PowerPoint Presentation

Managing Your Energy CostsEnergy Webinar Series

This Activity received funding from the Department of Climate Change and Energy Efficiency as part of the Energy Efficiency Information Grants ProgramIn an increasingly competitive market, Australian red meat processors are faced with the challenge of reducing the bottom line while meeting health, quality and environmental standards. Understanding your energy use and costs can lead to opportunities

AMPC has developed this series of five modules covering the areas of -Compressed Air -Lighting-Refrigeration-BoilersThis current webinar module covers the meat processing industry in general, what the main drivers of energy usage are, what the key savings areas are and how you can progress towards improving the management of energy on your site or business to reduce operating and maintenance costs.

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Energy costs by company size

Energy costs> $10M Per year< $200,000 Per yearEnergy costs

Energy is used in all aspects of red meat processing and represents a significant operating cost at small to medium facilities, ranging from $100,000 for sites processing 1,600 tonnes of hot standard carcass weight (tHSCW) per annum to $1,000,000 for sites processing 12,000 tHSCW per annum.

On a corporation of company level , a small company would consume around 3000 GJ of energy and have energy costs of 200,000 $ p.aWhere a large company would spend more than 10 Million $ p.a.Sufficiently large Sites or Companies must comply with the National Greenhouse Emissions reporting requirements. There are 2 thresholds for this, a company threshold of 200,000 GJ or 50 kilotonnes of Carbon Dioxide.

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Fuel use across the industry

Industry EnergyConsumption JBS capture and use biogas in its existing natural-gas fired boiler plant of its Dinmore, Queensland facility to reduce dependence on grid-connected natural gas by over 48 per cent.

ElectricityThe average industry split of energy by source is shown in the figure. The actual energy sources and breakdown will differ between sites, depending on what fuel is available and the fuel costs.

The primary energy sources at red meat processing facilities are electricity and natural gas. Sites may also supplement boiler gas or generate electricity from bio-fuels. A significant amount of sites use, also use Coal for steam or hot water generation.

There are major changes occurring in the Australian energy market which will impact the fuel use across the industry in the future.

Looking at Electricity Prices, in the short-to-medium term, we have seen most price rises already and future price rises will be more moderate.This is a result of reduced energy demand energy due to factors such as lower economic growth and government policies to improve energy efficiency and increase renewable energy generation. The largest price rises we have seen in recent years was due to increases in network costs which are around one third of the electricity bill.A future price on carbon could also lead to an increase in pricing.

Gas prices are expected to rise as much as 100% due to the rapid increase in Liquefied Natural Gas (LNG) exports, primarily to Japan and Korea. LPG pricing follows the trend in crude oil prices and is independent of natural gas pricing. This translates to an increase of $X p.a for a small meat processing site and $x p.a for a large processing site.

For LPG, there is currently a surplus of LPG in Australia which is leading to price stabilisation.

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Where is my energy going?

No Rendering

Rendering

Refrigeration 33% Refrigeration 15%In terms of equipment, although there are differences between sites, Steam and Hot water systems contribute the most to a sites energy consumption. On sites that do rendering, the steam and hot water systems contribute a larger amount.

Refrigeration is the next larger consumer.

Pumping, Lighting compressed air and packaging equipment total around 10%.

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Factors affecting energy use

Energy use and cost varies between processing sites and is influenced by various factors.

[LOCATION] Each state has different regulations and electricity tariffs which will impact energy cost. The location impacts on refrigeration requirements and energy costs[OWNERSHIP] Larger companies tend to have the capability and capacity to drive energy targets and KPIs from the corporate head office down to the facility. [MARKET] Meat for the export market requires more chilling/freezing to extend the shelf life and enable transportationThe red meat processing industry is faced with increasing environmental pressures such as stricter wastewater discharge quality requirements, tighter greenhouse gas emission regulations, and greater consumer and community expectations relating to sustainable red meat production and processing systems. In addition to these increasing pressures, international competition is impacting multinational red meat processing facilities and larger domestic plants with export licenses. The small to medium facilities servicing the domestic market are less exposed to macro-economic factors such as international market access and the exchange rate, however these facilities compete alongside the large multinationals in terms of securing and retaining labour and controlling other inputs costs. [SPECIES]-Cattle and sheep abattoirs tend to need significantly less hot water than pig plants. Sheep processing generally uses less than pigs or cattle principally because the animal is less bulky and less energy is required for chilling, sheep meat is not normally aged for as long, less processing is required for stomachs, and many sheep companies ship their product out as a whole animal.[AGE]-Technology improvements has significantly reduced energy consumption of the equipment. [TPUT]-Total energy use will increase with production.[Increased processing level Facilities which have further processing operations (such as rendering) use more energy than those which do not.The age of equipment and maintenance on the site will also impact on the energy use of the site. 5

5 Steps to Energy Management

Understanding your energy usage and costReview your energy management systems

Develop an energy management improvement planUnderstand energy use and key opportunitiesImplement and track energy improvements

The first step to understanding your energy use is to develop an energy management plan.An Energy Management Plan (EMP) contains management techniques to help managers to mitigate the risks associated with increasing energy costs, greenhouse gas emissions resulting from energy use, and consumer and community expectations relating to environmental performance of the business. When implemented successfully, an EMP can unlock significant opportunities to reduce energy costs, improve plant operation, maximize the operating life of energy consuming plant and equipment, reduce the environmental impact of business operation, empower employees to actively engage in energy efficiency, and improve brand image within the marketplace. The following five steps will move your site towards best practice in energy management. We will describe these in more detail on the following slides, but the key steps in improving energy management involve-Understanding your sites usage-Reviewing what you are currently doing in regards to energy and what systems you have in place-Developing a plan-Having a good understanding of the energy use on your plants, and where the key opportunities are-And finally, implementing and tracking the projects.

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Understanding your energy usage and cost

Firstly, determine your sites baseline energy use. Source your energy bills which will show you the total amount and cost of energy, usually for a specific month.Also, you can use your sites metering if it exists. You may want to consider implementing additional metering if you can not determine your usage.Its good to have an understanding of the energy use on a monthly basis and also daily or weekly usage if you can. Later we will talk about linking this information to your production.

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Review your energy management systems

Senior management commitment Understanding of energy savings potentialEnergy targets and key performance indicatorsEnergy metering and monitoringEnergy management reportingEnergy supply managementOperating and maintenance proceduresAccountabilities for energy managementTraining and awareness proceduresCompliance with legal and/or regulatory requirements

The energy management review is a structured assessment of the systems which are in place for managing energy.It is important to involve all levels of management, including financial, operations, maintenance and health, safety and environment.Here is a checklist to assess your energy management systems,

-Do you have Senior management commitment to energy?-Do you have a good understanding of the energy savings potential across the sites? What percentage reduction is achievable?-Do you have Energy targets and key performance indicators?-What levels of Energy metering and monitoring do you have?-How do you report on Energy consumption ?-How are you manageing your energy supplies and contracts?-Do your Operating and maintenance procedures consider the energy imapcts of poorly ,maintained equipment?-Who is accountable for energy management?-What training do you have and what is needed?-Are you complying with energy related legal and/or regulatory requirements ?

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Develop an energy management improvement plan

Develop an energy management plan-- See the AMPC template

Based on the energy management review, identify and assess actions needed to improve the management systems that are currently in place for managing energy.Include in the improvement plan:The specific energy management action;The Manager responsible for implementing the action;The Timeframe for implementing the action;The planned evidence for the energy management action on completion.

See the template on the AMPC website, which will assist you to create a plan quickly. It also provides a template to assess your energy management systems.

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Understand energy use and key opportunitiesProduction Tonnes

Understand the key drivers of energy use by analyzing the facilities energy use against different factors. Consider, conducting a brainstorming session with key technical staff.What is your energy use by Production? Can you explain any variances?What is the variation by operating hours, seasonal changes ?

Identify opportunities to reduce energy use by surveying the facilitys energy using equipment and conducting a brainstorming session with key technical staff.Its important to know the potential energy savings at your site and what the costs are of achieving this. Then, prioritise.

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AMPC energy baseline tool

There is also a tool available from the AMPC which will assist you in creating an energy baseline for your plant.

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Implement and track energy improvements

You should be tracking all of your opportunities, and estimating capital costs and savings where possible.Ultimately, assign capital, assign responsibilities.Set performance targets for the sites and track your performance Implement and review the energy savings action plan.Continuously integrate energy management into your business through behavior and organisational changes. This will also include building capacity throughout the organisation and having roles and responsibilities defined in regard to energy. Also your maintenance and capital replacement plans should take into account energy costs of poor maintenance, or selection of new equipment.

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SAVINGS$13,300 Per year

Payback: Long termSavings 30-80%

Savings: 25-50%

Case Study:Teys Energy ManagementLong term sustainability goalsUtility reduction programSite teamsSite identifies and implements projectsReport monthlyCorporate steering committeeSet targets across all utilities and KPIsBuy in from plants on KPIs

Teys Wagga Wagga, which processes 1200 cattle head/day reduced gas demand by 10% per unit of productionSets ambitious targetsCollects data on monthly energy useWeekly usage is compared to targets on Elec and Gas and variances investigatedNow replacing ponds with anaerobic digestors

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Where to nextSavings: 25-50%

Develop specification for any replacement lighting (do not automatically replace like for like)

Compressed AirLightingRefrigerationBoilers

See energy module to identify potential energy saving opportunities in the compressed air, refrigeration, lighting, boilers.

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DisclaimerSAVINGS

Savings: 25-50%

The views expressed herein are not necessarily the views of the Commonwealth of Australia or AMIC and the Commonwealth and AMIC do not accept responsibility for any information or advice contained herein. 16