Imagine, and It Shall Be: The Vision of Sustainable Production Planning
11 Jun 2020 - Production, Industry 4.0, Technology, Sustainability
For more than 50 years, PSI software solutions have been helping the energy industry and energy-intensive sectors increase efficiency and make responsible use of energy, raw materials and labor. Particularly in the metals industry, we make a special contribution to sustainable production with our advanced products. Reducing carbon dioxide emissions (CO2) and optimizing energy consumption has been at the heart of our technological and environmental vision for some time now.
In light of the environmental situation and the resulting challenges for our industry, we at PSI are certain: we must do more for nature and our customers! We want to inspire positive change and help steel producers to better meet the needs of their customers, stakeholders and governments. That is why we want our planning module to expand its efficiency in an overall perspective. Follow us on our thought journey into the world of future sustainable production planning.
Sustainability Within Iron and Steel Industry
The iron and steel industry is one of the largest industrial emitters of CO2, accounting for between 4% and 7% of anthropogenic CO2 emissions worldwide. According to worldsteel Association, 1.85 tonnes of CO2 on average were emitted per tonne of steel produced in 2018. One beech tree binds about 12.5 kilograms of CO2 per year - so you would have to plant 148 trees to compensate for one ton of steel produced. Considering that 1,808.6 million tonnes (Mt) of crude steel were produced worldwide in 2018, this calculation seems alarming. It is no wonder that the level of environmental awareness is growing and more and more policies and initiatives are being developed to protect it.
One of such initiatives is the Emissions Trading System which is a market-based instrument that serves to protect the climate. It is designed to help achieve the 2030 goal of reducing greenhouse gases by 40% over 1990 levels – or even by 55%, according to the new EU Commission’s current plans for a “Green Deal”. Companies require certificates for the approved amount of greenhouse gas emissions, so-called “emission allowances”. One certificate covers 1 tonne of carbon dioxide emissions. Certificates are traded on special exchanges and in the capital markets and their price reflects not only the rules of supply and demand, but is also influenced by speculation. However, the overall number of issued certificates is limited, and will be gradually reduced through to 2030. Emissions-intensive industries such as steel production are issued with a certain volume of emission rights at no charge (“free certificates”). This “carbon leakage” protection is intended to prevent certain industries from shifting their production to countries with less stringent climate protection regulations.
Supporting the Planner in the Production Environment
Supporting metal producers in reducing their CO2 emissions and optimizing their energy consumption has been one of our product requirements for some time now. With PSImetals/Planning the planner in the steelworks is already able to monitor and adjust the expected energy consumption and CO2 emissions for a production line, the entire plant or individually per production order. Through the selection of an individually defined time interval, the planning solution supports the preparation of production plans as well as the creation of optimized line schedules. Furthermore, the user can access and use the energy forecast data stored in PSImetals for different time periods:
- The long-term prognosis can be used for strategic planning since it gives the user an overview of the expected basic energy consumption for the upcoming year.
- The mid-term prognosis is based on a monthly basis and enables the planner to adjust the energy purchasing by looking at daily buckets.
- As soon as planning becomes a detailed short-term prognosis on a daily or hourly basis, the forecast is generated in e.g. 15-minute time windows. During this time horizon, quick reactions to production events are required, and adjustments allow for quick profits by matching the forecast energy availability.
Breaking the Silos
Silos are the great hidden constant of the industrialized world. But we need to think bigger if we are to break through them to meet the future need to control green energy and minimize emissions. The biggest challenge we see here is the fact that business areas in the plant environment have always been and still are organized more or less separately from each other. At least for our customers this means that the steel plant is at the centre and the MES system has a direct, strong link to the production area of logistics and quality management.
But on the other hand, this also means that production planning works independently of the energy software. Consequently, the planning solution does not take into account energy prices, energy contracts or energy availability. It is the same vice versa: mills have to report, announce and calculate their energy consumption, but as the energy systems are not connected to the MES, the actual data resulting from production are not taken into account and neither the energy system nor the MES informs the other system about needs, schedules and priorities.
That seems pretty disruptive, doesn’t it? No battle was ever won with silence – so why do we stick to silos that were set up a long time ago and are no longer necessarily valid? Opening a conversation and encouraging more connections within the plant environment can open up a world of new possibilities.
To break down the silos and meet future needs in controlling green energy and minimizing emissions, there must be a change - a transformation!
Just Imagine, What If …?
Just imagine if we were to break the current silos and connect PSImetals Planning solution to the energy exchange and the existing trading system within a plant. Through a connection between the units, the system would be able to manage and optimize the energy position of the plant and the emission certificates in possession of the corresponding certificate types.
The operators in the steel mills would thus know as soon as possible when it is necessary to buy additional CO2 certificates.
The software would be able to support the forecast of the steel mill's demand for CO2 certificates for the next few years based on long-term planning and historical production data. In addition, certificates could be allocated to different departments to manage the departmental and overall position. Mechanisms for banking and borrowing during the trading period would also be possible.
Through a direct connection to the plant's energy management system, supported by PSImetals, the system would be able to trigger warnings if a production plan led to a sudden increase in energy costs or even to a violation of the applicable energy contracts.
Spinning the idea further, by connecting to the plant's contract management system, the planning solution would have access to the terms of the plant's energy contracts and:
- advise the best time to consume additional energy in times of high energy availability on the market;
- propose early energy procurement on the market;
- re-schedule production by efficiently considering the content of the energy contracts
In addition to these interconnections, the planning solution could also directly control the energy distribution within the production system.
A direct connection to the energy control system could balance power and thus help avoid power bottlenecks.
The information exchange of system forecasts could be considered in order to react quickly to undesired influences or to use quick compensation possibilities. Thinking ahead, the system would even be able to use parts of a process line buffer that supplies energy when a production process can be slowed down when energy is needed (load shedding), or start it up when energy is available (feeding). Driven by price effects in the market and existing energy contracts, it is even conceivable that energy could be stockpiled, for example, during the production of H2.
If You Can Imagine It, You Can Achieve It
To conclude our journey of thought, one can say that the integration of our production planning system with an energy management system, an energy load management system and the emissions trading system would lead to a cost-effective and sustainable production. Energy-efficient decision-making and compliance with environmental regulations were the key factors in our discussion. In view of the existing regulations and future changes regarding independent energy and production management systems, the status quo will not be sufficient for many metal producers to remain in a best-in-class position. Imagine the benefit of seamless integration between your production planning system and your energy management systems, delivered by a single solution provider with the know-how and expertise in each area. You can imagine it, can't you?
But we cannot go on this journey alone - global change requires a global community. Please share your thoughts on our ideas in this article - we look forward to embarking on this journey with you. Together.
What is your opinion on this topic?
Do you want to know how we break the silos?
Hanan el Habibi
Product Manager PSI Metals
Having worked in the business of steel tubes for more than 10 years, Hanan gained international experience within the industry. The international business knowledge helps her to mirror market expectations to the needs of our PSImetals software in supporting its customers. If she is not travelling around the world discovering new places, she loves spending time with her family and friends.
+49 211 60219-543
hhabibi@psi.de
