Increasing Profitability through Flexible Energy Consumption

factoryvectorThe concept of improving company profitability through flexible energy consumption is relatively new to most company managers. The identification of flexibility is not part of most energy reviews. Grid regulation across Europe has been blind to the benefits of onsite wind power with local consumption. Transmission, distribution and generation companies have little reason to champion the concept because it would result in a loss of generation, transmission and service revenues.

Yet, wind power generated on-site is the cheapest form of energy available to an increasing number of industrial companies. Because virtually all the costs of wind power are incurred during the installation of the wind turbine, wind power has the advantage that its costs are highly predictable for 20 years.

If an industrial company is to gain maximum benefit from self-consumption of on-site wind power, it needs to understand its ability to operate flexibly in response to power availability.

In this Application Note, published by the European Copper Institute in October 2014, I examine two methods of assessing an industrial site’s operational flexibility.

The Flexibility Checklist provides a quick and easy assessment of potential problems from powering industrial processes with on-site wind turbines, although it is not sufficiently thorough to enable final decision-making.

The second method – the ‘Flexibility Audit’ – starts with a comprehensive assessment of an industrial sites’ potential flexibility. The audit will search for potential flexibilities right down to the individual device level. The auditors take an open-minded approach in order to uncover flexibility where it is not expected. Data from the audit are combined with data on the company’s power consumption and business processes to model optimum solutions. The Flexibility Audit requires greater commitment from the company, but delivers results that are built on tested data.

Given the newness of the concept of flexibility and the unpreparedness of regulators, transmission and distribution system operators, there may be some reluctance on the part of companies to invest in on-site wind generation for self-consumption. However, researchers modeling with both the Flexibility Checklist and the Flexibility Audit have identified strong business cases.

The European Union funded e-harbours project investigated the situation in some of Europe’s busiest ports, including Rotterdam and Hamburg. They found major opportunities for flexible power consumption. Chemical plants that consumed power at a constant rate seven days a week could increase or decrease power consumption for limited periods by +or- 10%. A facility processing material from harbour dredging could shut down parts of its process for days with no major effect. Refrigerated containers operated at a constant rate, whether they were on the quayside during a humid summer’s day in Brazil or a December night in Hamburg.

From a technological point of view, there are no insurmountable barriers to the concept of flexible power consumption. If circumstances are favorable, wind-powered processes could be a real benefit to industrial companies daring to take the step.
You can download the full application note here.

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About Aedan Kernan

Aedan is a business communications specialist with interests in the development of new technologies and in environmental issues. He is a former managing editor of Supply Network magazine and former editor of Industry Europe. He has edited or written Annual Reports for public limited companies in the UK and the Netherlands. Aedan has also written extensively for Higher Education institutions, mainly on research and internal management issues.

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