million has been spent by the EU since 2002 (start of FP6) to support more than 30 projects dealing directly with energy efficiency and savings (European Commission, 2015a). It is estimated that 20-50% of the energy used in industrial processes is lost in the form of hot exhaust gases, cooling water and heat losses from equipment and products. The Figure 44 (extracted from SPIRE Roadmap, cf. Tello & Weerdmeester, 2013) compares the energy use and energy losses in industry sectors in the US to illustrate the huge potential that exists in re-utilising waste heat streams as a resource (Tello & Weerdmeester, 2013).

FIGURE 44: OVERVIEW OF ENERGY LOSSES (SOURCE: TELLO & WEERDMEESTER, 2013). The European Public Private Partnership for the Sustainable Process Industry through Resource and Energy Efficiency (SPIRE) has a “cross-sectorial vision” within the process industry to address a novel and radically improved production processes to increase the energy, resource and CO2 efficiency in industrial value chains. For this purpose proposes:

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1. Use energy and resources more efficiently (reduce) within the existing installed base of industrial processes. Reduce, prevent waste. 2. Re-use waste streams and energy within and between different sectors, including recovery, recycling and re-use of post-consumer waste; 3. Replace current feedstock by integrating novel and renewable feedstock. Replace current inefficient processes for more energy and resource efficient processes when sustainability analysis confirms the benefits; 4. Reinvent materials and products to have a significantly increased impact on resource and energy efficiency over the value chain. An overview of some EU funded projects in the area of energy efficiency in the latest years is provided in Table 16. TABLE 16: OVERVIEW OF RELEVANT EU-FUNDED PROJECTS REGARDING ENERGY EFFICIENCY IN PRODUCTION. A Method for On-Line Cleaning of Heat Exchangers to Significantly Increase Energy Efficiency in the Oil, Gas, Power & Chemical Process Sectors. This projects aims to develop an innovative projectile based on-line cleaning CLEANEX and injection system that will work under the required operating conditions to mitigate foulant build-up throughout the heat exchanger. The proposed solution will provide the industry with significant energy savings of over 10%

and reduce the CO2 foot print across a wide range of industrial sectors. Ceramic Heat exchangers with enhanced materials properties The project aims to develop a new generation of ceramic heat exchangers for high temperature heat recovery with the target of significantly reducing the CEREXPRO size and weight as well as also the price of such components by simplifying the manufacturing process and allowing a higher flexibility in the heat exchanger geometry.

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Novel climatic chamber with an Innovative, energy-saving Nano-Aerosol Humidificaction System for the manufacture of high quality Bakery products Bakeries are energy intensive, using large amounts of electricity and natural gas to operate the refrigeration system, compressed air system and ovens. Overall aim of the NanoBAK-Collaborative Project is the efficient energy NANOBAK management in the baking industry. Specific aim of this project is the development and demonstration of a novel marketable climatic chamber with an innovative, energy-saving nano-aerosol humidification system. The innovative ultrasonic humidification of the NanoBAK Project saves up to 50% of energy compared to conventional humidifiers. Low-temperature heat exchangers based on thermally-conducting polymer nanocomposites Thermonano aims at developing nanofilled-polymer-based heat exchangers enabling: i) effective heat conductivity; ii) cost reduction compared to metal materials; iii) design flexibility for an intensive volume exploitation; iv) superior THERMONANO corrosion resistance; v) promotion of the highly effective drop condensation with hydrophobic polymers. Three main application areas are devised: 1. Intercoolers increasing the efficiency of large diesel engines; 2. Heat recovery systems from combustion flue gases; 3. Application in the chemical and process industries where harsh chemicals or corrosive environments have to be faced. Sustainable Energy Technology at Work: Thematic Promotion of Energy Efficiency and Energy Saving Technologies in the Carbon Markets The overall objective of the SETatWork proposal is to undertake thematic SETATWORK promotion of energy efficiency and saving technologies in industry sectors connected with the carbon markets. The project will lead to initiation of a number of specific projects in industry sectors and provide comprehensive dissemination on tools and examples to broad target groups.

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Energy Efficient Process pLAnning system ENEPLAN project aim the development of a network-based meta-CAM tool towards energy-efficient multi-process manufacturing and optimum process planning from a given set of production requirements, adapted to the ENEPLAN functional specifications of metal formed or machined parts for automotive, aeronautic and domestic appliances. The development of the meta-CAM tool will help industry towards green and flexible manufacturing, energy efficiency, environmental friendliness and quick respond to market demands. Automation and Robotics for EUropean Sustainable manufacturing Develops hardware technologies to leverage bi-directional energy flows and to improve the use of renew-able energy sources in factories. A new electrical power supply system will dramatically reduce the energy consumption of AREUS robotized automation systems. Development of an integrated set of energy consumption reduction technologies based on a novel factory electrical (Novel variable-voltage DC based power network architecture) power supply system to exchange, harvest, store and recover energy at factory level. High Temperature cooking process optimization for holistic high efficiency mechanism of Microwaves for ceramic, concrete and glass industries…. DAPhNE project will design new continuous sustainable processes, such as for DAPHNE ceramic frit, cement, pozzolans and glass, using optimized MW technologies with real time self-adaptive control. Strategies common to the above processes will be developed in the frame of the DAPhNE project, to guarantee economies of scale for the targeted industries. Eco Manufactured transportation means from Clean and competitive Factory EMC2-Factory is developing a radically new paradigm for cost-effective, highly productive, energy- efficient and sustainable production systems. The project EMC2FACTORY results will lead to a sustainable green factory framework, oriented towards a highly resource and energy efficient production, as well as economically profitable. The new established paradigm will become a permanent reference point in European manufacturing

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Factory ECO-friendly and energy efficient technologies and adaptive autoMATION solutions. Factory-ECOMATION will enable European manufacturing industries to overachieve Europe 2020 program targets developing breakthrough FACTORY innovations for cost-effective, highly productive, energy-efficient and near- ECOMATION zero-emissions production systems; the project will therefore help European industry to meet the increasing demand for greener, more efficient and higher quality production, fostering the transition to an industry with lower waste generation, energy and raw material consumption. Enabling the drying process to save energy and water, realizing process efficiency in the dairy chain The project ENTHALPY aims to significantly reduce energy and water consumption in the European dairy industry through a selected pool of technologies especially suitable for the SME sector framework. The proposal ENTHALPY has significant SME participation in order to realise industrial and commercial relevance. Energy savings are expected to reach 63 % and water savings 18 %. This will lead to increased competitiveness in the dairy sector Demonstration of hygienic eco-design of food processing equipment as best available technique. The general objective of the ECODHYBAT project is to demonstrate that a ECO-DHYBAT proper eco-design criterion can reduce the consumption (and thus cost) of water, energy and chemical cleaning and disinfection agents of food processing companies, as well as the environmental cost of the sanitation processes

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Integrated engineering approach validating reduced water and energy consumption in milk processing for wider food supply chain replication EnReMilk is a demonstration project aiming to achieve significant water and energy savings in representative dairy, mozzarella and milk powder production, across the whole supply chain. Savings will be validated against a consumption baseline of existing operations, both in model simulations and in ENREMILK physical trials involving emerging and novel engineering technologies. It will ensure a smooth transition into practical implementation, providing an innovation-driven increase in the competitiveness of the EU dairy sector. EnReMilk will ensure that engineering innovations are verified as environmentally sustainable, economically viable and socially responsible, and that food quality and safety is not compromised. Superheated steam-based process for low energy and high quality drying of food and food residues The SteamDry project stems from the current trend in the EU market for processed foods. There is an increasing demand by consumers for foods that have undergone fewer changes during processing, and foods that look less STEAMDRY processed and are closer to their original state whilst retaining high nutritive values, flavour and a ‘natural’ image. SMEs manufacturing food processing machinery must not only improve the drying process so as to achieve the high quality demanded across the EU customer base, but they must also tackle the energy consumption and pollution issues that are typical of such equipment. Innovative and energy-efficient proofing/cooling technology based on ultrasonic humidification for high quality bakery products The project NanoBAK2 aims to take up the successful research results from the earlier research project NanoBAK. It will scale up, demonstrate and NANOBAK2 disseminate the technical and economic innovation of a climate chamber for proofing and cooling with an innovative, energy-saving ultrasonic-based humidification system for the manufacture of high quality products in SME bakeries.

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Low energy ovens The overall goal of the LEO project is to develop three types of oven: i) batch- deck oven, ii) batch-rack oven and iii) conveyor oven. These ovens will be based on a similar technology to reduce energy consumption and save time during the LEO baking process for a wide target group (craft bakery and bake-off actors). The LEO infrared technology will provide an overall reduction in energy of between 20 % and 40 %, and can be used in a two-step process (preheating and/or baking). The technology can be applied to partly baked bread (bake-off) and fully baked bread onsite (retail in-store and craft bakeries). Towards zero fossil CO2 emissions in the European food and beverage industry The overall objective of the GREENFOODS project is to lead the European food and beverage industry to high-energy efficiency and a reduction in fossil GREENFOODS carbon emissions in order to ensure and foster worldwide competitiveness, improve the security of energy supply and guarantee sustainable production in Europe.

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5. Flexibilities in Factories

Any production site has a set of flexibilities it provides for the operator and a set of volatilities it has to cope with. The purpose of this chapter is to identify those relevant, i.e. useable or noteworthy, for the Resource Networks Methodology (RNM). Thereafter, existing European projects dealing with the matter are investigated

5.1 OVERVIEW OF OF FLEXIBILITIES AND VOLATILITIES Naturally, flexibilities and volatilities can be associated with individual elements either acting in a production site or influencing it from the outside. These can be classified using different aspects which have implications on the way their particularities can be exploited within the RNM. Schenk, Wirth & Müller (2010, pp. 10-13) discuss a hierarchical organisation, peripheral areas and a functional organisation. In the following, a number of identified flexibilities or volatilities are categorized according to these and analysed for their potential or implications on the RNM (based on the concept presented in Deliverable 4.1, cf. REEMAIN, 2015).

5.1.1 HIERARCHICAL ORGANISATION The hierarchical organisation (see Figure 45) is concerned with different levels in which a production site can be viewed. While production equipment tends to be viewed on the workstation or group level, infrastructure is, depending on the particular factory, usually associated with the division or plant level.

FIGURE 45: HIERARCHICAL ORGANISATION OF A PRODUCTION FACILITY (SOURCE: SCHENK, WIRTH & MÜLLER, 2010, P. 10).

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5.1.1.1 PLANT LEVEL Primary or secondary energy carriers as well as renewable energy source, especially for electrical energy, which provide energy to all of a plant, are usually situated on the plant level. Similarly, customer orders are received on this level. All of these act as volatilities which need to be coped with in the production processes. In particular, the energy prices, the amount of self-generated energy (from natural sources) and the order/quantity of customer orders cannot be influenced. Considering the flow of energy, this marks the profile of the supply side which has to be considered when planning for the increased use of electricity, heat or cold from RES. The customer orders, on the other hand, cause the load which the plant has to deal with. Various characteristics of the latter, such as the number and order of production tasks required for completion, also influence how the load is distributed in the system. Energy generated by conventional means or energy storages can act as potential for flexibilities. These can be used to adapt the energy supply profile to the demand of the system, if need be. The potential is – however – limited, especially in the case of energy storages, which have a restriction on the amount for stored energy in addition to the maximum discharge (which also applies to conventional energy sources).

5.1.1.2 DIVISION/SECTION LEVEL While factory operators will aim to avoid complexity, work schedules are frequently defined on a per division basis or on a per section basis to account for differing loads as well as differing nominal capacities. The schedule, in turn, provides flexibility concerning the distribution of completed work over the day. It should still be noted that changes exploiting this flexibility will naturally have significant implications on the throughput of customer orders and social consequences for the workforce.

5.1.1.3 WORKSTATION/WORKSTATION GROUP LEVEL Individual workstations or machine and groups thereof provide potential flexibility on the lowest level in the material flow system. The degrees of freedom are usually restricted by the morphology of the factory (see Schenk et al, 2010, pp. 4 ff.), the factory orientation and the production process in particular. Personnel and their qualification in particular are also an important point for consideration in this. Exploiting flexibility within workstations or groups thereof implies shifting work and thus hours of labor. This is only possible if qualified personnel is available. Additionally, costs need to be contemplated as increasingly flexible work schedules are usually incentivized to the workforce through monetary compensation and night as well as weekend labor is associated with extra costs.

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5.1.2 PERIPHERAL AREAS The peripheral areas are more focussed on the actual production processes, which are considered as the main processes around which others are aligned in multiple layers. This stresses the importance of the actual production and ranks the other elements to one another. Schenk et al. (2010) also associate certain attributes, such as flexibility requirements or autonomy, to the various peripheral areas (see Figure 45). These have been regarded in the identification and analysis of flexibilities and volatilities below. In light of the planned RNM it is also noteworthy that the authors suggest a planning procedure moving from the main processes outwards.

FIGURE 46: PERIPHERAL AREAS OF THE MAIN PRODUCTION PROCESSES (SOURCE: SCHENK, WIRTH & MÜLLER, 2010, P. 11).

5.1.2.1 MAIN PROCESSES The main processes make up the actual production and are responsible for completing all production tasks in the material flow. Hence, this is identical to the consideration from 5.1.1.3. However, it should be noted that from a point of view concerned with peripheral areas, the main processes (i.e. workstations) appear as volatilities to peripheral processes and equipment.

5.1.2.2 1ST PERIPHERY In order to exploit the flexibilities available in the production process, elements from the 1st periphery need to be considered. Intermediate buffers and internal transportation equipment are the basis for decoupling the flow of materials within the factory. Accordingly, their capacity can be used to momentarily alter the production capacity to accommodate for an increased or decreased energy supply.

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Similarly, the production process control gives opportunity to implement energy-sensitive production planning and control strategies, such as those elaborated in section 4.3. This can serve to level the demand, decrease the total demand (by eliminating waste) or to adapt to a variable energy supply (price). A lot of potential can be found in production systems which work on different, complex customer orders. Modelling the individual tasks of such orders allows for determining critical and non-critical tasks. The latter are signified by time buffers for their completion which can be used to shift their load on the system (making use of intermediate buffers etc.).

5.1.2.3 2ND PERIPHERY All kinds of indirect infrastructure, i.e. infrastructure which is not immediately linked to the production processes and the flow of materials, can provide some flexibility in the system. Many energy carriers used to operate the production equipment can use or are already using storage facilities (e.g. compressed air tanks). Hence, indirect infrastructure equipment and distribution networks for energy carriers can serve as decoupling entities for the energy consumption of the production processes to some degree. The introduction of storages for heat/cold, compressed air, electricity and possibly others seems promising to increase the decoupling nature of the infrastructure. A solution which has been discussed considerably in science in the recent past and is increasingly being marketed by some companies is demand response (see sections 3.2.3.4, 4.3.1 and 4.3.4). It basically exploits the flexibility of indirect infrastructure equipment by switching it on or off if a monetary advantage can be generated from this. While this is usually only viable for very large consumers, it can also be viable for an ad-hoc network of multiple smaller consumers which are operated by a single entity. This model is used by some companies which market the potential of multiple to companies and control the equipment to increase or decrease the consumption according to the market situation. This does, however, require strict definitions of the requirements so the production process is not degraded. The latter is a prime concern for many production companies and also the main hindrance when discussing demand response for main processes. Waste treatment facilities also provide potential to avoid waste and increase the self-reliance of a production system. Examples could be waste heat recovery or miniature waste incinerators used to generate electricity from process wastes. Furthermore, spiking energy demands over short periods of time can be levelled by means of short term energy storages (see section 3.2). This can help to improve the controllability of the entire system by reducing short term volatility in the demand of specific production tasks.

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5.1.2.4 3RD PERIPHERY Power generation is possibly of the highest interest in the 3rd periphery. This has already been covered in section 5.1.1.1.

5.1.3 FUNCTIONAL ORGNISATION Besides the flow systems depicted in Figure 46, Schenk et al. (2010, p. 13) also consider the flow of personnel and capital/costs. The authors note that the flow of products and materials should always be the first to be considered in a factory planning project.

FIGURE 47: MATERIAL, ENERGY AND INFORMATION FLOW SYSTEMS (SOURCE: SCHENK, WIRTH & MÜLLER, 2010). The flexibilities and volatilities discussed in the previous sections 5.1.1 and 5.1.2 are naturally linked to the above flows. In order to plan for the exploitation of existing flexibilities, flows within RN should always be regarded in their entirety.

5.2 CURRENT EUROPEAN PROJECTS In order to exploit the flexibilities and to cope with the volatilities discussed in the above section 5.1 some projects are already looking into ways to improve the integration of RES into manufacturing. Below some insights on the motivation and focus of these projects are presented. The manufacturing industry turns raw materials into products, and is an important backbone of many economies around the world. The process of converting raw materials like oil, iron ore, trees or crops into products like plastics, metals, paper and food requires energy, mostly in the form of process

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D4.2: Requirements for Resource Networks compared to the state of the art 99/127 heat. Process heating systems always include at least one of the following: devices to generate or supply heat; devices to transfer heat away from the source; devices to contain the heat, e.g. kiln, ovens, etc.; and devices to recover heat energy. In total, the manufacturing industry used 127 EJ of final energy in 2010, which is approximately a third of global energy demand (including feedstock use). The total use also includes electricity, feedstock for petrochemicals production, blast furnaces and coke ovens. Electricity accounts for around 20% of final energy use in manufacturing, and is used for the production of aluminium, equipment, and lighting and cooling in factories (International Renewable Energy Agency, 2014; short: IRENA). Types of fuel used by industry have changed over time. During the last 50 years, industry has decreased direct coal use and increased natural gas use. Recent increases in both the price and price volatility of natural gas may interrupt these trends, although over the short term, most sectors are not able to switch fuels easily. According to IRENA’s projections, total global industrial energy use is projected to grow by 45% to 185 EJ in 2030, in the absence of energy efficiency improvements (including feedstock use). Taking into account energy efficiency improvements, more than 80% of the total final consumption (about 125 EJ) in the manufacturing industry is estimated to be used as process energy by 2030 (see Figure 48). The most energy-consuming sectors are the basic metals industry (iron and steel), the chemical and petrochemical industry, and non-metallic minerals (mainly, cement). Another area of growing energy demand is feedstock for chemical and plastics production, which is projected to increase to around 27 EJ by 2030 (excluding process energy use) (International Renewable Energy Agency, 2014).

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As can be seen, the energy efficiency improvement potential alone is not sufficient to reduce the increasing demand of fossil fuels and their associated environmental impact. Therefore, more efforts are required to examine the role of renewable energy in improving sustainability of the manufacturing industry sector. Achieving higher penetration levels for renewable energy in industry is key to realizing substantial reductions in the sector’s fossil fuel demand and related CO2 emissions. Today, mainly the pulp and paper industry, and the food processing industry use renewable energy resources, accounting for approximately 45% and 25% of their energy demand, respectively. In total, renewable sources account for only 8 EJ, which is about 10% of the sector’s total global energy demand (excluding feedstock and electricity use). To date, renewable energy use in manufacturing has received little attention. Yet, renewable energy technologies can provide practical and cost-effective alternatives for process heat generation, and as a carbon source for the production of chemical and plastics. These potentials need to be exploited in order to achieve a doubling of the renewable energy share in the global energy mix by 2030 (International Renewable Energy Agency, 2014). In recent years, renewable energy has increasingly attracted public and policy attention particularly for its potential to contribute to reductions in GHG emissions. Most interest has focused on the use of renewables in power generation and as biofuels. Although some attention has been paid to the potential for renewables, particularly biomass and solar thermal technologies, to contribute to heating and cooling in residential space heating applications, their use in industrial applications has received less interest (UNIDO, 2010). The four main renewable energy options suitable to use in industrial applications are:  Biomass for process heat;  Biomass for petrochemical feedstocks;  Solar thermal systems for process heat; and  Heat pumps for process heat.

The results of the study realized by IRENA (International Renewable Energy Agency, 2014), to analyze the global potential of renewable energy in 2030 in the industry, indicate that in the Reference Case the share of renewable energy in the manufacturing sector will increase from 8% in 2010 to 9% in 2030. This is comparable to the predicted 12% in 2030 from the New Policies Scenario (NPS) developed by the IEA (2013). If the renewables-based electricity consumption is included, the renewable energy share in the Reference Case would increase from 11% in 2010 to 15% in 2030. If the countries were to implement the 74 REmap Options in the manufacturing sector, the renewable energy share would increase to about 19% of heat demand or 26% if both heat and renewable-based electricity is considered. Scaled up to the global situation, this would be equivalent to a total renewable energy demand of 25 EJ (International Renewable Energy Agency, 2014).

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Beyond 2030, according to study realized by UNIDO (UNIDO, 2010) (and showed in Figure 49), suggests that renewable energy use in industry has the potential to grow from less than 10 EJ a year in 2007 to almost 50 EJ a year in for 2050 while biomass for process heat accounts for over 30 EJ/yr. Solar thermal is estimated to contribute up to 5.6 EJ/yr. The application of concentrating solar power (CSP) technologies in the chemical sector could potentially increase the contribution of solar thermal to 8 EJ/yr. Heat pumps will compete with solar thermal technologies for low-temperature process heat applications, depending on electricity prices and the availability of solar radiation. The estimated potential for heat pumps in 2050 is 4.9 EJ/yr .

FIGURE 49: RENEWABLE POTENTIAL IN INDUSTRY BY 2050 – FINAL ENERGY AND FEEDSTOSCKS (SOURCE: UNIDO, 2010). The food and beverage industry is an example of such an application (e.g. dairies). Solar process heat use has been successfully demonstrated in a few hundred industries. There is also increasing attention from developing countries, for example UNIDO has recently started demonstration projects in the Dairy industry of Western India and in the Ukraine, funded by the Global Environmental Facility (GEF). This solution is cost-effective in many cases: for example. Also direct of use solar drying is of interest, for example drying of tea has been successfully demonstrated (Taibi, Gielen & Bazilian, 2012). The chemical and petrochemical industry is the largest energy consuming industry sector. This industry requires significant amounts of heat (on the order of 11 EJ) at temperature levels between 100 and 400◦C. Modern Concentrated Solar Thermal (CST) plants are able to deliver heat at such temperatures, however this heat is not cheap and the space is a concern that may limit uptake in existing plants. In high temperature heating applications such as brick making, ceramics, lime or cement kilns, use of biomass and other alternative fuels for co-firing is widely spread and cost- effective (Taibi, Gielen & Bazilian, 2012).

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Although renewable energy can be widely used in industrial applications, its fluctuating behaviour plays a key role. Therefore, is essential to provide of a “flexible path” to adopt more use of renewable energy sources as well as benefit from harvesting of waste energy. These could be through battery technology, fuel cells, super capacitors as well as through novel thermo-chemical solutions for local storage. Generation of renewable energy through improved photovoltaic technology is also a requirement for success, while concentrated solar power could be used when very high temperatures need to be generated. Some of these technologies will also find application in other parts of the value chain (energy, transport and construction sector) through higher resource efficient electrification of society (smart grids, building heating/cooling, transport propulsion etc.). Modelling and simulation is required to show how systems coupled with energy storage systems could be deployed in processing operations. Energy storage will be a fundamental need in a future where fluctuating renewable energy plays a major role particularly approaches for storage of low- grade energy. As was show above, there are a few projects integrating renewable energies into industry. An overview of some of them funded by UE developed in the latest years is provided in Table 17.

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TABLE 17: OVERVIEW ON EU PROJECTS CONCERNING USE OF RES IN PRODUCTION. Using the flexibility potential in energy intensive industries to facilitate further grid integration of variable renewable energy sources. IndustRE has identified the flexibility potential of the industrial electricity demand as an opportunity that - through innovative business models - can facilitate further growth and integration of variable renewable energy, while reducing the INDUSTRE industrial electricity costs. In this project the electricity intensive industry in Europe works closely with the renewable energy sector in order to find common ground and create win-win situations. The project activities are relevant for all industries in Europe, especially the chemicals, non-ferrous metals, cold storage, steel, and water treatment sectors. These five sectors with 302 TWh/year represent about 10% of the electricity consumption in Europe. Solar Hydrogen via Water Splitting in Advanced Monolithic Reactors for Future Solar Power plants. Building on the results of FP5 project HYDROSOL, this project concerns the HYDROSOL II technical realisation and evaluation of a directly solar heated process for two-step thermo-chemical water splitting using an innovative solar thermochemical reactor as the core of a volumetric receiver. The reactor is based on ceramic honeycombs incorporating active metal oxide redox pair systems. Re-design of the dairy industry for sustainable milk processing The main idea of the SUSMILK project is to analyze and optimize the whole process chain for milk and milk products with regard to energy and water consumption. The project aims at developing new concepts and technologies for SUSMILK the supply of heat, cold and power and integrating them into the respective process steps. The integration of innovative and efficient technologies into a “green dairy” concept that will aim at maximizing water and energy savings is a central part of the project. Industrial Process Heat by Solar Collectors InSun aims to demonstrate the reliability and quality of large scale solar thermal INSUN systems for different types of industrial process heat applications on medium and higher temperature levels, each system with a maximum heating power of 1 MW.

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6. Need for Action

Production always is the dominant factor concerning which every other goal is oriented (see the description of factory planning, section 4.2). Still, both the legislative and the markets are pushing for more benign manufacturing. This is in stark contrast to one of the prime assumptions in factory planning: Factories are consuming energy in a way, assuming that energy is an unlimited resource. Increasing the amount of renewable energy will inevitably lead to new problems keeping the production running. Just considering the technology, a lot seems possible today (cf. section 3.1 and section 3.2). However, there is still an apparent lack for the question “How can RES be used in a production environment?” Smart grids and micro grids try to give an answer to the issue but there is a strong emphasize on electricity and load management on a macro level. Looking to the micro level of a factory other energy carriers for heat or kinetic energies are quickly disregarded. Hence, the RNM aims to find solutions for investigating and planning a production system in a way that all resources (as in requirements for a production operation) are considered conjointly. Considering the factory level, it can be stated that a structure that allows for a flexible energy consumption of the machines and shifting of the energy demand needed in combination with a flexible energy supply, which is able to react to volatile energy availability through the intelligent use of flexibilities is missing. To overcome these issues and plan as well as operate factories with a high level of renewables the following methods and tools are needed: - combined modelling of all production and logistics elements, information, resources and control strategies, which can be found in factories - appropriate prediction models for all energy supplying sources like photovoltaics, wind but also other prerequisites - appropriate prediction models and tools for resource demands caused by factory operation - planning methods to design flexible combined energy generation and consumption structures - manufacturing control strategies to use available flexibilities in energy generation and consumption to secure high level of productivity. The RNM is aimed to provide a holistic planning methodology which tackles these issues. For this purpose, it will make use of available flexibilities to match – either in planning or in operation – to volatile capacities and loads.

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7. Definition of Requirements for Modelling and Operating Resource Networks

This chapter summarises the requirements which are necessary to plan and model as well as operate Resource Networks (RN) within factories. Therefore section 7.1 gives a short explanation of how a RN needs to be understood. Section 7.2 takes a deeper look on the boundaries of the planning method for developing and designing Resource Networks and explains the application area. Section 7.3 defines the results which can be expected using the method and leads to the requirements for the further work in Task 4.2.

7.1 DEFINITION AND FUNCTIONALITY OF RESOURCE NETWORKS A RN is defined as a virtually isolated ‘unit’ of a production system, which fulfils a specific production task, for which it requires and supplies specific media and process pre-requisites, and which can be characterized by both a specific energy demand profile and a specific energy supply profile. Virtually isolated is here understood as the property of a RN to operate entirely self-reliant, i.e. including all elements of a production system (infrastructure, production equipment, etc.) to fulfil its task.

The goal of the methodology to be developed is to be as close as possible to the way of how production is planned in the state of the art. Production machines, logistics, needed resources are still physically linked like before. In this case “virtually isolated” means, that different elements of production (energy supply, prerequisites, production machines, logistics, etc.) will be put in a theoretical coherence (production task, media requirements, etc., this needs to be defined within the planning method in Task 4.2) to better calculate relevant energy and media demand and to identify and assign relevant dependencies for flexible operation. The network itself means that there is a communication between the different elements. It also means that data, which is generated in the different elements of a network, needs to be gathered, processes and used for interaction between the elements. Each of the Resource Networks should be able to operate autarkic. All relevant energy media needed for the specific production task are supplied within the resource network. This gives the flexibility needed for decentralised operation of the network Figure 50 illustrates three exemplary Resource Networks. It shows that different Resource Networks can share and compete on different resources and pre-requisites managed.

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FIGURE 50: EXAMPLE OF DIFFERENT RESOURCE NETWORKS WITHIN A FACTORY (SOURCE: STOLDT, FRANZ, SCHLEGEL & PUTZ, 2014).

7.2 APPLICATION AREAS OF THE PLANNING METHOD To define the requirements of the planning method it is important next to the definition of the Resource Networks to determine the application area wherein the planning method should be used. Following the Top-Down-approach of factory planning the upcoming paragraphs narrow the application area.

7.2.1 PLANNING CASES In factory planning four basic cases for planning issues can be considered (cf. VDI 5200-1, 2011): - Planning on Greenfield In this planning case there is no existing factory building. The only restrictions for the planning are the terrain and the infrastructure for energy, media, etc. The material flow as well as building infrastructure can be planned abundantly. - Change planning Change planning is always implemented within a existent factory. All restrictions of the running system have to be taken into account. An example of a change planning is the

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optimisation of a production or the integration of new machines and facilities as well as supporting infrastructure. - Dismantling When a production within a factory is stopped and there is no use for the building anymore, the building has to be dismantled in a coordinated way to prepare the area for the reuse. - Revitalisation The revitalisation describes the process of giving an industrial fallow a new use. Its similar to the change planning process, though it has specific requirements regarding the refurbishment of the building.  The planning method to be developed is assigned to support the planning process for the cases “Change planning” and “Revitalisation”.

7.2.2 PLANNING LEVEL WITHIN FACTORY PLANNING Considering the hierarchical organisation of a factory (cf. section 5.1.1), factory planning processes can focus on the building, entire production segments (production areas) or single working places. All of these levels have specific goals and specific requirements which have implications for the methodology. The planning of a working place is very specific and focusses more on ergonomic aspects. Besides it can be noted, that it has only a small influence to energy and resource demand of the whole factory.  The planning method should be developed to support planning activities mainly on the building and production area levels.

7.2.3 PHASES WITHIN THE PLANNING PROCESS The picture below shows the typical phases within the factory planning process. Though, not all of these phases concern the Resource Networks Methodology.

FIGURE 51: PLANNING PHASES WITH INDICATION OF COINCIDENCE WITH THE RESOURCE NETWORKS PLANNING METHOD (ARROW IN RED COLOR). The goal definition summarises aspects like flexibility, product and process quality, profitability, transparency, worker orientation but also sustainability. Sustainability as well as flexibility are the goals, which influence directly the design of Resource Networks. Flexibilities have already been described in Deliverable 4.1 (REEMAIN, 2015) and section 5.1. Regarding the sustainability there should be defined three different planning goals.

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- Autarkic energy supply The factory is independent from the power supply company and generates all energy with decentralised own energy sources. - Regenerative energy supply Focus of the energy supply concept is to maximise the amount of energy which is generated by renewable energies. - Alternative energy supply The goal is to use unconventional energy sources (co-generation, etc.) to optimise effects in the reduction of emissions and energy costs. In real planning cases it can be assumed that companies will choose a sustainability goal that consists of a mixture of these goals.

The “gathering of data” phase and the “planning concept” phase need to be completely accomplished within the planning method for Resource Networks just like in classical factory planning process.

In detail planning phase there are some steps that do not need to be included, since they are not affected by the Resource Networks methodology, e.g. the preparation of specification books for machines.  The start of the planning method is located in the goal definition phase and the point to stop is located within the detail planning phase.

7.2.4 PLANNING METHDOLOGY WITHIN THE FACTORY PLANNING PROCESS As described in Chapter 4.2 already at the step “functional determination” energy and resources are considered. Though, as described above Resource Network planning method aims for planning cases within brownfield. Therefore, steps within functional determination like selection of the manufacturing process, determination of the process sequence and selection of the production equipment are already fixed and need to be seen as input parameters for the following planning steps. According to the common planning process the Resource Networks planning method needs to be an iterative and repetitive process.  The planning method to be developed should be an integrated, repetitive planning containing the steps dimensioning, structuring and design.

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FIGURE 52: INDICATION OF THE RESOURCE NETWORKS PLANNING METHOD IN THE FACTORY PLANNING PROCESS.

7.3 RESULTS AND FUNCTIONALITY FOR THE METHODOLOGY The following subsections give an overview of requirements concerning the results of the application of the methodology and as well as expected functionality the methodology in itself has.

7.3.1 RESULT OF THE IMPLEMENTED PLANNING METHOD The result of the planning method will be a detailed applicable concept for the realisation of Resource Networks in a whole factory or in a separated production area. For each Resource Network and the factory al all the concept will give a clear picture of: - Structure Within the structure all elements are defined. Besides that, material flows, energy flows, information flows and personnel flows are visualised within each network to describe every interaction between the different elements (cf. Deliverable 4.1 (REEMAIN, 2015) and Stoldt et al., 2014). - Energy supply and demand Within each network is specified which energy source is assigned to the network and which amount of energy is provided by this source. Additionally the amount of energy needed by every element is quantified specific for each state the element can operate in. - Prerequisites Elements within the production need specific prerequisites regardless of whether they are resource supplying or resource demanding elements. Each of the elements will

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describe regarding the type and amount of needed media prerequisite. Besides that, within the resulting concept can be seen which Resource Networks shares which specific prerequisite. - Flexibilities Flexibility is one of the key factors of the Resource Networks methodology. As described above they can be located in the supplying or demanding site. Within the concept it will be clearly pointed out, which flexibilities are located in which levels and which elements they effect on Resource Network level as well as on factory level and what are the parameters as well as the boundaries to exploit them.

7.3.2 FUNCTIONS OF THE RESOURCE NETWORKS PLANNING METHOD (RNPM) The Resource Networks Planning Method (RNMP) should allow factory planners, industrial engineers or energy managers to implement renewable energy sources without affecting the security of supply. Stakeholders of the method should be empowered to: - Detect possible Resource Networks The method gives a guideline of a how to identify, analyse and define possible Resource Networks. Therefore, the method will take the material flow as basic process and derive relevant media prerequisites starting with the main processes outwards (cf. section 5.1). - Specify the production task within the Resource Network To increase the flexibility of Resource Networks, it is necessary to understand the production process as well as dependencies within the material flow and find opportunities to decouple it from other processes without affecting relevant logistic goals like production output of the whole system. With the method the user will be able to define the boundaries of the production task within each Resource Network. - Assign relevant energy and media prerequisites to the production task The media prerequisites and energy sources related to the machines of the chosen production task must be identified, localized and quantified in order to quantify the amount on energy and resources needed as well as provided. Therefore, the method will start with main processes supporting the production process itself and then move outwards to the media prerequisites needed by supporting process (e.g. logistic processes). - Identify possible flexibilities within a Resource Network Once the Resource Network has been specified, flexibilities within the RN have to be chosen. The kind of flexibility to be achievable depends from the elements and resources within the RN. Section 5.1 gives an overview of possible flexibilities to be examined for each case of Resource Network. REEMAIN

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- Setting the boundaries for the flexibilities wherein the Resource Network can operate After the flexibility has been chosen, the boundaries for operating the system have to be defined. The method will help to set the parameters for the boundaries to not negatively affect the main logistic goals. The claim of the RNPM is to optimize the overall level of Renewable Energy integration within a factory. Therefore, after setting up each Resource Network also the interaction between the networks within the factory level has to be examined and assessed. - Identify the dependencies between the different Resource Networks While deploying the individual networks the methods needs to show which interactions are appearing on factory level to be sure, that the production is running properly and global logistic goals will be achieved. - Assess goal achievement regarding sustainability for the factory After the design of the Resource Networks and their interactions the overall planning goal has to be assessed. If the results are not meeting the expectations the planning steps within the method have to be executed again. Relevant KPIs have to be developed, if not suitable from the work of Deliverable 2.1 (REEMAIN, 2014).

7.4 OPERATION OF RESOURCE NETWORKS The planning method sets the framework for the operation of the Resource Networks and the factory. Within the boundaries of the flexibilities there is still high degree of freedom. The methods for operating the Resource Networks need to individually optimise the operation of every Resource Network as well as to control global optimum. Therefore, especially manufacturing control algorithms need to be developed which allow for a decentralised, autonomous control of the Resource Networks. These algorithms should be integrated in the manufacturing execution level of the production system. Besides, interfaces to BAS (Building Automation System) or EMS (Energy Management System) need to be considered.

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8. Summary

This document is aimed at providing the theoretical background for the development of the Resource Networks Methodology (RNM). For this purpose, the motivation as well as different aspects relating to the matter – some of which are going to be integrated into the RNM – have been discussed to give an overview on the state of the art. In particular, the following has been discussed:  The European legislative is pushing for the integration of renewable energy sources (RES) and higher energy efficiency.  European standardisation bodies are working on and provide a number of standards which support the integration of effective energy and environmental management.  International markets are pushing for better energy efficiency, mostly for economic reasons.  The integration of RES is increasing in the energy markets although the actual amount is country-specific.  RES technologies are available for a number of different applications (such as electricity, heat, cold, etc.) and have already been applied in industrial use cases.  A number of energy storage technologies are available and can be used to store limited amounts of energy, preferably, for short or medium terms.  Research on smart grids and micro grids is under way but focusses on a grid or a regional level with little regard for the actual production processes of a manufacturer.  Energy efficiency has been thoroughly researched with respect to production environments and various approaches for energy-efficiently planning and controlling production systems exist. However, the immediate integration of RES is only starting to enter the research focus.  A multitude of flexibilities (buffers, storages, etc.) and volatilities (sequence of incoming orders, availability of RES, etc.) exist in a production site, some of which can be used to further the integration of RES. Having identified the various short-comings considering a greater integration of RES in the production environment, a set of requirements for the development of the Resource Networks Methodology has been developed. These will guide the future work in work package 4 of the REEMAIN project.

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Acronyms

AC Alternating current BAS Building Automation System BDEW Bundesverband der Energie- und Wasserwirtschaft BICEP Business for Innovative Climate & Energy Policy CAES Compressed Air Energy Storage CCS Carbon capture and storage CEN European Committee for Standardization CHP Combined heat and power CHPC Combined heat, power and cold generation COP Coefficient Of Performance CSI Cement Sustainability Initiative CSP Concentrated Solar Power CST Concentrated Solar Thermal D&D Demo & Deployment DC Direct current DMS Distribution management system EDLC Electrochemical double layer capacitor EIA Energy Information Administration EJ Exajoul EMAS Eco-Management and Audit Scheme EMS Energy Management System EnB Energy baselines ENER European Commission Directorate-General for Energy EnPI Energy performance indicators EnWG Energiewirtschaftsgesetz ESS Energy Storage System GEF Global Environmental Facility HAWT Horizontal axis wind turbines HES Hydrogen-based energy systems ICT Information and communication technology IEA International Energy Agency INDC Intended Nationally Determined Contributions

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IRENA International Renewable Energy Agency IRPs Intellectual Property Rights ISO International Standardization Organization JRC Joint Research Centre KPIs Key Performance Indicator Mtoe Million Tonnes of Oil Equivalent MW Megawatt NaS Sodium sulphur batteries NiCd Nickel cadmium NiMH Nickel metal hydride PPC Production planning and control PTC Parabolic trough collectors PV Photovoltaic PVT Photovoltaic-Thermal R&D Research & Development RDI Research, Development & Innovation RES Renewable Energy Sources RFB Redox flow battery RN Resource Networks RNM Resource Networks Methodology SMEs Programs to encourage smaller companies SMES Superconductive Magnetic Energy Storage SPIRE Sustainable Process Industry through Resource and Energy Efficiency TES Thermal Energy Storage TFC Total final consumption TPED Total primary energy demand TPED Total primary energy demand UPS Uninterruptible power supply VAWT Vertical axis WBCSD World Business Council for Sustainable Development WEO World Energy Outlook WTI West Texas Intermediate

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Solera (2015). Case study PV-plant monitoring Meiser-Soltex. Retrieved from http://solera.solarlog- portal.de/4655.html (09.09.2015) Song, I. K., Jung, W. W., Kim, J. Y., Yun, S. Y., Choi, J. H. & Ahn, S.J. (2013). Operation schemes of smart distribution networks with distributed energy resources for loss reduction and service restoration. IEEE Trans Smart Grid 2013; 4(1): 367–74. Stoldt, J., Franz, E., Schlegel, A. & Putz, M. (2014). Resource networks: Decentralised factory operation utilising renewable energy sources. Procedia CIRP 26 (2015), S.486-491. Suberu, Y. S., Mustafa, M. W. & Bashir, N. (2014). Energy storage systems for renewable energy power sector integration and mitigation of intermittency. Renew Sustain Energy Rev 2014; 35: 499–514. Taibi, E., Gielen, D. & Bazilian, M. (2011). The Potential for Renewable Energy in Industrial Application. In: Renewable and Sustainable Energy Reviews, Vol. 16, No. 1, pp. 735-744. Tello, P. & Weerdmeester, R. (2013). SPIRE Roadmap. http://www.spire2030.eu/uploads/Modules/ Publications/spire-roadmap_december_2013_pbp.pdf (October 27th of 2015) U.S. Department of Energy (2013). Grid Energy Storage. Office of Electricity Delivery and Energy Reliability, Dec. 2013. Retrieved from http://energy.gov/sites/prod/files/2014/09/f18/ Grid%20Energy%20Storage%20December%202013.pdf (October 27th of 2015) U.S. Department of Energy (2014). Energy Storage Safety Strategic Plan. Office of Electricity Delivery and Energy Reliability, Dec. 2014. Retrieved from http://energy.gov/sites/prod/files/2014/12/ f19/OE%20Safety%20Strategic%20Plan%20December%202014.pdf (October 27th of 2015) UNIDO (2010). United Nations Industrial Development Organization. Renewable Energy in Industrial Applications: An assessment of the 2050 potential. Retrieved from http://www.unido.org/ fileadmin/user_media/Services/Energy_and_Climate_Change/Energy_Efficiency/Renewables_% 20Industrial_%20Applications.pdf (October 27th of 2015) VDI 5200-1 (2011). Factory Planning – Planning Procedures. Verein Deutscher Ingenieure: VDI- Handbuch Produktionstechnik und Fertigungsverfahren, Band 1: Grundlagen und Planung. Wang, J., Conejo, A. J., Wang, C. & Yan, J. (2012). Smart grids, renewable energy integration, and climate change mitigation-future electric energy systems. Appl Energy 2012; 96: 1–3. Weinert, N., Chiotellis, S. & Seliger, G. (2011). Methodology for planning and operating energy- efficient production systems. CIRP Annals – Manufacturing Technology 2011; 60:41-44. Weinert, N. & Mose, C. (2014). Investigation of advanced energy saving stand by strategies for production systems. In: 21st CIRP Conference on Life Cycle Engineering, Trondheim, 18.- 20.06.2014, pp. 90-95. Wilcox, M. (2015). L’Oréal USA Deepens Commitment to Action on Climate Change: Global Beauty Leader Joins Coalition for Innovative Climate and Energy Policy. Retrieved from

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http://www.ceres.org/press/press-releases/l2019oreal-usa-deepens-commitment-to-action-on- climate-change (October 29th of 2015) Wood, J. (2012). Integrating Renewables into the grid: Applying MW Scale Energy Storage Solutions for Continuous Variability Management. Ecoult: energy storage solutions. Xue, X., Wang, S., Sun, Y. & Xiao, F. (2014). An interactive building power demand management strategy for facilitating smart grid optimization. Appl Energy 2014; 116: 297–310. Zhang, H., Zhao, F. & Sutherland, J. W. (2015). Energy-efficient scheduling of multiple manufacturing factories under real-time electricity pricing. In: Manufacturing Technology; 64; 41–44. Zhou, Z. & Li, L. (2013). Real time electricity demand response for sustainable manufacturing systems considering throughput bottleneck detection. In: Proceedings of the IEEE International Conference on Automation Science and Engineering, Madison, August 17th-20th 2013. pp. 640 – 644.

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List of Figures

Figure 1: Indication of the Resource Networks Planning Method in the Factory Planning Process...... 6 Figure 2: 1986 to 2015 Oil Price Evolution (Source: EIA, 2015)...... 18 Figure 3: International Natural Gas Prices Evolution (Source: EIA, 2011)...... 19 Figure 4: Medium Size Household Gas Prices Evolution 2004-2015 (Source: EUROSTAT, 2015)...... 19 Figure 5: Medium Size Industries Gas Prices Evolution 2004-2015 (Source: EUROSTAT, 2015)...... 20 Figure 6: Medium Size Household 2004-2015 Average Gas Prices Comparison (Source: EUROSTAT, 2015)...... 20 Figure 7: Medium Size Industries 2004-2015 Average Gas Prices Comparison (Source: EUROSTAT, 2015)...... 20 Figure 8: Domestic Gas Prices Versus Industrial Gas Prices (averages 2004-2015) (Source: EUROSTAT, 2015)...... 21

Figure 9: Global Primary Energy Demand and Related CO2 Emisssions by Scenario (Source: OECD/IEA, 2015)...... 22 Figure 10: Graphical Representation of Electricity Production Origins (Source: International Energy Agency, 2015a)...... 23 Figure 11: Medium Size Household Electricity Prices Evolution 2004-2015 (Source: EUROSTAT, 2015a)...... 24 Figure 12: Medium Size Industries Electricity Prices Evolution 2004-2015 (Source: EUROSTAT, 2015a)...... 24 Figure 13: Medium Size Household 2004-2015 Average Electricity Prices Comparison (Source: EUROSTAT, 2015a)...... 24 Figure 14: Medium Size Industries 2004-2015 Average Electricity Prices Comparison (Source: EUROSTAT, 2015a)...... 25 Figure 15: Domestic Electricity Prices Versus Industrial Electricity Prices (Source: EUROSTAT, 2015a)...... 25 Figure 16: Wood Pellets Global Production (Source: REN21, 2014)...... 27 Figure 17: 2013 Solar Water Heating Collectors by Country (Source: REN21, 2014)...... 27 Figure 18: Solar Water Heating Collectors Global Capacity (2004-2014). (Source: REN21, 2014)...... 28 Figure 19: Evolution of Global Solar PV Cumulative Installed Capacity 2000-2014 (Source: Solar Power Europe, 2015)...... 29 Figure 20: Solar PV Capacity and Additions, Top 10 (Source: REN21, 2014)...... 29

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Figure 21: Global Solar Pv Cumulative Market Scenarios Until 2019 (Source: Solar Power Europe, 2015)...... 30 Figure 22: Wind Power Global Capacity, 2004-2014 (Source: REN21, 2014)...... 31 Figure 23: AVEDA’S Website Content on Renewable Energy (Source: http://www.green-e.org)...... 37 Figure 24: WINDMADE Sample Logo for Business Use(SOURCE: WINDMADE)...... 37 Figure 25: Roof Image of Solar PV System Meiser-Soltex (Germany) (Source: Solera GmbH)...... 46 Figure 26: Krispl Fruit Juice Rooftop Installation (Source: AEE INTEC)...... 47 Figure 27: Ground Mounted Parabolic Trough Collector at Frito Lay Factory (Source: fritolay)...... 47 Figure 28: Biomass Bakery Oven by Hornos Saturnino (Source: HornosSaturnino)...... 48 Figure 29: Energy Storage Technologies Classification (Source: Fuchs, Lunz, Leuthold & Sauer, 2012)...... 49 Figure 30: Distribution of Various Battery Technologies According to their Energy and Power Densities. (Source: Sarasketa-Zabala, 2014)...... 51 Figure 31: Classification of the Grid Energy Storage Services (Source: Eyer & Corey, 2010)...... 54 Figure 32: Hampton Wind Farm Power Smoothing and Ramp Rate Reduction (Wood, 2012)...... 56 Figure 33: Factory Demand Response Application Electric Diagram (Riffonneau, Bacha, Barruel & Ploix, 2011)...... 56 Figure 34: Rated Power of US Grid Storage (U.S. Department of Energy, 2013) ...... 57 Figure 35: Battery Energy Storage Systems Deployed (U.S. Department of Energy, 2014)...... 58 Figure 36: Microgrids are Constructed with Different Skills, Equipment and Structures (Source: Farhangi, 2010)...... 63 Figure 37: Quick Facts: Smart Grids Projects (Source: Smart Grid Projects Outlook, 2014)...... 65 Figure 38: Heuristics for Finding Improvements of the Energy Efficiency in Manufacturing Systems (Source: Müller & Löffler, 2009; cited from: Müller, Engelmann, Löffler & Strauch, 2009)...... 72 Figure 39: General Factory Planning Methodology...... 75 Figure 40: Steps of Factory Planning Projects Considering Energy...... 78 Figure 41: Machine States During Non-productive Phases (Source: Frigerio & Matta, 2013)...... 81 Figure 42: Possible Energy Saving Operating States...... 83 Figure 43: Classification of Measures for Raising Energy Efficiency and Flexibility in Factories...... 85 Figure 44: Overview of Energy Losses (Source: Tello & Weerdmeester, 2013)...... 87 Figure 45: Hierarchical Organisation of a Production Facility (Source: Schenk, Wirth & Müller, 2010, p. 10)...... 94 Figure 46: Peripheral Areas of the Main ProductIon Processes (Source: Schenk, Wirth & Müller, 2010, p. 11)...... 96 Figure 47: Material, Energy and Information Flow Systems (Source: Schenk, Wirth & Müller, 2010). 98

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Figure 48: Estimated Global Industrial Energy Use (Source: International Renewable Energy Agency, 2014)...... 99 Figure 49: Renewable Potential In Industry By 2050 – Final Energy and Feedstoscks (Source: UNIDO, 2010)...... 101 Figure 50: Example of Different Resource Networks within a Factory (Source: Stoldt, Franz, Schlegel & Putz, 2014)...... 106 Figure 51: Planning Phases with Indication of coincidence with the Resource networks Planning Method (Arrow in red color)...... 107 Figure 52: Indication of the Resource Networks Planning Method in the Factory Planning Process. 109

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List of Tables

Table 1: Energy Efficiency Targets for two REEMAIN Countries and the EU28...... 12 Table 2: 2012 World Energy Productions (Source: International Energy Agency, 2015)...... 16 Table 3: World Energy Demand: Main Sectors Split (Source: International Energy Agency, 2015). .... 17 Table 4: 2012 World Energy Productions: Origin Split (Source: International Energy Agency, 2015). . 17 Table 5: Europe Electricity Demand (Source: International Energy Agency, 2015a)...... 23 Table 6: Status of Biomass Technologies: Characteristics and Costs (Source: REN21, 2014)...... 31 Table 7: Status of Solar Thermal Technologies: Characteristics and Costs (Source: REN21, 2014)...... 31 Table 8: Status of Photovoltaic Technologies: Characteristics and Costs (Source: REN21, 2014)...... 32 Table 9: Status of Wind Power Technologies: Characteristics and Costs (Source: REN21, 2014)...... 32 Table 10: Boycotts of Companies Due To Environmental Issues (Source: Ethicalconsumer, 2014). .... 35 Table 11: Renewable Energy Systems Technologies (Source: Deliverable 3.1, cf. REEMAIN, 2014a). . 39 Table 12: Suitable Application for each Technology (U.S. Departmernt of Energy, 2013)...... 53 Table 13: Comparison of Existing Grids and Smart Grids (Source: Farhangi, 2010)...... 60 Table 14: Overview of Smart/Micro Grids Projects...... 67 Table 15: Challenges and Issues (Source: Mahmood, Javaid & Razzaq, 2015)...... 71 Table 16: Overview of Relevant EU-funded Projects Regarding Energy Efficiency in Production...... 88 Table 17: Overview on EU Projects Concerning Use of RES in Production...... 103

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