Thesis
Reference
Improving energy efficiency in Swiss industrial sectors: status, emerging technologies and trends
ZUBERI, Muhammad Jibran Shahzad
Abstract
The Paris Agreement 2015 is a historic initiative taken by the global community to fight against climate change and steer the world towards clean energy transition. The industry sector which accounts for almost one-third of the global final energy demand offers great potential for energy efficiency improvement. Energy efficiency (EE) is also a major pillar of the Swiss Energy Strategy 2050. Although several steps to incentivize EE improvement in industry have been taken in Switzerland, the size of the EE gap that currently exists in its high-value manufacturing sector is largely unknown. Since industrial technologies are advancing rapidly, it is important to evaluate the current diffusion of conventional measures and the potential wide-scale application of emerging technologies in the sector. This thesis employs bottom-up methods to assess the techno-economic final energy saving potentials in industry in the short-to-medium term at the level of individual sectors and for cross-cutting technologies.
ZUBERI, Muhammad Jibran Shahzad. Improving energy efficiency in Swiss industrial sectors: status, emerging technologies and trends. Thèse de doctorat : Univ. Genève, 2019, no. Sc. 5369
DOI : 10.13097/archive-ouverte/unige:121458 URN : urn:nbn:ch:unige-1214585
Available at:
http://archive-ouverte.unige.ch/unige:121458
Disclaimer: layout of this document may differ from the published version.
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UNIVERSITÉ DE GENÈVE FACULTÉ DES SCIENCES Section des Sciences de la Terre et de l’Environnement Professeur Martin K. Patel Département F.-A. Forel
des Sciences de l’Environnement et de l’Eau Institut des Sciences de l’Environnement
Improving Energy Efficiency in Swiss Industrial Sectors Status, emerging technologies and trends
THÈSE
présentée à la Faculté des sciences de l’Université de Genève pour obtenir le grade de Docteur ès sciences, mention sciences de l’environnement
par
Muhammad Jibran Shahzad Zuberi
de
Karachi (Pakistan)
Thèse N 5369
GENÈVE
Repromail – Université de Genève
2019
This thesis is dedicated to
Abbu and Ammi without whom I would not have reached to this level, Zoya for her continuous support and love,
Yousra and her family for all the efforts and encouragements,
and
Rohaan, my dearest!
This page is intentionally left blank
i
R emerciements
Je voudrais exprimer ma profonde gratitude au Professeur Martin Patel, directeur de thèse, pour son soutien constant, ses conseils d'expert et son regard critique tout au long de ma période de recherche. Je tiens aussi à le remercier de m'avoir aidé à traverser les moments plus difficiles de cette période. Outre mon superviseur, je voudrais également remercier les autres membres du jury, les professeurs Peter Radgen, Beat Wellig, Armin Eberle et Stefan Schneider pour leurs encouragements, leurs commentaires éclairés et leurs suggestions au cours du processus de révision.
Cette thèse a été financée par l'Agence suisse pour l'innovation (Innosuisse) et fait partie du Centre de compétences suisse pour la recherche énergétique - Efficacité des processus industriels (SCCER-EIP).
Je tiens à remercier mes collègues du SCCER, en particulier le Professeur François Maréchal, le Professeur Stefan Bertsch, Don Olsen, Frédéric Bless, Cordin Arpagaus et Marina Santoro pour leurs contributions et nos discussions fructueuses tout au long de mes recherches. Je tiens également à remercier toutes les autorités compétentes, notamment l'Agence de l'énergie pour le secteur privé suisse (EnAW / AEnEC), qui ont fourni des données précieuses pour la conduite de cette recherche. Des remerciements spécifiques pour chaque partie de mes recherches sont présentés à la fin de chaque chapitre.
Outre l’assistance et le soutien techniques, j’apprécie hautement le temps mémorable passé à Genève et en Suisse auprès de mes chers amis Stefano, Farrukh, Ruchi, Navdeep, Gaby, Hae-in, Soner, Bram, Anton, Nicoline, Mariana, Aude, Asya, Alexia, Viktória, Andrea, Selin, Alisa, Khurram, Ansar, Kapil, Hemant, Thomas, Habib, Béatrice, Daniel et bien d'autres, y compris tous mes collègues actuels et anciens. Une mention spéciale à mes amis proches, Kai et Elodie, avec qui j'ai passé la majeure partie de mon temps à Genève ; je chéris chaque moment passé avec eux. Un merci spécial à Sameed & Liyana et à Shoaib & Arooj pour leur aide et leur soutien tout au long de mon séjour à Genève.
Enfin, et surtout, je voudrais exprimer mon amour, mon affection et toute ma reconnaissance à ma famille en particulier et à mes proches en général pour leur soutien, leurs encouragements continus et leurs prières. Tout ceci n'aurait pas été possible sans eux.
Muhammad Jibran Shahzad Zuberi.
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A cknowledgements
I would like to express my deepest gratitude to my thesis supervisor Prof. Martin Patel for his continuous support, expert advice and critical reviews throughout my research period. I would like to thank him also for supporting me through the difficult times during this period. Besides my supervisor, I would also like to thank the other members of my jury, Prof. Peter Radgen, Prof. Beat Wellig, Dr. Armin Eberle and Dr. Stefan Schneider, for their encouragement, insightful comments and suggestions during the review process.
This thesis was financially supported by the Swiss Innovation Agency (Innosuisse) and is part of the Swiss Competence Center for Energy Research – Efficiency for Industrial Processes (SCCER-EIP). I would like to acknowledge my SCCER colleagues especially Prof. François Maréchal, Prof. Stefan Bertsch, Don Olsen, Frédéric Bless, Cordin Arpagaus and Marina Santoro for their fruitful inputs and discussions throughout my research. I would also like to thank all the relevant authorities especially The Energy Agency for Swiss Private Sector (EnAW/AEnEC) for providing valuable data for conducting this research. Specific acknowledgments for each part of my research are presented at the end of each chapter.
Beside the technical help and support, I highly appreciate the memorable time in Geneva, Switzerland provided by my dear friends Stefano, Farrukh, Ruchi, Navdeep, Gaby, Hae-in, Soner, Bram, Anton, Nicoline, Mariana, Aude, Asya, Alexia, Viktória, Andrea, Selin, Alisa, Khurram, Ansar, Kapil, Hemant, Thomas, Habib, Beatrice, Daniel and many others including all my current and former colleagues. A special mention to my close friends Kai & Elodie with whom I spent most of my time in Geneva and I cherish every moment spent with them. A special thanks to Sameed & Liyana and Shoaib & Arooj for their help and support throughout my stay in Geneva.
At last but definitely not the least, I would like to express my love, affection and kindest regards to my family in particular and relatives in general for their continuous support, encouragement and prayers.
This would not have been possible without them.
Muhammad Jibran Shahzad Zuberi.
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R ésumé
L'Accord de Paris 2015 est une initiative historique de la communauté internationale visant à lutter contre le changement climatique et à mener le monde vers une transition globale en faveur des énergies propres. L’implémentation des énergies renouvelables et de l'efficience énergétique sont les éléments clés de la transition vers une énergie propre. À court et à moyen terme, l'efficience énergétique est considérée par plusieurs organisations internationales comme l'option la plus accessible, la plus rapide et la plus économique pour économiser de l'énergie et atténuer le changement climatique. L'efficience énergétique est également l'élément clé de la politique énergétique nationale de plusieurs pays. Le secteur industriel, qui représente près du tiers de la demande mondiale finale en énergie, offre un potentiel considérable d'amélioration de l'efficience énergétique. La Suisse a quant à elle élaboré le document Stratégie Energétique 2050, un ensemble de mesures stratégiques visant à réaliser la transition vers une économie à faibles émissions de carbone. L’efficience énergétique est l’un des principaux piliers de sa stratégie nationale. Bien que le gouvernement suisse ait pris plusieurs mesures pour encourager l'amélioration de l'efficience énergétique au niveau industriel, le déficit d'efficience énergétique existant actuellement dans le secteur de la fabrication à haute valeur ajoutée est largement dû à la complexité des secteurs concernés et au manque de disponibilités des données (ex.: au niveau des activités physiques). Pour faire face à ce problème, une nouvelle méthode est mise au point et testée;
son objectif est d’estimer les niveaux d'activité physique sectoriels en Suisse sur base desquels les indices d'efficience énergétique sectoriels sont formulés.
Les technologies industrielles progressant elles aussi rapidement, il est important d'évaluer la diffusion actuelle des mesures d'efficience énergétique conventionnelles et l'application potentielle à grande échelle des technologies innovantes émergeant dans le secteur industriel. A cette fin, cette thèse utilise des approches ascendantes (dite bottom-up) pour évaluer sur le court et moyen terme les potentiels d’économies d’énergie techno-économiques finales dans l’industrie, au niveau des secteurs individuels (soit les secteurs chimique, pharmaceutique et du ciment) et des technologies transversales (à savoir les systèmes de récupération de chaleur excédentaire et à moteur électrique). Les résultats sont présentés sous forme de courbes de coûts de l’efficience énergétique. Au final, les mesures d'efficience énergétique sectorielles et les technologies transversales évaluées dans cette thèse correspondent au potentiel économique total des économies d'énergie finales de 23 PJ p.a. (6 PJ d'électricité et environ 17 PJ d'énergie thermique; soit 19% de la demande d'énergie finale industrielle en 2017 en Suisse) si les coûts d'investissement totaux sont pris en compte dans l'analyse coûts-bénéfices. Les économies d’énergie thermique estimées, en plus des économies découlant des mesures prises exclusivement pour l’atténuation du CO2, équivalent à une réduction potentielle de CO2 de 1.3 Mt CO2 par an (soit 34% de l'inventaire de CO2 d'origine fossile de l'industrie suisse en 2017, et ce, comme ci-dessus, sur base des coûts totaux d’investissement). Etant donné que la prise en compte de l'additionnalité et la manière de la comptabiliser peuvent avoir une forte influence sur le rapport coût-effectivité des mesures d'efficience énergétique et, par conséquent, sur la décision des décideurs, ce paramètre est également analysé et discuté en détail. Si l’additionnalité est prise en compte (considérant les coûts d’investissement dans l’énergie comme représentant les coûts additionnels d’efficience énergétique), le potentiel économique total passe à 25 PJ p.a. (8 PJ p.a d'électricité et 17 PJ p.a d'énergie thermique; soit 20% de la demande d'énergie finale industrielle en 2017). Ces travaux constituent une contribution à la littérature scientifique, jusqu'ici limitée, consacrée aux mesures économiques d'efficience énergétique applicables dans les secteurs manufacturiers hétérogènes à forte valeur ajoutée, et sont susceptibles de fournir une base d’informations aux décideurs politiques. Les indicateurs technico-économiques utilisés pour
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décrire les mesures potentielles d'efficience énergétique peuvent également être adaptés, moyennant les ajustements nécessaires, à d'autres régions du monde qui, en retour, pourraient fournir aux parties prenantes des retours utiles leur permettant de promouvoir des solutions d'énergie propre économiquement viables.
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A bstract
The Paris Agreement 2015 is a historic initiative taken by the global community to fight against climate change and steer the world towards global clean energy transition. The implementation of renewable energy and of energy efficiency are key elements for clean energy transition. For the short to medium term, energy efficiency is considered to be the largest, fastest and most economical option for saving energy and mitigating climate change by several international organizations. Energy efficiency is the key component of national energy policy in several countries. The industry sector which accounts for almost one third of the global final energy demand offers great potential for energy efficiency improvement. Switzerland has developed the Energy Strategy 2050 which is a strategic policy package for realizing the transition towards a low-carbon economy. Energy efficiency is one of the major pillars of the national strategy. Although several steps to incentivize energy efficiency improvement in industry have been taken in Switzerland, the size of the energy efficiency gap that currently exists in its high- value added manufacturing sector is largely unknown majorly due to the complexity of the sectors and lack of data (e.g., on physical activity levels). To tackle the issue, a new method is developed and tested for estimating the Swiss sectoral physical activity levels based on which, sector-specific energy efficiency indices are determined.
Since industrial technologies are advancing rapidly, it is important to evaluate the current diffusion of conventional energy efficiency measures and the potential wide-scale application of emerging innovative technologies in the industry sector. To this end, this thesis employs bottom-up methods to assess the techno-economic final energy saving potentials in industry in the short to medium term at the level of individual sectors (i.e. chemical and pharmaceutical and cement sectors) and for cross-cutting technologies (i.e. electric motor driven and excess heat recovery systems). The results are presented in the form of energy efficiency cost curves. In total, the sector-specific energy efficiency measures and the cross-cutting technologies assessed in this thesis correspond to total economic potential final energy savings of 23 PJ p.a. (6 PJ p.a. of electricity and 17 PJ p.a. of thermal energy; 19% of the Swiss industrial final energy demand in 2017) if total investment costs are considered for the cost-benefit analysis. The estimated thermal energy savings, in addition to the savings from measures exclusively related to CO2
mitigation, are equivalent to a potential CO2 abatement of 1.3 Mt CO2 p.a. (34% of the fossil-based CO2
inventory in Swiss industry in 2017; as above, based on total investment costs). Since the consideration of additionality and the manner of accounting for it may strongly influence the cost-effectiveness of the energy efficiency measures and consequently the decision by decision makers, this aspect is also studied in detail. If additionality is accounted for (based on energy-related investment costs representing the additional costs of energy efficiency), then the total economic potential increases to 25 PJ p.a. (8 PJ p.a.
of electricity and 17 PJ p.a. of thermal energy; 21% of the industrial final energy demand in 2017). This work is a contribution to the so far limited international literature on economic energy efficiency measures applicable to high value-added and heterogeneous manufacturing sectors and is meant to inform decision makers. The techno-economic indicators used to describe energy efficiency measures can also be adapted to other parts of the world by making suitable adjustments which may provide useful insights for stakeholders to promote economically viable clean energy solutions.
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T able of Contents
Remerciements... i
Acknowledgments ... ii
Résumé ... iii
Abstract ...v
List of Tables ... xi
List of Figures ... xiii
Chapter 1: Introduction ...1
1.1. Climate change policies and energy efficiency ...1
1.2. Energy efficiency in industry ...3
1.3. The case of Switzerland ...5
1.4. Scope and outline of thesis ...8
References ...11
Chapter 2: A detailed review on current status of energy efficiency improvement in the Swiss industry sector ...15
2.1. Introduction ...17
2.1.1. Overview ...17
2.1.2. Literature survey ...17
2.1.3. Swiss energy efficiency programs ...18
2.1.4. Aims and objectives ...19
2.2. Materials and methods ...20
2.2.1. Tracking energy efficiency improvement in industrial sectors ...20
2.2.2. Data analysis of Swiss companies with target agreements ...23
2.3. Results and discussion ...24
2.3.1. Energy efficiency improvement in Swiss industrial sectors ...24
2.3.2. Data analysis of measures implemented in Swiss companies with target agreements ...27
2.3.3. Energy efficiency improvement in Swiss companies with target agreements ...31
2.4. Conclusions ...33
References ...35
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Chapter 3: Techno-economic analysis of energy efficiency improvement in electric motor driven
systems in Swiss industry ...39
3.1. Introduction ...41
3.2. Materials and methods ...42
3.2.1. Data collection ...42
3.2.2. Data characteristics...44
3.2.3. Data identification and categorization ...45
3.2.4. Electricity savings potential of EMDS ...47
3.2.5. Heat recovery from air compressors ...47
3.2.6. Energy efficiency cost curves ...48
3.2.7. Energy prices ...48
3.2.8. Discount rate ...49
3.2.9. Lifetimes of technical measures ...50
3.3. Energy saving measures in EMDS in Swiss industry ...50
3.3.1. Improving the efficiency of motor driven units ...51
3.3.2. Adjusting operation to actual needs ...53
3.3.3. Control systems ...54
3.3.4. Process optimization ...54
3.3.5. Heat recovery from air compressors ...56
3.4. Results and discussion ...57
3.4.1. Potential for electricity savings ...57
3.4.2. Cost-benefit analysis ...61
3.4.3. Sensitivity analysis ...67
3.4.4. Methodological comparison between data sources ...68
3.4.5. Swiss-specific results in international perspective ...70
3.4.6. Limitations and opportunities for future work ...71
3.5. Conclusions ...72
References ...74
Appendices ...79
Chapter 4: The importance of additionality in evaluating the economic viability of motor- related energy efficiency measures ...85
4.1. Introduction ...87
4.2. Materials and methods ...87
4.2.1. Cost-effectiveness of EE measures ...87
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4.2.2. Accounting for additionality ...88
4.3. Case study: Motor retrofit ...90
4.3.1. Situation ...90
4.3.2. Electricity demand by motors and price ...90
4.3.3. Salvage value ...91
4.3.4. Remaining value of the motor ...91
4.4. Results and discussion ...92
4.5. Conclusions ...95
References ...97
Chapter 5: Excess heat recovery: An invisible energy resource for Swiss industrial sector ...99
5.1. Introduction ...101
5.1.1. Background ...101
5.1.2. Applied methods for industrial excess heat estimation ...101
5.1.3. Aims and objectives ...102
5.2. Materials and methods ...103
5.2.1. Process heat demand in the Swiss industry ...103
5.2.2. Energy and exergy analysis ...103
5.2.3. Excess heat quality ...107
5.2.4. Geographic excess heat maps ...108
5.2.5. Excess heat recovery measures ...109
5.2.6. Cost-effectiveness of excess heat recovery measures ...114
5.3. Results and discussion ...116
5.3.1. Energy and exergy efficiency improvement potential ...116
5.3.2. Conventional excess heat recovery measures ...122
5.3.3. Economic excess heat recovery potential ...124
5.3.4. Barriers to excess heat recovery ...129
5.4. Conclusions ...130
References ...133
Appendices ...136
Chapter 6: Heat integration of a multi-product batch process by means of direct and indirect heat recovery using thermal energy storage ...145
6.1. Introduction ...147
6.2. Materials and methods ...148
6.2.1. Heat integration analysis ...148
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6.2.2. Economic analysis ...149
6.2.3. Process description and data collection ...150
6.3. Results and discussion ...154
6.3.1. Potential for heat integration ...154
6.3.2. Optimization measures ...155
6.4. Conclusions ...160
References ...162
Appendices ...164
Chapter 7: Cost-effectiveness analysis of energy efficiency measures in the Swiss chemical and pharmaceutical industry ...170
7.1. Introduction ...172
7.2. Data acquisition and analysis methods ...175
7.2.1. Data-gathering and organization ...175
7.2.2. Final energy savings potential ...176
7.2.3. CO2 abatement potential ...176
7.2.4. Energy efficiency cost curves ...178
7.2.5. Additional investment costs for energy efficiency improvement ...179
7.2.6. CHP potential and costs ...179
7.2.7. Final energy prices ...181
7.2.8. CO2 prices ...182
7.2.9. Discount rate and measures lifetimes ...183
7.3. Results and discussion ...183
7.3.1. Final energy savings potential ...183
7.3.2. Cost-effectiveness analysis ...184
7.3.3. Sensitivity of the economic energy efficiency potentials ...190
7.4. Conclusions ...192
References ...195
Appendices ...198
Chapter 8: Bottom-up analysis of energy efficiency improvement and CO2 emission reduction potentials in the Swiss cement industry ...206
8.1. Introduction ...208
8.2. Materials and methods ...211
8.2.1. Data collection ...211
8.2.2. Final energy and CO2 savings potential ...211
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8.2.3. Energy efficiency cost curves ...212
8.2.4. Adaptation of investment costs ...213
8.2.5. Energy prices ...214
8.2.6. CO2 prices ...215
8.2.7. Discount rate ...215
8.3. Results and discussion ...215
8.3.1. Energy efficiency database for Swiss cement industry ...215
8.3.2. Cost-effectiveness analysis of energy efficiency measures ...217
8.3.3. Sensitivity analysis ...224
8.4. Conclusions ...227
References ...229
Appendices ...232
Chapter 9: Summary and conclusions ...244
9.1. Summary of the results and specific conclusions ...244
9.2. Overall conclusions and recommendations ...246
9.3. Opportunities for future work ...249
Author’s credentials ... xvii
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L ist of Tables
Table 1.1 Key indicative targets of the Swiss Energy Strategy 2050 for industry sector ...6
Table 2.1 EnAW data on cumulative savings of Universal Target Agreements in the two commitment phases ...19
Table 2.2 Result of decomposition analysis for five major Swiss industrial sectors from 2009 to 2016 ...27
Table 2.3 Final energy savings achieved and number of measures implemented in EnAW target agreements from 2000 to 2016 ...28
Table 2.4 Evolution of energy efficiency (% per annum) in Swiss companies with target agreements in different time periods ...33
Table 3.1 Metrics for costs and impacts of EE retrofit measures according to two methods ...44
Table 3.2 EMDS Measures categorization and sample size ...45
Table 3.3 Lifetime of the measures ...50
Table 3.4 Share of industrial EMDS in national and industrial electricity demand (approximately) ....57
Table 3.5 Share of electricity demand by EMDS application in industry ...57
Table 3.6 Economic electricity savings potential for major EMDS applications in Switzerland and the EU ...58
Table 3.7 Contribution of EE measures (τy) in total electricity savings potential ...60
Table 3.8 Economic energy savings potential in EMDS in the Swiss industry ...61
Table 3.9 Annual technical and economic potential electricity savings in the industrial EMDS in different countries ...71
Table 4.1 Annual electricity demand and price of each motor efficiency class ...90
Table 5.1 Properties of fuels used in Swiss industry under reference conditions with the calorific values based on Swiss NIR ...105
Table 5.2 Energy efficiency for industrial heating systems based on fuels and electricity ...106
Table 5.3 Estimated process heating data for the Swiss industrial sectors ...107
Table 5.4 Excess heat to power costs estimated for Switzerland ...111
Table 5.5 Comparing energy and exergy efficiencies of industry sector in different countries ...121
Table 5.6 Excess heat recovery potentials in industry estimated for different countries ...121
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Table 5.7 Excess heat temperature distributions in industry estimated by different studies ...122
Table 5.8 Excess heat recovery measures classification ...123
Table 6.1 Operating hours and temperature distribution of different process steps ...152
Table 6.2 Process requirements for direct and indirect heat recovery ...152
Table 6.3 Results of the pinch analysis for summer operations ...155
Table 6.4 Results of the pinch analysis for winter operations ...155
Table 6.5 Heat recovery potential of the proposed HEN design for summer ...156
Table 6.6 Heat recovery potential of the proposed HEN design for winter ...156
Table 6.7 Cost-effectiveness of the proposed optimization measures ...160
Table 7.1 Energy savings potentials in the chemical industry estimated for different regions ...174
Table 7.2 EE measures applicable in Swiss chemical and pharmaceutical industry in 2016 ...177
Table 7.3 Fuel emission factors and contribution of fossil fuels in overall fuel demand by Swiss chemical and pharmaceutical industry in the base year 2016 ...178
Table 7.4 Techno-economic characteristics of CHP based on internal combustion engines ...181
Table 7.5 Electricity and heat generation potentials and costs of CHP technologies for Swiss chemical and pharmaceutical industry ...188
Table 7.6 Annual potential of fuel, electricity and carbon dioxide savings in the Swiss chemical and pharmaceutical industry ...190
Table 8.1 Production data of the Swiss cement industry by site ...209
Table 8.2 Comparison of specific final energy use (GJ/t-cl) in CH, EU and world cement industry .209 Table 8.3 Economic energy efficiency potentials, CO2 and cost saving potentials in the cement sector estimated by different authors for different countries ...210
Table 8.4 Average share of fuels in total fuel energy demand by Swiss cement sector in 2014 ...212
Table 8.5 Final energy savings, costs and estimated diffusion data for energy efficiency measures applicable to Swiss cement industry in 2016 ...216
Table 8.6 Cumulative annual potential electricity, fuel and CO2 savings in the Swiss cement industry ...223
Table 8.7 Specific energy use before and after the implementation of energy efficiency measures and the required investment to achieve yearly cost savings ...223
Table 9.1 Contribution of the assessed energy efficiency measures to ES 2050 indicative targets ....248
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L ist of Figures
Figure 1.1 Global final energy demand by sector in 2015 ...3
Figure 1.2 Development of a) CO2 and energy intensities and b) final energy demand, CO2 emissions and gross value added in Swiss industry sector from 2002 to 2016 (2010 =100) ...8
Figure 2.1 Final energy demand of EnAW companies as percent of total final energy demand of Swiss industrial sectors in 2016 ...23
Figure 2.2 Final energy demand of individual sectors as percent of total final energy demand of Swiss manufacturing industry in 2016 ...24
Figure 2.3 Energy efficiency improvement in Swiss industrial sectors from 2009 to 2016...25
Figure 2.4 Development of final energy intensities in Swiss industrial sectors from 2002 to 2016 ...26
Figure 2.5 Cumulative final energy savings by measure category in EnAW companies in 2000-2016 ...30
Figure 2.6 Energy efficiency improvement in EnAW companies from 2006-2016 ...32
Figure 3.1 Linear fit for the compressor size as function of total investment cost ...46
Figure 3.2 Box plot diagram of all measure categories falling under compressed air systems ...46
Figure 3.3 Electricity price projections for industry up to 2050 ...49
Figure 3.4 Efficiency of electric motors (50 Hz, 4-pole) as per efficiency classes defined by IEC 60034-30 ...53
Figure 3.5 Difference in motor efficiencies if IE0 and IE1 efficiency motors are upgraded to IE3 ...59
Figure 3.6 Energy efficiency cost curve for major EMDS ...62
Figure 3.7 Energy efficiency cost curve for compressed air systems ...63
Figure 3.8 Energy efficiency cost curve for pump systems ...64
Figure 3.9 Energy efficiency cost curve for fan systems ...65
Figure 3.10 Energy efficiency cost curve for other systems ...66
Figure 3.11 Sensitivity analysis of cost-effective electricity savings potentials to electricity prices – Results for major EMDS, case of total investment ...66
Figure 3.12 Sensitivity analysis of cost-effective electricity savings potentials to discount rates – Results for major EMDS, case of total investment ...67
Figure 3.13 Sensitivity analysis of cost-effectiveness to lifetimes – Results for efficient compressors, case of total investments ...68
Figure 3.14 Comparing cost-effectiveness of measures implemented by EnAW and ProKilowatt for case of total investment ...69
Figure 3.15 Comparing cost-effectiveness of measures implemented by EnAW for both total investment and energy relevant investment cases ...70
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Figure 4.1 Depreciated and salvage value of the old IE2 efficiency class motor ...91
Figure 4.2 Comparing specific costs of the motor retrofit measure calculated by different approaches (IE2 motor if replaced by IE4 motor after X years of its completed lifetime) ...92
Figure 4.3 Comparing specific costs of the motor retrofit measure (replacing IE2 by IE4) calculated by advanced methods (RBD and SLD) with different salvage values i.e. 5%, 15% (base case) and 50% .93 Figure 4.4 a) Annual discounted cash flows and b) annual electricity savings over the years for different levels of old motor (IE2 in this particular case) age at the time of replacement ...94
Figure 5.1 Final energy demand by application in Swiss manufacturing industry in 2016 ...104
Figure 5.2 Process heat demand by sector in Swiss manufacturing industry in 2016 ...104
Figure 5.3 Excess heat temperature ranges assumed for the Swiss industrial sectors ...108
Figure 5.4 Schematics of steam generation by low pressure evaporation and vapor recompression (LPE&VC) using a) water injection (WI) cooling or b) heat exchanger (HX) cooling ...112
Figure 5.5 Electricity consumption per kg of steam (133oC, 3 bar) produced for the process using different technologies ...112
Figure 5.6 Total investment cost of different technologies for steam generation using excess heat at 50oC ...113
Figure 5.7 Electricity and fuel energy prices for Swiss industry up to 2050 ...115
Figure 5.8 Projected CO2 levy and ETS prices for Swiss industry up to 2050 ...116
Figure 5.9 Energy and exergy efficiencies of heating processes in Swiss industrial sectors ...117
Figure 5.10 The flow of exergy for process heat through the Swiss industrial sectors (in TJ) ...118
Figure 5.11 The flow of energy for process heat through the Swiss industrial sectors (in TJ) ...118
Figure 5.12 Heatmaps of excess heat sources of Swiss industry, overlaid with canton boundaries ....120
Figure 5.13 Energy efficiency cost curve for excess heat recovery in the Swiss industry ...124
Figure 5.14 CO2 abatement cost curve for excess heat recovery in the Swiss industry ...125
Figure 5.15 Specific costs of excess heat recovery in Swiss industrial sectors ...126
Figure 5.16 Specific costs of excess heat recovery measures implemented by EnAW companies in each industrial sector ...127
Figure 5.17 Specific costs (left) and payback periods (right) for SRC and ORC plants of different capacities ...128
Figure 5.18 Specific costs for steam generation technologies using excess heat at different temperatures (steam flow: 100 kg/hr) ...129
Figure 6.1 Pinch analysis study process ...149
Figure 6.2 Block flow diagram of the European textile plant under consideration ...151
Figure 6.3 Composite curves for summer (left) and winter (right) process requirements ...154
Figure 6.4 Proposed HEN design for summer operations ...157
Figure 6.5 Proposed HEN design for winter operations ...157
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Figure 6.6 Heat exchanger and storage network for the textile plant ...158
Figure 6.7 TES stratified tank loading and unloading profile ...159
Figure 7.1 Final energy consumption and fossil carbon dioxide emissions in the Swiss chemical and pharmaceutical industry during the period 2002 to 2016 ...172
Figure 7.2 Projections of final energy demand in the Swiss chemical and pharmaceutical industry according to Prognos ...173
Figure 7.3 Comparison of heat and electricity production by CHP as opposed to separate generation of heat and electricity ...180
Figure 7.4 Fuel energy and electricity prices for industry sector in Switzerland up to 2050 ...182
Figure 7.5 CO2 prices for industry sector in Switzerland up to 2050 ...183
Figure 7.6 Final energy efficiency cost curve for Swiss chemical and pharmaceutical industry ...185
Figure 7.7 Fuel efficiency cost curve for Swiss chemical and pharmaceutical industry ...185
Figure 7.8 Electricity efficiency cost curve for Swiss chemical and pharmaceutical industry ...186
Figure 7.9 CO2 abatement cost curve for Swiss chemical and pharmaceutical industry ...187
Figure 7.10 Specific costs of different CHP technologies for Swiss chemical and pharmaceutical industry ...188
Figure 7.11 Sensitivity analysis for changes in fuel and electricity prices ...191
Figure 7.12 Sensitivity analysis for changes in discount rate ...191
Figure 7.13 Sensitivity analysis for changes in CO2 prices ...192
Figure 8.1 Final energy demand by energy carriers, cement production and CO2 emissions in the Swiss cement industry from 2002 to 2014 ...208
Figure 8.2 Electricity and coal prices for Swiss cement industry up to 2050 ...214
Figure 8.3 Final energy efficiency cost curve for Swiss cement industry in 2016, case of total investment ...218
Figure 8.4 Final energy efficiency cost curve for Swiss cement industry in 2016, case of energy- relevant investments calculated with EUPs’ age taken as a) half and b) two-third of their lifetime ...219
Figure 8.5 Electricity efficiency cost curve for Swiss cement industry in 2016, case of total investment ...220
Figure 8.6 Fuel efficiency cost curve for Swiss cement industry in 2016, case of total investment ...221
Figure 8.7 CO2 abatement cost curve for Swiss cement industry in 2016, case of total investment ...222
Figure 8.8 Sensitivity analysis of cost-effective final energy savings potential to final energy prices ...224
Figure 8.9 Sensitivity analysis of cost-effective fuel energy savings potential to CO2 prices ...225
Figure 8.10 Sensitivity analysis of cost-effective CO2 abatement potential to CO2 prices ...225
Figure 8.11 Sensitivity analysis of cost-effective final energy savings potential to project costs ...226
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Figure 8.12 Sensitivity analysis of cost-effective final energy savings potential to project costs, final energy prices and CO2 prices ...227
Figure 9.1 Energy efficiency cost curve for overall Swiss industry ...247
1
C HAPTER 1 I ntroduction
1.
1.1. Climate change policies and energy efficiency
Although a clear majority of public (including >95% of scientists) agree that climate change due to anthropogenic activities is real, not all agree [1]. For example, 54-65% of Americans believe in climate change while the rest are skeptical about its existence [1]. Among them, the current US president, Donald Trump, argues that climate change is a hoax and is a fictive phenomenon made up to control different aspects of the American society [2]. This made him withdraw from the Paris agreement in 2017 despite US being world’s second largest energy consumer (16%) and CO2 emitter (15%) after China in 2017 [3,4]. However, the following observations [5,6] show that climate change is unequivocal.
Rise in global temperature: Since the late 19th century, earth’s average surface temperature has risen by about 0.9oC. The increase in temperature has been driven mainly by increased greenhouse gas (GHG) emissions into the atmosphere, primarily due to the combustion of fossil fuels related to economic growth.
Warming of oceans: The oceans have absorbed much of this increased heat in atmosphere, with the top layer (until 700 m of depth) showing a temperature increase of more than 0.2oC since 1969.
Shrinkage of ice sheets: Data from NASA show that Antarctica has lost about 119 billion tonnes of ice per annum during the period 1993 to 2016. In past five years, the rate of Antarctica’s ice loss has nearly tripled compared to the rate in the previous decade. Greenland alone has lost about 281 billion tonnes of ice per annum in the last decade.
Decrease in snow cover: According to satellite observations, the level of spring snow cover has declined significantly over the past five decades in the Northern Hemisphere and the snow is melting earlier.
Rise in sea level: In the last century, global sea level has risen about by 0.2 m. The rate in the last two decades has nearly doubled and is slowly increasing every year.
Acidification of oceans: The acidity of the ocean surface waters has increased by almost 30% since the beginning of the industrial revolution. The rise in acidity is due to the increased absorption of CO2 from atmosphere which, in turn, originates from anthropogenic activities. The amount of CO2
absorbed by the oceans’ upper layer is increasing by approximately 2 billion tonnes per annum.
There are several other observations and extreme weather events which show that climate change is real and there is sufficient evidence to it. The Paris Agreement 2015 is a historic initiative by the global community to fight against climate change and steer the world towards global clean energy transition.
The agreement, with 189 national climate plans covering approximately 98% of the global emissions, offers a starting point to pass on to future generations a more resilient and healthier world, more prosperous economies and fairer societies [7], also in context of the 2030 Agenda on Sustainable Development and its 17 Sustainable Development Goals (see later in this section). The global clean energy transition may require significant changes in business and investment behaviors and incentive policies across all sectors of economy [7]. The transition also entails prospects for the European Union (EU), which is world’s third largest energy consumer (14%) and CO2 emitter (12%) [4], to strengthen
2
its role as a world leader in renewable energy and to increase the market growth for EU manufactured goods and services, for instance in the field of energy efficiency [7]. The Paris Agreement has the following salient features [7]:
To keep global warming level well below 2°C compared to the pre-industrial levels and make efforts to limit the temperature rise to 1.5°C. The ambitious goal of 1.5°C is aimed for, in particular, in view of the most vulnerable countries/regions that are already suffering from the consequences of climate change.
To send a clear message to all stakeholders, policymakers, business investors and civil society that global clean energy transition is here to stay, and resources need to be shifted away from non- renewable sources.
To provide a dynamic mechanism to reduce emissions and strengthen targets over time. From 2023 onwards, all participants will meet every five years in a “global stocktake” to discuss progress in GHG emissions reductions, necessary adaptations and the support provided and received in context of the long-term goals of the agreement.
To legally bind all participants to pursue their national climate mitigation measures and to achieve their objectives.
To set up a transparent framework of accountability which includes the biennial submission of GHG inventories by all participants and other information required to track their progress, review by a technical expert, and mechanism to facilitate implementation and promote compliance.
To promote individual and collective measures with the aim to facilitate greater cooperation among participants and to share scientific knowledge on adaptations as well as information on policies and practices.
At a historic United Nations (UN) Summit in 2015, the 2030 Agenda for Sustainable Development comprised of 17 Sustainable Development Goals (SDGs) was adopted by world leaders. In 2016, these SDGs officially came into force, with the objective to mobilize global efforts to end poverty, fight inequalities and manage climate change [8]. Referring to the Paris Agreement, the targets of limiting the global temperature rise to 1.5°C and keeping the global warming level well below 2°C are aligned with the targets of SDG-7 (Affordable and Clean Energy) and SDG-13 (Climate Change) respectively [9].
Many of the major challenges the world is facing today revolve around energy. Be it climate change, food production, jobs and income or security, managing energy supply and demand is essential for all.
Universal access to clean energy is crucial for creating more sustainable and inclusive societies and resilience to environmental issues like climate change. As stated, the SDG-7 is focused on energy and its targets are [10]:
To ensure universal access to affordable, reliable and clean energy by 2030.
To increase the share of renewables significantly in the global energy portfolio by 2030.
To double the rate of global energy efficiency improvement by 2030.
To enhance global cooperation and facilitate access to clean energy research and technology by 2030. The research includes renewable energy, energy efficiency and investment opportunities to improve energy infrastructure and promote green technologies.
To upgrade energy infrastructure and technologies in developing countries (least developed countries in particular) by 2030 to provide sustainable and modern energy services according to their respective support programs.
The implementation of renewable energy and of energy efficiency are the key elements for clean energy transition. Energy efficiency can be defined as the relationship between the energy input and the output
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for a given activity. The output can be measured in terms of the output of a product in physical terms (e.g. a tonne of steel) or the level of an energy service (e.g. the number of miles covered per liter of gasoline by a car). A device or a process is considered more efficient if it either delivers same output for less energy input or more output for the same energy input [11]. For the short to medium term, energy efficiency is considered the largest, fastest and most economic option for saving energy and mitigating climate change by several international organizations and it is often referred to as “first fuel” [12].
Improving energy efficiency not only helps to reduce energy waste and lessen CO2 emissions but it also strengthens energy security. Energy efficiency is often also cost-effective and allows end consumers to save money. Some even argue that returns on investments in energy efficiency tend to be higher than returns on several other investments in the capital market [13]. However, among the barriers, lack of techno-economic data, resources and/or awareness, prevents end consumers, economic sectors and governments to track and improve energy efficiency [14]. For a successful energy transition, it is very important to become more efficient in how we use heat and electricity. For Europe, energy efficiency improvement has become a strategic issue and the region can be considered as the leader of the global transition to energy efficient technologies [15].
1.2. Energy efficiency in industry
According to IEA’s World Energy Balances (2017) [16], global final energy demand in 2015 (~ 393 EJ) was nearly twice of the level in 1971 (~178 EJ). The shares of economic sectors in the total global final energy demand are presented in Figure 1.1. The industry sector accounts for more than one third (i.e.
37%) of the global total final energy demand (see Figure 1.1) and the share is gradually increasing.
Transport and the residential sector are the second (29%) and the third (22%) largest users of final energy after industry [16]. Globally, these three sectors need energy efficiency improvement the most [12].
More specifically, the global potential of energy efficiency in industry has been estimated at approximately 31 EJ per annum (p.a.), equivalent to more than 20% of the sector’s final energy demand [17]. For Europe, energy efficiency improvement in industry sector can play a major role in achieving its strategic targets and can serve as one of the key drivers for improved competitiveness of its industries [15]. Due to increased concerns about climate change and energy security as well as the strategic significance of improving energy efficiency, global and regional energy efficiency profiles are regularly being monitored. However, given the number and the complexity of industrial processes and product end-uses, the development of consistent and comparable energy efficiency indicators for industry sector is a challenge [18].
Figure 1.1 Global final energy demand by sector in 2015 (Source: IEA (2017) [14])
Industry 37%
Transport 29%
Residential 22%
Commercial 8%
Agriculture
2% Non-specified
2%
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Although global demand for bulk materials has increased in recent years, particularly in developing countries, some countries are dealing with overcapacity in key industrial sectors. For example, global capacity of crude steel production in 2013 was 2’164 Mt while demand amounted to 1’648 Mt.
Consequently, the capacity utilization rate of steel plants was 76% which was, historically, one of the lowest [18]. Similarly, cement industry has also faced several years of overcapacity, with a utilization rate of cement plants in China and India of around 50%. The overcapacity of industrial plants threatens the sector’s competitiveness and makes capital investment in energy efficiency projects difficult. On the other hand, it provides the opportunity to retire old inefficient parts of the stock and improve average performance level throughout the sector. Such challenges highlight the need for sustainable policies for the industry sector based on detailed understanding of energy use and CO2 emissions [18]. The level of energy efficiency and CO2 emissions in industry and the economic options for clean energy transition differ significantly from one country/sector to another. In the context of the Paris Agreement and SDG- 7, it is essential to assess the current state of different industrial sectors by country or region and to identify the key areas where the largest impact can be achieved [18].
As stated, measures to improve energy efficiency in industry are generally considered cost-effective.
Apart from energy savings, energy efficiency brings multiple benefits such as improved productivity, product quality, competitiveness etc. Another advantage of pursuing energy efficiency in industry is that it involves fewer actors than the other sectors of economy [17]. However, a number of studies have revealed that the rate of implementation of energy saving measures is still very low [18]. This implies the existence of an energy efficiency gap which can be explained by the presence of several barriers to energy efficiency improvement. These barriers can be broadly classified into economic (access to capital, heterogeneity1 etc.), technical (local lack of technology, need for reconfiguration of production processes, further R&D needs etc.), informational (lack of awareness, lack of experience etc.), institutional (lack of government policies, uncertainty about the company’s future etc.) and split incentives [19]. Several studies [19–23] have discussed and ranked these barriers according to their effect on a firm’s decision-making process of investing in an energy efficiency measure. Their results show that economic barriers are often the most critical and hinder the adoption of energy efficient measures.
In order to boost the adoption of energy efficiency measures in industry, it is critical to remove barriers that are affecting the decisions of end-users. Although there is a large body of literature on the policy frameworks to encourage energy efficiency and on the driving factors to adopt energy efficiency measures, further work seems necessary on how to overcome the barriers to energy efficiency, especially economic barriers [15]. Companies typically employ payback approaches for the economic assessment of energy efficiency measures. They usually reject capital investments unless their payback times are less than a certain limit which is often very conservative (i.e. 2-3 years). It is understandable because long payback means capital tied up and high investment risk [24]. However, the approach does not account for time value of money and, more importantly, it does not include cash flows beyond the payback period. Since the cost benefits through energy efficiency measures are achieved during the lifetime of the measure, these benefits should be considered [25]. Lack of required data and information on key economic variables (e.g. additional costs of energy efficiency or economic additionality, relevant discount rates, economic measure lifetime etc.) restricts development of key economic indicators which are needed by stakeholders for decision making. It is obvious that, without understanding and addressing
1 A given energy efficiency measure may be cost-effective in general but not in all cases (specific costs may vary by site or sector or region).
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the techno-economic barriers effectively, global and regional energy efficiency targets cannot be achieved [15].
Across the globe, industry is striving gradually to increase (or at least maintain) its share of high value- added products. Companies in high-income countries tend to relocate low-value manufacturing to developing countries mainly because the costs of goods and services supplied in these countries are relatively low. High value-added manufacturing does not only ensure competitiveness in the global market compared to the traditional manufacturing but also helps to reduce (direct) environmental impacts (less harmful and innovative processes are usually employed). Furthermore, high value manufacturing involves particular expertise requiring higher levels of qualification, offering higher salaries and possessing greater value in many ways for businesses and stakeholders. As other world regions, Europe has been promoting global supply chains while aiming for high value products in specialized areas [26]. While a substantial amount of work has already been done in the past on energy efficiency improvement in traditional manufacturing processes [27–33], there is limited research on energy saving opportunities in high value-added manufacturing and heterogeneous industrial sectors.
1.3. The case of Switzerland
After the Fukushima nuclear accident in Japan in 2011, Switzerland decided to gradually withdraw from nuclear energy. To do so, the Swiss current energy system needs to be transformed as nearly 40% of the electricity is produced from nuclear resources [34]. In this context, Switzerland has developed the Energy Strategy 2050 (ES 2050) which is a strategic policy package for advancing the energy transition towards a low-carbon economy. It consists of a detailed set of new and revised laws and policy measures that is foreseen to be realized in two phases. The three pillars of the strategy are a) withdrawal from nuclear energy, b) reduction of energy demand and GHG emissions per capita and c) promotion of renewables and energy efficiency [35]. Since the energy and environment policies in Switzerland are gradually becoming stricter (see later in this section), it is crucial for the country to use energy as efficiently as possible. The industry sector, which accounts for nearly 20% of the total energy demand in Switzerland, could play a significant role in the goal achievement [34].
In ES 2050, the final energy demand of the industry sector has been projected until 2050 under three different scenarios, i.e. a) Business as usual (BAU), b) Political Measures (PM) and c) New Energy Policy (NEP) [36]. Table 1.1 presents an overview of the indicative targets of ES 2050 for the Swiss industry relative to the year 2010. The first set of measures (PM), which target the promotion of renewables and energy efficiency, was approved by the Swiss parliament and entered into force on 1st January 2018. In contrast, the key element of the more ambitious package (NEP), a revenue-neutral energy tax2 aiming to increase the cost of energy demand and emissions by switching from subsidies to pricing mechanisms after 2025, was rejected by parliament in 2017. While a suitable and widely supported alternative policy measure (or a set of measures) remains to be identified and implemented, the Swiss government reiterated, in its climate policy package published in December 2017, the long- term goal of reducing until 2050 its total GHG emissions by 70-85% compared to the levels in 1990 [35].
Switzerland imposed a CO2 levy of 12 CHF/t CO2 on fossil fuels in 2008 which was increased to 36 CHF/t CO2 in 2010, 60 CHF/t CO2 in 2014 and 84 CHF/t CO2 in 2016. The levy was imposed to create
2 According to this concept, the tax revenue is recycled to private consumers and to companies instead of being used by the state; this principle is already to a large extent applied in the context of the Swiss CO2 taxation. The required political majorities were not achieved for the analogous application to energy use.
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an incentive for the end consumers (households, service sector and parts of industry) to use fossil fuels more economically and to opt for green or more carbon-neutral energy sources. The present CO2 levy of 96 CHF/t CO2 has been charged since January 2018 [37]. To promote energy efficiency and GHG emissions reduction in industry, Swiss government has implemented two policy measures, i.e.
reimbursement of the CO2 levy (see next paragraph for details) and of the electricity grid surcharge (Kostendeckende Einspeisevergütung or KEV; cost-based compensation given to the renewable energy producers by collecting it from the electricity consumers in Switzerland) [35]. Large consumers with an installed rated thermal input of 20 MW or more are exempt from the CO2 levy and it is mandatory for them to participate in the Swiss Emissions Trading Scheme (ETS). Under the Swiss ETS it is foreseen to reduce the cap of CO2 emissions by 2.2% p.a. between 2021 and 2030 [38]. On the other hand, companies with an electricity bill exceeding 10% of their gross value added (GVA) are fully exempt from paying the grid surcharge. Companies with electricity costs falling between 5% and <10% of their GVA can apply for partial reimbursement of the surcharge [35,39].
Table 1.1 Key indicative targets of the Swiss Energy Strategy 2050 for industry sector (Source:
Prognos (2012) [36])
Category Scenario Indicative target
Final energy demand PM -4% by 2020 vs 2010 level -18% by 2035 vs 2010 level -26% by 2050 vs 2010 level NEP -7% by 2020 vs 2010 level
-27% by 2035 vs 2010 level
-39% by 2050 vs 2010 level
Electricity demand PM -5% by 2020 vs 2010 level -17% by 2035 vs 2010 level -23% by 2050 vs 2010 level NEP -4% by 2020 vs 2010 level
-23% by 2035 vs 2010 level
-34% by 2050 vs 2010 level
In order to get reimbursed for the CO2 levy and the grid surcharge, companies are required to enter into legally binding target agreements thus formally committing them to reduce their final energy demand and CO2 emissions to a certain level. For energy intensive consumers, these target agreements are typically tailor-made (not forcing the implementation of standard energy efficiency measures) while for small and medium enterprises (SMEs), they are ready-made (implementation of the standard measures if applicable and economically viable) [35]. The Swiss government mandated the ‘Energy Agency of the Swiss Private Sector (EnAW)’ and the ‘Cleantech Agency Switzerland (act)’ to help industries in the design and implementation of energy efficiency measures throughout the period of the target agreements. The agreements signed with these two third parties are called ‘Universal Target Agreements’ [40,41]. Energy intensive companies with more than 18 TJ (5 GWh) of heat and 1.8 TJ (500 MWh) of electricity demand p.a. can also opt for ‘Cantonal Target Agreements’. Both the universal and the cantonal target agreements set an indicative target of 2% p.a. for energy efficiency improvement [35,41]. The only difference between the two models is that under the former, reporting is done to EnAW or act while under the latter, to the canton. Currently, not all Swiss cantons offer cantonal agreements.
The minimum requirement for energy intensive companies not having to sign a target agreement, is to have an energy demand audit (Energieverbrauchsanalyse or EVA). Companies that opt for this model are responsible to meet the required energy efficiency improvements within three years [35].
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It should be noted that the focus of target agreements is on the implementation of cost-effective energy efficiency and CO2 saving measures (having a payback time less than 4 years for process specific measures and 8 years for measures related to infrastructure). To support implementation of electricity saving measures that are economically challenging (i.e. having payback times greater than 5 years) and to ensure efficient use of electricity in various sectors including industry, the Swiss Federal Office of Energy (SFOE) has been operating a competitive tenders scheme (called ProKilowatt) since 2009.
ProKilowatt provides financial support by auctions and makes sure that projects (undertaken by and for a single entity) and programs (undertaken for several organizations) with the best cost-benefit ratio are nominated. The main performance criterion is the amount of electricity saved per unit of financial support (cost-effectiveness) [42]. Under the ES 2050, financing has been opened for reducing transformation losses in generation and distribution of electricity [35].
Switzerland is an interesting study case not only due to its ambitious energy and climate policy but also because of the specific features of the industry sector. Switzerland has made the transition from traditional manufacturing (e.g. production of primary aluminium, railway locomotives etc.) to a knowledge-based economy. The country is highly specialized in precision engineering with many applications and is currently one of the world leaders in high value-added products [43]. Supported by the legal, financial and political context, a number of very successful and hi-tech companies in life sciences, biotechnology, microelectronics etc. are operating in Switzerland [44]. The Swiss chemical and pharmaceutical industries produce over 30’000 products, nearly 90% of which are specialties. The global annual demand of some of these specialty chemicals is even below a few metric tonnes. In 2011, 98% of the Swiss chemical and pharmaceutical sector’s total sales, i.e. CHF 149.2 billion, were outside Switzerland [45]. Swiss watch-making industry is another example of high value-added manufacturing.
Switzerland is the third largest exporter of wristwatches (exported over 20 million timepieces of worth CHF 18.8 billion in 2017) after China and Hong Kong. The average price of a Swiss exported watch is over CHF 800 (luxury watches) which is 200 and 30 times more than the average price of a Chinese and a Hong Kong watch respectively [46]. Furthermore, almost 80% of the products manufactured by the Swiss mechanical, electrical and metal (MEM) industry are exported, of which the EU has a share of 60%. Switzerland is also among the top ten largest exporters of machinery in the world [47,48].
Although Switzerland, as a manufacturer of high value products, has strengthened its economy in recent years, many of its traditional manufacturers like cement and paper industries face difficulties due to global competition. In addition to the increasing regulations, sales fluctuations due to globalized markets and high labor costs are some of the key challenges which the industries are facing today [48].
Figure 1.2a presents the CO2 intensities3 and energy intensities of Swiss industry sector from 2002 to 2016. Across the entire time period, the figure shows an almost linear relationship between the two indicators, displaying a decreasing trend. While both intensities have decreased over time, CO2 intensity has decreased at a faster rate (3.4% p.a.) than energy intensity (2.7% p.a.) probably due to fossil fuel substitution as one of the reasons. Figure 1.2b displays indices for final energy demand, CO2 emissions and GVA for the Swiss industry for the same period. The figure shows that the GVA in Swiss industry increased by almost 2% p.a. during the period 2002-2016. In the same period, final energy demand and CO2 emissions decreased by 0.8% p.a. and 1.5% p.a. respectively. The reduction in energy demand and the emissions could be the consequence of a decrease in physical production or due to an increase in energy efficiency or both. The rate of increase in GVA is found to be higher (2% p.a.) than the rate of decrease in the other two variables, which may be explained by the increasing share of high-value added
3 Process specific CO2 emissions are not included. All GHG emissions as the result of fossil fuel combustion are expressed in terms of CO2-equivalent.
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products in the overall product portfolio of Swiss industry. However, at this point, it is difficult to pinpoint the exact reasons, especially when there are no statistics on physical production available at the federal level.
Figure 1.2 Development of a) CO2 and energy intensities and b) final energy demand, CO2 emissions and gross value added in Swiss industry sector from 2002 to 2016 (2010 =100) (Sources: SFOE (2017)
[49], FSO (2017) [50], FOEN (2018) [51])
It is noticeable that Switzerland is making an effort to ensure energy efficiency improvement in the industry sector, however, it is not fully clear to what extent these efforts have been successful and how these policies are going to evolve in future. The first step to analyze this domain is to estimate the energy efficiency gap currently existing in the industry sector. Furthermore, with the rapid change in technology for several unit processes, it is utmost important for the energy efficiency programs to update their lists of energy efficiency measures and to promote implementation of these measures to achieve the ES 2050 indicative targets. In view of its ambitious energy and CO2 laws and its hi-tech industrial sector, Switzerland can serve as an ideal candidate for analyzing policy and research driven energy efficiency improvement opportunities in a high value-added manufacturing sector.
1.4. Scope and outline of thesis
In view of the research gaps identified in the previous sections, the central research question is:
What are the economically viable energy efficiency improvement opportunities in a high value-added industry sector?
To answer the research question, Switzerland has been chosen as the case study region for the reasons given in Section 1.3. The specific aims and objectives of this thesis are:
To develop and apply a methodology to estimate physical activity levels in Switzerland and to assess the current level and trend of energy efficiency in Swiss industry.
To identify for key Swiss industrial sectors the energy efficiency potential by process groups (e.g.
electric motor driven systems, excess heat recovery systems etc.).
To evaluate the economic viability of existing and emerging innovative energy efficiency measures.
To identify which parameters influence the economic viability of the energy efficiency measures and to which extent.
To develop a bottom-up model for the industry sector and to assess techno-economic final energy saving potentials in the Swiss industry at the level of individual sectors and process groups.
2002
2003 2004 2006 2005
2007 2009 2008
2010 2012 2011
2013
2014 2015 2016
40.00 45.00 50.00 55.00 60.00 65.00 70.00 75.00 80.00
0.90 1.00 1.10 1.20 1.30 1.40 1.50
CO2intensity (t CO2/million CHF)
Energy intensity (TJ/million CHF) a)
0.70 0.75 0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20
Index
Final energy demand CO2 emissions Gross value added
b)
