aspentech 7/2/05 9:27 PM Page 1 REFINING Reducing CO2 emissions Several long-term challenges and opportunities face refiners after the introduction of the European Union ETS. These include emissions monitoring, operational improvements, emissions forecasting and economic emission reduction Ian Moore AspenTech UK Ltd A s if refineries were not under enough pressure to optimise operating performance, 2005 saw additional worries introduced for all refiners in the European Union. New legislation came into effect that will directly impact bottom-line profitability and will bring increased focus (and costs) to managing CO2 emissions. The European Union Greenhouse Gas Emissions Trading Scheme (EU ETS) became reality on 1 January 2005. This scheme covers over 12 000 installations, accounting for approximately half of Europe’s CO2 emissions. Under the EU ETS, member states are responsible for issuing allowances in accordance with the final allocation, as indicated in their National Allocation Plans (NAPS). Companies covered by the scheme must track their emissions and produce verified annual emissions reports. They must also ensure they have a sufficient number of allowances to be surrendered year-by-year to avoid financial sanctions, and additional local and national pressures may yet drive true site reductions as opposed to purchasing allowances from the market. Many refiners have battled just to obtain the current state of emissions measurement. Baseline data reflecting previous emissions performance has been collected and verified independently. Procedures for monitoring and verifying future emissions are being put in place and approved, although there is still some uncertainty as to the final allocations for the 2005–2007 time frame. Without this basis, the likely cost of purchasing allowances is unclear. While the main focus for refiners has been to establish baseline emissions and to set up systems for CO2 emissions tracking, the purpose here is to discuss some of the challenges that lie ahead for refiners once these systems are up and running. These include: — Emissions monitoring — Emissions forecasting — Operational changes — Emissions reduction. The cost of the EU ETS to refiners will not be simply about purchasing allowances, but will include costs for manpower, improved instrumentation, more frequent laboratory analyses (and possibly laboratory accreditation), thirdparty verification and the overhead costs of trading allowances. An estimate of the cost of purchasing allowances alone can be made for UK refiners, based on public domain information as shown in Table 1. It is assumed that the basis of the allowances granted under the UK NAP represents 95% of the current CO2 emissions. In the unlikely event that the refiners do not purchase CO2 allowances to meet actual emissions production, the cost of exceeding the allowance for 2005–2007 is €40/tonne. It is almost certain that the refiner would avoid this punitive situation by purchasing CO2 allowances at the market price, which is taken to be €10/tonne in this example. On this basis, the total cost for a typical large refinery would be around €1–1.5 million per year. When averaged over the total refinery energy cost, this represents an increase in energy cost in the region of 1%. However, the rise in marginal energy cost is much higher, around 20% (depending on CO2 and fuel prices). This increase in marginal costs represents another significant incentive for refiners in the EU to focus their attention on overall energy consumption efficiency and reduction. Emissions monitoring The EU ETS monitoring and reporting guidelines require high levels of accuracy for the calculation of emissions. A particular challenge for refiners is the wide variability in composition of one of the main fuels: refinery fuel gas. Not only does this impact upon measurements of calorific value and carbon content, but it can also introduce large errors into flow meter readings if not corrected properly. UK refinery preliminary CO2 allocations Refinery BP Oil BP Oil COP Esso Total Innogy Cogen LOR + Cogen Petroplus Shell ChevronTexaco Total Location Grangemouth Coryton Killingholme Fawley LOR, Killingholme Killingholme Killingholme Teeside Stanlow Pembroke Milford Haven Annual allocation tonnes CO2/yr 1 616 960 2 255 071 2 639 008 3 505 874 2 113 916 304 356 2 418 272 300 226 2 926 576 2 033 647 1 175 557 5% above alloc tonnes CO2/yr 85 103 118 688 138 895 184 520 — — 127 277 15 801 154 030 107 034 61 871 Table 1 1 P T Q Q2 2005 w w w. e p t q . c o m 5% at 40/tonne million/yr 3.40 4.75 5.56 7.38 — — 5.09 0.63 6.16 4.28 2.47 5% at 10 tonne million/yr 0.85 1.19 1.39 1.85 — — 1.27 0.16 1.54 1.07 0.62 aspentech 7/2/05 9:27 PM Page 2 REFINING 33.5 33 32.5 32 31.5 31 30.5 30 29.5 29 28.5 28 15 20 25 30 35 40 Feed API gravity Figure 1 FCC regenerator CO2 emissions vs feed gravity Historically, many refiners do not routinely correct off-gas purge and fuel gas flows for changes in specific gravity (molecular weight), which also makes it difficult to establish reliable hydrogen and fuel gas balances. With the EU ETS in place, many refiners will use on-line gas density analysers to accurately calculate fuel gas mass flows. However, correlations between density and calorific value break down when there is more than 10% hydrogen and/or olefins in the fuel gas, and this is normally the case. Therefore, regular laboratory analyses of fuel gas composition are required to establish the emissions factor for fuel gas, to allow CO2 emissions to be calculated accurately. More accurate flow meter correction around the fuel gas system, and more regular gas sampling, opens up the opportunity for refiners to more closely monitor their hydrogen and fuel gas networks. AspenTech’s experience (PTQ Spring 2003, pp83–90) is that closer monitoring of these systems can identify inefficiencies and losses with high economic returns. These have included large letdowns of hydrogen gas to fuel gas, bypasses around LPGrecovery units and even open valves to flare. In a recent study for a European refinery, AspenTech’s proprietary hydrogen planner software was used to reconcile data around the refinery’s hydrogen system. The hydrogen content of the fuel gas routinely measured around 50 mol%, yet the simulated hydrogen content based on metered purge flows to fuel gas was around 30 mol%. Further investigation identified that up to 12 000Nm_/h of hydrogen-rich gas was being purged to the fuel gas without metering. AspenTech is now working with the refinery to improve instrumentation, flow meter calibration and update control strategies to reduce this loss of hydrogen. These improvements are complementary to those being made for CO2 monitoring. Once emissions-monitoring systems have been set up to comply with the EU ETS, it is expected that more attention will be given to how this information is available to refinery personnel, head office staff and the CO2 traders. The components of the emissions calculations are likely to include oil accounting reports, process data within the data historian, laboratory information and utility reports. The need to pull this information together may lead to the introduction of role-based visualisation systems, allowing different personnel to access on-line the data they require in the context they need to fulfil their functions quickly and consistently. Operational changes The introduction of the EU ETS and associated marginal CO2 emissions costs has the potential to change economic decisions within the refinery operation. Outside of the utility system, the major refinery process unit operations that impact refinery CO2 emissions are the FCCU and the hydrogen plant. Hydrogen demand for a site is particularly high if the refinery has a hydrocracker unit as part of its configuration. Conventional wisdom is that yield economics in the FCC and hydrocracker process units always outweigh utility considerations, and this may still be the case at lower CO2 prices. “CO2 prices approaching €40/tonne can alter the optimum FCC feed rate and feed selection, as well as process conditions affecting conversion such as riser outlet temperature” 2 P T Q Q2 2005 However, analysis using the proprietary Aspen RefSYS refinery simulation software shows that CO2 prices approaching €40/tonne can alter the optimum FCC feed rate and feed selection, as well as process conditions affecting conversion such as riser outlet temperature. Figure 1 shows the impact of varying API gravity on CO2 production from the regenerator, although it is important to also consider the overall utility balance for the unit. While CO2 emissions calculation alone is unlikely to give sufficient justification for building such simulation models, it provides additional justification for having these models available to refinery staff. The site economic (LP) model can be updated to represent FCC unit CO2 emissions over a range of feeds and operating conditions. Emissions from hydrogen plant production (process and fuel) can be estimated based on the overall site hydrogen balance. Therefore, the impact of marginal CO2 costs on optimum operation may be evaluated easily within the LP model, if CO2 emissions are represented correctly. This will become more important in the longer term as CO2 costs inevitably increase. While ideally suited to the evaluation of marginal economics, the site LP is not the ideal tool to accurately estimate the gap between emissions allocation and actual production. Due to the sensitivity of this calculation, it is not normally practical to achieve the fidelity of hydrogen, fuel and steam balances required within the site LP model. Higher CO2 emissions costs will also drive operational changes to reduce energy consumption and to improve overall energy efficiency across the refinery. Areas likely to attract particular attention are process furnace efficiencies, use of higher carbon content fuels, and losses of hydrocarbons to flare. A typical refinery fuel gas header consists of multiple off-gas streams, imported make-up gas (for volume balancing), one or more enrichment gases, fuel gas consumption in boiler and furnaces, and pressure relief to the flare. Enrichment gases such as propane are periodically added to ensure fuel gas quality is high enough for all furnaces, although at times quality cannot be controlled due to its effect on the volume balance. Unstable fuel gas header pressure and quality is a common problem throughout the industry, leading to flaring, excessive enrichment costs and unstable furnace operations. Flare losses and the use of higher carbon content fuels relates directly to increased CO2 emissions. AspenTech has developed an on-line aspentech 7/2/05 9:27 PM Page 3 REFINING fuel gas optimisation (FGO) technology, which includes inferential fuel gas quality and volume imbalance prediction, non-linear dynamic optimisation, and a furnace-monitoring and advisory system. Implementation of FGO applications has typically given a 50% reduction in flaring and a 20% drop in enrichments costs. Additional benefits are improved furnace efficiencies, more consistent product qualities (for example, where the process furnace is a feed heater or reboiler) and more reliable process operation. The FGO will always aim to minimise operating costs, and in some cases reductions in enrichment gas will lead to higher carbon content fuel oil being combusted. However, this is just a function of refinery economics: refiners will not switch to lower carbon content fuels unless it is economical to do so. Losses of fuel gas to flare are often not metered within a refinery. Although an estimate of hydrocarbon losses (and hence CO2 emissions) can be made from an overall carbon balance for the refinery, this calculation is highly inaccurate. In many cases, the refiners can apply a “de minimis” approach to flare emissions (less than 1% of total) subject to approval of the competent authority. This allows flare CO2 emissions to be calculated by use of non-intrusive ultrasonic flow meters. It may well be the case that the requirement under the EU ETS to quantify hydrocarbon losses to flaring will allow refiners to more accurately quantify the benefits from reducing such losses, and provide the economic justification to install improved fuel gascontrol systems and flare gas-recovery systems. CO2 emissions forecasting It can be expected that the price of CO2 allowances will be most volatile after the end of each yearly period (January to March) when CO2 emissions accounts will be finalised and audited. Refiners are unlikely to wait for this period before making any purchasing decisions, and will look to make these decisions over the year in line with the predicted gap between actual emissions and owned allowances. One of the challenges refiners are therefore facing is to develop methodologies and tools for prediction of CO2 emissions ahead of time (demand forecasting), to reduce the level of uncertainty and support more economic trading decisions. The most obvious tools for doing this work are the refinery planning and scheduling tools. It is unlikely that refiners will wish to make short-term predictions based on scheduling tools. It is more likely that the site LP planning Production planning and scheduling aspenONE Energy Management for petroleum Hydrogen Manager Utilities Planner H2 network & fuel gas model Utilities plant model Simplified H2 plant model Simplified FCC CO 2 model Data historian DCS Figure 2 Architecture for demand forecasting solution model will be considered for CO2 emissions forecasting. However, as the cost of CO2 emissions only applies at the margin of yearly production, small errors in the prediction of emissions have a big impact on the requirement to buy or sell emissions. For example, if the allowance allocation is 95% of expected emissions, then a 1% error in predicted emissions will change the required credits purchase by 20%. As already stated, while the LP model is the ideal tool for evaluating marginal economics, it is not normally practical to achieve the level of fidelity required for hydrogen, fuel and steam balances required within the site LP model. There is an obvious balance to be made here between the accuracy of the models used for prediction and the uncertainty in the assumptions made about long-term plans in the first place. A high degree of rigour in the models adds little value if accuracy improvements are swamped by uncertainties in the base data. However, it is our experience from utility demand forecasting that there are substantial benefits from using rigorous utility models to establish future demands, 3 P T Q Q2 2005 based on production plans provided by the LP tool. Therefore, the components of accurate CO2 emissions forecasting should include: — Production plans for the major process units (from the site LP model) — FCC emissions (from the site LP model, calibrated from reactor models — Hydrogen network and fuel gas balance simulation — Hydrogen plant model — Utility system simulation. These components are combined in the Utilities Planner module of the aspenONE Energy Management for Petroleum solution. The software architecture for this solution is shown in Figure 2. Almost all refiners import some utilities, whether these are power, steam and/or hydrogen from a third-party supplier. Under the EU ETS, responsibility for the CO2 emissions associated with the production of these utilities lies with the provider, not with the purchaser. However, it is anticipated that the CO2 costs will ultimately be passed on to the purchaser as part of the utility price. Hence, the cost of CO2 associated with, say, hydrogen aspentech 7/2/05 9:27 PM Page 4 REFINING production will ultimately depend on whether or not the refiner generates hydrogen itself or imports it as a utility. One interesting point, though, is that the supplier is likely to average this emissions cost over the whole import load, whereas the refinery is paying for CO2 purely at the margin of the gap between actual emissions and owned allowances. This could potentially have an impact on utility operations and purchase decisions if CO2 prices are high. For example, the economics of running a condensing turbine depends upon the import power price, the internal fuel price and the site CO2 cost. CO2 reduction With already high-energy costs and the introduction of the EU ETS, refiners are under increasing pressure to develop strategies to reduce CO2 emissions and energy costs. Normally, this challenge is passed down from the refinery manager to the site energy co-ordinator, as the most cost-effective way to reduce emissions is seen as energy efficiency improvements. It is tempting to consider CO2 emissions reduction as only an energy performance issue, which is understandable but may lead to some opportunities through process operational changes being missed. Developing the optimum strategy to meet CO2 emissions targets requires the evaluation of many different options, which can include: 1. The scope for refinery-wide energy efficiency: improved energy efficiency will lead to reduced fuel usage and hence CO2 reduction. Any study needs to consider both operational improvements (for example, improved furnace operation and capital projects, addition of heat exchanger surface and conversion of steam turbine drives to electric motors) 2. Reducing CO2 emissions through improvements in production processes: for many refiners, the FCCU catalytic cracking operation can contribute to over 50% of refinery CO2 emissions. Catalytic cracking is therefore a CO2-intensive operation, while other processes such as delayed coking capture the carbon and prevent its release as CO2. Delayed coking is therefore a CO2 non-intensive process and may perhaps be regarded as the only proven process for carbon sequestration. Opportunities to redirect streams from CO2-intensive to nonintensive processes are therefore important, particularly if CO2 prices increase in the longer term 3. Reducing carbon concentration in fuel gas: most refinery fuel gas streams contain relatively large amounts of C3+ material. By improving the level of LPG “The cost of CO2 associated with, say, hydrogen production will ultimately depend on whether or not the refiner generates hydrogen itself or imports it as a utility” recovery, the refinery fuel gas can be made lighter, which in turn results in fewer CO2 emissions. Fuel lost by the removal of LPG components is normally made up by natural gas. As already discussed, use of enrichment gases can also be minimised to lower fuel carbon content 4. Cogeneration: for those refineries that currently import power, there is an overall benefit in moving to highefficiency, gas turbine-based cogeneration systems. While installing cogeneration means increased CO2 emissions at the refinery, the overall benefits in CO2 emissions reduction are large when taking into account the much lower thermal efficiency of a conventional power plant that would otherwise supply the refinery’s power needs 5. Reduced losses: issues such as reduced flaring through improved control and flare gas recovery need to be considered. 6. Processing of lighter crudes: while the processing of lighter crudes may have an adverse effect on refinery margins, the use of lighter crudes can provide an option to refiners. This is only likely to be an option in extreme circumstances purely based on marginal CO2 prices 7. Removal and recovery of CO2 from furnace flue gases: various technologies are available for CO2 removal such as absorption and membranes. Several uses can be made of the CO2 recovered: typically, as feedstock (for example, in urea production), in food and drink manufacture, and for enhanced oil recovery in oil reservoirs. It is clear that some of these options involve very large capital investment decisions. If global emissions are considered in preference to local emissions, CO2 costs will increase the attractiveness of cogeneration projects, but no refiner will go ahead with a cogeneration project solely for CO2 savings. Similarly, one cannot see a refiner installing a non-intensive CO2 process unit or CO2-removal technology without strong process reasons or an almost unimaginable increase in CO2 price. 4 P T Q Q2 2005 Options 2 and 6 can be considered from an operational perspective using the site LP model, as long as CO2 emissions production is correctly represented in the model. Option 7 is unlikely to be considered seriously by most refiners, unless a cap on CO2 emissions is threatened. Therefore, the main focus of most CO2-reduction strategies will include options 1, 2 and 5, with consideration given to planned cogeneration schemes and process unit operational changes. Recently, AspenTech and Air Liquide Italia completed a Phase 1 CO2 emissions-reduction study for Saras SpA. Italy, which illustrates some of the points previously discussed. The scope of the study included both energy reduction and hydrogen management. The duration of this study was around six months and focused on the Sarroch refinery located in Sardinia, Italy. While the refinery has its own power plant, it also imports steam and hydrogen from the adjacent Sarlux plant. Sarlux is an integrated gasification combined cycle (IGCC) plant taking residual oil from the refinery and producing 550MW power for the Sardinian grid. Sardinia does not currently have a natural gas supply, although this may be available in the future if a pipeline is installed from Algeria to mainland Italy via Sardinia. The main objectives of this study were to: — Establish a baseline for current refinery CO2 production — Identify the scope for reducing these emissions through technically feasible projects — Assess the impact of hydrogenrecovery projects on these emissions, both for current operation and for autooil projects — Develop a preliminary roadmap for refinery investment to reduce CO2 emissions. After data collection, the first step in the analysis was to build heat balances for the individual process units, an overall steam balance, and a model of the hydrogen network and fuel gas system. These balances then allowed a baseline for current CO2 emissions to be established. It should be highlighted that this baseline was not the same as that reported by Saras to the Italian authorities, and for deliberate reasons. The “informal” baseline used in this study included CO2 allocations for imported power, steam and hydrogen. This is because Saras wanted to look at CO2 emissions from a global perspective and not purely at local emissions within the refinery. Partly this was because of Saras’ partial ownership of Sarlux (and hence its related emissions). More importantly, however, Saras wants to aspentech 7/2/05 9:27 PM Page 5 — Reducing the average carbon content of fuel (lower CO2 production for fixed heat duty). For example, reducing LPG content of fuel gas and make-up with natural gas. The primary emphasis in this phase was on potential capital investment projects, although opportunities for fouling reduction, pumparound optimisation and other operational improvements were considered. For each of the individual refinery process units, Pinch analysis was applied to establish targets for energy savings through improved heat recovery. The overall level of potential energy savings within the process units identified was 10%. A typical target energy saving for an average-performing refinery would be around 17%. Hence, the lower savings potential for the Saras refinery indicates that the process units as a whole already have a good degree of energy efficiency. This energy saving represents a saving of 7.5% in emissions, if emissions associated with imported steam and power are included in the baseline. Further energy savings potential through interaction between the processes and the utility system were identified using the proprietary Total Site Analysis method. The two major opportunities were a hot water loop to recover low-grade heat for heating, and heating feedwater to the main boiler deaerators (DFW heating). More detailed analysis and cost estimation is still required to confirm the feasibility of these projects. The weighted average furnace efficiency for the refinery was install projects that give global benefits, rather than just exploiting local boundaries of legislation. For example, consider a refiner that imports hydrogen rather than owning its own hydrogen plant. Any internal hydrogen-recovery project from fuel gas will inevitably increase local CO2 emissions. This is because the energy content of hydrogen in the fuel gas will have to be replaced by a carbon-containing fuel, probably natural gas or fuel oil. Globally, the saving from CO2 from reduced hydrogen production should more than offset the local increase, and so improving hydrogen efficiency should have a positive environmental benefit. Similar arguments apply to cogeneration projects, and even simple operational changes such as switching a process drive from a steam turbine (internal fuel) to an electric motor (imported power). With specific regards to energy performance, the main focus of the study was: — Reducing absorbed process furnace duties (saving fuel fired and hence CO2 produced). For example, increasing a furnace inlet temperature by additional preheat — Reducing boiler steam demand (by lowering process consumption or raising process steam generation). For example, increased steam generation from FCCU pumparound streams — Increasing furnace and boiler efficiencies (saving fuel fired and hence CO2 produced). For example, control projects to reduce excess air, or capital investment in air preheat lower than that expected for a top energy-performing refinery. Potential savings through no- or low-cost furnace efficiency improvement projects were estimated, as well as savings from projects requiring higher capital investment for equipment items such as air preheaters. Other options for reducing refinery CO2 emissions, including FCC yield changes and replacing fuel oil firing by natural gas (if available in the future) were also briefly considered. The improvement roadmap for the energy portion of the Saras CO2-reduction study is shown in Figure 3. Actual CO2 savings are not shown for confidentiality reasons. The potential switching of fuel oil firing to natural gas is shown for comparative purposes, should a natural gas supply become available in the future. In Figure 3, projects with lower capital investment and those that can be implemented quickly are given a higher priority. The financial benefits of each project depend upon both energy and CO2 prices. The projects identified as part of the hydrogen study are relatively carbon-neutral if emissions from Sarlux are considered. Therefore, they are not detailed in this discussion. AspenTech is now working with Saras to define a plan for more detailed project identification and implementation in line with the expected turnaround plans for each process unit. Challenges and opportunities Understandably, in the area of CO2 emissions, refiners have so far FCC yield changes Higher cost furnace % Low cost furnace Higher cost process energy changes Low-cost process DFW heating Hot water loop Natural gas supply Now T1 Refinery CO2 reduction (ktonnes/yr) Figure 3 Preliminary roadmap for CO2 reduction T2 aspentech 7/2/05 9:27 PM Page 6 Site-wide energy and CO2 reduction audit No No Fuel gas Utilities optimisation management benefits clear? benefits clear? Yes Site-wide energy-reduction study Hydrogen Yes optimisation benefits clear? No Yes Utilities benefits study Fuel gas study Process improvement projects Stop Stop Attractive Attractive Attractive Aspen utilities implementation Hydrogen study Gas system decision support Fuel gas optimiser Hydrogen compsite LP CO2 management Figure 4 Suggested approach to refinery CO2 reduction concentrated on achieving compliance with the EU ETS and on putting systems in place to be able to calculate CO2 emissions to the satisfaction of their authorities. The speed at which each refiner has proceeded with this work has to some extent been determined by the speed of movement at national levels. Some refiners have verified systems already in place, whereas others are still working with the authorities for verification and approval. However, as the challenge of having these systems up and running has largely been overcome, refiners are now starting to focus on the challenges ahead. As described in this article, these will include providing a greater visibility to continuous emissions monitoring, evaluating the impact of CO2 cost on plant and utility operations, forecasting of emissions to support trading decisions, and ultimately a drive to reduce emissions. Although in many ways these represent challenges refiners can do without, there are also opportunities to be captured. Hydrogen-, fuel gas- and LPG-recovery systems often do not get much attention within a refinery and, as a consequence, losses to fuel gas and flare are significant. Closer monitoring of these systems through improved instrumentation, flowmeter correction, process control and operator support tools will give high levels of return on investment. Looking at the business processes around CO2 emissions as whole, there are a variety of tools a refinery can use for monitoring, identifying beneficial operating changes, forecasting and CO2 Tools for refinery CO2 management Tool Monitoring Yield accounting LP planning Utilities model H2/Fuel gas model Control/APC FCC model Process models Pinch tools Role-based visualisation Event management Table 2 ✔ — ✔ ✔ — — — — ✔ — Operational changes — ✔ ✔ ✔ ✔ ✔ — — — ✔ Forecasting projects — ✔ ✔ ✔ — ✔ — — — — Improvement — — ✔ — — — ✔ ✔ — — reduction. These are shown in Table 2. Increasing fuel prices, combined with the EU ETS, will help to drive CO2 reduction projects. The question facing refiners is “where to start?” An audit process has been developed to quickly identify areas within the hydrogen, fuel gas and utility systems that offer the most potential for economic savings (Figure 4). This approach considers a wide range of opportunities for CO2 reduction, from on-line optimisation of the hydrogen, fuel gas and utility systems, through to capital investment studies in preheat trains and furnace efficiency improvement projects. In this way, the refiner can identify the optimum long-term strategy for CO2 reduction. Aspen RefSYS simulator software, Total Site Analysis, Fuel Gas Optimisation (FGO), and the Utilities Planner module of the aspenONE Energy Management for Petroleum solution are registered trademarked products of AspenTech. Ian Moore is a senior advisor in the AspenTech UK Ltd, European services organisation. He is based in the UK and is responsible for managing process modelling, energy improvement and emissions reduction projects. Moore graduated in chemical engineering from Exeter University and holds a M Eng degree from McMaster University in Canada. Email: [email protected]
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