Case Study: RTO Replacements with No Upfront Capital
After operating two regenerative thermal oxidizers (RTOs) for the last 25 years, Soliant LLC of Lancaster, S.C., considered what repairs were needed to ensure reliability. The company asked Dürr Systems, Inc. EES, a supplier of RTOs, for recommendations.
Dürr representatives inspected the equipment and determined that the RTOs were gas hogs: they had been designed with a low thermal efficiency to accommodate volatile organic compound (VOC) loading significantly higher than their operating levels. In 2006, the units used 56,675 Dekatherms at an average of $10.78 per dth, which equaled about $50,913 a month or more than $600,000 per year.
A new RL60 rotary-valve RTO replaced the old oxidizers. The system went online Dec. 17, 2007, and the Energy Performance Contract (EPC) began Jan. 1, 2008.
An EPC requires no capital investment from the company. Jim Griffin, the supplier's regional sales manager, noted, "Soliant was interested in the oxidizer replacement project and the energy savings it would generate, but they had already budgeted their capital resources for expanding production to meet increasing demand. It's a story I hear frequently from customers, and it's the primary reason Dürr began financing energy projects."
"As a small company, we thought it was a good way to implement a greener solution without a large capital outlay," said Jeff Bailey, vice president of operations for Soliant. "The performance guarantee ensured both sides have a vested interest in improvement."
As part of the arrangement, Soliant pays the supplier a fixed monthly fee from the natural gas savings generated by the RTO replacement. Dürr guarantees the RTOs' measurable thermal efficiency for the full contract term. The contract also includes bonuses for exceeding the guaranteed thermal efficiency and penalties for falling short. This means that if the RTO performance falls below the guaranteed level, the supplier pays the company's additional gas usage and has an incentive to immediately address the issue.
At this current price the unit saves Soliant an average of $56,500 per month. Through June of 2008, the new RL60 reduced Soliant's gas usage for VOC abatement by 85 percent. The company's long-term gas supply contract ended in June. Soliant is now getting a contract natural gas price of $14/dth.
|
|
Natural Gas Usage(dekatherms/mo) |
Operating Cost($/month) |
|
Old RTOs (2006 Avg) |
4,723 (56,675dth/yr) |
$66,122/mo |
|
|
|
|
|
New RL60 RTO |
|
|
|
January 08 |
734 |
$10,276 |
|
February 08 |
782 |
$10,984 |
|
March 08 |
650 |
$9,100 |
|
April 08 |
726 |
$10,164 |
|
May 08 |
609 |
$8,526 |
|
June 08 |
617 |
$8,638 |
|
Average Month |
686 |
$9,604 / month |
|
|
|
|
|
Gas Savings |
4,037 dth/mo |
$56,518/month |
Overall, the company has reduced its net monthly operating expense, because the average natural gas savings exceeds the monthly payment for the equipment through the contract. As an additional benefit, at the end of the contract term, Soliant will own the equipment and be the sole beneficiary of the energy savings.
"Soliant was in a position where their production depended on the operation of two 25-year-old oxidizers that cost them $66,000 per month in gas alone. By using the EPC to fund the RTO replacement, at the end of the contract they will have a new RTO that costs them just $9,600 per month to run," Griffin said.
For this project, the supplier estimated the cost to repair the aging units at around $250,000. Soliant chose not to invest in the old equipment. Newer equipment would provide the needed energy savings as well as reduced maintenance costs. "There's really no comparison between the old and the new equipment," said Bailey. "The old system had 42 hydraulic valves for controlling air flow, which were a maintenance headache. The new Dürr unit has a single rotating valve, which requires minimal service and is a much simpler design."
Because the supplier's payment depends on the system's performance, the company continuously monitors performance and regularly inspects and tunes the system. "Since the Dürr equipment services our entire coating department, 24/7 support is critical," said Bailey.
He also noted that, "While energy savings have been realized with the new equipment, what's of equal importance is the fact that we have more oxidizer capacity that will allow us to add new coating lines." A new process could be connected to the old units with just minor ductwork changes.
The new RL60 RTO system is about a quarter the size of the old two-oxidizer system as a result of significant developments in RTO design over the last 25 years. Whereas the old RTOs were arranged with seven horizontal flow ceramic media beds radiating outward around a central combustion chamber, the new RL60 uses a vertical flow arrangement with the combustion chamber sitting atop 12 wedge-shaped ceramic media beds, all in a single can. The ceramic media bed area has been substantially reduced by the use of structured honeycomb ceramic blocks, which accomplish the same heat exchange at 50 to 100 percent higher velocity than randomly packed ceramic saddles.
By implementing this RTO replacement project under an EPC, Soliant was able, with no capital outlay, to:
• expand its VOC capacity for future production lines,
• save more than $675,000 annually guaranteed,
• replace aged equipment with a state-of-the-art machine,
• avoid $250,000 in repairs, and
• get long-term supplier monitoring and service.
According to Walt Smith, Soliant's plant engineer, the decision has proven to be the right one. "The RL-style thermal oxidizer designed by Dürr demonstrates that the oxidizer is a solid system using proven technology. My only question is 'Why did we wait so long?'"
About the Companies
Soliant is a worldwide leader in precision coating of durable films and laminates. The company specializes in decorative products for the transportation, marine, heavy truck, recreation, consumer electronics, and consumer packaging industries. It also provides contract coating and laminating for large global partners.
Dürr Systems, Inc. EES, the world's leading supplier of VOC abatement systems, has been partnering with its clients for the last 10 years to reduce energy consumption through its Energy Performance Contracting program.