Evaluation of Energy Efficiency Opportunities

in Petroleum Refineries using the Concept of

Value Engineering
Dr. Eng. / Tarek ElShennawy, Manager of Electrical Engineering Sector,
Alexandria National Refining & Petrochemicals Co. (ANRPC)
Agenda
• Energy Efficiency in Petroleum Refineries
• Barriers to Energy Efficiency in Petroleum
Refineries
• The concept of Value Engineering (VE)
• VE as Applied to Energy Efficiency Projects
• Case Study (Replacement of traditional lighting
fixture with energy efficient lighting).
• Conclusions & Recommendations.
Energy Efficiency
• Energy means electricity & fuel (natural
gas).
• Improving energy efficiency means doing
the same job (or better) with less
consumed energy.
• Energy savings = Money saving.
• CO2 emission reduction (0.5 kg of CO2 is
saved per 1 kWh of electrical energy saved).
Petroleum Sector Modernization
Program
Barriers to Energy Efficiency in
Petroleum Sector
- The Culture of replacing equipment is same same.
- In most cases, the Capital Cost (initial or purchase
cost) is the determinant factor. No LCC is carried
out.
- The equipment used are classified to work in
hazardous areas. Such Explosion Proof (Ex)
equipment are very expensive.
Value Engineering (VE)
VE is a systematic process that is performed by
a multi-disciplinary team which:
1) Identifies the main function of a product
2) Suggests alternatives that can perform the
same function (or better), at lower costs.
3) Establishes a Value for each alternative.
Value = output (function) / input (cost).
4) Select the alternative with the highest
Value.
Value Engineering
Function F
Value = =
Cost C
To increase the Value, we can:

- Reduce the cost for the same output

or
- Improve the output for the same cost
or
- Improve the output and Reduce the cost.
Case Study
• Replacement of traditional Explosion
proof (Ex) lighting fixture (250W) with
energy efficient one.
• The main restriction is the Ex category.
The new fixture must match the
hazardous area classification (Zone 1 or
Zone 2), gas group (IIA or IIB or IIC),
temperature class (T1 or T2 or . . . T6)
Stage 1: Team Selection

• Multi disciplinary team including:

- Team Leader (from Energy Team)
- Electrical Engineer (with high knowledge of
lighting principles + Ex requirements)
- Installation Specialist (Ex competent)
- Maintenance Specialist (Ex competent)
- HSE Specialist
- Financial.
Stage 2: Data Preparation

• The existing lighting fixture has the

following characteristics:
- Ex Category: Ex de IIC T4
- Body: Aluminium Alloy
- Glass: Tempered (with steel guard)
- Lamp: Mercury Vapor
- Power: 250 W
- Lumens: 6000 Lm
- Lifetime of Lamp: 5000 hours
- Ingress Protection: IP55
Stage 3: Generation of Ideas
• Direct replacement of the flora
lamp with LED lamp is not allowed,
since the manufacturer does not
allow any modification. Instead, he
suggests replacing the old fixture
with LED pendant fixture that gives
similar lumens. Two options exist:
1) LED fixture with Chip on Board
2) LED fixture with LED arrays.
Other Alternatives

The VE team members come up with

other alternatives:
3) LED tube
4) LED tube with GRP* body
5) Fluorescent lighting
6) Fluorescent with GRP* body
All alternatives are approximately 80 W
*GRP = Glass-Reinforced Plastic
 Stage 4: Function Analysis
• The main function is lighting (lumens).
• There are some other optional (quality)
features including light quality (colour
rendering), mechanical strength, ease of
maintenance, possibility to add batteries, . . .
• The main function and extra options will be
assigned weights, according to importance.
For example, lighting lumens (50%), lighting
quality (20%), mechanical strength (10%),
maintainability (10%) & extra options (10%).
Stage 4: Function Analysis
• The team members will rank the main
function and the optional features from 0 to
10 according to its importance. This will be
done for all alternatives.
• Other options include number of holes in the
junction box for through wiring, safety locks,
familiarity of staff with the solution,
availability of spare parts and technical
support, . . .
Stage 4: Function Analysis

Function Wt. Alt. Alt. Alt. Alt. Alt. Alt.

% (1) (2) (3) (4) (5) (6)
Lumens 50% 9 10 7 7 9 9
Light Quality 20% 9 9 9 7 8 7
Maintenance 10% 5 8 6 7 7 8
Durability 10% 10 10 9 7 8 6
Other 10% 7 7 8 8 8 8
Total 8.5 9.3 7.5 7.1 8.4 7.9
Stage 5: LCC
• Life Cycle Cost (LCC) = Capital cost +
Installation cost + Energy costs +
Maintenance costs
• Energy costs are based on 0.1$/kWh
• Operating hours / year = 4400 hrs.
• Lifetime of the product = 10 years
• Energy costs =
0.1$*Power(kW)*4400hrs*10yrs
• Cost of replaced lamps will be included in the
maintenance costs.
• End of life value is assumed to be zero.
Stage 5: LCC

Cost ($) Alt. Alt. Alt. Alt. Alt. Alt.

(1) (2) (3) (4) (5) (6)
Capital cost 500 600 400 350 400 300
Installation 100 100 200 150 200 150
Energy cost 308 308 352 352 316 316
Maintenance 100 100 100 100 200 200
Total 1008 1108 1052 952 1116 966
 Stage 6: Evaluating Value

VALUE Alt. Alt. Alt. Alt. Alt. Alt.

(1) (2) (3) (4) (5) (6)
Function 8.5 9.3 7.5 7.1 8.4 7.9
LCC 1008 1108 1052 952 1116 966
VALUE (*10-3) 8.43 8.39 7.13 7.46 7.53 8.18

The alternative with the maximum Value is

replacing the existing flora lighting fixture with
LED lighting fixture with Chip on Board (COB).
Stage 7: Development & Reporting

• The alternative with the maximum value is

neither that with the highest function nor
that with the lowest LCC.
• Traditional financial indicators can be easily
calculated.
• Annual energy saving for 1 fixture = (250W-
80W)*4400 = 750 kWh
• Annual money saving for 1 fixture = 75$
• Payback time = 500/75= 6.5 years
Conclusions
• The most trivial financial indicator says that
the payback period is 6.5 years. This will not
be attractive to most businesses. But we
have to remember that Ex equipment is very
expensive and this is one big barrier to
energy efficiency projects.
• LCC is already calculated. In our case study, it
was 1008 $. Although some other options
have lower LCC values, yet this solution gives
the highest value, concerning function/cost.
Recommendations
• VE is a very useful tool in selecting products
(or services or processes) with the maximum
value (function/cost).
• The analysis phase is straight-foreword and
the calculations of the Value are simple and
gives direct results.
• VE can be applied as a systematic approach,
especially for new projects, or when we want
to upgrade existing units / facilities.
 THANK YOU!

ANY QUESTIONS?