Our Sales Director Sami Kallio describes how steam production at a process-industry plant now works as a hybrid system, with gas and electricity used according to market conditions. He also examines the potential savings from the service model and continuous optimisation of energy production.
The company’s plant produced steam for its processes with gas. The old system worked and still had useful life left, but the equation was difficult: thin margins, volatile energy prices and competition that prevented higher costs from being passed on in product prices. Savings therefore had to be found in the plant’s own energy production and how it was controlled.
About six months ago, Auris Energia commissioned an electric boiler plant alongside the existing gas system, turning steam production into a hybrid model. We optimise production based on electricity and gas prices, conditions in the reserve market and the customer’s actual process-steam needs, with decisions made at 15-minute intervals when necessary.
Auris Energia is responsible for the investment, design, procurement, supervision, optimisation and maintenance of the entire solution. The customer receives steam as a service without investing in a new electric boiler.
“Together with the customer, we have identified an opportunity for annual savings of approximately EUR 1.5 million. Hybrid steam production has now been running for about six months, and we are clearly moving towards the savings level estimated in advance,” says Auris Energia’s Sales Director Sami Kallio.
The customer has not invested a single euro of its own funds in the new production model.
“The customer can direct its own capital to its core business. We take care of energy production and optimisation. This gives the customer the best return on its investment capacity,” Kallio says.
Where does the savings potential come from?
According to Kallio, this is where many discussions go astray. Savings do not arise solely from the choice of energy source, but from how steam production as a whole is managed in different situations.
When steam produced with electricity is more cost-effective than steam produced with gas, the electric boiler can be used. When gas is the more sensible choice under market conditions, the existing gas system is used.
The system’s flexibility can also be used in the reserve market when that suits the customer’s process needs and market conditions. Decisions can be made at 15-minute intervals if necessary. Optimisation is based on a forecasting model that takes into account historical operating data, the steam needs of the customer’s process, developments in electricity and gas prices, and conditions in the reserve market.
In practice, the solution combines existing gas production, a new electric boiler and market-based control into one continuously optimised whole.
“The savings do not come from one piece of equipment, but from managing the entire energy system continuously. Steam production must respond to the market, but the customer’s production and process needs always come first,” Kallio says.
In energy-intensive industry, savings potential of this scale can mean a 30–40% impact on total energy-production costs.
Can an energy service be reliable?
A service model means that a company entrusts part of its critical energy production to a partner. It is a reasonable question, and Kallio does not avoid it.
Auris has operated since the late 19th century, is a company important to security of supply and has a strong balance sheet. It has decades of experience supplying energy to industrial customers, including in exceptional circumstances such as the start of the war in Ukraine and the Balticconnector disruption.
The basic principle of the hybrid solution is clear from a supply-security perspective: if one energy source is disrupted or becomes expensive, the other can carry production.
“We have considered solutions for different market and security-of-supply scenarios,” Kallio says.
Kallio is nevertheless honest about why similar models have not yet spread faster. The numbers have not always been calculated comprehensively enough. Companies have often already invested heavily in their own systems and fear that money will be wasted.
Energy is also not the customer’s core business, so improvements are often pursued alongside other work.
“Another major factor is psychological: do I trust the service model, is this possible, and can the supplier really deliver everything agreed in all circumstances? It took the customer about a year to approve this sales project, even though the savings potential was strong from the outset,” Kallio says.
What is usually missing from the calculations?
Kallio says an in-house investment often looks cheaper in Excel if the comparison is limited to the purchase price. But the full calculation often omits the same items: tied-up capital, operational responsibility, skills risk, utilisation rate, maintenance, downtime and technology risk.
Once these items are included, the service model can become considerably more competitive from the customer’s perspective.
Ultimately, it comes down to one choice. Should a company devote its expertise and capital to running an energy system or to developing its core business? Operational excellence comes from focusing on what the company does better than anyone else.
“For plant management, a major energy investment is a one-off decision. For us, optimising and operating an energy system is everyday work,” Kallio says.
This project and customer relationship are no longer just plans or calculations. The hybrid model has been in use for about six months, and early operating experience indicates that savings are developing much as forecast.
The final annual level will depend on electricity and gas prices, reserve-market conditions and the customer’s production needs, but the direction is clear. The first operating experiences have been encouraging and support the original calculations. The energy-service model is on track to meet expectations.