Technology Opportunities for Industrial Customers

ET Summit San Francisco, CA October 22, 2014

Welcome to the 21st Century, Gas Gets Smart

James Reese, P.E. California Manufacturing Technology Consulting

CMTC Background with Industry

}  Designated Manufacturing Extension Partnership Center in Southern California for U.S. Dept. of Commerce

}  Assists manufacturing firms improve and expand business operations to compete in global marketplace

}  For the past 5 years, CMTC has supported the Continuous Energy Improvement (CEI) program for SoCalGas and SCE

}  Under CEI, CMTC has worked with 15 industrial and 2 agricultural companies in developing long term energy management plans.

2

SoCalGas Projected Energy Savings - 2015

3

Source: SoCalGas 2015 Energy Efficiency Budget Filing March 26, 2014

Industrial Natural Gas Use by Sector

4

Source: 2014 California Gas Report Prepared by the California Gas and Electric Utilities

Characteristics of Industrial Customers

5

}  Focus of resources is on production.

}  Frequent changes in operations and facilities due to changing production demands.

}  Energy projects must compete with other business investments. Need short payback.

}  Energy efficiency measures cannot impact process, production rate, product quality.

}  Limited resources and expertise in energy management.

Opportunities for Natural Gas Savings

6

}  Significant opportunities for energy savings if challenges can be addressed.

}  Substantial savings can be achieved with operational changes rather than equipment replacement.

}  Energy savings from productivity improvements directly impact bottom line.

}  Need customer upper management support to implement change.

Examples of Opportunities for Industry

7

}  Case Study 1: }  Excess O2 Optimization }  4 MMBtu/hr Furnace for Metal Forging or Heat Treating }  Potential Natural Gas Savings of 70%

}  Case Study 2: }  Waste heat Recovery to Produce Hot Water }  6 MMBtu/hr High Temperature Toaster Oven }  Potential Natural Gas Savings of 21% - 55%

Case Study 1: Furnace Combustion Optimization

8

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

Savings,  th

erms/yr  or  $

/yr

Natural  Gas  Sa

vings,  %

Furnace  Excess  O2  Level,  %

Savings,  %

Savings,  therms/yr

Savings,  $/yr

Issues and Solutions

9

}  Issues: }  Certified furnace temperature profile }  Changing furnace operating conditions depending on product

}  Application of Technology }  Improved process monitoring and control for real time furnace

temperature profiles }  Improved scheduling of furnace operations }  Submeters to track performance (therms/lb) }  Advanced Utility Meter to track performance hourly and daily

}  Operation of furnaces that are idle between production runs }  Understand cost for limited operations such as on weekends

Case Study 2: Oven Waste Heat Recovery

Key Characteristics of Oven: }  High temperature of oven exhaust }  High moisture content of exhaust

10

Annual Non-­‐Cond. CondensingNatural Flue  Gas Heat N.G. N.G. Heat N.G. N.G.Gas  Use, Temp., Recovery, Savings, Savings, Recovery, Savings, Savings,therms °F therms/yr therms/yr %  of  Input therms/yr therms/yr %  of  Input

200,000 600 36,000 42,353 21% 94,000 110,588 55%

Issues and Solutions

}  Issues }  Quantity of waste heat and hot water demand }  Timing of waste heat and hot water demand

} Application of Technology }  Submeters for ovens and boilers }  Advanced Utility Meter for hourly operating

profiles }  Sizing of hot water storage tank

11

Conclusions

}  Industrial Sector has Cost Effective Opportunities to Save Natural Gas

}  Key Industry Concerns in Implementing Energy Savings: }  No adverse impacts on production, product quality }  Short payback

}  Opportunities for Emerging Technologies: }  Advanced metering to provide hourly profiles }  Improved process controls for process optimization and to

ensure no adverse impacts on production

12