CAP. 1 CAP. 2 Promotion and development of energy CAP. 3 efficiency in process industry Strategy and experience of the Italian multi-utility Hera S.p.A. CAP. 4 Energy Management & Asset Upstream Hera S.p.A. CAP. 5 London, 23 rd January 2018
1. Contents pag. 03 HERA Group profile Energy Efficiency strategy & experience 2. pag. 07 Role in EU-MERCI Project 3. pag. 17 Conclusions 4. pag. 20
1. HERA Group profile
A business model that is unique in Italy HERA was the first national experiment in the combination HERA Group: of council-owned companies Strong local roots Aptitude for innovation Indipendent Management Balanced and constant growth in all areas of activity (regulated or free-market) and progressive incorporation of other companies. 4 4 1 2 3
Offering primary local services to citizens A major Italian multi-utility 4 th national HERA operates mainly in environmental operator services (collection and disposal of waste), 1 st national water (mains water, sewage and purification) 2 nd national operator and energy (distribution and sale of electricity operator and gas). 3 rd national op. ̴ 7 millions of tons/y of waste treated ̴ 35,000 km of drinking water network ̴ 21,000 km of gas network ̴ 10 TWh/y of electricity sold ̴ 20,000 m 3 served with district heating 5 4 1 2 3
Strategy and Global Agenda HERA creates shared value working on Global Agenda Goals Activities carried out by HERA cover 10 over 17 global goals of United Nations Organization for Sustainable Development. Smart energy use Efficient use of resources Innovation CIRCULAR ECONOMY 6 goals are involved in our Energy Efficiency strategy 6 4 1 2 3
2. Energy Efficiency strategy & experience
Context for energy efficiency in Industrial Sector Context positive elements: Huge energy savings potential : - En.Eff. Directives obligations - High energy intensity sectors - Presence of subsidies (mainly Whc) - Technological opportunities - Improvement of ESCO’s structure and services HOWEVER Technical and economical barrieres are still preventing a broad development of energy efficiency in Industrial Sectors A COMPREHENSIVE AND DEEPLY STRUCTURED APPROACH IS NEEDED 8 4 1 2 3
Context for energy efficiency in Industrial Sector White Certificates Scheme has been the SYNERGIES FOSTERED BY WhC ITALIAN SCHEME main driver over the last decade Energy efficiency in Italian industrial sector Purchasing WhC to meet Dynamic targets and trading in the last ten years has been mainly Market pushed by White Certificates incentives and by energy audits obligations. Industrial En.Savings targets upon Obliged Specialized final Gas&Electricity distributors Subjects ESCOs consumers à WhC to be obtained Competences improvement Technological White certificates are considered a European neutrality Energy Services best practice in fostering energy efficiency 9 4 1 2 3
HERA’s strategy: obligation and opportunity HERA needs to meet annual energy savings targets Investment in human and economical resources to build internal As gas and electricity distributor HERA is competencies obliged under Italian White Certificates Programme to meet annual energy savings. Capitalization of historical Target can be satisfied: experience in management of § purchasing WhC on dedicate market; different internal assets. § originating WhC through EE projects and initiatives. Development of a set of energy services broadly applicable to industrial operators . - Very uncommon for Utilities - More like an ESCO company - Playing a central role in promoting energy efficiency on a territorial level From OBLIGATION to BUSINESS OPPORTUNITY 10 4 1 2 3
HERA’s strategy: towards both directions Internal Assets and ISO 50001 certification Towards external industrial operators Energy management system certification has Support to industrial operators in scouting and been a priority: 7 company belonging to HERA development of energy efficiency projects (Vs Group are already certified and progressive knowledge barrier). energy savings target are established. Participative project development on a Origination of Whc through energy efficiency no-fee basis and scouting of available initiatives in internal assets, mainly on water subsidies of financial support for investments. infrastructures plants. 6,600 toe/y en.savings Hera S.p.A ( resp. 2013) 11 4 1 2 3
HERA’s strategy: a comprehensive approach Broad informative campaign in cooperation with LOCAL Industrial Associations: seminars, whorkshops. Trust, knowledge barrier SYNERGIES Opportunity for investing in guaranteed energy savings FINANCIAL & Technologically neutral approach, CROSS and free-risk access to strong wide experience of internal PATRIMONIAL COMPETENCES WhC incentives. EM Department in energy audits SOLIDITY Investment lever and WhC processes. reliability Strong interlocutor Network of technological partners PARTICIPATIVE Involvment of industrial operators in TECHNOLOGY capable of developing yet in the PROJECT opportunities identification and SPECIALISTS scouting phase project development DEVELOPMENT customized/specialistic analysis Commitment, cooperation Technical added value 12 4 1 2 3
HERA’s strategy: outputs and results ü Energy Saving projects RESULTS: are made bankable Reinforncement of results through n ° 160 certification standards through the access to (e.g. ISO 14064) energy savings projects White Certificates accessed WhC scheme Access to WhC incentives 450,000 toe Energy Performance Contracts ü HERA assumes the risk saved in 2007-2017 INDUSTRIES do not Implementation M&V schemes take any cost until project is developed and Feasibility studies bankable. Energy Audit IEA Report ”Energy Provider-Delivered Energy Efficiency” 13 4 1 2 3
Example: industrial heat pumps Installation of heat pump to recover heat at low temperature and serve medium temperature process project carried out in a chemical-food industry The industrial plant decides to Access to incentives carry out the (White Certificates project Scheme) Identification of an energy efficiency improvement opportunity Energy Audit 14 4 1 2 3
Example: industrial heat pumps T≈32 ° C 3.500 mc/h cooling tower The project The Energy Audit showed the availability of industrial heat lost in the cooling tower, cooling system available throughout the year in great quantity but to reduced temperature (3.500 mc /h and T T≈60 ° C 20 mc/h 30-35 ° C). Refinery sect. The current heat pump technology allows this waste heat to be used to produce hot water (up T≈29 ° C to 90 ° C). storage pool T≈29 ° C 15 4 1 2 3
Example: industrial heat pumps €1.400.000 Discounted Payback Period €1.200.000 NO WhC €1.000.000 WhC [280€/WhC] €800.000 €600.000 DPP with WhC DPP with WhC Thanks to the €400.000 incentive the DPP is €200.000 acceptable for the €- Company 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 €(200.000) year €(400.000) DPP without WhC €(600.000) Capex (€) 495.628 Routine maintenance costs (€/y) 2.000 (year) 20 Extraordinary maintenance costs (€/y) 0 Expected Saving (€/y) 125.597 Discount rate (%) 8,0% WhC (€/y) 338.830 Tax rate (%) 31,5% Decrease in production (%) 0,3% Depreciation rate (%) 10% 16 4 1 2 3
3. Role in EU-MERCI project
Role in EU-MERCI: KPIs validation activity INDUSTRIAL HERA participated in EU-MERCI Food Processing SECTORS project for KPIs validation activity , Textile comparing indicators’ values of Good Ceramic Practices in EU-MERCY library with those of projects developed with its Plastic & Metal Manufacturing partner-industries and acknowledged Chemical industry with White Certificates. MAIN n°19 projects evaluated § Cooking / Drying Furnaces PROJECTS Heat Recovery systems n° 9 Good Practices § sheets validated Upgrading of Refrigeration Systems Mechanical Vapour Recompression § n°7 Industrial sectors Advanced control systems analysed Global process optimization 18 4 1 2 3
KPIs validation: preliminary remarks Positive outcome for the majority of KPIs validated • Best alignment for KPIs « cost of implementation » and « Cumulative Cash Flow » For further analysis • KPIs validation has been more successful • Payback time periods in some cases too for Good Practices obtained from wide low compared to HERA analysed cases and sample of projects . field experience (specially for Refrigeration Systems and Mechanical Vapor • KPIs showed to be more solid for some Recompression); GPs whose energy savings could be measured through easy and homogenous • Sensible differences in annual energy methods (e.g. heat recovery). savings associated to projects for those GPs including multiple and different energy savings measures. 19 4 1 2 3
4. Conclusions
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