February 2021

Special Focus: Digital Transformation

Reduce OPEX and improve sustainability through digital energy optimization strategies

Oil and gas companies are looking for quick ways to reduce OPEX amid the pandemic and oil and gas market crises.

Lau, C., Schneider Electric

Oil and gas companies are looking for quick ways to reduce OPEX amid the pandemic and oil and gas market crises. Initiatives to improve sustainability are further intensifying this challenging environment. Energy cost is about 30% of variable and labor costs, the second largest expense following feedstock cost. Energy optimization is a key opportunity to reduce energy cost and lower emissions.

Digital transformation solutions can accelerate the return of energy optimization investments. By implementing digital energy optimization strategies, an average-size refinery (200,000 bpd) or petrochemical plant can improve profitability by an estimated $15 MM/yr–$30 MM/yr and reduce carbon dioxide (CO2) emissions by 500,000 mtpy–900,000 mtpy: the equivalent to taking 100,000–200,000 gasoline-fueled cars out of service.

Visualization and monitoring

Visualization and monitoring can be simple and effective solutions to reduce energy costs. Integrating various sources of energy data and displaying them in key performance indicators (KPIs) that operators can relate to—and how their actions can impact the company’s overall objectives—enforces accountability. An often overlooked basic solution is automation loop tuning and performance monitoring. Automation loop performance monitoring ensures that each control loop is performing to its designed performance. A South African chemical company was able to reduce its steam cost by $3.6 MM/yr utilizing real-time accounting and visualization solutions.

Energy management and utilities modeling

Using proven software technologies, such as advanced regulatory control and advanced process control (APC), can reduce variance of operational conditions. Once the process is achieving stable operation, the application of real-time optimization allows the plant to run close to its optimal target. The benefits include energy conservation, minimizing material consumption, maximizing throughput and reducing product quality variance. A Japanese refinery reported a 5% reduction in energy cost using a real-time optimization strategy. The largest Indian refinery reported a savings of $7.2 MM through better visualization and $5 MM via real-time optimization.

Variable speed drive

A variable speed drive (VSD) is a simple energy-saving solution that provides quick payback. By using VSDs vs. on-off switch direct across the line motor starters, up to 50% of energy cost can be saved. Thousands of pumps function in an average refinery, and hundreds of fans in a liquefied natural gas (LNG) plant, so energy costs can add up quickly. Pumps and motors are often oversized, so more energy is being consumed than is required. Most new VSDs also have smart condition-based monitoring capabilities that help improve asset availability. The author’s company’s remote electrical asset monitoring solutions helped a U.S. petrochemical plant detect undersized VSDs and malfunctioning transformers that caused premature aging, allowing them to avoid unscheduled plant shutdowns.

Digital twin

Digital twins are a hot topic today, but what would generate more return on investment (ROI) is using one digital twin model for the entire lifecycle—from design to simulation, to engineering and commissioning, to operator training, to operations and maintenance. Digital twin for equipment monitoring is an online asset monitoring strategy based on the design vs. actual concept. It assists operating sites to improve performance by leveraging the digital twin prediction feedback to the operation staff. Digital twins can be developed for process units or assets such as compressors, exchangers, fire heaters, pumps and electrical equipment.

Unifying power and process

Power and automation are two key digital elements in digital transformation, so it only makes sense to integrate power and automation that are traditionally separated. By adopting this unifying concept through the entire lifecycle of a plant—beginning with incorporating power data into the digital twin from design to build to operations to maintenance—profitability and sustainability can be improved dramatically. By integrating energy data with process data into a unifying process automation system, operators can visualize asset health and energy efficiency; conduct rapid diagnostics of motors, pumps, fans, MOV and electrical assets problems through sequence of events; diagnose problems; and resume productions in minutes vs. days.

Energy sourcing

Strategically sourcing energy can reduce energy cost. For example, the author’s company can help customers make smarter purchases, whether it is improving efficiencies or increasing renewable energy content. The company has helped more than 6,000 clients globally and managed $30 B in portfolio spending to date.

Active energy management

Traditionally, companies manage the three elements of energy efficiency, sourcing and sustainability in silos (FIG. 1). A better way of approaching this is by adopting strategic comprehensive planning to help reduce energy cost and lower emissions. The author’s company’s energy experts can help improve energy forecasting and purchasing decisions, and benchmarking energy KPI goals. An energy management softwarea that is based on a global data management platform collects vast data sources and integrates them into one single source of energy and sustainability information depository.

FIG. 1. Manage the three elements of energy efficiency, sourcing and sustainability by adopting a strategic comprehensive plan to help reduce energy cost and lower emissions.

Value chain optimization

Enterprise-wide value chain optimization is based on enterprise visualization and unified planning and scheduling. By optimizing feedstock purchases and production schedules, companies can make faster decisions and improve asset performance. Companies can track production costs, energy cost and materials in real time as they move through the supply chain. A major Middle East oil and gas company asserts that it has realized a $1-B benefit since implementing a value chain optimization solution only a few years ago.

Microgrid optimization

Microgrid optimization is optimized energy management from multiple distributed energy sources, interconnected loads, controlled as a single entity, operating in parallel with the grid or in an intentional island mode. Hospitals and airports are utilizing microgrid to improve their resiliency and energy efficiency. The microgrid strategy is not a new concept to oil and gas companies. Plants have been optimizing energy sources and trade-offs using steam, fuel and electrical grid energies. Refineries have been utilizing cogeneration technology for a long time, while some plants are selling power back to the grid, and most plants have fast load-shedding capabilities. What will be new for oil and gas companies is incorporating renewable energies as part of the energy management system. Some onshore well pads and offshore platforms are already incorporating solar and offshore wind energies. We may see microgrid applications for downstream oil and gas soon.

Energy as a service

This is a new concept of operating companies outsourcing energy to a third-party company to design, build, own, operate and maintain with no capital investment. One of the major benefits is the shifting of CAPEX to OPEX, especially when capital budgets are constrained. The idea behind this is that companies can choose to focus on their core business in oil and gas by leasing energy. HP


          a EcoStruxure™ Resource Advisor

The Author

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