Due to increased cost pressures caused by a reduction in its commodity-based business, the Sasol Corporation required innovative solutions to minimise costs. Sasol decided it needed a new way to measure and manage plant energy costs, due the large impact this has on overall business performance. The new solution would have to monitor energy costs and usage in real-time, allowing management, operators, and engineers to optimise energy usage within the plant, identify the amount of energy needed to meet internal requirements and minimise this impact on the local electrical grid.
The plant draws process water from a nearby river to produce steam in two steam stations and an automatic thermal reformer (ATR) area that is used for internal and external client consumption. The process water is treated in one plant and mixed with condensate that is recovered from additional plants. Previously, steam demand for external customers was extremely high, especially for customers involved in coal reformation. However, as the demand for coal decreased and imported natural gas increased, steam demand declined, shifting the strategy from maximising output to minimising cost. The price of steam for internal and external customers is based on an algorithm that approximates a fair market price at current conditions. Steam stations are contractually obligated to operate with 160 tons per hour of spare steam, which is approximately equal to the steam output from one boiler. If plants cannot meet the demand for steam, they must reduce supply to the electrical generation customers, who buy electricity directly from the grid.
Collaboration
The Invensys Business Performance Services consulting team worked closely with Sasol personnel (from the Sasol One Site in Sasolburg) to develop real-time dynamic performance measurements (DPM) at Steam Plants 1 and 2. To determine the underlying real-time performance measures and calculate costs and profits, DPMs and real-time financial metrics were created for each process unit and area within the two plants. Management and operator dashboards, that utilise DPMs and real-time financial data, were also created to provide management, operations and engineering with critical information in real-time to enable better and more informed business decisions.
Initially, the consulting team conducted a plant operation and strategy audit. They interviewed Sasol personnel from all aspects of plant operations, starting with plant managers and continuing with the operators and other pertinent personnel in the operation. Invensys’ structured methodology was used to determine the correct measures of performance and to break down key plant performance measures into lower-level functional entities so that they could be managed effectively. The component solutions were then recombined into an overall structure.
The Invensys-measured process helped to reconcile differences in how raw materials consumption was measured between the engineering and accounting staffs. The engineering production division measured coal consumption using mechanical devices (based on the number of revolutions made by a wheel flow meter), while the accounting division based its measurements on weighing devices at the mine and silo measurements that resulted in significant weight differences. Therefore, reconciliation was required to arrive at a working solution. The process was also used to help identify a water source cost that had previously been incorrectly allocated.
Automation and IT systems
Sasol has made a significant investment in its automation and IT infrastructure. Each steam station has a dedicated DCS, historian and graphical interface. At the start of the project, each DCS was found to have some unused capacity. The unused computing capacity provided Sasol an opportunity to host applications beyond the basic process control such as implementation and execution host for real-time performance measurements and business intelligence feedback.
Monthly financial reports provide an overall representation of the steam generation business and the entire Infrachem Syngas steam and utilities businesses. These financial reports are generated using Hyperion Financial Management reporting capabilities that utilise key financial data from various sources. Managerial, operations, and maintenance reports utilise input from the operational data store (ODS) system, SAP, and other manually entered sources to provide custom reports to meet current requirements. Daily, production supervisors use these reports to review the production performance from the previous day.
Development of DPMs
Modelled in the DCS, DPMs were developed for each individual boiler, steam station, and the steam generation. Three station-level DPMs were developed: steam cost; steam quality and production rate. Each individual boiler is required to produce the lowest-cost steam at the proper pressure and temperature specifications and maintain reliable production, while managing production rates. For each boiler, the variable steam generation cost, including labour, consists of four major components: coal; electricity; fuel and water. Emission levels were monitored and improved to enhance Sasol’s environmental footprint.
Additionally, management rolled out a maintenance initiative that was designed to improve the availability of key assets and avoid emergency shutdowns. This was accomplished by improved planning, increased predictive-reactive maintenance ratios, setting proper priorities for maintenance activities, and reduced cost. Real-time performance measurements focused on the following within the maintenance area:
* Reactive/predictive maintenance ratio.
* Boiler availability.
* Emergency maintenance reaction time (the time from when a breakdown occurred to when the repair was completed and the equipment was back in operation).
* Maintenance schedule deviations (important for improving the maintenance planning process.
Implementation
DPM algorithms, real-time financial models and unit levels were implemented in the two DCSs. Using existing plant-level assets for implementation; cost factors on the plant floor can be tracked in real-time. These algorithms are executed at a frequency that is in close proximity to the cycle time of the process, with the historical collection performed at a similar frequency. Unit-level metrics are then aggregated at the station and plant levels using the functionality of the historian. The totalling can be performed at various periods, including the shift, day and month.
Real-time financial data with allocated costs are tracked using the ValuMax activity-based costing system and provide an immediate representation of product costs across the portfolio. The same real-time financial data is projected to be integrated into SAP as the fidelity and applicability of the data is better understood.
Once the performance measurement models were installed, they were historicised to provide a performance profile of each unit and station. This baseline enabled an economic comparison of boilers under various conditions. Using improved procedures and training, improvement initiatives, projects, and operational improvements can be financially tracked and validated. Creating this type of baseline enables the development of data for financial and accounting validation.
Training Sasol operators and engineers to think and act strategically are key opportunities for improved results. Dashboards provide operations personnel clear and simple feedback to individual impact on Sasol’s business performance. Integrating this type of strategy is helping to improve Sasol’s business and build the knowledge and skill base of its operators and engineers. Providing operations personnel with a tool that provides feedback as to which boiler produces the least expensive incremental steam enhances performance of each steam station. For example, operators can now make production decisions based on economic information.
Results
As Sasol continues to improve its operation and drive business value for the company, it will acquire new products and process technologies to help achieve these goals. Sasol Infrachem management views development of its employees as one of the company’s most critical tasks. Government regulations and key personnel nearing retirement underscore the importance of skills and knowledge development.
The DPM methodology brings together various functional areas (such as accounting, engineering, management, operations, and maintenance) to discuss the overall business in an holistic way. This type of interaction creates understanding across business areas, enables proper strategic performance measures to be developed across functions and helps create new and valuable business processes aimed at improving the bottom line.
Invensys’ Real-Time Energy Usage Monitoring Solution was a key tool for helping Sasol to achieve positive results on this project. A 6% savings in energy and 4% savings in electricity costs within the first month – a saving of approximately R2 million was achieved and electricity savings progressed and improved throughout the second and third months.
The annualised direct benefit of this project was initially expected to be a 2% reduction in variable costs associated with energy feedstock and electricity. The results have far exceeded these estimates. In collaboration with Invensys, Sasol will incorporate future business information with process data and identify other areas of improvement through advanced multivariate statistical analysis, continuous improvement programmes such as Six Sigma, and other business value-adding activities.
For more information contact Jaco Markwat, Invensys Operations Management, +27 (0)11 607 8100, [email protected], www.iom.invensys.co.za
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