Energy Pro USA

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Paper Mill Client
Project Analysis Report
______________________________

-- Draft -For Discussion Purposes Only

Energy Pro USA

Energy Pro USA Table of Contents

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Executive Summary ...................................................................................................................................... 3 Introduction.......................................................................................................................................... 3 Key Projects and Annual Savings ........................................................................................................ 4 Electrical Demand Reduction............................................................................................................... 6 Models.................................................................................................................................................. 7 Projects ........................................................................................................................................................ 16 1. #1 and #2 PM 1st Dryer Section to DP Control ............................................................................ 17 2. Electrical Load Reduction Plan.................................................................................................... 21 3. Modeling ...................................................................................................................................... 23 4. Paper machine Change Over Reduction....................................................................................... 29 9. Buy/Sell Modeling ....................................................................................................................... 39

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Executive Summary

Introduction
Client and Energy Pro-USA have entered into an agreement to combine resources to improve Client’s profitability by reducing the cost of energy required at the Client location mill, and increasing productivity of the processes there.

This Analysis Report outlines the business opportunities identified by Energy Pro-USA during our assessment of the Client mill. It further identifies areas for profit improvement which will require additional study. Business opportunities are presented for approval, based on the following priorities:

Alignment with Client business strategy Risk adjusted return on investment Minimum time and ability to implement

Along with these business opportunities, a set of statistical models is presented as the basis for measuring the actual contribution to profit for each of these improvement measures. These models have been audited by an independent firm and found to accurately measure plant electrical load, plant steam consumption, and monthly production for paper machines 1 and 2. Additional modeling tools are forthcoming.

Finally, this report provides a basis for agreement on investment, plans and schedules for improvement initiatives. Since the economics of each improvement measure depend on the time and cost required to implement them, changes to plans and schedules must be reviewed promptly and the economic impact assessed. The report sets forth a change management process to objectively deal with unforeseen events and assign accountability for costs associated with the change.

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Key Projects and Annual Savings

Energy Conservation Electrical Load Reduction ($375,500-$616,500 total) A. Pump Motors B. Pulping Systems C. Machine Drives D. Building Ventilation E. Compressed Air Condensate Loss Capture Steam Trap Repair Insulation Total Energy Conservation Savings $ 306,500 – $ 489,500 $ $ $ $ 28,000 – $ 10,000 – $ 42,000 20,000

8,000 – $ 13,000 23,000 – $ 52,000 $ 183,000 $ 141,000 $ 50,000

$ 749,500 – $ 990,500

Process Improvement Paper machine Change-Over Reduction Stock System Changes Total Process Improvement Savings $1,670,000 - $4,360,000 $3,020,000 - $4,430,000 $4,690,000 - $ 8,790,000

Capital Projects #1 PM 1st Dryer Section to DP Control #2 PM 1st Dryer Section to DP Control Capital Project Savings* *Additional potential Capital Projects are identified later in this report. c $ 325,000

Buy/Sell Modeling Buy/Sell Modeling x

Management Tools Energy and Productivity Modeling

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Client and Energy Pro must agree and sign-off on prioritization of projects. Projects will be reviewed in order of priority at all meetings. Status reports, resource allocation and jeopardy resolution should also be handled in order of priority.

Below is an initial prioritization for discussion and agreement between Client and Energy Pro:

Project 1. #1 and #2 PM 1st Dryer Section to DP Control 2. Electrical Load Reduction 3. Modeling

Annual Savings $325,000

Notes Capital Project

$306,500$489,500 Phase 1 – Plant-Wide Energy Modeling – Complete. Phases Remaining: Meters Installed, Sub-Modeling $1,670,000$4,360,000 $3,020,000$4,430,000 Dependent on Stock System Changes Project and Capital Projects #1 and #15

4. Paper Machine Change Over Reduction 5. Stock System Changes 9. Buy/Sell Modeling

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Electrical Demand Reduction
Client’s goal is to eliminate purchased power from the utility. To achieve this goal, facility electrical power and steam consumption must be reduced. Facility electrical power consumption should be reduced as far as possible and steam consumption should be reduced up to the point where all turbine – generators are at peak output. In order to achieve this goal, steam use by the process and building heat must be reduced by approximately 64.8 thousand pounds per hour. Energy Pro has identified projects that will positively impact megawatt reduction as follows:

Electrical Load Reduction: Steam Conservation:

1.20 MW 12.7 kpph or 19.6% of the 64.8 kpph goal ( 0.52 MW equiv)

Energy Pro has further targeted steam reduction opportunities that currently achieve 77% of the 64.8 kpph goal. Further efforts are required to define projects within these as of yet examined areas. ** For a project to be executed, it must fall within the investment criteria outlined on page Error! Bookmark not defined..

Electrical Power Savings Target Savings by Area (in kWh / year)

Process and Heating Steam Savings Target Reduction (in kpph Average Steam Flow / year)

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Models
Overview
Statistical models for each of the major production processes have been completed using historical data from the period of April 2006 through April 2008 (except for the Steam Model which continues to August 2008). Models for steam and electricity are driven by a set of production and utility related independent variables. Actual steam and electricity usage (as measured by specific meters) are the dependent variables. Models for production for each machine were similarly developed. Each of these models will be reviewed, tested, and validated with plant personnel before adoption. Later, these models can be complemented by a set of “first principle” models aimed at further improving the precision of our analysis of improvement opportunities for operations. Models serve the dual purposes of providing a tool for control of daily operations as well as a means to quantify achievement of system improvements. An Enterprise Optimization Model (“EOM”) has been developed to provide a user friendly interface to the models. It combines current data from the mill processes with the various models to produce online reports and charts showing actual results versus model predicted values. Each of the models is introduced below. Model parameters are listed along with their coefficients. Charts are provided showing the closeness of fit between predicted and actual values. The EOM is then presented along with a series of screen showing various reports. Management control using data from EOM is discussed. Finally, a few important future modeling plans are highlighted.

Plant-Wide Energy Models
The Plant Wide Energy Models for Electricity and Steam are data-based multiple regression models based on two years of daily data. The two tables below show basic model construction and values for constants within the models. We use R squared (“R2”) for each model to determine the proportion of total variation in the dependent variables described by the model. The R2 values for each model are quite high at 94.7% and 97.9%, respectively.

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Model

Model

Plant Electricity Load =
127119 + 708.469 * Cool + 134.410 * Heat + 0.00944304 * FS_MASS_PRODUCTION + 0.0597008 * DR_mass_produced + 18.9504 * PM02_run_time + 0.985946 * PM03_Avg_jl_width + 25.8653 * PM03_schedule_time + 902.775 * PM03_Jumbo_reels + 0.0632147 * PM09_Jl_mass + 0.0176264 * PM09_Jl_length + 24.3388 * PM09_schedule_time - 6.77090 * turbine3_delays_min - 4.31619 * turbine4_delays_min - 3.29258 * turbine5_delays_min - 8.86901 * turbine6_delays_min

PI Steam =
3082.97 +8.68969 * Heat -6.36449 * River_Inlet_Temp +0.01427 * Gen6_TOT_KWH +0.00213 * Gen5_TOT_KWH +0.00568 * Gen4_TOT_KWH +0.00446 * Gen3_TOT_KWH -0.06226 * turbine3_delays_min -0.17051 * turbine4_delays_min -0.06812 * turbine5_delays_min +1.27616 * turbine6_delays_min -72.6520 * boiler_10_delays -131.765 * boiler_10_startup -24.5356 * boiler_14_delays -93.2005 * boiler_14_startup +3.11039 * PM02_sets_wound +0.00010799 * PM02_Jl_length +134.260 * PM02_first_reel

**Information sources for each variable can be found in the Appendix.

+4.19324 * PM03_sets_wound +0.21707 * PM03_schedule_time +2.27681 * PM09_avg_grammage +4.83078*PM09_sets_wound +0.16084*PM09_schedule_time +0.00023676*DR_mass_produced -0.0003358*wash_step

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When actual electricity load is plotted over time versus predicted load, the two curves coincide nicely. The small variations that do exist between the two are fairly randomly distributed. The plot of predicted versus actual load on an XY plot shows that the model fits well along the entire range of values.

 

Plant Electricity Load: Actual vs Predicted
Dec 01, 07 to Apr 18, 08
300000 KWH 200000 100000
12 /1 / 2 1 2 00 7 /8 / 1 2 2 00 7 /1 5 1 2 /20 0 /2 2 7 1 2 /20 0 7 /2 9 /20 1 /5 07 /2 00 1/ 8 12 /2 0 08 1 /1 9/ 2 1 /2 00 8 6/ 20 2 /2 0 8 /2 0 2 /9 08 /2 2 /1 0 08 6/ 2 2 /2 00 8 3/ 20 08 3/ 1/ 2 00 8 3/ 8/ 2 00 3/ 8 15 /2 00 3/ 8 22 /2 00 3/ 8 29 /2 00 8 4/ 5/ 2 00 4/ 8 12 /2 0 08

Actual
     

Predicted
 

Pred(Plant_load) / Plant_load
400000

350000

300000

Plant_load

250000

200000

1 50000

1 00000 1 00000

1 50000

200000

250000

300000

350000

400000

Pred(Plant_load)

 

 

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Energy Pro USA

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When actual steam load is plotted over time versus predicted load, these two curves also coincide nicely (see Figure 3). Once again, the small variations that do exist between the two are fairly randomly distributed. The plot of predicted load versus actual on an XY plot (see Figure 4) shows that the model fits well along the entire range of values.

Plant Steam: Actual vs Predicted
May 01, 08 to Aug 24, 08
7000 6000 5000 MLb 4000 3000 2000
5/ 2/ 20 08 5/ 9/ 20 08 5/ 16 /2 00 8 5/ 23 /2 00 8 5/ 30 /2 00 8 6/ 6/ 20 08 6/ 13 /2 00 8 6/ 20 /2 00 8 6/ 27 /2 00 8 7/ 4/ 20 08 7/ 11 /2 00 8 7/ 18 /2 00 8 7/ 25 /2 00 8 8/ 1/ 20 08 8/ 8/ 20 08 8/ 15 /2 00 8 8/ 22 /2 00 8

Actual

Predicted

 
Pred(steam_pi) / steam_pi
8000

 

7000

6000

steam_pi

5000

4000

3000

2000 2000

3000

4000

5000

6000

7000

8000

Pred(steam_pi)

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Energy Pro USA Productivity Optimization Models

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Daily productivity models for paper machines 1, 2, and 3 are data-based multiple regression models based on two years of daily data. The three tables below show basic model construction and values for constants within the daily models.

PM01 - Daily Management Model PW_Mass_P= 
0.0113025 * run_time   ‐0.0479143 * lostime_enpro_total  ‐0.00719767 * operation_enpro_total  ‐0.0434667 * curtail_total  +0.0472929 * JL_Calc_machine_speed  +0.185598 * Avg_basis_weight  +0.00263173 * avg_J_width 

PM02 – Daily Management Model PW_Mass_P= 
+0.326821 * Avg_basis_weight  +0.00439925 * run_time  +0.0530020 * JL_calc_machine_speed  +0.00187354 * avg_J_width  ‐2.21861 * PM_Start_Up  ‐0.0466085 * curtail_total  ‐0.0500801 * lostime_enpro_total 

PM03 – Daily Management Model PW_Mass_P= 
+0.285661 * Avg_basis_weight  +0.0186283 * JL_calc_machine_speed  +2.65418 * jumbo_reels  ‐0.0340673 * curtail_total  ‐0.0449420 * lostime_enpro_total  ‐0.0771185 * Abs_weight_grade_scale  ‐0.779588 * weight_grade_change  ‐6.07602 * pm_start_up 

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Projects
This section contains detailed project information including identification of key resources and timelines for the following prioritized projects:

1. #1 and #2 PM 1st Dryer Section to DP Control 2. Electrical Load Reduction 3. Modeling 4. # 2 Mill Change Over Reduction 5. Stock System Changes 6. Condensate Loss Capture 7. Steam Trap Repair 8. Insulation 9. Buy/Sell Modeling 10. Business Process Improvements Each Project Section includes the following: Loss Ladder Project Details & Dependencies Measurement of Results Project Team Timeline

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1. #1 and #2 PM 1st Dryer Section to DP Control
Loss Ladder Loss due Steam Venting to Atmosphere
Loss Approximately $325,000 / yr of steam is lost because 50 pound steam is vented to the atmosphere after being used in the Dryer Cans on #1 and #2 Paper Machines After steam is used for drying, there is steam that accompanies the condensate (blowthrough steam). Normally, this steam is separated out in a steam separator and reused in a lower pressure section (wet end dryers). In the case of #1 & #2 PM , it is vented to atmosphere, which is a huge waste of steam. The control of the flow of blow through steam is normally done by limiting the pressure drop across the dryer (steam supply to condensate header). The steam and condensate systems for the #1 and #2 PM have not been updated and maintained to control the drying process or capture the blow through steam. The system in use is antiquated. Financial reserves have not been available to provide adequate controls to capture this blow through steam from the process Use improved siphons, and change the steam and condensate system Install differential pressure control Revise the system to cascade blow through and flash steam from the main section dryers to the 18 Lb steam header.

Cause

Action

Why

Recommendations

General Project Overview
1. 2. 3. 4. 5. General Engineering of the Project Based upon the work completed on #3 PM Detailed Engineering and Calculations for the project building upon the engineering by a professional engineering firm APEC Complete Engineering Drawings approve P & I D’s, specify valves and controls Procure Valves, pipes, and equipment. Contractor Bidding a. b. c. d. e. f. 6. 7. Non Destructive Testing of the Dryer Cans. - JLM Steam Piping and Installation – TG Young Installation of Journals, siphons, and flex hoses plus – Steam Systems Inc.. Condensate Piping and Installation – TG Young Condensate Tanks, and Pump fabrication – Steam Systems, Inc Process Controls, and electrical installation – Client, Cornerstone, Invensys, and Cougar Electric.

Installation of equipment on the run Installation of equipment during maintenance outages April 8, 2009

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Energy Pro USA 8. Tie in to live steam lines during mill shutdown

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1. #1 and #2 PM 1st Dryer Section to DP Control
Project Team
Title  Energy Pro Engineer APEC – Consulting Engineers Project Engineer Name  Contact Info  Responsibilities  Project coordination, implementation scheduling, oversee project from Energy Pro perspective Furnish Contractor Drawings, P & I D’s and check sizing calculations, specify valves, and equipment Approve all designs, review all specifications, oversee project from Client Perspective. General Management of the Mill and Project Paper Making Operations

Operations Manager Paper Making Manufacturing Manager Electrical Engineer Sr. Process Control Engineer

Mill Electrical Supervision, design and installation. Project & Process Control Engineer

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1. #1 and #2 PM 1st Dryer Section to DP Control
Timeline (Italic represents completed Steps)
Work Item Description Start* Finish*

1 2 3 4 5 6 7 8 9 10 12 12

Preliminary Engineering Detail Engineering Bid meeting with contractors Procure Equipment Non-Destructive Testing Construction of Steam Lines upstairs Programming of Control System Install Electrical wiring Construction of Condensate Lines downstairs Installation of Journals, Siphons, and flex hoses on Dryer Cans Tie in to Live steam System Commissioning

4-22-08 5-06-08 6-6-08 5-22-08 8-14-08 6-11-08 8-15-08 6-6-08 9-1-08 10-18-08 10-18-08 10-19-08

5-05-08 7-08-08 8-31-08 7-31-08 10-01-08 7-15-08 10-15-08 10-18-08 10-18-08 10-18-08 10-18-08 10-19-08

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2. Electrical Load Reduction Plan
Electric Cost Calculation
To ensure we investigate, develop and execute projects that meet our mutually agreed upon investment criteria, we must estimate the valve per unit energy saved. Using historical data, we have arrived at the following conclusion:

Internal Marginal Cost to Generate Electricity Hourly data analyzed for % of Time when Duke purchase price exceeds marginal cost to produce Average sales price when there exists the opportunity to sell Power Potential Incremental Margin resulting in Power Sales

4.016 367 61.59%

cents per KWH Days

It is estimated that the incremental benefit for saving KWH electricity will be $ 0.05611 / KWH From the chart, we calculate the incremental savings potential for electrical power to be 61.592 % x $ 0.0259 or $ 0.0160 + $ 0.0416 / KWH or $ 0.05611 / KWH.  This analysis methodology and result must be confirmed by all Steering Committees.

6.606

cents per KWH

2.590

cents per KWH

  Increasing Coal Costs – If coal were to increase from an average of $ 77.68 to $ 120.00 per ton, the average cost to generate steam would increase approximately 54%, as would the resultant cost to generate electricity. In that the above analysis is dependent on historical buy and sell pricing, we cannot apply this coal cost increase to our analysis except to conclude that market price for peak power will tend to increase. Electrical Buy Sell price projections are out of the scope of this report.

Measurement of Results
All Electrical Load Reduction projects will be measured by the Plant-Wide Electricity Model.
300000 KWH 200000 100000
12 /1/ 2 12 007 /8/ 12 200 7 /15 12 /20 0 /22 7 12 /20 0 7 /29 /20 1 /5 07 / 20 1/ 08 12 /2 1/1 008 9/ 2 1/2 008 6/2 0 2 /2 08 / 20 2 /9 08 / 20 2/ 08 16 /2 2/2 008 3/ 20 3 /1 08 /2 00 8 3/ 8/ 2 3/1 008 5/2 0 3/ 22 08 /2 3/2 008 9/ 20 4 /5 08 /2 4/1 008 2/ 20 08

Plant Electricity Load: Actual vs Predicted
Dec 01, 07 to Apr 18, 08

Actual

Predicted

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2. Electrical Load Reduction Plan
Prioritization
Our objective is to identify opportunities and develop projects to save 10,700,000 kWh per year or , on average, approximately 1.2 MW. The chart at left illustrates our initial estimates and is used to prioritize the areas we will investigate. For a project to be executed, it must fall within the mutually agreed upon investment criteria.

Target Savings by Area (in kWh / year)

Investigation
The Electrical Load Reduction Plan is broken into various areas of inquiry. See individual plans for each area. Work in these different areas will be conducted concurrently. A. B. C. Pump Motors - From the above chart – over 70% of energy reduction opportunities will result from addressing pumping inefficiencies. Pulping Systems – There is new technology that will reduce the energy require for re-pulping fiber. Machine Drive – Evaluate current drive technology to seeking opportunities to employ new cost effective technology to improve efficiency. Building Ventilation – Improve the efficiency of building ventilations systems. Compressed Air Utilization – Eliminate unneeded or inefficient uses of compressed air. Other Electrical Projects – As with all such projects, investigation frequently uncover previously unforeseen opportunities to save electricity.*

D. E. F.

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3. Modeling
Loss Ladder Electrical Power reduction
Loss The targeted amount of power reduction is 3 Megawatts. Our analysis found $590,000 of Electricity (1.2 Megawatt). Identified steam losses are $560,000 (0.35 MW Equiv.), steam opportunities targeted for large capital are $1,630,000 (1.03 MW Equiv.) a remainder of $650,000 (0.41 MW Equiv.) is as of yet undetermined. Energy using equipment does not employ the most efficient available technology; There is no detailed energy data reported / modeled with sufficient sensitivity to detect the result of most individual energy conservation initiatives. Financial reserves have not been available to provide adequate instrumentation and controls to monitor energy use. • Utilize the model design in process created by Bob Stein. • Use Modeling to report the amount of energy consumed per unit of production. • Feedback to operators and correct energy inefficiencies.

Cause Action

Why

Recommendations

Project Details and Dependencies
Modeling tools can impact operating practices and measure the profitability of capital projects. • The energy sub models will allow operators and department managers to see how changes in operational procedures, practices, or decisions in their area impact energy usage on a daily basis as well as see the effect of specific projects in their area on energy usage. Sub models are based on real time or near real time data and provide Client the opportunity to change operating practice in order to reduce energy intensity. Energy is saved in two ways, by investing in new equipment or modifying existing equipment or by learning to better operate existing equipment. Of the two, the latter provides the most rapid payback and frequently, the greatest ancillary benefit. Providing associates the tools to measure the impact of minor operating improvements encourages floor level innovation, empowering the very people that are in the best position optimized a process. Sub metering also provides a continuous measure of equipment wellness.

• •

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3. Modeling
Energy Modeling is a three-phased project. Phase 1 will create electric and steam models at the plant-wide level. In order to create responsive operational area models, Energy Pro will implement a metering project to collect real time electric and steam consumption and power factor data. The installation of meters will allow energy pro to then create energy sub-models. Sub-models provide the ability to model energy consumption of specific areas of the process.

Phase 1 - Energy Modeling at Plant-Wide Level

Complete

Phase 2A – Electrical Metering Phase 2B – Electrical Sub-Modeling

11/30/08 02/27/09

Phase 3A – Steam Metering Phase 3B – Steam Sub-Modeling

03/31/09 05/31/09

Total Steam Metering is dependent upon finishing metering for the new turbine plant. Honeywell target is end of March, 2009.

Phase 1 – Energy Modeling at Plant-Wide Level
This phase is complete. Additional details can be found in the modeling section of this report.

Phase 2A – Electrical Metering
In order to provide better management of the electrical demand reduction initiative, as well as provide real time – near real time feedback on the operation of key production areas, the following sub meters will be installed in the electrical distribution network.

 
Project Costs Preliminary estimates are that the electrical metering initiative will cost approximately $ 150 k plus the additional labor on the part of Client and Energy Pro personnel to capture and store the data for analysis.
POWERHOUSE MILL01 Boilers, Turbines (Old and New) Paper Machine 3 Winder Casting / Coating Drums Embossers Sheeters Rewinders MILL02 Paper Machine 1 Paper Machine 2 Winder WWTP Waste Treatment

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Energy Pro USA Phase 2A – Electrical Metering

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Project Team
Title  Energy Pro  Engineer  Power  Engineer    Name    Contact Info  Responsibilities  Project coordination, Data  Gathering and analysis,  implementation scheduling.  Motor Systems Analysis and  Optimization  Plant Electrical Power  Utilization Analysis and  Optimization  Client  Liaison      PI Data Implementation and  Scheduling 

 

 

Timeline
Work Item 1 2 3 4 Description Initial Review of Sub Metering Needs – Meter communication protocol. Determine Metering points and Complete Meter Plan. Solicit Bids from meter suppliers and installation contractors Sub Metering Review Meeting (Data and Operational Steering Committee, DSC and OSC). Review Proposal and recommend suppliers Sub Metering Review Meeting (Executive Steering Committee (ESC) Review and Approve DSC and OSC recommendations 6 7 Order Metering Equipment Schedule Metering Equipment Installation - OSC 10-15-08 10-17-08 OSC 8 9 Install Meters Program Meter to collect data in the PI System 10-27-08 11-15-08 11-14-08 11-25-08 SP 10 Validate Meter Operation – DSC and OSC 11-26-08 11-30-08 Start 9-2-08 9-4-08 9-26-08 10-13-08 DSC, OSC 10-14-08 ESC 10-16-08 Finish 9-3-08 9-23-08 10-12-08

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Energy Pro USA Phase 2B – Electrical Sub-Modeling

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Electrical sub-models will be developed by Energy Pro to meter production nodes. The models will be incorporated into the Energy Pro EOM (Enterprise Optimization Model) portal. This target date is dependent on the completion of the electrical meters being installed. Any delays to the Phase 2A – Electric Meter Installation will result in a day-to-day slip of this target date.

Project Team
Title  Energy Pro  Engineer  EP Sr.  Statistician  Sr. Process  Control  Engineer    Name    Contact Info  Responsibilities  Project coordination, Data  Gathering and analysis,  implementation scheduling.  Data analysis, modeling  Project & Process Control  Engineer 

   

   

Timeline
Work Item 1 2 3 4 Description Data Analysis, Integration and Automation Models Created EOM Programming and Testing EOM Release with Electric Sub-Models Start Date 12/01/08 01/01/09 01/24/09 02/27/09 Stop Date 12/31/08 01/23/09 02/26/09 02/27/09

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Energy Pro USA Phase 3A – Steam Sub Metering

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Project Team
Title  Energy Pro  Engineer  Client  Liaison    Name    Contact Info  Responsibilities  Project coordination, Data  Gathering and analysis,  implementation scheduling.  PI Data Implementation and  Scheduling 

 

 

Timeline
Work Item Description #2 Mill – 50lb Steam Meters Installed #1 Mill Steam Meters Installed #2 Mill – Steam Meters Installed Start Finish 11/01/08 03/31/09 02/28/09

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Energy Pro USA Phase 3B – Steam Sub-Modeling

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This target date is dependent on the completion of the steam meters being installed. Any delays to the Phase 3A – Steam Meter Installation will result in a day-to-day slip of this target date.

Project Team
Title  Energy Pro  Engineer  EP Sr.  Statistician  Sr. Process  Control  Engineer    Name    Contact Info  Responsibilities  Project coordination, Data  Gathering and analysis,  implementation scheduling.  Data analysis, modeling  Project & Process Control  Engineer 

   

   

Timeline
Work Item 1 2 3 4 Description Data Analysis, Integration and Automation Models Created EOM Programming and Testing EOM Release with Steam Sub-Models Start Date 04/01/09 04/16/09 05/02/09 05/31/09 Stop Date 04/15/09 05/01/09 05/20/09 05/31/09

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4. Paper machine Change Over Reduction
Loss Ladders Loss due to Length of Set-Up Time to Change Over Paper Machines
Loss Approximately 500 tons / yr, of business is turned down, (Gross Operating Margin $506/ton * 500 tons = $250,000 / yr) Excessive set-up time makes short runs (less than 2000 lbs) uneconomical Management has not provided the equipment or procedures to make fast changeovers. Capital expenses / limitations and survival issues have prevented management from focusing on this issue. Identify waste during the change over process working with the engineers, to come up with ways to change grade and/or basis weight quicker with the same or better results.

Cause Action Why

Recommendations

Loss due to Changing Over Paper Machines in #2 Mill
Loss Depending on market conditions, $1,670,000 to $4,360,000 per year is lost because the paper machines make broke during color and weight changes. Each machine averages 55 color/weight changes per month, or 1320 changes total per year for both machines. Reducing the average time per grade change by one minute saves approximately $36,000/yr per machine. The paper machines make broke (off grade) paper when grades are changed. Management has not provided the equipment or procedures to make fast changeovers. Capital expenses / limitations and survival issues have prevented management from focusing on this issue. The industry’s best practice is to change over in 10 minutes, making approximately 600 lbs of broke. Set a new target to average 15 minutes per change. Achieve these changes by: • Performing an assessment of change over process activities and document procedures. • Performing engineering study for the supporting equipment improvements, to verify that the new procedures and engineering improvements can achieve lower targets. • Incorporating additional solutions from teams into the new changeover procedure. • Developing a simulation model of the paper-making process in # 2 Mill that will allow the team and Client management to evaluate the effect of proposed changes prior to implementation.

Cause Action Why

Recommendations

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4. Paper Machine Change Over Reduction
Project Details and Dependencies
Key Metric: color change time as entered by the back tender (from turn up of the reel to the Beater Engineer’s decision “on color” or machine/back tender’s decision “on grade”, which ever happens last) Baseline Metric: average color change time from January through June 2008, as reported during that time. Progress Metric: to be reported out and tracked. Progress will be measured by this metric: average color change time by paper machine over the previous week, i.e. the metric is a weekly average.

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4. Paper Machine Change Over Reduction

Paper Machine #1 and #2 employees and supervisors studied each step of the color change process. They generated more than 40 ideas to reduce the color change time, some of the top priority ideas include: • • • • • • At changes – dyes running at wall, BE at wall, ABE in color room Teamwork on changes – one BE filling MC while other making change Daily – post color change data. Make it very visible to show Standard definitions for the 5 or 6 types of changeovers. Pre-change checklist to ensure ‘homework’ is done for upcoming change Identify and try some type of individual dye flow meter/indicator to confirm dye pump is working.

There are two phases to this project. Phase 1 will reduce the color change times for Paper Machine 1 and 2 by 10 minutes by 12/31/08. Phase 2 will reduce the color change time an additional 20 minutes by 3/31/08. These changes will allow Client to bid on short runs that they weren’t able to do in 2007 because of excessive color change times. Approximately $5M in new business was lost in 2007 for this reason.

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4. #2 Mill Change Over Reduction
Measurement of Results
The Paper Machine Changeover Project will be measured by the Monthly Productivity Models.
1800.00 1600.00

PM03 Prime Mass: Actual vs Predicted
April 2006 to April 2008 Billing

PM02 Prime Mass: Actual vs Predicted 1400.00
April 2006 to April 2008 Tons 1200.00 Billing
1000.00 800.00 600.00
6/ 1/ 20 06 8/ 1/ 20 06 10 /1 /2 00 6 12 /1 /2 00 6 2/ 1/ 20 07
Actual

1800.00 1600.00 1400.00 Tons 1200.00 1000.00

800.00 600.00
6/ 1/ 20 06 8/ 1/ 20 06 10 /1 /2 00 6 12 /1 /2 00 6 2/ 1/ 20 07 4/ 1/ 20 07 6/ 1/ 20 07 8/ 1/ 20 07 10 /1 /2 00 7 12 /1 /2 00 7 2/ 1/ 20 08 4/ 1/ 20 08
Actual Predicted

Project Team
Title  Energy Pro  Engineer  Energy Pro  Engineer  Assistant Paper  Making  Manufacturing  Manager  Beater Room  Coordinator  Assistant Paper  Making  Manufacturing  Manager  Assistant Paper  Making  Manufacturing  Manager  Paper Making  Manufacturing  Manager    Name    Contact Info  Responsibilities  Project coordination, Data  Gathering and analysis,  implementation scheduling.  Project coordination, data  gathering and analysis,  implementation scheduling.  #2 Paper Machine 

 

 

 

 

   

   

4/ 1/ 20 06

Beater Room  #1 Paper Machine 

 

 

Beater Room & Pulping 

 

 

Paper Making Operations 

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4/ 1/ 20 07 6/ 1/ 20 07 8/ 1/ 20 07 10 /1 /2 00 7 12 /1 /2 00 7 2/ 1/ 20 08 4/ 1/ 20 08
Predicted

4/ 1/ 20 06

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4. Paper Machine Change Over Reduction
Timeline Work Item Discovery Identification *Dependency - #1 & #2 PM DP Steam Control (Capital Projects) Phase 1 – Reduce Changeover by 10 minutes *Dependency – Stock System Changes Project Phase 2 – Reduce Changeover by additional 20 minutes Sept 2008 Description Start Finish 05/15/08 12/31/08 10/18/08 12/31/08 03/31/09 03/31/09

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5. Stock System Changes
Loss Ladder Stock Prep
Loss Depending on market conditions, $3,000,000 to $4,000,000 per year is lost due to flushing fiber from the stock prep area and sheet breaks in #2 Mill (see Appendix J). • • It takes over 5 hours of runtime to flush the system (Stock Prep and Paper machine) Benchmark similar operations that have systems which allow changeover within 10 minutes. Reducing changeover time would save 250 minutes of flush time.

Cause

Action Why

Management has not provided the equipment or procedures to make fast changeovers. Capital expenses / limitations and survival issues have prevented management from focusing on this issue. Reconfigure the couch pit piping and eliminate the saveall. Steps required will be: • Evaluate the need for additional pumps, piping, and chest to capture the increased flow of material during sheet breaks. Validate engineering design and supply flow calculations. • Perform failure mode analysis and risk analysis for the project • Route the couch pit pump line to the machine chest. • Control the pump-out rate by level control • Install controls to maintain couch pit consistency at 4-5% Consistency control water to be WW from the seal pit. • Limit fresh water flow to couch pit by reusing process water for showers. • Write new procedures for grade changes to minimize fiber left in chests and couch pit and for operating during a sheet break. Work with the operators to implement the new procedures.

Recommendations

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5. Stock System Changes
Project Details and Dependencies
1. 2. When changing from one color to another without flushing the machine, the task is to minimize the time required for the machine to achieve stability on the new color. The stability is influenced by: • The amount of stock contained within the machine chest, couch pit and saveall system • The recycle of stock from the trim through the saveall back to the machine chest The current practice to minimize the time to stability is to dump the couch pit (trim plus excess water) when starting the color change. While this procedure is effective to minimize changeover time, it also results in considerable loss in good fiber to the sewer with the attendant wastewater treatment and sludge disposal costs.

3.

Proposed Action Plan Objective: Reduce/eliminate fiber losses to the sewer due to grade changes and sheet breaks. Energy Pro simulated Client # 1 PM and determined the amount of time for the system to equilibrate after changing colors at the pulper is over 300 minutes without dumping chests to the sewer. Changes to the Stock System will be simulated to predict a new value for change over time, based on operating scenarios provided by Client. These simulation changes are the basis for the engineering cost estimate, and savings projected for the improvement.

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5. Stock System Changes
Next steps A. Agree to Process Configuration Options B. Write Operating Scenarios –describe how the new configuration operates 1. Grade change - Colors and whites 2. Breaks 3. Combination of above C. Class 10 Estimates for Stock System Changes D. Economic Analysis utilizing Simulation Results for Proposed Operating Scenarios E. Design & Engineering for the Changes F. Construction G. Write operating procedures and work with operators on implementation.

Measurement of Results
1800.00

PM03 Prime Mass: Actual vs Predicted
April 2006 to April 2008 Billing

1000.00 800.00 600.00

6/ 1/ 20 06 8/ 1/ 20 06 10 /1 /2 00 6 12 /1 /2 00 6 2/ 1/ 20 07
Actual

Project Analysis Report

6/ 1/ 20 06 8/ 1/ 20 06 10 /1 /2 00 6 12 /1 /2 00 6 2/ 1/ 20 07 4/ 1/ 20 07 6/ 1/ 20 07 8/ 1/ 20 07 10 /1 /2 00 7 12 /1 /2 00 7 2/ 1/ 20 08 4/ 1/ 20 08

4/ 1/ 20 06

Actual

Predicted

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4/ 1/ 20 07 6/ 1/ 20 07 8/ 1/ 20 07 10 /1 /2 00 7 12 /1 /2 00 7 2/ 1/ 20 08 4/ 1/ 20 08
Predicted

4/ 1/ 20 06

The Stock System Changes Project will be measured by the Monthly Productivity Models.

1600.00 PM02 Prime Mass: Actual vs Predicted

April 2006 to April 2008 Billing
1800.00 1600.00 1400.00 Tons 1200.00

1400.00 Tons 1200.00 1000.00 800.00 600.00

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5. Stock System Changes
Project Team
Title  Energy Pro Engineer    Name    Contact Info  Responsibilities  Project coordination, data  gathering and analysis,  implementation  scheduling.  #2 Paper Machine 

Assistant Paper  Making  Manufacturing Mgr  Beater Room  Coordinator  Assistant Paper  Making  Manufacturing  Manager  Assistant Paper  Making  Manufacturing  Manager  Paper Making  Manufacturing  Manager  Paper Making  Engineer 

 

 

   

   

Beater Room  #1 Paper Machine 

 

 

Beater Room & Pulping 

 

 

Paper Making Operations 

 

 

Engineering for all stock  system changes 

Timeline
Work Item Description Simulation Operating Scenarios Write-Up Engineering Cost Estimate Acceptance & Approval Project Launch Project Construction Write Operating Procedures Tie-In and Commissioning Start July 2008 Sept 2008 10/15/08 11/15/08 1/2/09 1/2/09 1/2/09 3/1/09 Finish 10/31/08 11/30/08 11/15/08 12/15/08 1/2/09 2/28/09 2/28/09 3/1/09

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9. Buy/Sell Modeling
Objective
Create a Model that provides real time scheduling knowledge that optimizes the gross margin resulting from the operation of the firm’s boilers, turbines and process steam applications. Revenue sources are the sale of power to the grid and sale of specialty paper (Heavy weights, deep colors, special coatings).

The Steam / Power Generating Model will interface with:
1. 2. 3. 4. 5. 6. Individual EP Process Models – Steam and Electrical consumption by production center. Real Time pricing information for power purchases from the power broker / utility. Steam / Power plant operation cost information (coal, water, parasitic load factors) Process Efficiency data for both Steam Generation and Power Generation by boiler and turbine – generator set. It will reference historical data as well as calculate real time efficiencies. Process Steam Demand by schedule and real time. Building environmental heating steam demand based on temperature, wind speed and direction.

The model will provide real time process control recommendations for:
1. 2. 3. 4. 5. 6. 7. Turbine 1, 2, 3, 5, 6, 7 and 8 power generation rates, steam flow rate and exit temperature. Anticipated steam generation requirements for boilers 10 and 14 Anticipated steam demand for 18 #, 50 # and 165 # steam by process center. Anticipated power demand by process center. Target power available for sale or recommended utility purchases Purchase price of power, Gross Margin of Power Sales or avoided loss of Power Purchases Economic Calculations - cost of each the above steam or power flows to the plant for paper production.

Discussion Points
1. There is insufficient boiler capacity to meet all turbine generators and process steam requirements simultaneously. The entire 600 psi output from boiler #10 can pass through turbine #6 to generate 185 psi steam and generate about 9 MW of electricity. Turbine #5 is the most economic source of 18 psi steam that is used for process heat as well as most building heat at flows over 2 MW. Turbine # 8 is more efficient for flows under 1.5 MW. There will be limited capacity of 185 psi steam to operate condensing turbines (#3, #9, #10) Turbine #9 extraction and Turbine #7 will need to be analyzed in terms of best cost for the production of 50 psi steam to dry paper. Process steam values (margin per pound) will be supplied to this model. Boiler #14 will be converted to Bio Fuel to generate premium priced power in the near future.

2.

3.

4. 5.

6. 7.

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Turbine / Generators Parameters 
            1  2  3  4  5  6  7              Turbine #3  Turbine #5  Turbine #6*  Turbine #2  Turbine #1  Turbine #7  Turbine #8    Steam  Flow  Maximum  per KW  Output  (pounds)  (kw)      13              6,000   47              7,500   32.5              9,846   70              1,000   47              1,500   13.4              9,400   13.4              9,400      

     

     

Input  Output  Pressure Pressure  (psi)  (psi)      185 Condensing  185 600 185 185 18 185 50 18

185 Condensing  185 Condensing 

    Maximum  Steam  Flow  (kpph)                78.00             352.50             320.00               70.00               70.50             125.96             125.96  

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