Here’s a scenario: Your company has received approval for the construction of a major petrochemical complex, and you have been named as the project director of risk management. The product economy is booming and financial risks are reasonably low. Your selected construction contractors have stellar safety performance records, as do your technology providers; personal and process safety risks are considered acceptable, if not exemplary. Things appear to be looking good. However, one broad issue lurks, and you start to worry. Emerging environmental concerns have translated into rather tight restrictions in permitting, and your own corporate sustainability targets further emphasize one area of risk. These factors equate to facility operational reliability that mandate considerable mitigation and perhaps may make or break the project completely.
At its steady state operation, the production facility itself consumes very little utility steam, if any. However, in the event of a plant trip, high-pressure steam drivers and steam-dependent equipment are critical to minimizing downtime and flaring, as well as protecting capital investment. The potential financial implications associated with regulatory violations, equipment damage, and the tarnish of corporate image are staggering.
Building in Reliability
The immediate answer to the risk concerns is obvious: the project will have to accommodate the installation of an extremely large utility steam production unit, as well as all associated equipment required. The investment, of course, is not trivial; but the necessity of steam reliability and the avoided costs mentioned above make it justifiable.
Now, fast forward a few years. Despite a strong reliability record, due in no small part to that decision, the recognition of diluted return on investment has prompted some uncomfortable conversations between you and the new site management. For example:
- “Do we really need all of this excess steam capacity?”
- “You do realize that we are running steam generators to produce 1500 psig steam, only to let it down for actual use?”
- “We must have the most expensive low-pressure steam in the world!”
Though you stand by that original project decision made from the perspective of risk management, you too feel, as an owner-operator, there must be a better long-term solution to realizing the value of that initial investment.
Extracting Profit from Reliability
This scenario, though hypothetical, is completely valid. The reality is that incorporating reliability into facility design is costly, and for better or worse, the value of that reliability is in avoided costs, not tangible bottom line impact. However, there are ways to squeeze real profits out of your steam reliability investments.
Depending on your physical site location, steam-to-power generation may be a lucrative option. With typical Gulf Coast industrial electricity rates being around 65 United States dollars per megawatt-hour (65 USD/MWh), a 25 megawatt (MW) steam turbine/generator could reduce your facility electricity costs by more than 14 million USD. Installation of such a unit may also pay out as mitigation of external power loss, i.e., establishing an uninterruptable power supply, given increasing concerns over grid reliability and reserve power.
Conversion of large electrical drivers to steam drivers is another way to capitalize on excess steam capacity. Large pump and compressor electrical motors are costly to operate; however, turbine drivers may be a viable option. From a unit reliability perspective, redundancy, for example, a primary turbine driver with an electric motor backup or vice versa, might be feasible.
Integration with other facilities is yet another solution worth considering, particularly in areas with a high concentration of industrial facilities. Who knows? Your “problem” might just be another site’s perfect solution.
Deep Dive Your Options
Navigating the options can be tricky. Solomon Associates’ experts can assist in evaluating your options to realize the potential that your inherent reliability may provide to your bottom line. Whether you are looking at steam reliability, grid and electrical power reliability, or carbon emissions and thermal efficiency, we at Solomon can help you both assess your performance against your peers, as well as formulate a solid method to extract value from your investments.
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