Jul-2002

Refinery energy efficiency and environmental goals

Cheaper fuels do not always reduce costs, say the authors, and an alternative is cogeneration. It is argued that fuel saving programmes and cogeneration, applied worldwide, could reduce world fuel consumption by some 26 million tons a year

Zoran Milosevic and Wade Cowart, KBC Process Technology

Article Summary

Stringent environmental limits being imposed on the quality of fuels that refineries can burn is increasing the cost of refinery marginal fuels, which prompts an additional incentive to save energy. One way to mitigate the effect of this increased pricing is the adoption of cogeneration which, through the resultant fuel savings, also significantly reduces CO2 and other greenhouse gas emissions.

An examination of the cost effectiveness of cogeneration in improving energy efficiency and reducing stationary source emissions includes understanding how environmental constraints and fuel costs improve the viability of energy conservation (Encon) projects, as well as the environmental improvements that can result.

In the 1960s, energy conservation was a relatively simple economic issue. Refinery energy-efficiency was decided primarily in the design phase, by applying trade-off criteria of the day and by optimising between energy and investment costs of heat and power recovery equipment. However, refinery design guidelines changed as fuel prices increased following the two oil shocks in the 1970s and more energy-efficient designs replaced older, less efficient designs.

Then, as the period of variable economics and depressed margins followed in the 1990s, it became increasingly difficult to justify energy conservation projects. New technologies that matured in the 1980s, such as the industrial gas turbine and pinch technology, made significant impacts but had a relatively short period of undisputed economic investment attractiveness due to changing fuel and power prices and alternative investment pressures.

For example, preheat trains were designed for approach temperatures of about 60°C in the 1960s. This optimum then decreased to about 20°C in the 1970s and early 1980s. This decrease offered large scope for improvement. Today, the optimum approach is likely to be 35–40°C. Thus, revamping a preheat train in the 1980s allowed three times more energy savings than in the 1990s. The economics of installing furnace air preheaters is just as illustrative of the reduced energy saving incentives; these projects offered two-year simple paybacks in the 1980s, versus about four-year paybacks in the late 1990s. Subsequently, refineries that were designed or revamped in the 1980s tend to occupy high positions in the energy efficiency league tables today, while most refineries that missed the period of favourable revamp economics of the 1980s remain relatively inefficient.

Less attractive economics was not the only reason for the reduced energy conservation activity in the last decade. New fuels specifications and new processing requirements forced refineries to invest scarce resources into upgrading processing technology, rather than improving the efficiency of utilities. Today, however, environmental concerns may reverse these trends, making energy-saving investments more attractive as fuels become more expensive.

Energy efficiency
The refining industry as a whole can be classified as energy inefficient. The worldwide average refinery energy consumption is about 95 per cent higher than KBC’s best practice target. Therefore, as the starting energy efficiency of the average refinery is relatively low, it follows that the scope for improvement should be high.

Refinery energy performance can be assessed in terms of the ‘best technology’ (BT) index of the site. This index is the ratio of the refinery total energy consumption (including fuels, FCC coke, and power import) to the sum of BT energy consumption allowances (standards) for each process unit and for the off-sites.

The BT standards have been developed by fundamental analysis and design studies on individual process units. They take into consideration the key process parameters affecting energy consumption, such as actual feed quality, conversion and fractionation performance. Based on more than 100 refineries that have been energy-surveyed, KBC believes that an energy performance of 100 per cent BT is achievable in a grassroots unit built today. Such a unit has an economically justifiable level of energy efficiency and is supported by a highly efficient steam and power system.

Many European and American refineries achieve BT indices better (less) than 150 per cent. This means that even a first quartile pace-setter consumes 50 per cent more energy than an optimised refinery designed and built today. The industry BT average is about 195 per cent. Thus, it can be said that the refinery industry as a whole is 95 per cent energy inefficient. The reasons usually cited for this condition are as follows:
- Units were designed when the cost of energy was low
- Phased expansion – new units were built stand-alone and not heat-integrated with older units
- Utility systems were seldom modified/optimised when onsite expansions were made
- Capital savings – units were designed for minimum investment cost
- Refineries rely on power import and have low inhouse power generation efficiency.

Hand-in-hand with the refinery’s relative energy inefficiency goes an equally inefficient environmental performance. The average energy performance of 195 per cent BT means that, on average, refineries consume 95 per cent more fuel than would be the optimum today, and consequently they emit 95 per cent more CO2. In decades past, before the current, more stringent, environmental limits and fuel quality specifications were introduced, this could have also meant up to 95 per cent more sulphur emission. Directionally, reduced energy consumption results in reduced air emissions. However, there is another link between refinery energy and environmental performances. Namely, air emission regulations may, and in some countries already do, limit the total site fuel consumption. If this is the case, the refinery expansion potential and its future depends on the ability to reduce the fuel consumption of existing units. This circle gives further incentives to save energy and reduce emissions.

Project justification
On a worldwide basis, the average potential for energy efficiency improvements has been found to be about 30 per cent. For example, the combined chart (Figure 1) shows the results of energy surveys (European refineries) with both the “before optimisation” and the “after optimisation” BT indices. The “after optimisation” indices are found by calculating the fuel savings from implementing all economically justifiable energy conservation projects identified at each individual site.