Technology

Carlos Teixeira

Energy Demand Side Management in

Industry

Research Paper
(undergraduate)
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Carlos Teixeira

Energy Demand Side Management in Industry

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 Energy
Demand Side Management
In
Industry

Carlos J. Coelho Teixeira

Doctoral Program in
Electrical and Computers Engineering
FEUP, 2011
TABLE OF CONTENTS
LIST OF FIGURES ............................................................................................................................................ 3
1. INTRODUCTION ................................................................................................................................... 4

2. PRIMARY ENERGY DEMAND OVERVIEW .............................................................................................. 5

2.1. PRIMARY ENERGY SHARES................................................................................................................... 6

3. WHAT INDUSTRIES, WHAT SHARES AND HOW IS ENERGY USED? ........................................................ 8

3.1. INDUSTRY SHARE ON ENERGY DEMAND .................................................................................................. 8
3.2. BREAKDOWN OF INDUSTRY ENERGY USE BY SECTOR ................................................................................... 9
3.3. WHAT USES FOR ENERGY IN INDUSTRY? ................................................................................................10
3.3.1. Chemicals and petrochemicals ...............................................................................................10
3.3.2. Iron and steel .........................................................................................................................11
3.3.3. Nonmetallic minerals .............................................................................................................12
3.3.4. Pulp, paper and print .............................................................................................................13
3.3.5. Non-ferrous metals ................................................................................................................13
4. HOW TO DECREASE THE ENERGY DEMAND FROM INDUSTRY? ...........................................................14
4.1. MEASURES ACROSS SECTORS ..............................................................................................................14
4.1.1. Combined Heat and Power (CHP) ...........................................................................................14
4.1.2. Recycling and alternative fuels ...............................................................................................15
4.1.3. Improving efficiency in motor-driven systems .........................................................................15
4.1.4. Compressed air systems .........................................................................................................16
4.1.5. Pumping systems ...................................................................................................................16
4.1.6. Lighting systems ....................................................................................................................17
4.2. SPECIFIC MEASURES .........................................................................................................................17
4.2.1. chemicals and petrochemicals ................................................................................................17
4.2.2. Iron and Steel.........................................................................................................................17
4.2.3. Nonmetallic minerals .............................................................................................................18
4.2.4. Pulp and Paper ......................................................................................................................18
4.2.5. Non-ferrous metals ................................................................................................................19
5. ENERGY AUDITS ..................................................................................................................................19

6. WHICH PROMOTION MECHANISMS? ..................................................................................................21

6.1. OPPORTUNITY MECHANISMS ..............................................................................................................22
6.2. THE SGCIE (INTENSIVE ENERGY CONSUMPTION MANAGEMENT SYSTEM) .....................................................23
7. INNOVATIVE PRACTICES .....................................................................................................................24
7.1. INDUSTRIAL SYMBIOSIS OF KALUNDBORG ..............................................................................................25

Energy Demand-side Management in Industry Page 2

LIST OF FIGURES

FIGURE 1 - WORLD ENERGY DEMAND SHARES FOR ELECTRICITY GENERATION AND FOR FINAL CONSUMPTION .......................................... 6
FIGURE 2 – FUEL SHARE OF END-USED ENERGY ....................................................................................................................... 7
FIGURE 3 – SHARE OF TOTAL ENERGY CONSUMPTION AT INDUSTRY ............................................................................................... 9
FIGURE 4 – SHARE OF TOTAL ENERGY CONSUMPTION AT INDUSTRY, IN EU-15, AT 2000 AND EXPECTED TO 2030 ...................................10
FIGURE 5 – STEEL PRODUCTION SCHEME, IN (OECD/IEA, 2007 P. 98) ......................................................................................11
FIGURE 6 – CEMENT MANUFACTURE PROCESS IN (OECD/IEA, 2009 P. 4) ...................................................................................12
FIGURE 7 – THERMAL ENERGY EFFICIENCY FOR DIFFERENT KILN TYPES, USING DATA FROM (WBCSD, 2010) ..........................................13
FIGURE 8 – COMPARISON BETWEEN A CONVENTIONAL AND AN ENERGY-EFFICIENT PUMPING SYSTEM (KEULENAER, ET AL., 2004) ...............16
FIGURE 9 – ENERGY SAVINGS POTENTIAL IN CHEMICAL AND PETROCHEMICAL INDUSTRIES (OECD/IEA, 2007 P. 94). ..............................17
FIGURE 10 – ENERGY POTENTIAL SAVINGS FOR IRON AND STEEL INDUSTRY (IEA, 2009 P. 54) ............................................................18
FIGURE 11 – ENERGY POTENTIAL SAVINGS FOR PULP AND PAPER INDUSTRY (IEA, 2009 P. 143) .........................................................19
FIGURE 12 – AN ENERGY AUDIT OVERVIEW (HASANBEIGI, ET AL., 2010 P. 4).................................................................................21
FIGURE 13 – KALUNDBORG INDUSTRIAL PARK (IN HTTP://WWW.SYMBIOSIS.DK).............................................................................25

Energy Demand-side Management in Industry Page 3

1. INTRODUCTION
Throughout history, the use of energy has been central to the functioning and development
of human societies and one of the great challenges that humanity will face, in this twenty-first
century, is to give everyone on the planet access to safe, clean and sustainable energy supplies
(Boyle, et al., 2003). When providing energy-related services to society, significant environmental
and social impact can be produced, especially when fossil or nuclear fuels are used, considering
their extraction processes, risks and environment effects, namely those related with CO 2 emissions
that contributes to present climatic changes.
As finite resources, fossil fuel reserves cannot accommodate all the energy demand increase.
Proved reserves of oil and gas are sufficient for some few decades, while coal reserves can continue
to be explored by 1-2 centuries, more, taking into account the relation between actually proved
reserves and the actual production rate (Boyle, et al., 2003). New reserves are being found but
requiring new technologic advances in the process and more energy spending.
Impacts of extracting energy from fossil or nuclear fuels are greater than they need be
because of the low efficiency of our current systems for delivering energy, converting it into forms
appropriate for specific tasks, and utilizing it in our homes, machinery, appliances and vehicles
(Boyle, et al., 2003). Improving the efficiency of these systems is one of the ways to reduce
negative impacts satisfying the same needs of final energy reducing primary energy use. Also,
replacing fossil fuel by renewable energy sources, even without reduction of final energy demand,
will reduce negative impacts. According with IEA (OECD/IEA, 2010), the total energy demand is
expected to increase 47% between 2008 and 2035, maintaining actual policies. If new policies are
adopted, the total energy demand is expected increase less (36% in the new policies Scenario and
22% in a more ambitious scenario, which requires the concentration of greenhouse gases in the
atmosphere to be limited to around 450 parts per million of CO2 equivalent).
According with (Boyle, et al., 2003), it will be necessary to implement greatly-improved
technologies for harnessing the fossil and nuclear fuels (to ensure that their use, if continued,
creates much lower environmental and social impact), to develop and deploy the renewable energy
sources on a much wider scale and to make major improvements in the efficiency of energy
conversion, distribution and use. Solutions to the problem can be found both in the energy
production and in the demand sides. Efficiency type measures can be technological or social: in the
first case, the installation of more efficient energy conversion or distribution technologies can help
reducing energy input for the same needs of useful energy or energy service, while, in the second
area, individual and/or collective lifestyles re-arrange, may produce a reduction of the energy used
to perform a given service (Boyle, et al., 2003).
In the classic definition of Gellings (1995), Demand-Side Management (DSM) is “the
planning, implementation, and monitoring of those utility activities designed to influence customer
use of electricity in ways that will produce desired changes in the utility’s load shape”. This concept
can be extended to any energy carrier, and can be implemented by utilities as well as by other
entities. The objective continues to be the modification of load shape by driving energy users into a
desired target, in terms of energy use. So DSM can be applied to electricity use, but also to other
energy carriers in order to decrease the demand for some of them (oil, for example), increasing the

Energy Demand-side Management in Industry Page 4

demand for other (renewables), and may represent, or not, an effective reduction of the total energy
demand. Also, by modifying lifestyles, some load shifting or peak shaving can be obtained.
As we will see forward, industry represents half of the Final Consumption of Energy, and
near one third of total primary energy demand. So, the weight of any measure allowing for reducing
its energy demand has a great impact in the total energy demand. This is more important if we
observe that half of this industrial consumption is concentrated in 5 industry types. So, any action
over their energy demand has also great impact in the global energy reduction. Also, as energy use
is directly related with Greenhouse Gas emissions, CO2 reduction targets imposes new challenges to
industries, as well as to transports, services and other activities. Not being the subject of this work,
it will often appear in a strict connection with energy analysis because reducing fossil fuel use,
replacing it by other clean fuels, will obviously contribute for reducing CO 2 emission.

2. PRIMARY ENERGY DEMAND OVERVIEW

In (OECD/IEA, 2005), energy means strictly heat and power extracted from any kind of fuel
or directly provided as a resource, while “energy commodity” covers both, fuels and heat and
power. Other synonymous that appear on literature are “energy carrier”, “energy vector” or
“energy ware”. Coal, oil and natural gas are natural resources of energy as well as wood, straw or
dried dung, with different energy potentials. Water flow, solar radiation and air flows are also
sources of energy, as well as nuclear reactions. So, according with Boyle, et al (2003), Primary
energy is the “total energy content of the original resource”.
Crude oil, hard coal and natural gas, which are extracted or captured directly from natural
resources, are considered “primary” energy commodities while “Secondary” energy commodity
refers to those produced from primary commodities, by any kind of process. For example,
petroleum products (secondary) originated from crude oil (primary), coke-oven coke (secondary)
from coking coal (primary), charcoal (secondary) from fuel wood (primary), and so on (Boyle, et
al., 2003). Primary heat is the capture of heat from natural sources (solar panels, geothermal
reservoirs) and represents the arrival of “new” energy into the national supplies of energy
commodities. Secondary heat is derived from the use of energy commodities already captured or
produced and recorded as part of the national supplies (heat from a combined heat and power plant,
for instance) (Boyle, et al., 2003).
Collecting global values of Energy Demand is a difficult task, considering the large number
of entities, governmental as well as private companies, where data should be requested
(OECD/IEA, 2005). Also, as it is difficult to measure, in some cases, the primary energy its value is
estimated taking an average efficiency coefficient. The value obtained is referred as notional
primary energy and is computed by dividing the energy delivered by 0.33, except for
hydroelectricity (Boyle, et al., 2003). As an example, when considering nuclear energy, the primary
energy is estimated to be 3 times the electric energy produced. In hydroelectricity, the output and
input are equal.
According with (Boyle, et al., 2003), those rules are used by United Nations Department of
Economic and Social Affairs, by the International Energy Agency (IEA), by BP Statistical Review
of World Energy, but there are some countries that were using, in a recent past, different

Energy Demand-side Management in Industry Page 5

approaches. Due to these different approaches, as well as due to some necessary unit conversions,
some differences appear between data of different sources.

2.1. PRIMARY ENERGY SHARES

Mainly, data shown has been collected from the United States Energy International Agency
(EIA, 2010) and from International Energy Agency (OECD/IEA, 2010) reports, both published in
2010 but referring information from 2007 and 2008 respectively. In the second one, projections to
2035 are shown for two different scenarios: maintaining actual policies (1) and adopting new
policies (2) which are identified in the reference book.
Table 1 – Primary Energy Demand for recent years and OECD/IEA two projection scenarios for 2035.
Source of information / year Oil Solid Fuel Gas Renewables Nuclear
(EIA, 2010)/2007 35% 27% 23% 10% 5%
(OECD/IEA, 2010)/2008 33% 27% 21% 13% 6%
(OECD/IEA, 2010)/2035 (1) 28% 29% 22% 15% 6%
(OECD/IEA, 2010)/2035 (2) 28% 23% 22% 19% 8%

From Table 1 we can conclude that the two sources show similar shares: oil and gas have
slightly decreased while renewables (includes hydro, biomass and waste, for example) have
increased 3%, from 2007 to 2008. Projections from IEA to 2035 point out a small reduction of oil
share, for both scenarios. Solid fuel share will increase if actual policies are maintained, but may
reduce if new policies are adopted, being replaced by renewables and nuclear.

Figure 1 - World Energy Demand shares for electricity generation and for final consumption

In Figure 1, we can observe primary energy commodities shares, both for producing
electricity and for final consumption (energy delivered), considering information from (EIA, 2010).
From the total primary energy considered, 39,2% was for electricity generation and about
two thirds (27.5%/39.2%) is lost in electricity related losses (in the conversion processes, as well as
in transmission). Main contribution for electricity production if from solid fuels (44%), while oil
contribution is only 5%. Renewables, which includes hydro, account for 18% of the total, equal to
gas contribution. Nuclear, that is integrally used to produce electricity, accounts for 14% of the

Energy Demand-side Management in Industry Page 6

total. Note that in this particular case, according with the rules explained before, real contribution of
nuclear energy is around 9 Quadrillion Btu. For the same reason, as renewables includes hydro, that
has a direct conversion, the “real” primary energy required is a little different.
The values discussed before agree with those presented in (OECD/IEA, 2005), where it was
found that “the major sources for production of electricity and heat are coal (39% of global
electricity production), followed by natural gas, nuclear, hydro (each of these fuels accounting for
around 17% of global production) and oil (with only 8%)”. In fact, “during the past 30 years there
have been major changes in fuels used for generating electricity. (…) the share of oil decreased
from 25% to 8%, while the share of nuclear increased from 3% to 17%” (OECD/IEA, 2005).
Electricity, as a secondary energy commodity, will increase total delivery from 301,2 QBtu
to 359 QBTU, which represent 72.5% of the accounted primary energy that is end-used through any
energy carrier. The main contributor to end-used energy (without considering electricity) is oil
(55%), followed by gas with 25% and solid fuels with 16%. Renewables, which includes hydro,
biomass and waste, for example, accounts for only 5% of the total. When considering total end-used
energy (359 Quadrillion Btu), oil share is 46%, gas is 21%, electricity and solid fuel accounts for
16% and 13% respectively, while renewables share is only 4%. These results are shown in Figure 2.

Figure 2 – Fuel share of End-used Energy

If we consider total final consumption, we need to include heat as an energy carrier, taking
into account that some primary energy is used to produce heat for different usages. Biomass and
waste have now an important role, greater than coal, as an energy carrier. From the OECD/IEA
2035 projections, in both scenarios, oil share is expected to decrease 4-5% and may be replaced by
electricity which is expected to increase 6%. Taking into account the increasing role of renewable
sources in the electricity generation, this increase in electricity demand should be filled by
renewable energy as well as by increasing electricity industry efficiency considering electricity
related losses as significant. Table 2 shows the results compiled from (OECD/IEA, 2010), for 2008
and for the two scenarios defined before.
Table 2 – share by energy carrier on final consumption (total for 2008 was 8423 Mtoe)
Biomass & Other
Source of information / year Oil Coal Gas Electricity Heat waste renewables
(OECD/IEA, 2010)/2008 42% 10% 16% 17% 3% 13% 0%
(OECD/IEA, 2010)/2035 (1) 38% 9% 15% 23% 3% 11% 1%
(OECD/IEA, 2010)/2035 (2) 37% 9% 16% 23% 3% 13% 1%

Energy Demand-side Management in Industry Page 7

 The most relevant fact is the inclusion of Biomass and waste as an energy carrier, with a
share greater than coal. From the OECD/IEA 2035 projections, in both scenarios, oil share is
expected to decrease 4-5% and may be replaced by electricity which is expected to increase 6%.

3. WHAT INDUSTRIES, WHAT SHARES AND HOW IS ENERGY USED?

Energy is consumed in the industrial sector by a diverse group of industries—including
manufacturing, agriculture, mining, and construction - and for a wide range of activities, such as
processing and assembly, space conditioning, and lighting (EIA, 2010). According with the
economic activities contained, the Industry sector is divided in 13 branches (OECD/IEA, 2005):
Chemicals and petrochemicals, Iron and steel, Non-metallic minerals, Pulp paper and print, Non-
ferrous metals, Transport equipment, Machinery, Mining and quarrying, Food beverages and
tobacco, Wood and wood products, Textiles and leather, Construction, Not elsewhere specified.

3.1. INDUSTRY SHARE ON ENERGY DEMAND

Globally, the industrial sector comprised 51 percent of global delivered energy use in 2007,
as we can observe in Table 3, but if we consider the total energy demand, corresponding to the end
use delivered energy plus electricity related losses (27.5% of the total energy demand), industrial
sector share is reduced to 37.2%.
Table 3 – end-used energy for different activity sectors (World)
Electricity-related
Source of information / year Industrial Transportation Commercial Residential losses
% of Energy delivered 51.4% 27.3% 7.4% 13,9% ---
(EIA, 2010)/2007
% of Primary energy 37.2% 19,8% 5.4% 10.1% 27,5%

If we consider OECD countries only, which represent 49.6% of the world primary energy
demand, industrial share decreases to 41% while transportation rise to 33.4% and commercial use
increased to 10.6%. As electricity related losses are similar (27.1%), industry share in total primary
energy is now 29.9% almost equal to the share of transportation, which increased from 19.8% to
24.4%.
Table 4 – end-used energy for different activity sectors (OECD)
Electricity-related
Source of information / year Industrial Transportation Commercial Residential losses
% of Energy delivered 41.0% 33.4% 10.6% 15.0% ---
(EIA, 2010)/2007
% of Primary energy 29.9% 24.4% 7.7% 10.9% 27,1%

Considering non-OECD countries, that represent 50.4% of the primary energy demand,
industrial share is 44.5% of the total primary energy demanded by this group of countries, and
61.8% of the total energy delivered. Comparing with OECD, main reduction occurred in
transportation and commercial shares.
Table 5 – end-used energy for different activity sectors (non-OECD)
Electricity-related
Source of information / year Industrial Transportation Commercial Residential losses
% of Energy delivered 61.8% 21.2% 4.2% 12.8% ---
(EIA, 2010)/2007
% of Primary energy 44.5% 15.3% 3.0% 9.3% 27,9%

Energy Demand-side Management in Industry Page 8

 Considering the 27 members of European Union, and data relative to 2007, the final
consumption share by activities, shown in Table 6 , is slightly different from the above data, but we
must pay attention that OECD do not include in industry consumption primary energy resources
used in some industries as feedstock (raw materials). Industry, in EU-27, accounted for 28.4% of
the total final energy consumption, against the 41% of OECD countries, or the 61.8% for non-
OECD countries and the 51.4% of World data. The Services &Households consumption has 39.3%
share, while Commercial and Residential share for OECD is 25.6% and 17% in non-OECD
countries.
Table 6 – end-used energy for different activity sectors (EU-27)
Source of information / year Industrial Transportation Services & Households Non-energy uses
Energy delivered 28.4% 32.3% 39.3% ---
(Eurostat, 2010)/2007
Total energy (*) 18.3% 20.8% 25.3% 35,6%

3.2. BREAKDOWN OF INDUSTRY ENERGY USE BY SECTOR

Among all world industries, five classes are responsible for 50% of the energy used by the
sector, over the world, as it can be observed in Figure 3, according with data presented in (EIA,
2010).

Figure 3 – share of total energy consumption at industry

Chemicals, which includes a set of industrial areas, from “highly intensive raw materials,
such as basic petrochemicals, to high value added consumer commodities (pharmaceuticals and
cosmetics)” (European Comission, 2003) has a share of 22%, and represent roughly 10% of the
total worldwide final energy demand (IEA, 2009). Iron and steel, with 15% share, is the second
energy consuming area, followed by nonmetallic minerals, which includes cement, concrete, bricks
as well as glass and ceramics, with a share of 6%. The forth position is occupied by pulp and paper
industries with 4% followed by nonferrous metals with 3%, which includes aluminium, silicon,
titanium and other non-metallic minerals. The remaining 50% is “characterized by the large
divergence in terms of products and by low energy intensity, as most of these products involve high
value added with limited energy use” (European Comission, 2003).

Energy Demand-side Management in Industry Page 9

 Figure 4 – share of total energy consumption at industry, in EU-15, at 2000 and expected to 2030

According with (European Comission, 2003), industry has been greatly influenced by the
increasing globalization of the world economy which has had a considerable impact on the location
of production. In fact, the share of total industry energy consumption at EU-15, referred to 2000, is
quite different from World data, as it can be seen in (European Comission, 2003). The total share of
the 5 industry families that was 65% in 2000, and was (on the time the report was written) expected
to reduce to 59% in 2030.
Chemicals share in EU-15, for the year 2000 was 17%, lower than the 22% shown for world
data (year 2007), and it was expected to maintain its share by 2030, while Iron and Steel that
represented 19% in 2000, is expected to decrease to 13% by 2030, while 2007 data refers that Iron
and Steel share in world industry energy consumption was 15%. This share reduction is expected to
be replaced by an increase in non-ferrous metals industry and by the other less energy intensive
industries.

3.3. WHAT USES FOR ENERGY IN INDUSTRY?

Although desirable, no detailed statistics are available that allocate industrial energy use for
the various steps in manufacturing. Rough estimates suggest that 15% of total energy demand in
industry is for feedstock, 20% for process energy at temperatures above 400°C, 15% for motor
drive systems, 15% for steam at 100 – 400°C, 15% for low temperature heat and 20% for other
uses, such as lighting and transport (OECD/IEA, 2007 p. 41).
The energy use is highly dependent on the industrial sector, but also has regional
dependence, considering that different primary energy commodities can be used to obtain final or
intermediate energy or non-energy products used in the industrial process. Following, we will
discuss each one of the 5 most consuming industries in terms of energy use processes.
3.3.1. CHEMICALS AND PETROCHEMICALS
The petrochemicals subsector uses primary energy commodities as feedstock as well as to
produce heat and power. The energy bill accounts for 60 percent of the industry’s operating costs
(EIA, 2010). Feedstock and process energy required for this sector comes from oil and/or gas-
derived products (IEA, 2009), depending on the resources available in each region.
Table 7 - Energy Use in the Chemical and Petrochemical Industry, 2004, excluding Electricity (OECD/IEA, 2007)

Energy Demand-side Management in Industry Page 10

 According with (OECD/IEA, 2007), nine processes (detailed in Table 7) account for 22.5 EJ
of final energy use (including feedstock), which is about 65% of global energy (33.62 EJ) used in
the chemical and petrochemical industry. The the most important “building block” in the sector is
ethylene, which can be produced by various chemical processes. In Europe and Asia, it is produced
primarily from naphtha (refined from crude oil) while in North America and the Middle East,
ethylene is produced from ethane, which typically is obtained from natural gas reservoirs (EIA,
2010).
3.3.2. IRON AND STEEL
Crude steel can be obtained both using blast furnaces (as well as basic oxygen furnaces) to
process iron ore and scrap, or using electric arc furnace, which uses direct reduced iron, scrap and
cast iron. The first process uses mainly iron ore and accounts for two-thirds of steel production. The
electricity arc furnace process uses mainly scrap and accounts for 34% of steel production. Only 3%
of all steel is produced in other processes such as open-hearth furnaces, which are out-dated.
(OECD/IEA, 2007).
Iron can be produced by melting scrap metal, using electric arc furnaces, which is a process
more efficient than producing the same iron from ore and coke, using blast furnaces, which make
this process tremendously energy intensive (EIA, 2010). The total final energy use by the iron and
steel industry, including coke and blast furnaces, was 21.4 EJ in 2004. Global steel production was
1 057 million tonnes (Mt) in 2004. The average energy intensity is 20.2 gigajoules per tonne (GJ/t)
of steel. Globally the iron and steel industry accounts for the highest share of CO 2 emissions from
the manufacturing sector, at about 27% (OECD/IEA, 2007).

Figure 5 – Steel Production Scheme, in (OECD/IEA, 2007 p. 98)

Energy Demand-side Management in Industry Page 11

 According with (OECD/IEA, 2007), most of the energy consumption is related to the blast
furnace process (10 – 13 GJ/t crude steel), including the hot stove. In sintering, are used 2 – 3 GJ/t
crude steel, in coke-making 0.75 – 2 GJ/t crude steel and in steel rolling 1.5 – 3 GJ/t crude steel.
Production of DRI using natural gas requires approximately 12 GJ/t crude steel, while electric arc
furnaces use 1 – 1.5 GJ of electricity per tonne of crude steel.
Although being environment friendly because it is a recycling process, the energy balance
for the production of iron from scrap must account also for the transportation needs for scrap, as
well as for the electricity related losses. On the other hand, considering the melting scrap metal
process is less energy intensive, these industries can be installed far from coal production, and use
even renewable resources for the production of electricity.
3.3.3. NONMETALLIC MINERALS
In nonmetallic minerals are are included cement, glass, brick, and ceramics production. From
these, cement production is the most significant industry, accounting for 85 percent of the energy
used in the sector. (EIA, 2010). To produce cement four key ingredients (lime, silica, alumina and
iron) are needed; usually, a feedstock of limestone, clay and sand is used to extract those
ingredients, which are mixed and exposed to intense heat, forcing some chemical reactions to be
produced and will originate the clinker (IEA, 2009), in a process illustrated in Figure 6.

Figure 6 – cement manufacture process in (OECD/IEA, 2009 p. 4)

Most of the energy consumption is related with heating processes, using wet or dry kiln,
especially due to the high energy associated with the 1450 ºC in the kiln. Although dry kiln process
requires less heat than wet kiln, energy costs still constitute between 20 and 40 percent of the total
cost of cement production (IEA, 2009 p. 79). The best available technologies estimates show that
thermal energy consumption is in the range of 2.9 – 3.3 GJ/ton of clinker, but world weighted
average range is between 3.38 GJ/ton of clinker for dry kiln with preheater and pre-calciner and
6.39 GJ/ton in wet kiln processes, as show in Figure 7.

Energy Demand-side Management in Industry Page 12

 7
MJ/ton
6
5
4
3 6,39
2 4,41 3,86
3,38 3,71
1
0
dry, with pre-heater dry, with only pre- dry, without pre- semi-wet/semy dry wet
and pre-calciner heater heater

Figure 7 – thermal energy efficiency for different kiln types, using data from (WBCSD, 2010)

Although thermal efficiency shown in (OECD/IEA, 2007) are slightly different from those in
Figure 7, with a value of 2.9 GJ/ton of clinker, all values are far from the thermodynamic minimum
to drive the endothermic reactions, 1.8 GJ/ton of clinker.
3.3.4. PULP, PAPER AND PRINT
Energy use in the pulp and paper industry is divided by chemical pulping, mechanical
pulping, paper recycling and paper production. Approximately two-thirds of final energy
consumption is fuel that is used to produce heat, while the remaining third is electricity that can be
delivered from electrical network of produced on-site (OECD/IEA, 2007). As primary input for
pulp and paper manufacture is wood, these industries usually generate approximately half of its own
energy needs from biomass. The majority of the fuel used in pulp and paper-making is used to
produce heat and just over a quarter to generate electricity (IEA, 2009 p. 136).
In some cases, integrated paper mills generate more electricity than they need and are able to
sell their excess power back to the grid. As is the case in other industries, recycling significantly
reduces the energy intensity of production in the paper sector (EIA, 2010). Chemical pulp mills
require less external energy than mechanical pulp mills, but require approximately 2.2 tonnes of
wood to produce a tone of bleached Kraft paper, as half of the wood is incinerated in the recovery
boiler. Mechanical pulping uses large amounts of electricity than chemical pulp mills, which are
self-sufficient in energy terms. A typical chemical mill has a steam consumption of 10.4 GJ/air dry
tonne pulp and an excess of electricity in the order of 2GJ/ air dry tonne pulp.
Paper production uses electricity in all process steps (preparing the stock from pulp, forming
a sheet, dewatering drying and, sometimes, coating the paper), although heat (steam) is needed for
the drying process. For a non-integrated paper mill, stock preparation and paper machines typically
have energy intensities near 200 and 350 kWh/ton, respectively (OECD/IEA, 2007).
3.3.5. NON-FERROUS METALS
Within the production of nonferrous metals, are included aluminum, copper, lead, and zinc,
with the most important being the aluminum production. Energy accounts for about 30 percent of
the total cost of primary aluminum manufacturing and is the second most expensive input after
alumina ore (EIA, 2010). Primary aluminum is produced in three steps, with different energy
intensities associated. Bauxite (ore) mining is a low energy intensity process, while the final step,
the smelting of aluminum is a highly energy-intensive electrochemical process. Refining alumina,
which is the intermediate step, is a medium energy intensity physicochemical process (IEA, 2009).
According with (Boyle, et al., 2003 p. 106), in 1880’s smelting 1 tonne of aluminum metal
required 50 MWh of electricity, while by the end of the twentieth century this value was about one
Energy Demand-side Management in Industry Page 13
third. In fact, by 2007, aluminum smelters were responsible by 3.5% of the total electricity
consumption (IEA, 2009 p. 163). For each ton of aluminum produced, smelting accounts for 120 GJ
of the 155 GJ of the total energy used to produce it, which corresponds to more than 75%, while re-
melting aluminum (when recycling), only uses 10 GJ/ton.
Smelting of aluminium is the most energy-intensive process requiring, on average, 15.5
MWh/ton of aluminium, which represents an intensive use of electricity. Worldwide, electricity
used is obtained from hydro and from coal stations, with high regional variations. In Asia,
electricity is generated from natural gas while in Oceania coal is the main used fuel (IEA, 2009).

4. HOW TO DECREASE THE ENERGY DEMAND FROM INDUSTRY?

Industrial energy intensity (energy use per unit of industrial output) is a measure of the
efficiency in the global use of energy. Considering a given output of final products, a decrease in
energy intensity requires a reduction on energy used to produce it, which implies more efficient
transformation processes. Even, when final products demand increases, an energy intensity decrease
is achieved if energy increasing rates are lower than demand increase. Although industrial energy
intensity has declined substantially over the last three decades across all manufacturing sub-sectors
and all regions (OECD/IEA, 2007), energy consumption has continued to increase.
In order to reduce end-use of energy, there are global measures that cross all industrial
sectors as well as some measures that apply to specific industrial sectors (Hasanbeigi, et al., 2010).
Some of the measures result in a decreasing of primary energy demand, especially within fossil
fuels, while other result in less global energy use, by using more efficient processes. As industries
often use power and heat simultaneously, one way of reducing energy demand is by producing, in
the same process, electricity and heat. According with (IEA, 2006), combined heat and power
generation can bring 10 to 30% fuel savings over separate heat and power generation. Also, using
waste as a source of energy or as feedstock will contribute for reducing primary energy demand,
while contributing for reducing environmental negative impact of waste materials.
Some specific measures do exist in each industrial subsector, and can be used, sometimes in
a regional basis, to reduce energy demand as well as greenhouse gas emissions. Renewables are an
example, considering that their availability depends on the local where industrial plants are located.
Sometimes, energy intensive industries moves close to regions where hydroelectric potential is
high, and use hydroelectricity directly in their industrial process. In (Magueijo, et al., 2010) are
identified, for the Portuguese industrial sectors, potential energy saving actions. As the main source
of information are documents from the International Energy Agency, some of them not yet
publically available, we can assume that most of them are directly applicable on World industry.

4.1. MEASURES ACROSS SECTORS

It is important to refer that a set of energy-efficient components does not mean an efficient
system if a system-wide perspective is not applied (IEA, 2009). There is a great potential to reduce
energy by improving the efficiency in motor systems (pumping, compressed air, fan systems), in
steam systems and in process heating systems.
4.1.1. COMBINED HEAT AND POWER (CHP)

Energy Demand-side Management in Industry Page 14

 Some industries that use heat and power in their processes produce both in a combined heat
and power plant which decrease their energy intensity. According with (OECD/IEA, 2007) the
introduction of CHP results in fuel savings of 10 to 20%, when heat and power are both used in the
industrial process, or when it is possible to sell one of them to other industries or to the electricity
grid. CHP offers energy efficiency, economy, emission reduction and energy security advantages.
Sometimes, waste products form the industrial process can also be used as fuel, which increases
global efficiency, and decreases final energy use.
In the chemicals and petrochemicals subsector, CHP is suitable to be used, also with CCS
(CO2 Capture and Storage), the use of bio-based feedstocks and the recycling of polymers and other
chemicals such as solvents and lubricants (IEA, 2009). In pulp and paper industry, a global potential
increase for 10% heat efficiencies and 11% electricity efficiencies, which corresponds to 600 PJ of
heat and 300 PJ of electricity, exist. If CHP actual use is increased, an extra 250 PJ reduction can
be achieved. CHP is also referred in non-ferrous metals industry, helping reducing heat losses and
improving heat transfer efficiency.
4.1.2. RECYCLING AND ALTERNATIVE FUELS
In nonmetalic minerals, replacing conventional fuels (mainly coal and/or petcoke) with
alternative fuels (including natural gas) and biomass fuels, which can be 20-25% less carbon
intensive than coal (OECD/IEA, 2009), can allow reducing energy use. In some European
countries, the average substitution rate is over 50% for the cement industry and up to 98% as yearly
average for single cement plants. Typical alternative fuels used are pre-treated industrial and
municipal solid wastes, discarded tyres, waste oil and solvents, plastics, textiles and paper residues,
biomass, among others. The use of these alternative fuels offers great opportunities, once modest
additional investments are needed to utilize some of these alternative fuels. Environmentally, gains
are very expressive: as fuel-related CO2 emissions are about 40% of total emissions from cement
manufacture, the CO2 reduction potential from alternative fuel use can be significant, considering
that most of them will be incinerated, by using additional fossil fuels, themselves emitting CO 2;
also, the use of these alternative fuels prevents unnecessary land-filling of wastes (OECD/IEA,
2009).
In pulp and paper, black liquor gasification, advanced drying technologies and bio refineries
are promising energy-saving technologies. Black liquor gasification is expected to reach 4.0-6.0 EJ
by 2050, and corresponds to a 600PJ to 900 PJ reduction potential, by replacing gas- or coal- fired
electricity (IEA, 2009 p. 152). According with (IEA, 2009), if global recycling is increased to 60%,
more 250 PJ can be saved, while in non-ferrous metals, more effective waste-heat recovery and use
can reduce fuel and electricity to between 9.5 and 10 GJ/ton of alumina, and may result in 20%
energy saving.
4.1.3. IMPROVING EFFICIENCY IN MOTOR-DRIVEN SYSTEMS
When more efficient motors are used, a global decrease of about 3-4% in total energy used
in industry can be reached and, in some particular cases gain can reach 8% (Magueijo, et al., 2010).
Falkner, et al., (2011) is even more ambitious than previous analysis, when saying that “if the all the
Electric Motor-driven Systems (EMDS) used the most energyǦefficient technologies available, it
would reduce total global electricity demand by about 10%”.

Energy Demand-side Management in Industry Page 15

 Figure 8 – comparison between a conventional and an energy-efficient pumping system (Keulenaer, et al., 2004)

If a conventional pumping system is used, the global efficiency is only 31%, although
individual components have no less than 60% of efficiency. When selecting more efficient
components (no less than 88% efficient), and when using a Variable Speed Drive to adjust power
from the electrical motor, the global efficiency is 72%, which corresponds to a decrease of 57% of
input power, as we can see in Figure 8.
4.1.4. COMPRESSED AIR SYSTEMS
Compressed air is a frequently used energy source in industry, driven by an electrical motor.
The compressed air is distributed, through a network of pipes, all over the production site to the end
use devices (car industry robots, high pressure spraying pistols, etc). System performance depends
on the performance of each element, yet overall system design and operation have an even greater
influence on performance. Together with the use of high efficiency motors and variable speed
drives referred before, the following technical measures could improve the overall performance of a
compressed air system (Keulenaer, et al., 2004):
- optimal choice of the type of compressor for the specific end use applications;
- improvement of compressor technology (eg multi-stage compressors);
- more sophisticated control systems;
- recuperation of heat for use in other functions;
- improving air treatment (eg drying, filtering);
- a better overall system design, including the introduction of multi-pressure systems;
- improving the air flow in pipework to reduce the pressure losses caused by friction;
- reducing air leaks
4.1.5. PUMPING SYSTEMS
There is a very wide range of pumping applications, from industrial dishwashers to large
pumps in the cooling circuit of a power station. Improving the efficiency of pump systems is

Energy Demand-side Management in Industry Page 16

achieved mainly by selecting the correct pump for the application and working conditions.
Important factors are (Keulenaer, et al., 2004): the design of the section head of the pump, the pump
flow, the design of the pump impeller, the properties of the fluid, the motor speed selected.
4.1.6. LIGHTING SYSTEMS
According with (Hasanbeigi, et al., 2010), lighting energy reduction potential do exist, with
natural dependency on its share on global energy. Simple measures, as using automatic controls to
switch-off lighting on week-ends, during the night or when a space becomes unoccupied,
optimization of plant lighting according with the use of each space and optimization of the use of
natural sunlight can help reducing energy.
Other measures may include replacing mercury lights with metal halide or high pressure
sodium lights, replace metal halide (HID) with high-intensity fluorescent lights (which incorporate
high-efficiency fluorescent lamps), using electronic ballasts and high-efficacy fixtures maximizing
the output to the work place.

4.2. SPECIFIC MEASURES

4.2.1. CHEMICALS AND PETROCHEMICALS

More than half of the total fuel inputs to accounts for feedstocks (non-energy use), which
reduces opportunities for decreasing fuel use (OECD/IEA, 2007). New developments in catalysts,
membranes and other separation processes, process intensification and bio-based chemicals could
bring very substantial energy savings. For this, ambitious R&D is required, spanning from basic to
applied research followed by technology development (IEA, 2009).

Figure 9 – Energy savings potential in chemical and petrochemical industries (OECD/IEA, 2007 p. 94).

4.2.2. IRON AND STEEL

IEA (2009) identified 3 principal modern routes to produce Iron and Steel based on scrap
and/or iron ore as well as in different technologies. One of the routes (Blast Furnace/Blast Oxygen
Furnace) is based on the use of 70% to 100% of ore and using scrap to fill the remaining part.
Another method (scrap/Electric Arc Furnace) is based on scrap only, while in the third one (Direct
Reduced Iron/ Electric Arc Furnace) is based on iron ore and often scrap also. Scrap/EAF is much
less energy-intensive (4 GJ to 6 GJ per tonne) than BF/BOF route with 13 to 14 GJ per tonne. As
the scrap/EAF production is limited by available scrap supply, there is a limit to the proportion of
steel output from this less energy intensive process. Depending on the actual technology used in
Iron making industries, potential for saving energy are very different from one region to the other,
as we can see in Figure 10.

Energy Demand-side Management in Industry Page 17

 Figure 10 – energy potential savings for iron and steel industry (IEA, 2009 p. 54)

China is the country with the higher energy saving potential, although its average efficiency
industry. The main factors for low global efficiency are the high share of small-scale blast furnaces,
the high share of inefficient coking plants and the low quality ore (OECD/IEA, 2007). Ukraine has
the highest potential for reducing energy intensity (8.7 GJ/ton of steel), although the energy saving
potential is one of the lowest, due to its reduced share on steel production. Worldwide, the higher
energy saving potential is related with blast furnaces improvements, followed by the use of blast
furnaces gases to generate power.
Energy savings and CO2 emissions reduction can be maximized (IEA, 2009) by using gas-
based Direct Reduced Iron, charcoal, plastic waste, CO2-free electricity and Hydrogen. Also with
better materials flow management, reductions can be achieved. Especially, replacing small-scale
facilities in China and India and replacing outdated open-hearth furnaces and ingot casting practices
in Ukraine and Russia, great reductions will be obtained.
4.2.3. NONMETALLIC MINERALS
Taking into account the already explained decreasing energy intensity from wet kiln to dry
kilns, one way of reducing energy demand is replacing non-efficient kilns by most-efficient ones.
As the investments required are very high, considering that it is necessary to modify plants layout,
this substitution process will occur slowly. According with (IEA, 2009), one of the main actions to
take is related with the replacement of most small-scale and vertical shaft kilns with large more
efficient ones, especially in China.
4.2.4. PULP AND PAPER
Outdated small-scale paper plants in developing countries, notably China and India, could
substantially reduce energy needs with larger plants. New technologies that can help reducing
energy use are especially relevant when replacing phased-out facilities by new ones.

Energy Demand-side Management in Industry Page 18

 Figure 11 – energy potential savings for pulp and paper industry (IEA, 2009 p. 143)

From Figure 11 we can observe that US have the highest energy saving potential, but the
highest saving potentials on specific energy are for Russia, with 11.6 GJ/ton of paper of potential
reduction, and for Canada, with 7.0 GJ/ton of paper.
4.2.5. NON-FERROUS METALS
Considering the relatively low melting temperature of aluminum scrap, the amount of energy
that is needed to transform scrap to new aluminum is only 6-7% of the energy necessary to produce
it from ore. To recycle aluminum reverberatory and induction furnaces are used, consuming 3-9 GJ
of fuel per tonne of aluminum.
Reduction of energy demand involve the replacement of older smelter technologies with pre-
bake cells, the development of process control, improvements on insulation to reduce heat losses are
other possibilities in reducing energy intensity. It is expected to reduce electricity consumption to
14.5MWh/t of aluminum in the short-term, with further reductions thereafter (IEA, 2009). Other
saving opportunities are on the use of natural gas-fired regenerative furnaces instead of
conventional cold air technologies. (IEA, 2009).

5. ENERGY AUDITS
The increased prices of primary energies together with environmental restrictions are forcing
industries to identify cost saving opportunities. Main industries, which account for a large share on
CO2 emissions and in energy, are required to proceed to some restructuring on their energy-
intensive processes, in order to decrease primary energy demand or replacing fossil fuels by cleaner
energy sources, reducing their global CO2 emissions. Auditing is a systematic way of knowing the
actual point of operation of a particular process as well as of identifying costly-effective measures
to adopt in order to improve efficiency.
To identify energy saving and/or CO2 reduction potentials, an energy audit are usually
required (Hasanbeigi, et al., 2010). According with the objectives to be reached, energy audits can
be preliminary or a detailed (or diagnostic audit). In a preliminary audit, a simple analysis on energy
use and performance is made, by using readily-available data, in a relative short time. Results are

Energy Demand-side Management in Industry Page 19

generally related with common opportunities for energy efficiency, and economic analysis is as
simple as calculating payback periods of the investments. When a detailed audit is performed, it is
required detailed data and information, usually not available. Although it takes more time to collect
the necessary information by measuring energy in particular point or processes, information after
processing will give a more accurate picture of the energy performance over all the system
(Hasanbeigi, et al., 2010). From these detailed audits more specific recommendation for
improvements are produced, as well as other economic indicators, like the internal rate of return
(IRR), the net present value (NPV), and often also life cycle cost (LCC).
A detailed audit has 3 main stages: preparation, execution, and reporting. Post-auditing stage
will appear if some of the measures were selected to be implemented, because it is necessary to
prepare and implement the action plan. After collecting the necessary data, it is necessary to analyse
it to calculate relevant indicators (for example, energy intensity of a particular process, patterns of
energy usage - week days, non-week days, month to month-, annual consumption, by energy
carrier. For electricity carrier also parameters that can affect electricity billing should be calculated
(load factor, peak power, voltage profiles).
General benchmarking and comparative analysis were described in (Falkner, et al., 2011)
(IEA, 2009) (Magueijo, et al., 2010) applied to general industry sectors, as discussed in chapter 4.
Some of the opportunities to improve systems efficiency and potentials for energy saving were
identified and discussed. Applying benchmarking and comparative analysis to a particular industry
or process allows for a deep analysis, taking into account regional or technological particularities. It
does not make sense to make a proposal to use aluminium scrap to produce new aluminium (is a
less energy-intensive process than obtaining and transforming alumina to aluminium), if we are in a
region where scrap dos not exist! It makes sense to compare the industrial plant with the best
examples within the same particularities, not with an infeasible solution.
Benchmarking energy performance of a facility enables energy auditors and managers to
identify best practices that can be replicated. It establishes reference points for managers for
measuring and rewarding good performance. It identifies high-performing facilities for recognition
and prioritizes poor performing facilities for immediate improvement (Hasanbeigi, et al., 2010).
According with the same source, plant performance may be benchmarked to:
- Past performance: comparing current versus historical performance;
- Industry average: comparing to on an established performance metric, such as the
recognized average performance of a peer group;
- Best in class: benchmarking against the best in the industry and not the average;
- Best Practices: qualitative comparing against certain, established practices or groups of
technologies considered to be the best in the industry.

Energy Demand-side Management in Industry Page 20

 Figure 12 – an energy audit overview (Hasanbeigi, et al., 2010 p. 4)

6. WHICH PROMOTION MECHANISMS?

As stated in (Crossley, 2000), “mechanisms are initiatives that aim to overcome policy and
program barriers which prevent the pursuit of cost-effective DSM and energy efficiency activities
and the achievement of national energy policy goals” while “DSM and energy efficiency programs
are specific actions taken by utilities and others, with the aim of influencing energy-using
behaviour”. While programs are targeted at energy end-users, mechanisms are targeted at the
developers and implementers of programs. As an example, when a regulator regulator allows a
utility to increase its prices to cover the cost of providing cash rebates to customers who purchase
energy-efficient appliances, this is a mechanism. The program corresponds to the cash rebate,
provided by the utility, to customers that purchase energy-efficient appliances. Other example: an
energy efficiency funding agency established by a government provides a mechanism allowing
funding programs for energy efficiency by utilities.

Energy Demand-side Management in Industry Page 21

 Although sometimes being difficult to distinguish the program from the mechanism, this
chapter is related only with mechanisms that aims to promote energy demand reduction applied to
industry. In Crossley (2000), a set of 25 mechanisms is presented including control, funding,
support, or market mechanisms. Among them, we can found:
- Energy efficiency licence conditions for electricity businesses – This mechanism
establishes a legal framework to require electricity businesses to consider and promote
energy efficiency, as part of the conditions under which they are granted a licence to
carry out their business. (control mechanism);
- Public benefits charge for energy efficiency - A public benefits charge is a method of
raising funds from the operation of the electricity market, which can then be directed into
DSM and energy efficiency activities (funding mechanism);
- Promotion of energy efficiency by industry associations - This mechanism involves
industry associations promoting energy efficiency services to their members. An industry
association may be able to provide its members with access to energy efficiency services
which the individual members themselves may be unable to obtain. (support
mechanism);
- Demand-side bidding in competitive markets - Demand bidding schemes provide the
opportunity for a customer’s offer of electricity demand reduction to offset the
requirement for either increased generation of electricity or increased purchase of
wholesale electricity by electricity retailers. Typically, this opportunity is realised by the
customer bidding into a wholesale electricity pool a price level above which the
customer will reduce their demand for electricity. (market mechanism);
The European Commission’s ManagEnergy (www.managenergy.net) initiative supports
local and regional authorities and those who work with them, such as energy agencies involved in
energy efficiency and renewable energies, through an interactive website, training workshops and
networking events. The Commission’s Sustainable Energy Europe campaign
(www.sustenergy.org) raises public awareness about sustainable energy, including through the EU
Sustainable Energy Week and Energy Days, and helps everyone play their in changing the energy
landscape.

6.1. OPPORTUNITY MECHANISMS

Under this topic I will address some of the lacks pointed out on literature, which can increase
the adoption of more efficient systems. Lacks are related with constraints (technical, financial,
social, …) detected when looking for BAT and BP (Best Available Technology, and Best Pratice).
If there are more efficient technologies, why they are not used? If a promising technology is
appearing, why not fund its development? These are questions that EDSM and EE promoting
mechanisms should answer, in order to develop these technologies.
Falkner et al. (2011) pointed out that “a) Governments should consider adopting mandatory
minimum energy performance standards for electric motors in line with international best practice;
b) Governments should examine barriers to the optimisation of energy efficiency in electric motor-
driven systems and design and implement comprehensive policy portfolios aimed at overcoming
such barriers”. Wyman (2010) wrote that “Support for R&D should ensure that strong projects can
develop to a level so that they can attract sufficient levels of private sector investment”.

Energy Demand-side Management in Industry Page 22

 In (IEA, 2009) more policy needs are pointed , like “putting in place supportive measures
that provide industrial firms with information and improved tools for assessing their technical
options”, as well as “introducing performance incentives, targets and agreements at the plant, firm
or sector levels which, without specifying technologies and processes, encourage firms to identify
and implement appropriate technical action”. If the only drive for efficiency is the saved energy
costs, not yet proved technologies will have difficulties to be improved. It is needed financial
support to do R&D and to transfer technology to industry.
Other initiatives can be found, that aim to cover some of the lacks before identified. As an
example, ten leading European Research Institutes have taken up the challenge to found an
European Energy Research Alliance (EERA)1, with the objective of accelerating the development
of new energy technologies by conceiving and implementing Joint Research Programmes in support
of the EU - Strategic Energy Technology (SET) plan by pooling and integrating activities and
resources, combining national and Community sources of funding and maximising
complementarities and synergies. According with their webpage, the development of promising
technologies is often hampered at national level as there appears to be sub-critical mass in
individual countries.
National and European energy R&D programmes have to be streamlined and coordinated, to
achieve accelerated energy technology development which can subsequently be shared and
implemented via the commercial community. The primary focus of the EERA will be on the
strategic and targeted development of next generations of energy technologies drawing on results
from fundamental research and maturing technologies to the point where it can be embedded in
industry driven research.

6.2. THE SGCIE (INTENSIVE ENERGY CONSUMPTION MANAGEMENT SYSTEM)

The Management System of Intensive Energy Consumption was created in accordance with
the National Action Plan for Energy Efficiency (PNAEE), and is mandatory for consumers with an
annual consumption greater than 500 toe. Consumers with consumption lower than 500 toe can also
take part on the program, in a voluntary basis.
The management system imposes an initial Energy Audit which should evaluate the energy
use and promoting the increasing of energy efficiency, including the use of renewable energy
sources. Once energy savings are identified, consumers must prepare a plan for rational energy use
to submit to an evaluation by DGEG (Portuguese Board for Energy and Geology), pointing out
which measures will be implemented, in order to increase efficiency.
The main indicators to be used are the energy intensity (IE), the carbon intensity (IC), and
the energy specific consumption (CEE), as show in equations 1 to 3.
௧௢௧௔௟௔௡௡௨௔௟௘௡௘௥௚௬ሺ௧௘௣ሻ
‫ ܧܫ‬ൌ  ீ௥௢௦௦஺ௗௗ௘ௗ௏௔௟௨௘ሺ̀ሻ
(1)

௧௢௧௔௟௔௡௡௨௔௟௘௡௘௥௚௬ሺ௧௘௣ሻ
‫ ܧܧܥ‬ൌ  ௣௥௢ௗ௨௖௧௜௢௡ሺ௨௡௜௧௦ሻ
(2)

1
http://www.eera-set.eu/home

Energy Demand-side Management in Industry Page 23

 ீுீ௘௠௜௦௦௜௢௡ሺ௞௚஼ை ሻ
మ
‫ ܥܫ‬ൌ  ௧௢௧௔௟௔௡௡௨௔௟௘௡௘௥௚௬ሺ௧௘௣ሻ (3)

Goals must be, at least, an increase of 6% for IE and CEE, along a six-year timeframe, for
mandatory cases. For the voluntary ones, goals are lower (4%), and the time span is increased to 8
years. In both cases, IC values should be collected and kept for historic. Also, measures where the
Return of Investment period is less or equal to 5 years (or 3 years for the voluntary facilities) should
be implemented within the first three years.
If goals are reached, an incentive scheme is applied. For those facilities in a voluntary base,
it corresponds to the reimbursement of 50% of the Energy Audit costs, with a maximum of € 750.
For all facilities under the program, incentives corresponds also to a reimbursement of 25% of the
investments made in equipment and management systems for the monitoring of the energy
consumption, with a maximum of 10 000€. If facilities only use natural gas and/or renewable
energy sources, limits of reimbursement are increased by 25% for renewables and 15% for natural
gas. Facilities under an Agreement of Rational Use of Energy are also exempt of ISP (Portuguese
tax for oil and energetic products), in a value dependent on the fuels used. For coal, coke or oil
coke, the value is 4.16 €/ton, for fuel oil containing less than 1% of sulfur is 15.30 €/ton and for oil
gas the amount is 7.81 €/ton.
When the goals are not reached, penalties are applied for deviations calculated in mandatory
reports. If corrective measures are adopted, allowing for recovering the deviations, are made in the
subsequent year, 75% of the penalties applied are reimbursed.

7. INNOVATIVE PRACTICES
As seen before, primary resources have energy potential that can be converted into useful
energy or into useful products, with certain efficiency. In each stage of the transformation processes
there are losses: on converting primary energy to electricity, on transporting energy commodities to
industries, on transforming primary into secondary energy commodities, and so on. Increasing
efficiency is reducing losses in every stage between the energy source location and the final
product. As a concept, the law of energy conservation still valid, and there are no energy losses,
only energy transformation into a non-used form of energy. Sometimes, these non-energy products
are in considered as waste and, if not used by another process outside the one where it has been
originated, will be placed anywhere, with negative environmental impacts.
Lowe (2010), in a common language, explain the idea behind the concept of eco-industrial
parks as a question: “Why pay money to produce a product you can’t sell, call it a waste, and pay
someone to dispose of it?” Some of the industrial processes are now dealing with this question and
are using their own wastes to decrease their energy intensity, by recycling it, by sharing energy
commodities or intermediate products. This concept can be extended to a large number of industries
as well as services acting as a community of manufacturing and service businesses located together
on a common property. Member businesses seek enhanced environmental, economic, and social
performance through collaboration in managing environmental and resource issues.
By working together, the community of businesses seeks a collective benefit that is greater
than the sum of individual benefits each company would realize by only optimizing its individual
performance (Lowe, 2010). These communities can decrease their production costs through
Energy Demand-side Management in Industry Page 24
increased materials and energy efficiency, waste recycling, and the sharing of some common
services, as waste management, training, purchasing, emergency management teams, environmental
information systems, and other support services. Such industrial cost sharing could help park
members achieve greater economic efficiency through their collaboration, producing more
competitive products.
According with (Lowe, 2010), by early 2001, at least forty communities in the US have
initiated eco-industrial development projects, some called eco-industrial parks, others called
industrial ecosystems or by-product exchanges. Innovators have launched at least sixty eco-
industrial projects in Asia, Europe, South America, Australia, South Africa, and Namibia. Japan
alone has over 30 projects.

7.1. INDUSTRIAL SYMBIOSIS OF KALUNDBORG

A commonly referred example is the the Industrial Symbiosis of Kalundborg2 which is built
as a network co-operation between six processing companies, one waste handling company and the
Municipality of Kalundborg, in Denmark.

Figure 13 – Kalundborg industrial park (in http://www.symbiosis.dk)

Asnaes Power Station, the plasterboard factory Gyproc A/S, the pharmaceutical plant Novo
Nordisk A/S, the enzyme producer Novozymes A/S, the oil refinery Statoil-Hydro A/S, the
recycling company RGS 90 A/S as well as the waste company Kara/Noveren I/S and Kalundborg
Municipality - exploit each other's residual or by-products on a commercial basis. One company's
by-product becomes an important resource to one or several of the other companies. The outcome is
reduced consumption of resources and a significant reduction in environmental strain. The
collaborating partners also benefit financially from the co-operation because the individual
agreement within the Symbiosis is based on commercial principles.

2
Information in http://www.symbiosis.dk
Energy Demand-side Management in Industry Page 25
 The Industrial Symbiosis of Kalundborg has some challenges to overcome, according with
the website of the project, namely the inclusion of new and alternative energy sources in the
symbiosis energy cooperation. Are referred the use of biomass as fuel or biogas, solar energy or
geothermal energy. Also, it is an objective, to minimize the use of natural water resources by
utilising cleaned waste water as process water. The process and industries are also studying new and
innovative ways to utilise by-products and waste materials as raw materials.

References
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