With the help of an Energy Service Company HeveaBoard Bhd has successfully reduced its annual energy cost by RM 720,000 from its Wood Dust Fired Thermal Oil Heater project.

Measure Implemented

Replacement of existing Medium Fuel Oil Fired Thermal Oil Heater by Wood Dust Fired Thermal Oil Heater

Benefit

Total annual energy cost savings approximately RM 720,000/-
Total annual fossil fuel savings 37,385 GJ
Annual CO2 reduction – approximately 2,916 tonnes

Background

In June 2001, the Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP) offered HeveaBoard Bhd an industrial energy walk-through audit at their factory. The company was convinced that the exercise would prove beneficial to them and welcomed the team’s invitation.The MIEEIP then immediately mobilised a selected group of foreign experts, engineers and local technical personnel to carry out a walk-through audit at the factory. The duration of this audit was for approximately two weeks. The main aim of the audits carried out by the MIEEIP was to identify energy saving measures for companies within the 8 industrial sectors targeted by the project. From the outcome of the audits, the team was required to select one typical and replicable energy saving demonstration project for each of the 8 sectors to reflect the entire manufacturing industry in Malaysia.


During the audit at HeveaBoard Bhd, the MIEEIP team found that one of the energy saving measures identified was suitable for the energy efficiency technology demonstration project of the MIEEIP. This project is now known as the Wood Dust Fired Thermal Oil Heater project. Ideally for energy efficiency projects to be successful several crucial aspects should be present. They are management commitment, funding and technical as well as project management expertise. The MIEEIP being an industrial energy efficiency barrier removal project, immediately arranged to put all the prerequisites in place. By presenting the results of the energy audit to HeveaBoard’s management the team was able to convince them of the benefits of the intended project in terms of cost savings as well as CO₂ reduction. Further, to ensure that the project had the expertise required for its successful implementation, the MIEEIP together with the Malaysian Industrial Development Finance Berhad (MIDF) developed a set of selection criteria to identify a suitable local energy page service company (ESCO). According to the established criteria Mensilin Holdings Sdn Bhd was selected to manage, implement and finance the project. Utilizing the funds provided to the MIEEIP for the execution of demonstration projects the MIEEIP through MIDF offered to the ESCO a 6 year loan of RM 2,000,000 with a grace period of 1 year to finance the project.

The project cost in total amounted to RM 2.8 million giving the company a simple payback period of 4 years. The results of the project are detailed as follows:

Total annual energy cost savings approximately RM 720,000/-
Total annual fossil fuel savings 37,385 GJ
Annual CO2 reduction – approximately 2,916 tonnes


Company and Plant Overview

HeveaBoard Berhad was founded in 1993 and commenced commercial operation in July, 1996. The company was listed in the Bursa Malaysia on 12th January 2005. HeveaBoard is a particleboard manufacturer, equipped with modern equipment and technology. It aims to achieve maximum utilization of rubber wood resources available within its vicinity and promote the rubber wood afforestation programme. The company is located in Gemas , Negeri Sembilan with close proximity to wood resources. Being one of the leading companies in the wood sector HeveaBoard is an ISO 9001:2000 certified company and is also Malaysia’s first Japanese Industrial Standards (JIS) certified particleboard manufacturer.

Heveaboard is made from 100% rubberwood, which is sustainable, renewable and environmentally friendly. The boards are covered with décor melamine paper lamination or with veneer. The particleboard plant has an installed production capacity of 360m³/day with an annual capacity of 120,000 m³ of boards of varying thickness.

The production process in the plant starts with the daily delivery of small rubber wood logs, branches and wood residues. This raw material then goes into the chipping process before being reduced to fine flakes of the desired size. The wet flakes then enter into a dryer with a moisture content of about 40%, where the flakes are dried with the direct heat of a wood or fuel oil burner. The dried flakes are then screened to separate fine and core particles. Upon completion of this process the moisture content of the flakes is 3-4% . The next step is glue mixing and blending.

The surface area and core particles are separately mixed with glue, wax emulsion and other additives metered accurately to achieve the desired quality. Once this has
taken place the resinated particles are spread onto a steel belt by air and mechanical formers. This process incorporates a computerized, programmable control system for ensuring consistent mat density and uniform weight distribution. From here the mats are sent to the Hot Press, which operates automatically on Programmable Logic Control, where they are compressed under high pressure and controlled temperature to form boards of precise thickness.

Finished boards coming out from the Hot Press are weighed automatically to make sure that the determined density is obtained and are then placed on the Star cooler to allow for glue setting. Before trimming the sides and cutting to accurate dimension , the boards are checked for bonding conformance and thickness tolerance. Then the panels are stacked for intermediate storage. Raw boards are stored for final conditioning to stabilize the board properties. These boards will later be calibrated to accurate thickness, sanded to fine surface finishes and graded. Finally, the graded plain board may be laminated with melamine impregnated decorative paper by a Short Cycle Press process or with natural veneer.


Project Overview

When the MIEEIP team audited HeveaBoard Berhad they found that the Medium Fuel Oil (MFO) fired thermal oil heater is one of the largest consumers of thermal energy in the factory utilizing approximately 37,385 GJ of MFO annually, which is 46% of the total thermal energy demand. The heat from the thermal oil is essentially used at the hot press process at an operating temperature of 210°C at the outlet of the thermal oil heater. The returning temperature of the thermal oil is about 175°C.

After careful assessment of the existing system and also considering that the factory produces excessive wood waste in its manufacturing process, the MIEEIP team in its audit report recommended to the factory management to consider the use of a wood dust fired thermal oil heater replacing the existing MFO fired heater.


Implementation

HeveaBoard produces large amounts of wood waste in the form of fine bark and dust during its manufacturing process and this is a potential source of cheap energy. In order to capitalize on the wood waste, the company replaced the existing MFO fired thermal oil heater to a 2.9 MW wood dust fired thermal oil heater. The new system has been installed in parallel to the current MFO fired thermal oil heater which has now become a standby heater. Both these systems are connected via a mixing collector to provide a smooth switch over whenever necessary.

The working of the wood dust system can be described simply, with the transportation of wood waste such as bark as well as sander dust, from the various sections within the factory via a specially constructed ducting system to a main silo. This silo consisting of a moving floor which is located near the wood dust heater has sufficient storage capacity to provide heater autonomy of up to 16 hours. From this moving floor the wood waste is fed by means of a screw feeder into the heater. The underfeed grate wood dust heater would require approximately 1300 kg of wood waste per hour and this is easily available from the processes within the factory. The fully underfeed stoker system allows a smooth and continuous combustion that takes place on a furnace, which is temperature-controlled in order to optimize combustion and avoid clinker formation. Air staging is used to reduce the emissions of NOx, CO and achieve no visible smoke. Other components of the wood dust system is an underfeedstoker, suspensory combustion, automatic deashing system, ash removal, flue gas recycling, post combustion chamber, refractory lining , heat exchanger, insulation and control system.


Project Management

Although the use of Biomass heaters in the country is not a novelty, the HeveaBoard project is still the first of its kind in Malaysia. Not only has this particleboard manufacturing company successfully installed a wood dust fired thermal oil heater at their manufacturing site, they have also effectively contracted an energy service company also known in short as ESCO to implement as well as finance the Wood Dust Fired Thermal Oil Heater project. From several companies that tendered for the execution of the project, MIEEIP together with MIDF selected Mensilin Holdings Sdn Bhd an ESCO company which met almost all the technical as well as financial criteria required for the implementation of the system. The ESCO concept despite being relatively new in Malaysia has been very successful in several other countries such as Canada, Korea, United States of America and Australia for many years now. An ESCO is a company that offers energy services which essentially includes implementing energyefficiency projects, in many cases on a turn key basis. An ESCO company can be briefly identified as a company:

That guarantees energy savings almost always through an Energy Performance Contract, which takes many different forms;
The remuneration of ESCOs is directly tied to the energy savings achieved; and
ESCOs can finance or assist in arranging financing for the operation of an energy system by providing a savings guarantee.


Looking closely at the above it is apparent that ESCOs assume some degree of risk when implementing and guaranteeing an energy efficiency project. By using the concept of performance contracting ESCOs differ from, e.g., consulting firms offering energy efficiency services or equipment manufacturers, as payment for services rendered will ideally only be made to the ESCO once energy cost savings are realized from the project . Hence, the performance contract ties payment and financing directly to the amount of energy that’s actually saved in the customer’s facility

As the HeveaBoard wood dust fired thermal oil heater project is the first demonstration project under the ESCO concept, the MIEEIP developed a project implementation structure to guide the ESCO in the execution of the project.

The following phases were established and adhered to, by both the ESCO and HeveaBoard to ensure the successful implementation of the project:


Phase 1: Project Initiation

In this phase the ESCO discussed their detailed work plan with HeveaBoard and designated a project manager to be responsible for all aspects of the project.

Phase 2: Investment Grade Audit

Phase 2 is one of the more important phases of the project; here the ESCO initiated the Investment Grade Audit (IGA) with the host.

The scope of the IGA is as follows:

Review of existing plant operation regime
Carrying out field measurements
Establishment of Baseline
Design and project planning

Phase 3: Contracting

Upon completion of the IGA activities, the ESCO submitted to the host the IGA report. The report was reviewed carefully by HeveaBoard and several recommendations were made. This was followed by the signing of the Energy Performance Contract (EPC) . Among others, the EPC consisted details such as the final savings estimate, savings calculation method, total project cost and other necessary clauses.

After the signing of the EPC, the conceptual design of the project was converted to detail engineering drawing with specification and the preparation of the tender document was carried out. Next came the tendering exercise which was performed and executed along with the host site. It is important to note that the acceptance on the part of the host is vital in all aspects of the project.

Phase 4: Construction

The ESCO was responsible for all procurement, fabrication, installation, testing and commissioning works. This was in compliance with the construction schedule set forth in the EPC.

Phase 5: Monitoring and Verification (M&V)

The ESCO established a monitoring and verification programme detailing the required tools and schedules for performance testing. This M&V protocol was defined and agreed by the host and will be carried out until the investment cost of the project is recovered.


Company Policy On Energy Management

“Safety – Our Priority, Efficiency-Our Commitment, Cleanliness – Our Desire, Quality-Our Guarantee”, this is how HeveaBoard has innovatively expressed their company policy. The company’s policy encompasses many important aspects which also recognizes the importance of efficient utilization of energy resources. For a company to seriously implement energy management activities the initiative must be fully supported by top management. HeveaBoard is one of the few exceptional companies where even the General Manager Mr S.Ganesan is directly involved in the energy management team established in the factory. The objective of this team is to maximize efficiency of the machinery and minimize the usage of energy.

When the MIEEIP spoke to him recently Mr Ganesan said that he is pleased that HeveaBoard was approached with the idea of implementing the Wood Dust Fired Thermal Oil Heater project at their factory. The company has always been looking for ways of maximizing the utilization of resources within its factory. Mr Ganesan was of the opinion that opportunities for energy improvement and energy efficiency projects in the wood panel industry is aplenty and the increasing cost of fuel makes it imperative that such initiatives are taken in the industry. He also mentioned that
the abundant wood waste produced during the process is difficult to dispose off but is ideal fuel for thermal energy plants.