• Knowledge capturing - learning organization
Figure 4.1 Energy and Environmental Management Process
Figure 4.1 Energy and Environmental Management Process
Performance evaluation should start with a top-down approach. Usually, more data are available on the overall or aggregated energy and environmental performance in a factory than on individual energy cost centers (ECC). Therefore, this data should be evaluated first. However, the evaluation methodology will be the same for the specific data on ECCs as it is for the aggregated data on a factory as a whole. Besides data evaluation, the suitability of energy and environmental management procedures throughout the factory has also to be assessed.
This methodology is usually referred to as energy and environmental auditing and it covers both organizational and operational aspects.
An energy and environmental audit (EEA), if conducted in a systematic and a comprehensive manner, is a powerful tool for evaluating current or past energy and environmental performance and management practice. The ultimate aim of energy and environmental audit is clear - identifying opportunities for reducing the cost of energy and of environmental compliance. Prior to the introduction of EEA process, it is useful to remind ourselves of the following definitions:
A department, a process, or unit of equipment, where the use of raw materials, energy consumption and environmental impacts can be related to ongoing activities and be continuously monitored.
• Significant Environmental Impacts:
Environmental impacts are categorized according to the effects on the environment that they produce in terms of air emissions, waste water discharges, solid waste (hazardous and non-hazardous), land contamination, underground water pollution, noise and odors. Their 'significance' is established based on the quantity and quality of environmental impacts, and in the regulatory, socio-political and economic context of a company's sphere of activity.
• Baseline Energy Consumption:
The calculated or measured energy usage at energy cost centers (ECCs) over a period of time.
• Baseline Environmental Impacts:
The calculated or measured amounts of waste, emissions and discharges at energy cost centers (ECCs) over a period of time.
• Standard Energy or Environmental Performance:
This relates the amount of waste, emissions and discharges or energy use to production output.
• Energy or Environmental Conservation Opportunity (ECO):
The opportunity for reducing energy consumption or environmental impacts by implementing organizational or technical improvement measures.
• Energy or Environmental Conservation Measures (ECM):
Technical measures for the realization of ECO, designed and costed for implementation in a specific plant, and at a particular ECC, usually with a short payback period.
• Performance Improvement Projects (PIP):
PIPs are key practical solutions to the problems of energy and environmental performance, identified during an energy and environmental audit, requiring some investment and presented with full technical and financial evaluation.
• Post-Installation Energy Usage or Environmental Impacts:
Measured and verified energy usage, amount of waste, releases or discharges of ECC after the implementation of ECMs and PIPs.
• Performance Improvement:
= (Baseline Performance) — (Post-Installation Performance)
• Techniques for Continuous Performance Monitoring:
- direct performance measurement;
- utility billing analysis;
- mathematical models and engineering calculations;
- suppliers' specifications.
The EEA is carried out through a sequence of activities aimed at determining the energy and material flows in a company, calculating energy and mass balances, including emissions and discharges, and establishing opportunities for reducing the costs of energy and of environmental compliance (Fig. 4.2). The term energy and environmental auditing denotes a study of a facility which has to provide the following:
(a) To determine how and where energy and raw materials are used or converted from one form to another, and the performance thereof.
(b) To establish a base line for energy and raw materials consumption, and for the types and amounts of waste generated.
(c) To provide a comprehensive analysis of all of the environmental issues and impacts of a company's activities.
(d) To identify the relevant legal and regulatory requirements.
(e) To quantify and qualify significant environmental impacts.
(f) To identify the opportunities for improving energy and environmental performance and to define measures for improvement.
(g) To evaluate the economic and technical viability of implementing these measures and to recommend performance improvement projects.
(h) To create prioritized recommendations for implementing performance improvement projects with the aim of reducing the cost of energy, raw material and environmental compliance.
It is important to clearly distinguish EEA from energy and environmental performance monitoring. Auditing is a periodic activity, sometimes carried out by an independent service provider, particularly in a case when it needs to verify conformance. It is based on a data sample, aimed at establishing the company's overall position regarding energy and environmental issues.
Performance monitoring is a continuous activity, part of management process, based on regularly measured data, carried out as an operations responsibility, aimed at assessing ongoing energy and environmental performance.
In practice, unfortunately, EEA is often reduced to checking the efficiency of main utilities, such as boilers, chillers or air compressors and the environmental impact thereof. It is obvious that a simplified form of an audit can yield only partial results and cannot provide full benefits and inputs to a comprehensive energy and environmental management program. Often, the audit neglects the role and impact of the human factor in energy and environmental performance.
Therefore, to avoid a piecemeal approach, the extent of the audit is shown in Figure 4.3. It is obvious and a matter of common sense that EEA covers all aspects of industrial operations. However, the scope of an audit may vary and will be defined by the actual need that triggers the requirement for carrying out the audit.
An energy audit is aimed at identifying the opportunities for reducing energy, water and raw material costs. It starts from understanding the processes at a company's individual plants and departments and recognizing issues that are relevant for energy consumption.
A systematic approach to energy auditing in a facility requires the study and understanding of interactions among the main factors influencing energy performance, i.e.:
The energy audit is important because it identifies how energy performance improvements can be achieved. The energy audit is focused equally on the physical aspects of energy consumption and on the human aspects related to the operation and maintenance of facilities. Generally speaking, the scope of an energy audit includes an examination of the following:
• energy conversions (in boilers, transformers, compressors, furnaces, etc.);
• energy distribution (of electricity, steam, condensation, compressed air, water, hot oil, etc.);
• energy end-users' efficiency (equipment and buildings);
• production planning, operation, maintenance and housekeeping procedures;
• management aspects (information flow, data collecting, data analysis, feedback of results and achievements, education of employees, their motivation, etc.).
When conducted thoroughly and systematically an energy audit provides recommendations for improvement that tie together various aspects of energy performance:
• people and their motivational and training needs;
• housekeeping, operation, and maintenance procedures improvements;
• equipment and technology efficiency improvements;
• efficiency of energy supply, distribution, and consumption.
Therefore, the emphasis is not only on the single aspect of the efficiency of a particular energy utility generation and distribution but also on the integration of the energy needs of a particular production process, the supply side options available to satisfy these needs and management techniques, which tie together all the resources (people, energy, materials, technology) in a cost effective way.
Another important area considered by an energy audit is waste (energy, water, raw material) minimization, and reuse and recovery or recycling of these resources. The elaboration of effective recommendations for performance improvement in such a context requires a basic understanding of industrial operations and main production processes.
Unlike the energy audit, the scope of an environmental audit may vary depending on the requirements of specific schemes for which the audit is requested. These may include:
• pure regulatory requirements (like IPPC);
• emission trading requirements (like EU ETS, or CDM);
• voluntary environmental schemes (like ISO 14000, EMAS, GRI, etc.);
• investment, insurance or money borrowing related requirements;
• customers or community requirements.
Regulatory requirements are usually embodied in the form of an environmental permit, and an environmental audit in that context aims at demonstrating compliance with the conditions specified in the permit.
Emission allowances that are traded have an economic value. For this reason, it is important that the parties in the market can be assured that emissions are determined with a high degree of certainty. Level of assurance means the degree to which an auditor, in this context also called a verifier, is confident in that the information reported for a plant is free from material misstatement.
In the context of ISO 14000 and similar voluntary schemes, the environmental audit is also referred to as an 'Initial Environmental Review'. Such a review focuses on three key areas:
1. environmental practices and procedures;
2. identification of significant environmental impacts;
3. identification of legal and regulatory requirements.
It is worth mentioning that in the context of the ISO standards the term 'Audit' is used to describe activities related to the periodical checking of the functions of an established environmental management system according to the ISO Standard's procedure. It is based more on a documentary review, rather then on a plant and facility reviews and measured data analyses.
When an environmental audit is required in the context of an investment, banks will require a detailed analysis of all environmental issues related to the company's operations (see the example in Box 4.1). Such environmental audits are concerned with past and ongoing environmental pollution at the site and the environmental status of the company.
In any event, any environmental or energy audit will have two components, i.e. organizational and operational, as explained at the beginning of this chapter.
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