Anhui Tian Du Paper Co. Ltd (Pulp and paper, China)

• The company lacked electricity and also needed a new boiler. They considered installing a cogeneration system that combines heat and power generation. This required an investment of 17 million Yuan (approximately US $ 2 million) with annual savings of 4.947 million Yuan (approximately US $ 0.6 million). The simple payback period is not enough to know if this option is financially feasible because with such a large amount of money consideration must be made as to worth of it in the future. (i.e. it can do less with 17 million Yuan in one year from now) because it may be better to invest it in something else with a better return on investment. The Net Present Value (NPV) was therefore calculated for this option as follows:

Where, F = increased annual cash flows; I = total investment; i = annual interest rate (%), choosing 6% ; j = year, equal to 1 -10; n = life of project (in years), choosing 10 years.
NPV = 4.947 X 7.36 – 17 = 19.41
Because the NPV is positive, the project is profitable
Lesson learnt: When an option requires high investment then the Net Present Value should be calculated in addition to the simple payback period to determine financial feasibility of the option.

Anhui Tian Du Paper Co. Ltd (Pulp and paper, China)

• Local and regional pollution is becoming a more important issue and the Chinese Government’s policies to reduce pollution levels are getting more and more strict. For this reason, the environmental feasibility analysis of options also included the calculation of reductions in SO 2, NO x, CO and particulate matter (PM) emissions, in addition to greenhouse gas emissions (CO 2). For example, the cogeneration plant’s implementation would result in the following emission reductions:

Jangxi Yadong Cement Corporation (Cement, China)

• The evaluation of an option to generate power from waste heat required more than just an internal feasibility analysis. The proposal for the project had to be submitted to local authorities for examination and approval before implementation. The company also has to negotiate with local electric utilities on how to supply excess power from this project to the utilities network and how much money the company would receive per unit of electricity. The project has received Government approval and an agreement with the utilities companies was reached in 2004 and will be implemented by November 2005.

Active Carbon Ltd (Chemicals, India)

• The company considered the temperature and quality of the steam used commercially sensitive information. For this reason median values were used to determine the economic feasibility of options. Since the median values were about +/- 5 percent from the real values this did not have much effect on the accuracy of the economic feasibility analysis, especially the payback period.
  Lesson learnt: High quality median values can be used to determine the economic feasibility of options in case the exact figures are confidential.

Pindo Deli PP (Pulp and paper, Indonesia)

• Paper sludge is a serious problem for this company. The Team and external facilitators held a brainstorming session to evaluate what could be done with this waste stream and the advantages and disadvantages of each possible solution. The results are summarized in the table below:

No	Option	Time Frame to Implement	Economic	Technical / practical	Environmental
1	Use as fuel on site (in new CFB Boilers as 5% mix in coal).	> 2 years	Cost neutral Reduce energy cost Cement plant need ash Reduce land fill	Pindo # 1 OK (being considered for the new boiler) Pindo # 2 no need for additional boiler 1800 t/month Depends on moisture content	Permanent solution & sale of ash
2	Work with cement plants for using sludge as kiln fuel.	Up to 1 year	- 5 USD on site costs - 5 USD/ t transport - … USD/t to cement plant	High moisture content, need pre drying before use. Pre drying options at cement plant or at Pindo # 2 (Identify & Study)	Permanent solution
3	Use as Land fill	Now but need new land in 2006	100 USD/t cost new land fill	Space Permit, monitoring Reputation	Temporary solution Worst case option
4	Survey other company who have coal fired boiler within reach	< few months	5 USD/t on site 5 USD/t transport	Many small users Risk of continuity Could be interim solution or stand by Permit required	Combustion Efficiency control
5	Build new paper m/c that can recycle the sludge into low grade paper	> 2 years	Income from low grade paper Reduced land fill and transport costs Cost neutral	Enough space at Pindo #1 and 2 Capacity 400 t/month – 50 % sludge and – 50 % fresh pulp. Can be used in combination with other option (not enough volume to get rid of all sludge).	Environmentally best solution because recycling of waste
6	Identify opportunity on site to minimize sludge run off into effluent	Continuous	Depend on option (but probably high)	Pindo #2 is a modern plant so opportunity is bigger at Pindo #1 (old plant) BENCH MARKING % sludge / ton production (3.7 % Pindo #2) Can be used in combination with other options	Reduce waste at source
7	Use as Compost in mushroom plantations	Already done (stopped since Nov 03 by Ministry of Environment for health reasons)	10 USD/t	No longer have permit (discontinued) Can use for cassava plantations (i.e. not in food chain) but only in small scale & far away plantations	Composition of compost is importance (Lead, Pb, is present, and is a major health hazard)
8	Incinerate on/off site & capture waste heat (e.g. heat air head dryer or boiler water feed)	Up to 1 year	Need study Operation cost	Off the shelf incinerators may be available. Need permit Need to dry sludge first (what %)	Need high combustion other wise emissions are too toxic

PT Semen Padang (Cement, Indonesia)

• A simple payback period of less then two years is the minimum criteria options had to meet to be accepted by management, so this was used as an important input for ranking feasible options. For example, an option to reduce coal consumption was not financially feasible because it had a payback period of ten years. However, options that were considered to be necessary from an environmental or safety perspective (e.g. to meet regulatory permit requirements) were ranked for implementation in the short term regardless of their payback period.
  Lesson learnt: Any criteria given by management is essential input in the ranking of feasible options.

Solid Cement Corporation (Cement, Philippines)

• Sometimes it is difficult to determine the investment costs of more technical options. At this plant this was solved by obtaining
  • Costs for the purchase of the solenoid valve for the air chokes from the plant’s purchase department
  • Costs for the high efficiency motors and Adjustable Speed Drive (ASDs) from a local supplier of a leading brand of these types of motors.
  Lesson learnt: The team can contact the purchase department and as well as suppliers in determining the investment costs of some technical options.

Associated Motor Ways, AMW (Iron and steel, Sri Lanka)

• The location of and distance between the different departments affected the technical and financial feasibility of some of the options. One striking example is the large distance between the boiler and the burner.
  Lesson learnt: The layout of the departments can be an important factor in the feasibility analysis.
  

Siam White Cement Company Ltd, SWCC (Cement, Thailand)

• The most interesting option implemented at the company was a V-separator to separate crushed limestone of different sizes. What was interesting about this option is that the V-separator was designed, constructed and installed entirely by company staff. This made it possible to make a separator that entirely meets the company requirements, as compared to standard separators that are offered by external suppliers.
  Lesson learnt: Large companies often have in-house capacity to design equipment needed for new options, whereas smaller companies will more likely have to look for outside suppliers of new equipment.

Thai Kraft Paper Industry Co. Ltd. (Pulp and paper, Thailand)

• Energy data were mostly available. However, some other data was more difficult to obtain because the company does not have meters installed or monitoring equipment to measure resources, such as water and compressed air use. In fact, well-trained staff could overcome such a problem. Nevertheless, the company claimed that they have their own annual improvement target areas, for which budget and plans have been approved by the top management, long before the company’s participation to the GERIAP project. As a result, there is nothing much left for facilitator and consultant to convince the company.
  Lesson learnt: The problem due to the lack of monitoring equipment is nothing when compare to the willingness to step out of the box.

Sai Son Cement (Cement, Vietnam)

• Before the GERIAP project the company was considering installing a variable speed drive (VSD) to control the motor speed of the FD blower but was not certain if this would impact the operation of the vertical kiln. An international expert assisted with the technical feasibility analysis and enabled top management to make an informed decision to approve the option.
  Lesson learnt: Knowledge and experience of an external consultant can be useful in assessing the feasibility analysis of some technical options that require specific industry and equipment expertise.

Company X (anonymous)

• For this fertilizer company, one important aspect of the feasibility analysis was the potential impact on the product quality. In addition to this, top management gave priority to no-cost and low options.
  Lesson learnt: Effects on product quality and top management preferences are two important factors to consider in the feasibility analysis.

Other lessons learnt:

• Use Worksheet 16 for each option investigated because it serves as a checklist and guidance on what information should be collected
• Write down the calculations made as part of the economic and environmental feasibility analysis, including assumptions made. This makes it easier for someone, including top management, to check your figures
• It is easier to complete a feasibility analysis if representatives from different departments and backgrounds are involved, covering production, environment, energy, purchasing, finance/accounting, maintenance, and others as necessary
• The Team should have direct access to a top management representative during the feasibility analysis, so that top management can give indications on whether to continue or not with investigating high cost and technically complex options based on preliminary results
• Technical, economic and environmental factors are of different important for different options
• Participation of the financial staff of the company is important for the financial feasibility because they know the evaluation process for large projects at the company and how financing should be incorporated in the company’s overall budgeting process
• Potential future environmental impacts (such as climate change) and social impacts (such as upcoming safety regulations) should also be considered
• If options are financially not feasible but generate a lot of greenhouse gas emission reductions, consider what impact Clean Development Mechanism (CDM) funding could have
• Economic evaluation is the hardest part of the feasibility analysis if the finance department is not cooperative
• At many companies reliable data are not available which makes it difficult to make a convincing case to top management about the feasibility of options
• It is useful to exchange information with other companies that face similar issues relating to energy efficiency
• The experience of consultants is an important factor in successfully completing the feasibility analysis of options
• Information from suppliers can be helpful to investigate the feasibility of options. However, be mindful that suppliers want to sell their products / equipments so they may give too optimistic figures

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