Smart Energy in the Chemical Industry

The adoption of IoT-based solutions in industry is primarily motivated by commercial interests. The chemical industry is a perfect example of an industry that can benefit from the adoption of IoT-based solutions, since it combines a range of key characteristics that make adoption more attractive. These characteristics include the fact that chemical plants exist on a relatively small geographic scale, tend to consume significant quantities of power with a considerable degree of flexibility as to when power is used, and comprise multiple sophisticated and interlinked processes within a single site. Chemical parks increase the potential savings that can be achieved through IoT-based solutions by grouping multiple different chemicals producers at a single site so that IoT solutions can be developed to encompass multiple participants. It should be no surprise that the chemical industry is already using IoT concepts in an advanced and effective way.

Currenta offers services for the chemical industry including utility supply, waste management, infrastructure, safety, security, ­analytics, and vocational training. Currenta is a joint venture between Bayer and Lanxess and operates CHEMPARK chemical park sites in Leverkusen, Dormagen, and Krefeld-Uerdingen, Germany.  Its three sites account for around one-third of total chemical production in North Rhine-Westphalia. More than 70 companies specializing in production, research, and services help to create synergies at CHEMPARK sites. Currenta CHEMPARKs are thus ideal environments for the testing and implementation of smart energy applications, effectively creating a “smart CHEMPARK.”

The following interview with Dr. Christian Czauderna, head of Business Management at Currenta, sheds some light on a fascinating industrial application of smart energy.  The interview was conducted by Bernhard Schaefer, Senior Manager at m3 management consulting.

Bernhard Schaefer: Mr. Czauderna, what are the key aspects of the “smart CHEMPARK” concept? What targets is Currenta aiming to reach?

Christian Czauderna: Every chemical park is based on the principle of combining different parts of chemical value chains by grouping together and connecting plants that use each other’s products. A smart chemical park provides additional features like the integration of new data sources and analysis algorithms to allow for a better understanding of the system and the potential for enhanced automation. Smartness for us means “using efficient structures in an efficient way,” for example, by optimizing energy use across different plants or even sites, taking into account external information like market prices. So why are we doing this? It’s all about preserving our natural resources and at the same time improving the competitiveness of the German chemical industry by optimizing energy production and procurement costs.

Bernhard: In what respect is a smart chemical park different from a smart grid as we know it from pilot projects by public distribution network operators? Are there any specific challenges?

Christian: Indeed, an example of what sets us apart from a normal smart grid is the integration of different forms of energy into the overall optimization process.  This includes not only electricity but also gas, steam, and raw materials that are used for production of chemicals. Another peculiarity is that our customers are all large companies with significant energy consumption and complex production processes. Many of these processes are characterized by flexibilities, i.e. the possibility to shift, postpone, or reduce energy consumption in accordance with external constraints. We also tend to see a high degree of automation in our customers’ production facilities. Most assets, like reactors, pumps, and fans are already integrated into a local communication system – so the basic infrastructure for a smart chemical park is already available.

Bernhard: So is the planned “smartness” really a new and innovative development? Presumably, cost optimization in the interest of your customers is already an established practice for you?

Christian: This is absolutely correct. We have already reaped the low-hanging fruits by designing the CHEMPARK and its energy infrastructure efficiently. However, due to rising costs in the chemical industry and the current climate of the energy market, we need to do more. Smart technologies will help us to uncover remaining potential by better understanding interactions between energy production and consumption in the numerous facilities located here.

Bernhard: Could you give some specific examples of smart elements in your industrial park? How do you manage the smart integration of value chains?

Christian: Basically we are bundling our own generation flexibilities with those of our customers’ energy consuming processes – and then we offer it on energy markets like the intra-day market or the electricity balancing market. One of our customers for example can provide a flexibility of ±10% of his energy consumption by shifting production between different production sites and through storage of the produced chemicals. This is more difficult than it sounds, as you need to adapt established production processes and install buffer capacities. Another example would be the installation of electrode boilers that create steam by heating water. A system of distributed boilers can be used to generate steam in times of low power prices and to back up the existing central steam generation. They can also help to contribute to negative power capacity on the balancing market, i.e. boiler operators are paid to consume electricity whenever there is surplus power on the grid, destabilizing supply and demand.  We are also thinking about establishing a system of distributed high-temperature heat pumps to convert our clients’ waste heat into useable steam that would feed into the steam network and be controlled by overall optimization in the network.

Bernhard: What competencies are needed to make this kind of project a success?

Christian: The chemical production processes involved are highly complex. To understand their inherent potential for energy savings and flexibilities we need a thorough understanding of chemical process engineering. Also, we need to respect any operational limitations, keeping in mind that the primary purpose of our clients’ facilities is to produce chemicals, not to offer power on energy markets. These analytical skills need to be complemented by IT and software skills for developing the algorithms we have to incorporate into our control systems. But, needless to say, we are not a software company, so for many applications we are partnering with external service providers. Another key skill is being able to assess the commercial viability of a new or innovative idea, based on a detailed understanding of external energy markets such as the markets for electricity balancing.  Finally, we need good communication skills to help our customers understand the targets we are aiming for and the technical-commercial concepts we can implement.

Bernhard: What is the role of dedicated software solutions, for example for modeling, simulation, and optimization of the energy infrastructure? Can you purchase such tools on the market?

Christian: To date, we have not found a commercial tool that would be able to support us sufficiently. As a result, we have to rely on heavily customized tools supplemented by in-house developments, which in fact limits our options. I imagine that dedicated tools could be developed jointly by chemical park operators; however, this is not yet a reality.

Bernhard: What is your approach to projects? Do you set up a single, all-encompassing project or rather a set of smaller projects? How do you integrate your customers into the project?

Christian: We rely on a number of solution-oriented pilot projects with significant customer integration. A key requirement is that we consider the solution to be suitable in terms of both time and profitability. Our customers are fully integrated into the pilot project as project partners. We are aiming at creating a high level of transparency for them, so that we can base the project on a joint understanding of the related challenges and benefits.

Bernhard: What have you accomplished to date? Are there any quick wins you have achieved?

Christian: First of all, we have significantly enhanced the flexibility of our power generation. We are now running our plants in a completely different way, no longer strictly coupling power and steam production in our cogeneration plants. We are also successfully offering the resulting flexibilities on the market for secondary and tertiary control power. Another successful innovation was the re-design of the production processes of one of our customers, which resulted in the creation of significant flexibilities in the region of 10 MW.

Bernhard: To conclude, what lessons have you learned? Do you foresee any major challenges in the near future?

Christian: A basic prerequisite is making the system you are looking at really transparent so that economic levers can be identified. Here we can make use of our proximity to our customers and our understanding of the processes we encounter in the CHEMPARK. However, the smartness we are aiming for is more than just technological – it entails a real change in habits, for example running a power plant completely differently than you are used to. With a view to the future, a major challenge will be to scale up the solutions developed in pilots, creating more standardized products which are applicable to most of our customers. IT security is something we have to look at together with our customers, ensuring that production data is handled safely. Finally, it will be essential to implement robust technological solutions that do not have to be replaced every three years or so when new technologies or data protocols are introduced.