Number 1/34 (March 2018)

no 1/2018

Energy Supply Security Valuation in Industrial Plant

Publication date: 2018-08-31
DOI: 10.12736/issn.2300-3022.2018106
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1. Introduction

One of many important matters in industrial plant management is energy security. Issues related to ensuring the security of energy carriers supplies that will cover the demand of the plant’s machinery and process equipment, relate mainly to two aspects – the procurement method and the level of reliability of supplies required to maintain the plant’s production continuity.

In terms of energy carriers procurement, purchasing strategies are developed, hence the following approaches to this issue can be identified:

a) procurement from external suppliers of selected carriers only, while the remaining carriers are generated in-house based on the plant’s own energy conversion assets

b) a similar principle to point a), but the in-house generated energy is also offered to other recipients (surplus output resale), which allows reducing the unit costs of the generated carriers

c) maximum reliance on the purchases from external suppliers and the generation of those carriers only that are not available on the local market.

The choice of an energy carriers procurement strategy is strongly conditioned not only by the local market’s development, but also by locally available and the plant’s own carriers transmission and distribution infrastructure, including its quality and the plant’s sensitivity to energy carriers supply discontinuity.

Energy supply reliability is the subject of many studies [1, 2, 4]. The issue is considered mainly in the economic aspect and it determines the rationality of decisions with regard to energy carriers supply solutions [3, 5]. The supply reliability results from the capital expenditures on supply networks’ construction and/or upgrades, as well as the costs of personnel for and implementation of the scheduled prevention, which determines the efficient operation of the entire energy infrastructure responsible for the energy supply security. Rational expenditure increase affects the improvement of energy supply reliability. On the other hand, it should be emphasized that underinvested areas of the energy infrastructure pose a risk of energy costs arising from its non-delivery. Reduction of capital expenditures on energy infrastructure increases the risk of potential costs due to the operation of grid infrastructure with decreasing reliability.

2. Energy supply security analysis

Energy supply security resulting from the power system’s reliability level is a concept combining organizational, technical and economic aspects related to ensuring the continuity of energy supplies to the recipient, in accordance with applicable standards and agreements. It translates mainly into the recipient’s potential losses due to the failure to meet standards or an occurrence of sudden energy supply interruptions.

It should be noted when analysing the above that from the recipient loss point of view the time interval of energy supply interruptions is extremely important, which mainly affects the costs due to such interruptions. For this reason, three security areas may be identified, as illustrated in Fig. 1. The power outage intervals shown in the figure, highlighted for their effects on the industrial plant, may be classified as follows:

  • area I: current security, referring to short breaks – time interval from t = 0 to t1 is of the order of several or a dozen minutes,
  • area II: medium-term security – time interval from t = 0 to t2 is of the order of several dozen minutes to several hours,
  • area III: long-term security – time interval from t = 0 to t3  ranges from several hours to even several days.


Fig. 1. Energy supply security areas

The need and method of ensuring security in an area depends mainly on the type of enterprise, its size and type of production processes, which are the factors determining its sensitivity to energy supply interruptions.

The required energy supply security depends on the plant type. This can be understood as the plant’s size (output), technologies and many other factors that can be assigned to two areas affecting the expected supply security level – the area of organizational factors and the area of ​​cost components.

It is most important to take into account the following organizational factors:

  • activities ensuring the energy carriers supply security
  • ensuring operation safety of the machinery and production equipment that may be affected by energy supply interruption
  • effect of production lines’ and processes’ disorganization, which may result from energy supply interruption
  • supply of energy carriers ordered from external suppliers
  • number of delivery locations
  • supply assurance guarantees in energy delivery contracts
  • availability of reserve supply sources
  • crisis management in case of longer energy supply interruptions.

The following cost components should be considered:

  • costs of energy supply from reserve sources
  • costs related to damage to components used for the processes that have not been completed due to energy supply interruptions
  • costs related to damage to machinery, equipment and tools at the moment of interruption of energy supplies to the processes
  • costs related to downtimes of downstream process lines to which a component from immobilized technologies has not been supplied as a result of power outage
  • cost of purchase on the market, often from the competition, of the components not produced due to a machinery and/or equipment damage resulting from energy supply interruption
  • costs of transport of such alternatively purchased components
  • lost benefits due to non-production of products
  • in the case of longer downtimes caused mainly by damage to machinery and process lines, costs of the lost market
  • costs of launching replacement technologies for the duration of repair of damaged machinery and process lines
  • during equipment repair the costs of products manufactured in competitive plants, ordered to deliver as contracted products to customers and thus to avoid contractual penalties and loss of customers.

When undertaking actions to ensure the security of energy supply to an enterprise, it is first necessary to consider what types of costs can be generated in each supply security assurance layer and how these phenomena may affect the costs of other areas. Such an analysis will allow the optimal decision from the point of view of potential costs and of the plant’s operation continuity assurance alike.

3. Security valuation

When perceiving energy security through the prism of needs and conditions related to ongoing production processes, it is necessary to present the key processes from the point of view of the plant’s strategy and associated energy supply conditions. Consequently, the concept of security measure can be introduced and considered in reference to the duration of interruption in the supply of any required energy carriers, in terms of the following criteria:

  • insufficient coverage of the current demand for energy
  • lack of coordination of simultaneous supplies of energy carriers required by processes, both in terms of delivery times and concurrent supplies
  • interruptions in delivery of any or all required energy carriers
  • time a process needs to restore its rated production parameters after a disturbance caused by the interruption or lack of one or more carriers supplies
  • effects of disturbance in a process on other processes.

Energy management security in a plant, even with various organizational measures and process improvements implemented in the organization of energy carriers preparation, is an issue that requires the absolute discipline of all involved services in respect of adherence to adopted energy carriers delivery and receipt schedules, which conditions efficient day-to-day energy management in the plant. There are technical and organizational measures that are foreseen for the occurrence of crisis situations, involving additional specialist services and equipment to mitigate the effects of potential disruptions.

In view of the need to establish such energy carriers supply and receipt management, diagrams may be drawn of process lines’ demand for energy carriers in a selected plant and then referred to their availability in supply networks. Depending on the plant size and the analysis reference scale, it may be a separate part of plant internal networks or, in the case of small units, the entire plant. The diagrams form the basis for analysis of the capacity to cover the demand considering the above-mentioned criteria.

From the point of view of enterprise size, location, company services’ organization and financial capability, three groups of enterprises can be identified, where the coverage of demand for energy carriers can be analysed:

group I – small enterprises with one dominant process line

group II – enterprises with several processes and well-developed organization of company services

group III – large enterprises with extensive structure, divided into separate organizational units with their own services operating within units.

Fig. 2 presents an example of the relationship between a process line’s demand for a necessary energy medium and its availability in an internal supply network. It may be any energy medium consumed in any process implemented in the enterprise.


Pd – power available in network
PS1 – peak demand before own sources build
PS2 – peak demand after own sources build
Pbrutto – current gross demand
Pnetto – current net demand
Pzw1, Pzw2 – powers of own sources

Fig. 2. Uncovered current gross demand for energy carrier

Depending on the group to which the plant shown in Fig. 2 experiencing the problem of periodic deficit of its process line’s power supply belongs, the problem solving, and optimisation options can be sought in the following areas:

  • group I enterprise, where no supplies from nearby sources are available, must build its own capacity to cover the deficit plus a security provision
  • group II enterprise with many process lines may spread the load over a day, which significantly reduces the aggregate demand for the medium below the sum of individual lines’ power demands. This approach to aggregated power demand allows its optimisation. However, this requires the company services’ strict adherence to agreed schedules of individual lines’ demand for energy carriers and, in an emergency, coordination of activities resulting from adopted schedules of conduct in an emergency
  • group III enterprise with the organisation made up of separate units in most cases cannot coordinate the schedules of process lines’ demand for energy carriers in individual units. Then ordering energy supplies according to the economies of scale remains, which is demonstrated by long-term measurements, e.g. for several weeks or months, depending on the type of technologies in place, their pace, and cycles repeatability.

In a situation where, despite the organizational measures taken, it is not possible to determine the power demand for any medium supplied below the power available in the multi-carrier network supplying a group II or III enterprise, then the enterprise must build its own generating capacity to cover the deficits, or new lines for transport of energy from nearby sources [4].

Much greater involvement of the plant’s services is required for coordination of process lines’ operation in terms of the delivery schedule of several energy carriers factors demanded by equipment installed in these lines.

On the path of building own in-house capacity to generate energy carriers unavailable from external suppliers, it is worth following the principle of decentralization. Sources will then be located as close as possible to the group of devices which demands the energy medium. It may take more capital expenditures than in the centralized model, but it allows for flexible management of the medium supply, especially where it is necessary to carry out repair, overhaul or at least inspection of devices used to convert energy carriers.

The use of modern information technology capabilities for monitoring parameters of available energy carriers, in nodes and in individual elements of a multi-carrier power grid, and for energy distribution management, enables the creation of an advanced grid management system that uses:

  • grid configuration optimisation with a view to ensuring security of the energy supplies to where it is currently demanded, including:
  • grid management in a manner that does not lead to overloads that may result in a failure
  • assurance of energy supplies’ required parameters
  • minimizing transmission losses
  • energy conversion in individual grid nodes to increase the flexibility of energy supplies and to allow their pricing
  • immediate response in emergencies and immediate launch of procedures to minimise impact area and severity, which significantly improves the overall availability of these grids, covering the existing demand and the security and reliability of energy supply.

4. Security measures

Taking into account the above considerations, specific measures of energy management security in industrial plant may be identified, and then a procedure for evaluating this security may be adopted, aimed at determining the optimal energy carriers use.

Before the energy management security measure is identified, the losses should be determined that may arise due to:

a) failure to start scheduled production because of current energy supply deficit – losses marked with the symbol S(a)

b) failure to complete production because of lack of correlation of the concurrence and level of supplies required by the processes – losses marked with symbol S(b)

c) costs of damage to processed or produced material because of interruption of supply of any or all required energy carriers – losses marked with symbol S(c)

d) costs of damage to machinery and equipment because of interruption of supply of any or all required energy carriers – losses marked with symbol S(d).

Losses Pspe, due to the above reasons, which are in direct relation to the energy supplied, can be formulated as:

w1.png                                                                                                                             (1)

Therefore, the measure of energy management security in an industrial plant will be the ratio of actual production output in a period, e.g. a month, to production output that could be accomplished if no production cycle was disturbed due to energy supply related reasons.

The concept of energy management security Bze, may be quantified by the flowing formula:

w2.png                                                                                                                   (2)

where: Pr – actual production output in a period, Pn – production output that could be accomplished if no production cycle was disturbed due to energy supply related reasons.

The findings made so far show that:

w3.png                                                                                                                (3)


w4.png                                                                                                                                      (4)

The ratio of the losses due to energy supply disruption to the output that could be accomplished if no production cycle was disturbed due to energy supply related reasons recorded in the above formula was marked as Wspe. Coefficient Wspe is an estimated relative indicator of production losses incurred due to disruptions in energy supplies to the plant. Taking into account the above symbols, formula (4) can be expressed as:

w5.png                                                                                                                              (5)

It should be emphasized that the estimated relative production loss indicator illustrates the importance of energy management security issues on the scale of the production potential of the entire plant.

5. Summary

The considerations present general principles and methods of conduct with regard to energy management security to prevent or reduce losses, marked with symbols S(a) and S(b). Losses – marked with symbols S(c) and S(d) – relate to a sudden energy carriers supply interruption that cannot be covered from reserve sources. In a plant’s stable operation and with proper delivery of energy carriers sufficient to cover the current demand in terms of quantity, timing, and delivery certainty of the carriers and their correlation with deliveries of other carriers required in individual processes, it can be assumed that losses S(a) and S(b) are close to 0. Therefore, it can be assumed for a plant’s stable operation that energy supply related losses may result only from a sudden interruption in the supply of any or most energy carriers that limit proper performance.

Because the supply of energy factors may be interrupted at any time of the plant’s operation and in most cases without notice that could trigger actions to minimize losses that may arise due to this reason, there is a need for appropriate analyses. Such analyses should be based on guidelines - which energy security area the plant belongs to, how sensitive its technologies are to possible energy supply interruptions, and what costs of S(c) i S(d) losses should be expected.

In extreme cases it may turn out that:

  • plant technologies are not sensitive to sudden interruptions in energy supply (they mainly belong to the third energy security area), therefore the S(c) and S(d) costs are practically irrelevant, which means that searching for a solution aimed at minimum costs of losses due to energy supply disruption in the plant should focus mainly on the S(a) and S(b) costs and on look for an alternative solution with acceptable costs on this basis
  • plant technologies are very sensitive to sudden interruptions in energy supply (they belong mainly to the first energy security area), in which case the S(c) and S(d) cost may be critical for the plant’s continuous smooth operation. Then the search for a solution aimed at the optimum electricity management security should focus mainly on costs S(c) and S(d) and look for a solution adequate to them.

Of course, in between the extreme cases there are instances of plants with some technologies in the first energy security area and some in the second and third areas.

Therefore, to obtain the optimum electricity management security solution an industrial plant must:

  • carefully analyse its technologies in terms of:
  • coverage of current demand for energy carriers
  • assurance of demanded energy carriers’ concurrent supplies
  • sensitivity to possible supply interruptions
  • estimate possible costs: S(a), S(b), S(c), S(d).

The solutions should be sought according to information and results obtained from this analysis.

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