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Note that this sample report is only to be used for the purpose of producing a properly
formatted, researched and written energy efficiency opportunities review report for the
HQA7005 course
A REVIEW OF ENERGY EFFICIENCY
OPPORTUNITIES IN PHARMACEUTICAL
INDUSTRY
By
____(Student’s Name)_____
____(Matrix Number)_____
____(Date)_____
1
Table of Contents
1.0 Executive Summary …………………………………………………………………………………………………………….. 3
2.0 Introduction ………………………………………………………………………………………………………………………… 4
3.0 Description of Energy‐Consuming Processes ……………………………………………………………………….. 6
3.1 Energy Supply System ………………………………………………………………………………………………… 7
3.2 Additional Note ………………………………………………………………………………………………………….. 9
4.0 Proposed Energy Efficiency Opportunities ……………………………………………………………………………. 9
4.1 Energy Performance ………………………………………………………………………………………………….. 10
4.2 Economic Performance ……………………………………………………………………………………………… 11
5.0 Recommended Energy Efficiency Opportunities for Implementation ………………………………….. 13
5.1 Heat Recovery …………………………………………………………………………………………………………… 13
5.2 Heat and Cold Supply ………………………………………………………………………………………………… 14
6.0 Conclusion …………………………………………………………………………………………………………………………… 18
7.0 References …………………………………………………………………………………………………………………………… 19
8.0 Appendix (If Any) ………………………………………………………………………………………………………………….
2
1.0 Executive Summary
Energy consumption in the pharmaceutical industry is significant. In fact, because of higher standards
for environmental conditions, the overall energy usage intensity (EUI) for pharmaceutical plants is 14
times higher than other types of manufacturing facilities. The most energy‐consuming processes in an
average pharmaceutical plant are the drying process of pills, the heating of syrups and the cooling of
syrups. Space heating and space cooling have also relevant energy consumption. The heat is supplied
by natural gas fired steam boilers while electrically‐driven chillers provides cooling. In this review, six
energy efficiency opportunities are considered to enhance energy saving in a pharmaceutical plant:
(i) Improvement of recirculation rate of the condensate in the steam pipe
(ii) Heat exchanger network
(iii) Cogeneration / Combined heat and power or CHP (gas turbine)
(iv) Substitution of steam boiler by two smaller steam boilers
(v) Solar thermal collector system
(vi) Absorption chiller
In order to maximize energy and economic performances, combinations of the energy efficiency
opportunities are made, resulting in five energy efficiency improvement packages for evaluation:
Based on the analysis conducted with reference to the existing state of the plant which is not
associated to any of the packages, it is found that Package 4 is the most attractive with annual energy
saving of 22.56%, annual cost reduction of 24.5%, annual carbon dioxide emission reduction of 15.93%
and a payback period of 3.78 years. Hence, in order to maximize energy saving, economic benefits and
carbon dioxide emission avoidance, it is recommended for Package 4 to be selected for
implementation in an average pharmaceutical plant.
3
2.0 Introduction
Given its importance in areas such as export revenue and job creation, and its heavyweight influence
in product innovation, increasing productivity and global trade, there is no denying the importance of
the manufacturing sector for any economy. For Malaysia, manufacturing sector has always been
recognized as an important sector, contributing more than 20 per cent to the nation’s Gross Domestic
Product (GDP) over the last five years. Pharmaceutical industry, in particular, which creates products
to alleviate suffering, prevent illness and cure diseases has become more important than ever today
in the wake of the Covid‐19 pandemic.
The pharmaceutical products in Malaysia can be broadly classified as follows: new chemical entity,
biologics, generic products (prescription medicine and non‐prescription medicine/Over the Counter,
OTC), health and food supplements, traditional medicine and veterinary products. In 1984, drug
registration was introduced in Malaysia and the Drug Control Authority (DCA) was established. All
drugs/medicine in pharmaceutical dosage forms and cosmetics have to be registered and notified
before sale and marketing is permitted in the country. There were 263 manufacturers in 2019 that
were licensed by the DCA, with 69.2% or 182 of these manufacturers categorised into producers of
traditional medicine, 26.6% or 70 being producers of modern medicine and 4.2% or 11 companies
being producers of veterinary products. This is summarized in Figure 1.
Figure 1: Licensed manufacturers in Malaysian pharmaceutical industry in 2019.
Among the major local companies are Pharmaniaga Manufacturing Berhad, Hovid Berhad, CCM
Duopharma Biotech Sdn Bhd and Kotra Pharma (M) Sdn Bhd. These companies focus mainly on generic
drugs, particularly antibiotics, painkillers, health supplements and injectables. Some of the foreign
owned companies with manufacturing presence in the country include Biocon Sdn. Bhd. (India),
Oncogen Pharma (Malaysia) Sdn. Bhd., Y.S.P. Industries (M) Sdn Bhd (Taiwan), Sterling Drug (M) Sdn
Bhd (the manufacturing arm of GlaxoSmithKline from UK), Ranbaxy (M) Sdn Bhd (India), Xepa‐Soul
Pattinson (M) Sdn Bhd (Singapore) and SM Pharmaceutical Sdn Bhd (India). The large multinational
corporations (MNCs) such as Pfizer, Schering Plough, Novartis, Eli Lilly and Astra Zeneca are mainly
licensed importers. Their products, which are mostly branded drugs, are distributed by locally
incorporated companies. Figure 2 shows the locations of various pharmaceutical companies in
Malaysia. The current ecosystem of Malaysian pharmaceutical industry is given in Figure 3.
4
Figure 2: Pharmaceutical industry in Malaysia is currently scattered across the region but prominent
in two main clusters in Klang Valley.
Figure 3: Ecosystem of Malaysian pharmaceutical industry.
5
In 2019, a total of 23,254 new pharmaceutical products are DCA‐registered, including natural products
(52.2%), prescription medication (18.2%), health supplements (11.3%), non‐prescription/OTC (6.8%),
new chemical entity (6.2%), veterinary medicine (3.3%) and biologics (1.9%) as portrayed in Figure 4.
Of all the registered pharmaceutical products in 2019, more than half were natural products, as
opposed to synthetic products created in laboratories. Blessed with rich biodiversity and home to
some of the world’s oldest rainforests, more than 2,000 plants with potential medicinal value can be
found in Malaysia. Due to its sheer abundance of raw materials, Malaysia has a competitive edge
against its global counterparts when it comes to developing its herbal pharmaceutical industry.
Figure 4: DCA‐registered new pharmaceutical products in Malaysia in 2019.
A total of ten projects with investments of RM212.91 million were approved for the pharmaceutical
industry in 2019. Foreign investments made up 59% or RM124.79 million while domestic investments
made up the remaining 41% or RM88.12 million. In terms of trade, total trade for pharmaceutical was
RM 7.6 billion in 2016. Exports of pharmaceutical products amounted to RM1.5 billion in 2016. The
top five export destinations in 2016 were Singapore (RM194 million), USA (RM155million), Brunei
(RM120 million), Indonesia (RM94 million) and Hong Kong (RM91million). In 2016, imports totaled RM
6.2 billion with top five import destinations were the Germany (RM861 million), China (RM822
million), USA (RM593 million), France (RM479 million) and Switzerland (RM397 million).
Although energy costs typically represent a small percentage of total production costs in the
pharmaceutical industry, the cost of energy is still significant. Furthermore, energy costs are growing
rapidly due to increased costs for natural gas and electricity, making energy management an
important focus area for improvement of operations and productivity.
3.0 Description of Energy‐Consuming Processes
An average pharmaceutical plant has an EUI of 3,819 kWh/m2, which significantly exceeds EUI of an
average commercial office building of 257 kWh/m2. The obvious reason for the high EUI is because of
the energy‐consuming processes that take place in a pharmaceutical plant. The plant typically receives
the pharmaceutical components and processes them to produce the different pharmaceutical
products. The products can be divided into different categories: solids (pills, capsules); semisolids
6
(gels, vaseline, moisturizer) and liquids (solutions, suspensions, syrups). The production of the
following products requires thermal energy:
(i) Production of gels, vaseline, and syrups: substances are mixed and heated up in tanks with
steam to temperatures between 60 and 90°C. The mixtures are maintained during some time
at the process temperature and are finally cooled down to temperatures oscillating in the range
from 25 to 60°C using cold water.
(ii) Pills are dried with hot air at 60°C.
(iii) In the production of towels, the tanks are previously disinfected with steam at 120°C.
(iv) Hot water at 60°C is daily prepared for cleaning, kitchen and other uses.
The most heat consuming processes in the company are the drying process of pills and the heating of
syrups. The space heating, in particular the heating of production halls, has also a relevant heat
consumption. Regarding cooling consumption, the cooling of syrups is the most consuming energy
process. The sum of the cooling processes corresponds to 30% of the total cooling demand. The main
cooling consumers are the refrigeration of buildings, in particular the cooling of the production halls.
Figure 5 provides a simplified energy‐consuming process flow of a pharmaceutical plant.
Figure 5: Simplified energy‐consuming process flow.
3.1 Energy Supply System
The heat used in the plant is generated in two natural gas fired steam boilers. Steam at 2 bar and
120°C is distributed to heat processes and for space heating. Cooling is provided by two electrically
driven chillers. They generate water at 7°C, which is used to cool down the processes from around
90°C to ambient temperature. Cold water is also distributed for space cooling. A cooling tower rejects
7
the heat from the condenser of the electrical chillers and the air compressors. In Figure 6, a simplified
scheme of the generation and supply system is shown.
Figure 6: Heat and cold supply systems.
8
3.2 Additional Note
In the heat and cold supply systems, it is assumed that waste heat of air compressors is currently not
used and the temperature of air outlet in the pills drying process is 65°C and is not recirculated. In
addition, Table 1 provides the values assumed for key parameters used for calculation in the analysis.
Table 1: List of assumptions.
4.0 Proposed Energy Efficiency Opportunities
Several energy efficiency opportunities for energy saving are proposed as follows:
(i) Improvement of recirculation rate of the condensate in the steam pipe.
(ii) Use of heat exchanger network.
(iii) Use of cogeneration / combined heat and power or CHP (gas turbine).
(iv) Substitution of steam boiler by two smaller steam boilers.
(v) Installation of solar thermal collector system.
(vi) Use of absorption chiller.
In order to maximize energy and economic performances, combinations of the energy efficiency
opportunities are made, resulting in five energy efficiency improvement packages for evaluation as
given in Table 2.
9
Table 2: Energy efficiency improvement packages.
Package ID Details
1 Package 1 Improvement of recirculation rate of the condensate in the steam pipe
+ Heat exchanger network of 113 kW
2 Package 2 Improvement of recirculation rate of the condensate in the steam pipe
+ Heat exchanger network of 113 kW
+ Cogeneration (gas turbine 375 kWth/200 kWel)
+ Substitution of steam boiler by 2 smaller steam boilers 600 kW
3 Package 3 Improvement of recirculation rate of the condensate in the steam pipe
+ Heat exchanger network of 113 kW
+ Solar thermal system (flat plate collectors) 1000 kW
+ Substitution of steam boiler by 2 smaller steam boilers 600 kW
4 Package 4 Improvement of recirculation rate of the condensate in the steam pipe
+ Heat exchanger network of 113 kW
+ Cogeneration (gas turbine 563 kWth/300 kWel)
+ Substitution of steam boiler by 2 smaller steam boilers 600 kW
+ Absorption chiller (50 kW cooling capacity)
5 Package 5 Improvement of recirculation rate of the condensate in the steam pipe
+ Heat exchanger network of 113 kW
+ Solar thermal system (flat plate collectors) 1600 kW
+ Substitution of steam boiler by 2 smaller steam boilers 600 kW
+ Absorption chiller (50 kW cooling capacity)
4.1 Energy Performance
Table 3 shows a comparison of annual primary energy consumption and potential saving. Figure 7
presents annual primary energy consumption of all energy efficiency improvement packages in
graphical form. It can be seen that Package 4 offers the highest energy saving as compared to other
packages.
Table 3: Annual primary energy consumption and potential saving.
10
16
Primary energy consumption (MWh)
14
12
10
0
Package 0 Package 1 Package 2 Package 3 Package 4 Package 5
(actual state)
Package ID
Figure 7: Annual primary energy consumption.
4.2 Economic Performance
Table 4 shows a comparison of the investment costs while Figure 8 presents the comparison in
graphical form. Package 1 offers the lowest investment costs as compared to other packages.
Table 4: Investment costs.
11
1400000
Own investment Subsidies
1200000
Investment cost (RM)
1000000
800000
600000
400000
200000
0
Package 0 Package 1 Package 2 Package 3 Package 4 Package 5
(actual
state)
Package ID
Figure 8: Investment costs.
Table 5 provides the total annual costs which include annuity of the initial investment, energy cost
and operation and maintenance (O&M) cost. Calculation of annuity is based on 10.3% of yearly
payment and 6% interest. Figure 8 depicts the annual costs in graphical form. It is clear that Package
4 has the lowest total annual costs.
Table 5: Total annual costs.
12
600000
Annuity Energy cost O&M
500000
Total annual costs
400000
300000
200000
100000
0
Package 0 Package 1 Package 2 Package 3 Package 4 Package 5
(actual
state)
Package ID
Figure 9: Total annual costs.
5.0 Recommended Energy Efficiency Opportunities for Implementation
Table 6: Total annual costs and saving.
Package ID Total annual costs (RM) Total annual saving as Total annual saving as
compared with Package compared with Package
0 (RM) 0 (%)
1 Package 0 480,111 ‐ ‐
(actual state)
2 Package 1 468,466 11,645 2.42
3 Package 2 381,901 98,210 20.45
4 Package 3 510,660 ‐30,549 ‐6.36
5 Package 4 362,471 117,640 24.50
6 Package 5 553,333 ‐73,222 ‐15.25
5.1 Heat Recovery
There is high inefficiency in the distribution of steam. The current recirculation rate of the condensate
is 30% as given in Table 1. It is recommended to improve the condensate recovery by reducing leaks.
On the other side, different waste heat sources are not recovered:
(i) Outlet air of drying pills process at 45°C (190 MWh).
(ii) Residual water of cleaning processes at 45°C (15 MWh).
(iii) Condensate of steam used in the disinfection of the towels tank at 70°C (less than 1MWh).
(iv) Waste water of the air compressors at 85°C (300 MWh).
(v) Water used to cool down processes.
13
The possible sinks are the preheating of processes, air for space heating or inlet water of the steam
boiler.
In (i) and (iv) the next measures are proposed:
o Heat exchanger in the dryer: use the hot and humid air outlet of the drying process to preheat
the air inlet. A heat exchanger of 25 kW is proposed. The annual saved useful supply heat is 113
MWh, which corresponds to a saving of 200 MWh of natural gas.
o Heat exchanger in the air compressors: use waste warm water of the air compressors to produce
hot water (cleaning, others). A heat exchanger of 88 kW is proposed. The annual saved useful
supply heat is 51 MWh, which corresponds to a saving of 90 MWh of natural gas.
Table 7 lists the heat exchangers proposed. (ii) and (iii) are excluded because of the low potential.
Recovering 80% of the condensate instead of only 30%, and installing the two heat exchangers, the
total annual saving of natural gas is 421 MWh, which corresponds to 12% of the actual natural gas
consumption.
In addition to the proposed heat exchangers, it can be observed that in the air compressors only 51
MWh of the 300 MWh are recovered as estimated from (iv). The rest could be used to generate hot
water or preheating other processes. Currently, most of the processes (gels, vaseline, syrups) are
heated by steam. It is recommended to study the possibility of preheating them with hot water in
order to use residual heat to heat them. The low temperature waste heat could furthermore be used
to preheat air for space heating.
With regard to (v), the cooling of gels, vaselines and syrups is currently carried out by using cold water
at 7°C. These processes have a cooling demand of 207 MWh, which corresponds to 30% of the annual
total cold demand (70% is space cooling). Cold water at 7°C is needed in order to achieve high cooling
velocities. Nevertheless, it is recommended to study the possibility of using cold water from the
cooling tower (20°C approx), at least in the beginning of the cooling processes. This measure would
decrease the generation of low temperature cold water at 7°C, which would consequently reduce the
electricity consumption of the chillers. Moreover, heat from water (after cooling down processes,
water is heated), could be recovered.
Table 7: List of heat exchangers proposed.
5.2 Heat and Cold Supply
In Package 4, the following equipment are installed.
(i) Cogeneration / Combined Heat and Power – CHP (gas turbine) 563 kW thermal / 300 kW
electrical.
14
(ii) Two steam boilers (600 kW)
(iii) Absorption chiller (50 kW cooling power)
The proposed CHP supplies heat to the processes and space heating. In order to optimize the
operation of the CHP, in addition an absorption chiller of 50 kW is proposed. The chiller consumes
heat to generate cold. The coupling of the CHP system with the thermal cooling system forms the
trigeneration system. The trigeneration system generates 2249 MWh of heat for processes, space
heating and refrigeration. It also generates 1669 MWh of electricity, which are sold to the grid, and
187MWh of cold for space cooling.
For covering the heat demand peaks, two boilers are used. Since the boilers are old, two new boilers
of a nominal power of 600 kW and 91% of efficiency are proposed. One supplies 108 MWh and the
other one is installed as backup in order to assure security of heat supply. Regarding the cooling supply
systems, the electrical and thermal chillers supply 880 MWh. Due to the cold generated by absorption
cooling, the existing electrically driven compression chillers produce now only 693 MWh of cold, less
than in the current state. Consequently, the electrical consumption of the chillers is reduced. Table 8
presents heat and cooling supply equipment and their contribution to total supply. Table 9 and Table
10 summarizes the contribution of the proposed equipment to the total useful heat supply (UHS) and
total useful cooling supply (UCS) respectively. Figure 10 and Figure 11 present the summary in a pie
chart format.
Table 8: Heat and cooling supply equipment and contribution to total supply.
15
Table 9: Contribution of the proposed equipment to the total useful heat supply (UHS).
4%
New CHP
New boiler
96%
Figure 10: Summary of the contribution of the proposed CHP and boiler to the total useful heat
supply (UHS).
Table 10: Contribution of the proposed equipment to the total useful cooling supply (UCS).
16
21%
Chillers
Absorption chiller
79%
Figure 11: Summary of the contribution of the proposed absorption chiller to the total useful cooling
supply (UCS).
17
6.0 Conclusion
The findings of the energy efficiency opportunities review revealed that energy efficiency
improvement Package 4 provides the best option to improve energy saving with maximum economic
benefits in a pharmaceutical plant. Under this package, the following measures are proposed:
(i) Improvement of the steam pipe distribution efficiency.
(ii) Heat recovery: heat exchangers to use waste heat of the dryer to preheat the inlet air of the
dryer and the waste heat of air compressors to generate hot water.
(iii) Cogeneration (gas turbine) for covering the base load of the remaining heat demand.
(iv) Substitution of old steam boilers by two smaller new steam boilers (redundancy is needed).
(v) Absorption chiller to cover part of the space cooling demand.
These measures allow to save 23% of the current primary energy consumption and 24.5 % of current
annual total cost (including fuel and electricity costs, O&M costs and annuity). The required
investment is about RM 445,000 with a short payback period of 3.78 years (taking into account the
subsidies). Reduction of carbon dioxide emission level is estimated at 15.93%. Table 11 summarizes
the saving potential and economic performance.
Table 11: Comparison of saving potential and economic performance of energy efficiency
improvement Package 4.
The outlook for realizing Malaysia’s aspiration to reduce the intensity of its carbon dioxide emission
by 45% as compared with the 2005 level by 2030 is encouraging if majority of the manufacturing
industries including the pharmaceutical sector make the right step to enhance energy saving. Energy
efficiency improvement package proposed in this review is a promising strategy that would transform
Malaysian pharmaceutical industry into an energy‐efficient sector. Its contribution would be
significant since this industry is among the biggest energy consumers in the country. Hence, even a
small improvement in energy performance will result in a crucial impact on Malaysia’s energy
efficiency landscape.
18
7.0 References
[1] …………………………………………..
[2] …………………………………………..
[3] …………………………………………..
[4] …………………………………………..
[5] …………………………………………..
19