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Management Side
Week of 28 December 2015: Energy and Culture in your Mill

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As we wrap up power and energy month here at Paperitalo Publications, remember this: unless energy prices change rapidly and drastically (either up or down), the actual practices of energy consumption in your mill are likely driven by your mill's culture more than any other parameter. Of course, this is true of nearly everything that happens in your mill, but it bears noting in particular as we look at energy consumption.

If your mill has the luxury of utilizing several different choices of fiber for your products, as certain virgin and recycled fiber mills do, the calculus of the most economical fiber is likely monitored daily. The same may be true of chemical additives, depending on grade, drainage conditions and other scenarios that arise regularly.

However, if you have the option of blending or switching fuel sources (or in the case of partially purchased, partially generated electricity, power sources), it is highly likely that you do not pay much attention to them. People are normally not of a mindset to adjust energy sources regularly based on the cost of fuel or electricity.

I have seen mills with bark boilers run them no matter what was happening to power prices. I have seen the same thing happen with coal and gas, even when standby boilers consuming alternative fuels were available to be switched on at nearly a moment's notice.

Yet, if fuel source prices move by 5% and fuel is 20% of your input costs, such a move is worth 1% of your total input costs. I have seen people nearly go berserk if their raw material costs move by 1%. Fuel just seems to be a minor ancillary cost to some people, when it seldom is truly so.

Moving fuel costs should have someone in your company jumping up and down, with excitement felt both internally and externally, to maximize the benefits to your company, no matter which way costs go.

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At one time, many mills had an "Energy Czar." In the simple days of the '70s and '80s, your energy czar was trying to reduce the use of purchased energy sources. The czar's activity was centered on buying cheap fuel and insulating everything that stood still. The situation does not have to be handled so simplistically now.

Today, we have real time data historians telling us of every input and output of our mills and recording them for posterity. It is not much of a leap to see these numbers in terms of costs; in fact, most of these systems already convert these engineering numbers into dollars. The reality is that we do not always pay attention to the data these systems are capable of providing.

I'll illustrate with a hypothetical case. I don't know anyone who calculates all the input costs in operating a press section, down to the last, tiniest critical component. But what if we did? What if we calculated the price of electrical energy, the price of heating water, the costs of the water, and the value of lubricating oil in a press section in real time? Then, likewise (and this is actually more likely) we do the same for the steam energy costs, make-up air heating and fan energy costs and the bowser oil use costs for the dryer section. Now what if within the limits of the process equipment, we changed the percentage solids coming out of the press section based on this data? No one does this because their internal cultural references would tell them this is crazy behavior.

Yet, with the data available to us today, not only is this possible, some company is likely going to do it sooner or later.

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Other companies, with fleets of mills and systems able to deliver products anywhere in the regions they serve, may start to do such an exercise on a systems basis, too. In this way, they will look at energy input costs in all the mills in their system, first at a macro level and then drilled down to the individual unit ops. Operating and downtime decisions may then be made using this data.

We now have more ability to analyze energy costs than ever before. Our ability to use all this data at our fingertips to optimize the process is limited only by the cultural attitude pervasive in the given mill site or company. Will you be the first to break your culture and utilize this data at your fingertips to optimize your business?

It is the holiday season, so we will eschew the quiz this week.

For safety this week, changing energy sources, as advocated above, may dictate different safety practices. Make sure your safety practices keep up with technology employed.

Be safe and we will talk next week.

You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions."


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