Norske Skog Tasman

Winner
2015
Minimising the cost of power at the Tasman newsprint mill

A new operating regime at Norske Skog Tasman could trim the company’s electricity use at its paper mill by about 6 per cent.

The change, deliberately slowing the paper machine’s operating rate, is the latest in a string of initiatives the company has undertaken in recent years as it fights to retain production amid declining global demand for newsprint.

Newspapers are shutting or shrinking in size and many newsprint mills have closed worldwide. Two machines have already shut at Tasman, in 2006 and 2013 respectively, and the company has been working since then to slash both its energy costs and consumption to keep its remaining machine viable.

Earlier this year Norske Skog started running the paper machine slower, reducing its energy use by 0.2 MWh per tonne of newsprint. If this can be maintained, it will save about 31,000 MWh of electricity annually.

The company says the change has also delivered production benefits by reducing downtime, paper breaks and production of off-spec paper.

Since 2013 Tasman has commissioned a 20.5 MW geothermal power plant, developed a production optimisation model and become the electricity market’s first dispatchable demand participant.

The Tasman mill at Kawerau uses roughly 500 GWh of electricity annually, about 230 GWh of which is generated on site. Electricity accounts for about half the variable cost of newsprint production; reducing its use and cost is key if the mill is to remain a low-cost operator.

Norske Skog Tasman says the TOPP1 plant commissioned in May 2013 delivers electricity at a variable cost about a third lower than what the company would expect to pay on-market.

In recent months the company has increased TOPP1’s net power output by about 1 MW to 21.5 MW by reducing parasitic load through improvements in control loop tuning, more accurate instrument calibration, and fixing programming errors.

Norske Skog Tasman also actively manages its pulp production to minimise electricity and transmission costs.

The mill developed its PowerTool computer model – a mixed integer linear programme - which combines data on the value of pulp storage with forecast electricity prices and other factors like maintenance schedules to help operators optimise production.

Using this and other tools, the company has been able to shift production out of high-priced periods and trim its electricity bill. It has gained additional savings by offering load into the instantaneous reserves market.

In November Norske Skog Tasman became a dispatchable demand participant and since then has consistently offered dispatchable demand bids at one of its grid exit points.

The company says being ‘dispatched off’ provides more certainty for the mill than PowerTool, which relies on forecast electricity prices which don’t always eventuate. The firm’s participation in the scheme has also benefited other consumers by capping wholesale power prices for those periods when the mill is dispatched off.

Norske Skog Tasman says the cultural shift within the business away from continuous production has been essential to maintaining the jobs of its 170 staff and 35 contractors, and the economic benefit the mill delivers to Kawerau and the forestry, engineering and transport industries in the Eastern Bay of Plenty.

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