Uss Kobe Steel Case Study

USS/KOBE STEEL COMPANY Energy Management Project Organization Meeting September 30, 1997

SUMMARY OF SSC/USS/KOBE PROJECT OPPORTUNITIES OPPORTUNITIES

SAVINGS

1.

Rolling Mill Heating Strategy

$ 202,284

2.

Rolling Mill Mixed Gas

$ 169,570

3.

Rolling Mill Hot Charge

$ 66,132

4.

BOP Shop Bag house-Elec.

$ 87,309

5.

BOP Shop Motors-Elec.

$ 290,935

6.

BOP Shop LMF’s

$ 267,397

7.

BOP Shop Ladle Prehtr. (Cap)

$ 555,300

8.

BOP Shop Ladle Prehtr. (Non-Cap)

$ 119,000

9.

Powerhouse Water in Blast Furnace Gas

$ 230,400

10.

Powerhouse Compressed Air System

$ 337,500

11.

Powerhouse 25-cycle Total Savings

$ 90,200 _________ $2,297,027

USS/KOBE CAPITAL PROJECT SUMMARY CAPITAL

SAVINGS

Project # 9 - WQC Blast Furnace Gas Refit

$2,213,000

$1,325,000

Project #10 - #1 Turbo Generator Refit

$ 3,416,000

$ 3,100,000

Project #11 — Automated Cutting Transfer

$ 5,200,000

$ 3,000,000

Project #12 — Gas Transmission Line Conn.

$ 7,750,000

$ 4,000,000

Project #13 — Roll Mill Billet Straightener

$ 2,588,000

$ 2,080,000

TOTAL

$21,167,000

$13,505,000

Capital Project Summary March 24,1998

USS/KOBE CAPITAL PROJECTS POWERHOUSE There are two projects related to capital improvements in the powerhouse that will have an energy savings impact on the plant operations. Description of operation The “powerhouse” is actually tour buildings providing a variety of services/utilities to iron making and general plant operations. The buildings are the new boiler house, steam powerhouse, gas engine house, and old boiler house. Utilities provided are 25 cycle AC electricity, 250 volt DC electricity, 900 & 250 pound steam, blast furnace wind, service and recycle water, and compressed air. The 25 cycle electricity is generated by the #2 Turbine Generator, which has a peak out put of 17 - 17.5 Megs. This generator uses 250 pound steam, which act as a system buffer for the steam loop. Steam is first made to make wind and then to generate 25 cycle power. If there are any problems in the steam loop, the generator is the first equipment to be dropped off line. The 25cycle electrical generation provides two base benefits to the plant: first, as an independent power source for river pumps, dc generation, boiler fans, it’s own injector pump, and as back up power to blast furnace pumps; and secondly, it provides a cost avoidance opportunity for electrical service by converting the 25-cycle electricity to 60-cycle electricity at #4 Bloom Mill’s frequency changer. The 60-cycle electricity is distributed through the “Clinton” grid, resulting in a reduction of purchased power from Ohio Edison. Direct users of 25-cycle electricity include 250-volt DC generation, through either a motor generator set or a single field rotary AC-DC converter, servicing iron making. (Back Up DC is provided by House Set #2, a 2250-pound-steam -powered DC generator.) 3 & 4 Blast Furnace stand-by pumps, #5 injector at #2 HPT, #1 circuit to Frequency Changer, and #2 pump house. A second turbine generator, (#1), is also 25 cycle and has a potential capacity of 12 Megawatts. The cost of a refit for this equipment is covered in the scope of Project I 0. Ladd boilers #7, #8 and #9 in the Old Boiler House produce 250-pound steam. 250 pound steam supplies the #5 turbo blower to create wind for the #3 furnace, #2 high-pressure turbo generator for 25-cycle electric generation, power plant auxiliaries and the plant steam system. Water to these boilers is provided by the recycle system. 900-pound steam is only produced in the New Boiler house and supplies steam to #6 turbo blower, generating wind for #4 Blast furnace. Feed water is condensate from interconnected condensers in powerhouse and iron making; make up comes from the treated water system. As a back up #6 Turbo Blower can use either 900 or 250-pound steam. In case of a turbo blower failure the #4 Turbo Blower can service either furnace, using 250 pound steam. Service water is river water that comes into the site by two methods, either from #2 and #3 pump houses or the lower tunnel. The pump houses lift river water to the main plant header while the lower tunnel draws water directly from the Black River to the powerhouse at the $30 Million Hole. Compressed air produced at the power house services iron making. It can also supply the plant wide system if needed. Back up for #6 and #7 Ingersoll Rand compressors is provided by the PAP, a steam system driven air compressor.

USS/KOBE PROJECT 9. WQC Blast Furnace Gas CLEANING LOOP REFIT Description of Project Approximately $230,400 excess purchased electricity is used annually through reduced fuel efficiency at the boilers in the Powerhouse. This amount of electric savings could be realized by removing water from the blast gas Blast gas is the primary fuel for Powerhouse boilers. The current problem with blast gas results from the high temperature blast gas used to fire the boilers. Since March of 1996 the average blast gas temperature has been 112 degrees Fahrenheit. This is greater than the previous average temperature of 96 degrees Fahrenheit. The increase in temperature results in more saturated water in the blast gas, which is an indicator of a larger problem. Saturated water in the blast gas causes combustion inefficiencies for the boilers. The water must be removed by heat before the fuel can burn effectively. What exists is a crisis loop. Fuel expends energy to evaporate moisture, reducing combustion efficiency. The result is that the boiler requires additional inefficient fuel, hence reducing steam out-put. Reduced out-put means less steam to the turbo-generator. The reason for this is the inadequacy of the WQC system. It can not cool down the cleansing water enough to remove the moisture from the Blast Furnace Gas. There are several reasons why the system has not been improved. There are isolation problems within the gas-cleaning loop; work can only be done during Blast Furnace outages. The isolation valves on either side of the strainer can’t close completely precluding its’ being cut out of the loop for repair. During the last double outage the repair was attempted but a Well valve failed flooding the system curtailing any attempt to open the system. Recommendations The solution to this problem is threefold. First, new hot well strainers are needed to stop contaminants and sludge entering the WQC system. Second, the cooling tower cells and spray deflectors must be cleaned. Finally, increase the capacity of the WQC system. Originally, the WQC pumping was designed to provide 9,000 gallons per minute, but the current requirement to clean blast gas is 11,000 to 12,000 gallons per minute. For every degree the blast gas temperature is lowered, there is an estimated savings of $1200 per month. Cost Justification Annual Savings = 16 degrees x $1200 x 12 month =

$230,400

Additional savings for the use of BFG in the boilers through a higher heating value would also add to the savings. This will be calculated during early engineering analysis.

USS/KOBE PROJECT 1O#1 TURBINE GENERATOR REFIT Description of Project The #1 Turbine Generator is of the same vintage as the #2 Turbine Generator previously described. This equipment is in poor repair and needs a major overhaul to be operational. The current contract relations between USS/KOBE and Ohio Edison preclude new electric generating capacity at this site until after the year 2004. This 25 cycle generator can be restored at a cost much less than what the cost would be for new generating capacity. There are certain improvements needed in the auxiliary systems to allow this equipment to reach its capacity of 12 Megawatts Recommendations A refit of this equipment primarily requires a complete overhaul of the turbine side of the unit, expanding the transformer capacity leading into the frequency changer, new steam piping to supply the turbine and associated labor and parts. Cost Justification The additional benefit of reducing the purchase of 60 cycle electricity may be as much as $3 million in annual savings. POWERHOUSE CAPITAL REQUIREMENTS WQC BFG CLEANING LOOP REFIT Cleaning and removal Filter pump Pumps Underflow pumps Motor repair Valve repair Pipe repair Instrument repair Clarifier 1&2 spares rebuild Electrical and instrument contractor Vacuum pump repair Cooling tower repair Clarifier 1&2 screens New settling basin Contractor Replace hot well strainer Valves (strainer) Piping Engineering, procurement, finance Total Total Powerhouse Capital

$600,000 $ 75,000 $150,000 $ 75,000 $ 60,000 $ 50,000 $ 50,000 $ 60,000 $140,000 $ 60,000 $ 77,000 $ 77,000 $250,000 $250,000 $125,000 $ 25,000 $ 24,000 $ 50,000 $336,000 $3,139,000 $6,555,000

#1 T/G REFIT Turbine blade replace Rotor, Bearings,etc Transformer Piping Labor Engr,procur,fin.

$2,000,000 $ 350,000 $ 200,000 $ 250,000 $ 250,000 $ 366,000

Total

$3,416,000

USS/KOBE PROJECT 11AUTOMATED CUTTING AND TRANSFER SYSTEM IN ROLLING MILL Description of Project The Rolling Mill produces approximately 40% of its product as 6” rounds. The rounds must be cut to specific lengths for the 4 Seamless Mill, which uses all of the 6” rounds produced in the Rolling Mill. USS/KOBE presently load all 4 Seamless product into railcars in the conditioning building. The cars are then moved to the south rail yard for holding and cooling. When the steel is ready to be mult cut, the cars are called to the peeler area for unloading, cutting, and reloading. After the cars are reloaded, they are dispatched to the seamless mill. The peeler area presently employs 18 people on 2-12 hour shifts for 5 days per week. This is equivalent to a work force of 27 people. There are 8 “torch machines” and it is assumed that 2 are out of service at any time. Recommendations An automated transfer and cutting system located at the Rolling Mill will eliminate rail and labor components of the existing method. Overall yield and productivity will be enhanced. A layout of the proposed arrangement is found on the attached sketch. Justification Annual Savings Labor- Change crew from 27 to 4 Rail Dummurrage Yield 2%

$1,300,000 $1,200,000 $ 500,000

Total

$3,000,000

Capital Improvements Demolition Purchased Equipment Construction Labor Design and Engineering

$1,200,000 $4,200,000 $2,600,000 $ 720,000

Total

$8,700,000

USS/KOBE PROJECT 12 NATURAL GAS TRANSMISSION LINE CONNECTION Description of Project A purchasing benefit can be obtained by the installation, (or ability to install), a pipeline to connect to the natural gas transmission network, USS/KOBE management estimate the savings to be as much as $4,000,000 annually. Easements have already been obtained for 20 miles of the 22.5 mile distance to connect to the gas transmission company. USS/KOBE has reached an impasse in the negotiations for the remaining easements and is not willing to take certain risks related to a conditional easement on the remaining lengths. Purchased Equipment and Materials Construction Labor Purchased Easements Legal and Title Fees Design and Engineering

$3,800,000 $2,400,000 $ 850,000 $ 200,000 $ 480,000

Total

$7,750,000

USS/KOBE CAPITAL PROJECT SUMMARY CAPITAL

SAVINGS

PROJECT 9 & 10- BOILERHOUSE

$ 6,555,000

$ 3,230,400

PROJECT 11- AUTOMATED CUTTING/TRANSFER

$ 8,700,000

$ 3,000,000

PROJECT 12- TRANSMISSION LINE CONNECTION

$7,750,000

$ 4,000,000

$23,005,000

$10,230,400

TOTAL

ROLLING MILL BILLET STRAIGHTENER

Project No. 13

Description of Project Yield at the Rolling Mill suffers because of an inordinately high loss percentage due to billets being bent both during and after rolling, therefore the production of straight billets has been identified by the company management as being of the highest priority. Losses from bent billets fall into the following categories: An average of 0.007% of the monthly throughput, amounting to 5880 tons annually is scrapped outright. Operational delays directly attributable to bent billets. Damages and replacement parts for the ultrasonic tester and the Magnaglo equipment because the bent billets do not enter the test area squarely. Maintenance labor costs to repair affected equipment. Current cost to transport and straighten bent billets at Betin Steel, Wickliff OH. Options •

• • •

Install an already purchased straightening guide just ahead of the cooling beds. This would probably remove the in-transit defects but would have no effect on those caused while on the cooling beds. The equipment is already available on site but has never been installed because there has been no adequate downtime. Purchase and install saw-touth, chain driven cooling beds designed to rotate each billet through 90° with each cycle of the bed. Cost prohibitive ($10 million plus), with no guarantee of 100% straight product Purchase and install a reconditioned gag straightener. Too slow to keep up with production and could not be used in- line of product flow Requires an operator at all times Purchase and install an in-line roll straightener. Permits continuous flow of product Requires no additional operator(s) Is the choice of many European mills, and is fast gaining acceptance in USA Several good quality, reconditioned, used units available Danielli has also made a proposal in 1995 for a new machine for $960,000, plus shipping and installation at site

Recommendation • •

Purchase and install a used and reconditioned roll straightener of proven design and from an experienced European manufacturer after expert inspection and evaluation by person(s) acceptable to both USS/KOBE and SSC Purchase and install all necessary material handling equipment

Cost Roll Straightener Material Handling Equipment Equipment Engineering Civil, Structural and Installation Power Distribution and Control Freight and Handling — Roll Straightener Engineering Procurement and Finance Total

$1,000,000 $ 536,000 $ 100,000 $ 460,000 $ 190,000 $ 25,000 $ 277,000 $2,588,000

Benefits Annual production loss avoidance from: Scrapped production. 5880 tons x $250 per ton Cost of operational delays Cost of damaged and replacement UST and Magnaglo parts Avoidable maintenance labor Transport and straighten at Betin Steel Total

Roll Mill Billet Straightener 3/24/98

$1,470,000 $ 345,000 $ 150,000 $ 80,000 $ 35,000 $2,080,000