Energy A customer viewpoint
Energy A customer viewpoint
Graham WhitehurstDirector, Michelin NI
Ballymena Celebrating 40 years of Truck Tyre Production in NI
Michelin BallymenaMichelin Ballymena
• 1.4 Million Truck Tyres per year– More than is sold in the whole UK & Ireland
• 1100 people– Working 357 days/yr, 24/7, 12 hour shifts
• Tyre process is very energy intensive– Consumes approx 200 GWh / annum
Major Energy User in NIMajor Energy User in NI
£2000k
£3000k
£4000k
£5000k
£6000k
£7000k
£8000k
£9000k
£10000k
2004 2005 2006 2007 2008 2009
£9 Million Energy Bill in 2009 !
Electricity
Gas
Ballymena had the highest Energy Costs in the Michelin
Group in 2008
Ballymena had the highest Energy Costs in the Michelin
Group in 2008
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
N.Ireland Italy Germany Spain GB France Romania
Michelin European Country Utility Costs Comparison
€/M
Wh
Energy has become the 2nd largest cost after
payroll (Excluding Raw Materials)
Energy has become the 2nd largest cost after
payroll (Excluding Raw Materials)
Overheads
Maintenance
DepreciationPay
Energy Costs
Michelin Energy Strategy
Michelin Energy Strategy
1. Utility SupplyA.Choice of UtilityB.Purchasing Strategy
C.Long-term, including renewables
2. Efficiency of Energy Use
A. Utility Choice : Gas or Fuel Oil ?
A. Utility Choice : Gas or Fuel Oil ?
‘Dual Fuel’ Boilers since 2005
Natural Gas or HFO ?
-25% £ Savings / yr
-29% less CO2 / yr
• Historically, Fixed Price ContractHistorically, Fixed Price Contract
• Low Risk, Budgets fixed,Low Risk, Budgets fixed,
• You know what you have to payYou know what you have to pay
• but are you paying too much ?but are you paying too much ?
• Now Flexible ContractNow Flexible Contract
• Market Pricing reviewed dailyMarket Pricing reviewed daily
• Purchase Decisions made daily/wklyPurchase Decisions made daily/wkly
2. Utility Purchasing Strategy: Gas
2. Utility Purchasing Strategy: Gas
• Pre-SEM, little or no effective competition
• Large customer presents it’s own problems - ‘maybe too big to take on’
• Welcome the potential for new players to the market, but timing critical, and SEM must deliver
B. Purchasing Strategy: ElectricityB. Purchasing Strategy: Electricity
Project Progress
Wind –Turbines
9% Electricity from 2 Wind-Turbines
• 3rd Party Supplier selected• Legal Contracts in place• 30 Year Lease, 15 Year initial PPA• Joint Planning Phase now to be engaged• Community & Council Lobbying• Project started in 2006 • Installation envisaged 2010 earliest
Dundee Factory, Scotland
C. Long-term Strategy: Wind-Turbines
C. Long-term Strategy: Wind-Turbines
C. Long-Term Strategy: CHPC. Long-Term Strategy: CHP
Project Progress
Onsite CHPPotential to supply 60% electricity
• Site offers a high Thermal Load, suited to onsite CHP Applications• 3 Preliminary Opportunity Studies now received for 3rd Party Funded Projects• External Consultant engaged to review the Offers and assist in Supplier decision • Installation could be as early as 2010
2. Efficiency of Energy Use2. Efficiency of Energy Use
To improve our energy efficiency we adopt three approaches:-
• Capital Investment Projects
• Best Practice maintenance
• Education of the workforce
£2 Million Energy savings since 2002
£1.2 Million Capital Investment– 17 Electrical projects– 9 Thermal projects– 4 Water projects
Efficiency – Capital Investment Efficiency – Capital Investment
•Identification of capital projects-> Action projects which reduce the ‘fixed’
energy load-> Generally work on at least a 2 year payback-> Prepare projects to have ‘on the shelf’ in
case additional finance becomes available
•Study support from external consultancy,
via Carbon Trust
Energy Projects – Breakthrough Ideas
Helpline 0800 58 57 94 www.thecarbontrust.co.uk/ energy
Energy Projects completedEnergy Projects completed
• Variable Speed Drives
• Insulation replacement
• Lighting optimisation
• Vent steam recovery
• Compressor control optimisation
• Steam Trap Checking
• Steam Leaks Repair
• Tableaux Controls Set-Up
• Air Leaks Management **
Efficiency - Best Practise MaintenanceEfficiency - Best Practise Maintenance
Background Historical Leakage rate > 40% (2 compressors)
High Compressor running Costs
No common approach across Site
Worsening Trend on Factory Air Consumption
40
45
50
55
60
65
Jan Mar May July Sept Dec
Efficiency – Air Leaks ManagementEfficiency – Air Leaks Management
‘’Right Tools for the Job’’– Ultrasonic leak detectors – Training of users– Tagging of leaks– Balanced scorecard monitor
Over 3000 leaks recorded & repaired to date
Leakage Rate July ‘08 reduced to 26%– Generated £37K annual savings
Efficiency – Air Leaks Management
Energy Awareness Campaigns• Monthly Factory Intranet Updates• Factory TV Energy Information• Information Boards @ Factory Gate• Team Meeting Energy Communications• Energy Checklists for Shutdowns developed• Energy improvement Ideas from the Workforce
Future Initiatives• Energy Spoke in each production team• Energy Promotional Week• Carbon Trust supported Interactive Staff Training
Workshops
Efficiency – Education of WorkforceEfficiency – Education of Workforce
METERING• Electricity• Air• Steam• Water
ENERGY TRACKING & ACCOUNTABILITY• Energy Monitor of Key Utilities by Workshop• Driven by a Factory Energy Improvement
Team
Efficiency – Education of WorkforceEfficiency – Education of Workforce
Efficiency Results: 10% improvement since 2005
3.90
4.10
4.30
4.50
GJ/Tonne
2005 2006 2007 2008
Site Energy Consumption
Impact of Energy Strategy - Costs
Impact of Energy Strategy - Costs
£5000k
£6000k
£7000k
£8000k
£9000k
£10000k
2005 2006 2007 2008 2009
Energy Bill
£5000k
£6000k
£7000k
£8000k
£9000k
£10000k
£11000k
£12000k
2005 2006 2007 2008 2009
Energy Bill No Focus Bill
Impact of Energy Strategy - Costs
Impact of Energy Strategy - Costs
-25%
£5000k
£6000k
£7000k
£8000k
£9000k
£10000k
£11000k
£12000k
2004 2005 2006 2007 2008 2009
Energy Bill No Focus Bill 2011
Impact of Energy Strategy - Costs
Impact of Energy Strategy - Costs
Wind-Turbines & CHP Installed
-12%
How can Government help ?How can Government help ?• The SEM needs to deliver on End-Customer Savings,
arising from an Effective Market. Mechanisms need to be in place to encourage both Generators & Suppliers to enter the Market to allow effective Competition, and drive down Costs.
• Recent PSO Reduction from the Energy Regulator
was very encouraging, and has had a major impact on the 2009 Energy Bill. Lobbying by CBI must continue on behalf of all Users.
• Further support needed on Government Assisted Investment Schemes, particularly for Companies seen to be actively reducing Energy Consumption and moving to renewable energy
Energy: Michelin ConclusionEnergy: Michelin Conclusion
• External Factors influencing Energy Costs, are outside the control of Industrial Sites.
• However, the use of Energy within a
Site and the development of strategies to diversify energy supply and purchasing can and should be MANAGED.
Thank you for your attention
Any questions?
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