Three steps to energy cost heaven

Reducing energy usage is never an intuitive process. We are talking, after all, about an investment that has no immediate benefits in terms of revenue and will only see returns at some unspecified point in the future, while the introduction of such systems might involve switching off installations required for production purposes. Such measures nonetheless make more sense than just in environmental terms alone.

The consolidation in the retail market generates a lot of pressure to reduce prices, while, on the other hand, almost every cost continues to grow, such as salaries, utilities, construction and development costs and taxes. Margins are being squeezed even further. The obvious response to this is to increase the scale of your activities, but this is often not possible due to inadequate gas or electricity supplies – and it’s unclear when this situation might change.

Where to find savings

As everyone knows, a firm’s profit is the difference between its costs and its revenue. In this case, the data published by GUS [the Polish Central Statistical Office] was not enough to form an accurate picture, so I decided to look into the financial reports of specific production companies. People naturally correlate rising profits with rising sales (either in terms of quantity or price), but for a company to improve its market share by even just a couple of percentage points can be a daunting task. It turns out that you can achieve such goals, in a much easier way and with more control, by reducing your costs. In other words, the full effect of making savings is seen in the costs and not the revenues. Taking a closer look at costs, one obvious point is that it’s difficult to reduce salaries or your rental fees. But through a method of elimination based on technical knowledge I came to the conclusion that the best way to cut costs is to reduce electricity and then gas consumption. However, for most production businesses or logistics firms serving the grocery segment, refrigeration and freezing consume the most electricity.

For those looking for ways to reduce the energy they use for cooling, this could be the perfect moment, because right now cooling technology is undergoing something of a revolution – and for a certain investment outlay energy consumption can be cut by as much as 45 pct. However, there are so many systems available on the market that decisions taken by management or research departments over which to invest in can often seem bewildering.

For this reason, I have devised three levels of energy efficiency. This concept could be treated like a map, or like a certification system like LEED or BREEAM. In simple terms, it lays out a system’s advantages and disadvantages and in this way suggests the possible strategies that can be adopted to apply it.

Level One

The first level involves the optimisation of installations without making any technical alterations to the system. Only the operational parameters are altered, which when it comes to refrigeration mainly covers the evaporation and condensation temperatures. Undoubtedly, the advantages of taking this approach are the low investment costs and the fact that the work in the factory doesn’t have to be halted. The disadvantages include the low level of savings compared to what can be achieved while those that can can’t be maintained over time. After a breakdown or a temporary halt, the system is often reset to the original sub-optimal parameters. I’ve managed to eke savings of up to 20 pct out of this method, with an installation that worked very poorly. On average, the savings come to around 16 pct. Other measures you can take at level one include fitting or repairing doors (for either cabinets or chambers), cleaning the heat exchanger and installing air curtains.

Level Two

At level two, not only are the operational parameters optimised, but, above all, the most suitable technology is installed. For cooling, this means replacing an F-gas (fluorinated gas) installation with a CO2-based system, or constructing a new building designed to house the latest technology. The advantage of this is clearly that very large energy savings can be achieved of as much as 45 pct compared to traditional cooling systems. The environmental advantages are less obvious but no less important. Cooling systems that use less electricity result in fewer emissions and CO2 installations do not contain highly harmful synthetic greenhouse gases. On the other hand, taking such a course of action involves a much larger capex investment and this needs to be justified. For a new cooling installation, the investment normally starts to pay back after a period of 2.5 to 6 years (or at the extreme ends of the scale, from 1.5 to 8 years). To justify such an outlay, a consultant should prepare materials for management boards that compare capex with opex for different systems. Nearly all the installations that I am currently working with are at least second level systems, so I can say that this is a good standard to achieve. But taking the action described above requires working with a consultant who is not only an expert on cooling systems but also familiar with the different organisational structures used in logistics.

Level Three

The main guideline for level three is to manage all the utilities together. Many buildings do not use advanced methods for heat recovery or turning warmth into cold (absorption chillers), which results in a situation where heat is removed from one installation but at the same time produced by another. Putting such systems into effect can be complicated, because it requires different groups of people working together on a design-and-build project that’s also difficult to develop and incurs the highest investment costs. But a building constructed to level three standards is peerless when it comes to low energy usage, low emissions and – also of crucial importance – its dependence on the external supply of utilities. The possible savings are shared between several installations. The building I’m currently working on serves as a good example, where the cooling installation can reduce energy usage by at least 60 pct. The simplest and most common third-level building combines a highly efficient CO2 cooling installation with a co-generation system, where waste heat from a gas-powered engine is used by the absorption chiller for the air conditioning or to support the cooling system. Such buildings are already being constructed in Poland. Other examples of third level systems include using a heat pump for drying or for raising the waste heat temperature, heat recovery from air compressors as well as generating electricity from a process steam pressure reduction station.

As can be seen above, the technology can be rather difficult to explain and I admit that a client when meeting engineers to discuss these issues could end up feeling rather lost. That’s why it’s extremely important to precisely establish the energy efficiency goals in the simpler way I have outlined. This could then be used by organisations at a financial and managerial level and should also be useful when performing technical due diligence.

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Cool customer

Maurycy Szwajkajzer graduated in refrigeration and air conditioning at the Warsaw University of Technology and has worked as an engineer and manager on cooling projects in Poland, France, and Russia. A consultant and refrigeration company founder in Poland, he has lobbied for the use of CO2 as an environmentally-friendly coolant, providing greater energy efficiency in refrigeration and the optimisation of construction. He is the new refrigeration technology editor for ‘Chlodnictwo & Klimatyzacja’ [Cooling & Air Conditioning] magazine and has taken part in and organised several conferences.

PICTURE: “The best way to cut costs is to reduce electricity and then gas consumption. But for most production businesses or logistics firms serving the grocery segment, freezing and refrigeration consume the most electricity,” admits SZE’s Maurycy Szwajkajzer