Energy management is not just energy consumption control. This is a difficult and complex task, including the management of projects, processes and goals and meeting the requirements of state energy and environmental protection policies. Elena Borodaenko, SUEK’s Deputy Director for Production Operations, explains how the fight for energy efficiency changes the attitude to standard concepts.
– In Issue 10 of our magazine, we wrote about an important event, the ceremony of awarding certificates of compliance SUEK’s energy management system with the ISO 50001 international standard. Why did you decide to go through the certification procedure?
– The reason was simple, and it emerged much earlier than our decision on certification. All large companies carefully monitor their expenses. Our company is no exception, especially if you consider the scale of our operations. Today, SUEK is a top-five global exporter of thermal coal and is the No.1 Russian producer of electricity and heat from solid fossil fuels. This is a giant whose assets include around 30 underground and open-pit mines, 9 washing plants processing coal in order to improve its quality, 3 ports that transship coal for export shipments and delivery to end consumers, 10 repair and mechanical plants and 27 heat and power generating facilities.
SUEK's operations are characterised by a great variety of processes and the large amount of equipment used; over 60,000 pieces of equipment assist in mining, processing, transportation, delivery, etc. They consume various types of fuel (diesel, electricity and coal) and are, in fact, the main consumers of resources. In 2018, our costs totalled almost 16 billion roubles [about $256 million], so one of the main reasons for improving energy efficiency was the growing cost of consumed energy resources.
Of course, all expenses affect the cost of production. Therefore, in order to minimise it, we need to reduce the energy intensity of production processes, that is, the energy consumption per unit of product. Moreover, the state also requires us to do so. According to the Russian Government Decree No. 321 dated 15 April 2014 'On approval of the state programme "Power industry development" of the Russian Federation', by 2020 SUEK needs to achieve a specific indicator of 8.0 kg equivalent fuel per tonne of coal mined. To tackle these tasks and ensure organisational and technological leadership in the industry, we began to introduce an energy efficiency management system in line with the best international practices. Energy management can substantially boost the efficiency of capacity utilisation, save fuel resources, optimise costs and reduce air emissions and water consumption per unit of products, that is, improve the environmental impact control of our business across the whole operating cycle.
We started thinking about energy efficiency around five years ago, because the costs of such amount of energy resources need to not only be controlled but also to be optimised. Looking ahead, I can say that all our efforts are already delivering tangible results: in 2018, the energy intensity of our production decreased by 12% compared to 2014, which helped us reduce energy consumption by 127,000 equivalent fuel tonnes. Therefore, certification became a kind of provisional summary of developments that were there for quite some time. For us, this was a certain milestone, not the first, like for many, but a very important one. All our efforts began to take shape as a complex, well-functioning system, and we realised that we wanted validation of our activities. We decided on certification and chose one of the oldest and most respected world certification bodies, TÜV AUSTRIA. We deservedly confirmed the compliance of our work with the international standards and, frankly, were not doubtful about obtaining this certificate. We just did not know how difficult or how easy it would be.
For us, it was quite exciting to work on the energy management, as people started talking about energy efficiency, in terms of its current meaning, just recently, and there are no proven ways to set up this process. Many methodological aspects are still unknown; we have to develop various organisational and technical activities from scratch. Over the five years of work, we have actually created and tested a technique for building our business processes in terms of energy efficiency, which is suitable for any large company. This certificate for us is not only a confirmation of the validity of our work, but also the opportunity to conduct annual audits, stay leader and t exercise self-control.
– What was the most unusual result achieved during the introduction of the energy management system?
– At first, we did not understand that this task would involve new challenging projects. Initially, it was necessary to ensure cost control, to optimise the process in terms of money 'consumption'. At the beginning of such processes, first you need to find a 'quick result zone', see where you can optimise the processes rapidly and without additional costs, reduce energy consumption, which, of course, will lower costs.
In order to get off the ground, we developed a big list of activities for each production unit that were to reap quick benefits. We generated a pool of ideas: what needed to be done to bring energy efficiency to a fundamentally new level. Our task was to get quick results and to explain to the management that the company would need to move on and initiate new activities which would require some investment.
'Quick result zones' require very simple actions, a kind of 'turn off the light, when you leave the room' or, in other words, the ability to control resource consumption. Capacity costs constitute a large part of electricity costs, which is why the control of capacity consumption during peak load hours enables savings. The task is to distribute capacity evenly. For this purpose, we developed a dedicated automated process control system (APCS) for power engineers to monitor the situation on a daily basis. The analysis of the obtained data broke the mould and helped understand how to optimise the process and draw up a forecast matrix for the future.
The simplest activity was to create a shift schedule to start work at different times and optimally distribute capacity. Here is an exciting example, pumping units (groundwater is one of the side effects during mining). Water can rise in different ways, and we can either run the pumps all the time or use a control system that makes it possible to stop these pumps from time to time and start them only when a critical situation occurs and water needs to be pumped out.
We reviewed the water removal cycle and purchased a system for automated pumping unit control. As a result, we reduced power consumption by 11%. This system was tested at one of the open-pit mines, after which it was replicated at other facilities. Through this example it became clear that capacity consumption could and should be controlled, despite the 24-hour production cycle. In general, to control capacity consumption indicators, SUEK set up energy dispatching offices at production plants for real-time monitoring of production processes and eliminating the causes of departing from the approved work schedule. The system controls the entire set of equipment, taking into account every link in the process chain. This allows the early identification and elimination of emergencies, thus improving the quality and stability of work.
Another example is heavy-duty dump trucks which are among the main sources of diesel consumption and a crucial cost item for SUEK's open-pit mines. Therefore, it was necessary to develop a package of measures in order to reduce costs and understand what impacts this consumption most. As it turned out, the condition of tyres was a very important factor. If the tyre pressure is wrong, the consumption of diesel becomes excessive. Therefore, the company established a department of tyre engineers who took control of the necessary procedures such as monitoring tyre pressure and monitoring road conditions, as the poor condition of roads also increases fuel consumption. The department developed and introduced instructions for checking pressure monitoring sensors, and they became components of the new business process. Now, all indicators are regularly checked and monitored, followed by the development of necessary measures.
By the way, idle running of engines also entails excessive fuel consumption. In this case, it was necessary to reduce inefficient operations, when equipment was running with no use. On the other hand, if the engine is turned off, then it will not start again given our cold winter. After analysing the situation, we came to the conclusion that the use of a fuel preheating system was feasible.
– Your description of 'quick effect zones' is very exciting. At the beginning of the interview you mentioned that this initiated a series of further production optimisation measures.
– First of all, I want to emphasise that optimisation along the entire chain would have been impossible without information support. To date, we possess complete data on each piece of equipment, including resource consumption, operating conditions, target indicators and actual performance. We have information about all major consumers from every point of view with breakdowns by work processes, types of energy resources and regions.
With all information at hand, you can immediately see any problematic areas and you begin to work according to the Pareto principle, where 80% of the effects come from 20% of the causes. Our efforts rely on our powerful information and analytical platform, which is regularly improved and refined. This in turn initiates the knowledge management process, an integral management part of any large organisation. It was very important to inform all employees about the changes and the effects achieved, to motivate them and to cultivate lean thinking in order to continue our onward movement. We needed to move from motivation to optimisation; therefore, the next step was the idea generation process. When changes begin, people become excited and develop innovative thinking.
For example, SUEK's excavator fleet is the largest consumer of energy resources (14% of the natural consumption volume) and one of the most important control objects for increasing energy efficiency. In this regard, in order to reduce electricity consumption and boost productivity, we decided to upgrade our excavators. And then our experts suggested using switched reluctance electric motors, which were subsequently installed on BELAZ heavy-duty dump trucks. The use of switched reluctance electric motors optimises energy consumption as compared to conventional motors. You can get a substantial economic benefit.
As part of the extensive modernisation of our excavator fleet, we installed automated control systems for the switched reluctance electric motors, replaced all high-voltage units and all cables and wires and upgraded lights. By the way, switched reluctance electric motors used for the upgrade were produced within our company, by Borodinsky repair and mechanical plant (RMP). We not only use energy-efficient technologies but also produce them!
Initially, repair and mechanical plants were only service companies in SUEK's structure. Today, having analysed and described the condition and capabilities of their equipment fleet, we regard them as mini-engineering plants, such as Borodinsky RMP specialising in the repair of diesel locomotives and now also in the production of switched reluctance electric motors. A few years ago, the directors of our service units studied production processes abroad in order to adopt their best practices and the overall production culture. Now, I can proudly say that there is a reverse trend: we welcome representatives of foreign companies. Many western production enterprises, despite anti-Russian sanctions, are considering the possibility of starting production in Russia.
– Does SUEK have experience in cooperating with other manufacturing companies?
– By the example of Borodinsky RMP, it became obvious that placing such orders with our own companies was much more advantageous. In addition, there is another good example, the equipment of BELAZ dump trucks with coal-carrying bodies as one of the ways to optimise the efficiency of diesel consumption by increasing the amount of coal transported per trip. In its composition, coal is less dense than overburden, which means it occupies more space for the same weight. For example, approximately 150 tonnes of rock can be loaded in a dump truck with a body volume of 40 cubic metres, while only 75 tonnes of coal will fit in the same body. The task is simply to increase the body volume.
For example, at our Vostochno-Beisky open-pit mine, by replacing two conventional bodies with coal-carrying ones, we lowered specific diesel fuel consumption by 8%, which ensured savings of 147 tonnes of diesel. Such bodies are exclusive and not mass-produced. At the moment, they are manufactured by our company, at Chernovsky repair and mechanical plant. Again, we had to build a chain of processes in order to solve the problem of how to use less diesel. First, we needed to make sure that the efficiency of the work performed, in terms of resource consumption, was getting better. When we began to monitor, it turned out that the load factor was not fully used. After all this analysis, we came up with the development of the new bodies.
Here is another interesting task: in the course of the energy efficiency project, we faced the challenge of not just saving energy but also of accumulating it in case of accidents and breakdowns. So, we explored the possibilities of using industrial lithium-ion batteries, which could be installed at any energy-intensive SUEK's production facility such as underground or open-pit mine, and washing plant. Subject to uninterrupted power supply, energy can be continuously supplied to any production unit.
All activities, regardless of their type, are accompanied by a host of organisation and management documents, instructions and regulations. When you begin to describe the rules of interaction, you ultimately get a smooth business process that is perfectly managed in accordance with the PDCA cycle: plan - do - check - move on (act).
– Today, people are very concerned about staff reduction because of equipment upgrades. How is this problem solved at SUEK?
– As for staff reduction during optimisation and automation, I can say for sure that we do not have such a problem. We do not reduce personnel and even try to find new employees because Russia's north is not the easiest place to live in, not to mention the fact that it takes workers years to master their occupations. Therefore, it is difficult to quickly rotate our staff. In many regions, there are educational facilities where graduates of vocational schools learn the occupations demanded by SUEK. Due to the lack of people, we work on a rotational basis, while work teams move from region to region. Therefore, if necessary, we retrain our personnel to perform new types of work.
– SUEK's mission states compliance with sustainable development principles. How is this implemented?
– Everything that we are talking about now is aimed at contributing to sustainable development. As for energy efficiency, we use the 'energy intensity' term, which means that there is an important task of reducing the energy capacity of our business as a whole and of each individual unit in terms of consumed resources. The solution to this problem lies not in one-time events, but in an integrated system of processes and targets that allow the optimisation of energy consumption in a continuous manner. The 'energy efficiency' term means not just less energy consumption and not just energy management. It also implies technological breakthroughs and responsibility to future generations for the environment, along with innovations and approaches to cultivating new thinking in people and a new perception of the energy resource.
When you begin to describe the rules of interaction, you ultimately get a smooth business process that is perfectly managed in accordance with the PDCA cycle. Over the five years of work, we have actually created and tested a technique for building our business processes in terms of energy efficiency, which is suitable for any large company.
Interviewed by Tatyana Kiseleva, Editor-in-Chief of Business Excellence