Optimization Deals With Power Deregulation

Abitibi Consolidated, Montreal, is the world's largest producer of newsprint as well as a top manufacturer of value-added papers, market pulp, and lumber. We have about 16,000 employees around the world, deployed in 27 paper mills, one market pulp mill, 22 sawmills, three remanufacturing centers, and 10 paper recycling centers.

Each year we manufacture approximately six million tons of newsprint, nearly two million tons of value-added papers, more than two million board feet of lumber, and almost a half million tons of market pulp. Our recycling operations consume more than four million tons of recycled fibers.

We faced a huge challenge in 2001 when the Ontario provincial government confirmed a deadline of May 1, 2002, for deregulation of the Ontario power marketplace. We have five paper mills located throughout Ontario, which together historically have purchased more than $100 million in electricity every year. (All figures in this story are in Canadian dollars.) In a regulated power market, this was never a problem. We knew the cost per megawatt/hour and we knew about how much power we would consume each year.

But with deregulation, electricity now is subject to wide swings in both availability and pricing. Heat waves in the summer and intense cold in the winter will elevate power demand. Generating equipment breakdowns and even power availability in neighboring markets affect the supply and cause fluctuations in pricing.

Three of our five Ontario mills have some degree of hydroelectric generating facilities, so they can supplement or replace some of the provincial power as needed. What we don't generate is purchased from the Ontario grid at market price or based on contractual agreement. Poorly managed power purchasing could result in additional costs of hundreds of thousands of dollars.

Responding to this situation required that we put in place a system that could overlay energy market information on our real-time electricity consumption so that we could monitor conditions and make better, more timely business decisions. We first investigated off-the-shelf energy management systems, but the only one that might have been suitable was priced at about $3 million, not counting annual support and maintenance costs. These costs were prohibitive, given the current economic situation in the newsprint market.

We then examined our operations in Ontario to see if we could build our own application more cost-effectively. After much creative reflection from a team that included personnel from our mills and our head office, we decided the answer was yes, we had the tools in place to create our own system. While it might not offer all the bells and whistles that the packaged systems did, we felt we had all the major elements.

One of those elements was our existing Realtime Performance Management (RtPM) solutions from OSI Software (www.osisoft.com). These modules were already used at 18 of our mills, functioning as the nerve centers for all production data and reporting. They were linked to various equipment, such as our DCSs and PLCs, via Windows-based operator interfaces.

Because they were on the critical path for managing production at each mill, each of the RtPM systems could be tapped to provide the raw process data that we needed, including metering information. The primary modules included PI Historian servers, PI Process Book, and PI Data Links.

We added a PI server at one mill that didn't have one and we added a second at our headquarters in downtown Montreal, which served as the control center for the entire application. We redeployed a used PI system as a hot backup, so if anything happened to our primary server we could switch over instantly. We then set up data links between the remote PI servers at each mill and the center in Montreal (Figure 1).

The next step was to deploy OSI's HTML interface to access the new Independent Electricity Market Operator (IMO) web site to obtain market information over the Internet. The IMO is to the electric marketplace what the stock market is to the financial world. This link gives us continuous up-to-the-minute information on the availability and pricing of electricity.

We also set up a link to the Environment Canada web site so we could collect current weather information on the metropolitan Toronto area and at the mill locations, so we can match weather changes to market conditions. We extended the use of PI/HTML by gathering information on the commodities futures markets for natural gas and crude oil.

We began to work on this solution, which now was officially known as the ACI Energy Management System (ACI/EM-SYS), in October 2001. One good thing about dealing with immovable deadlines is they force people to work together to reach a common goal. In this case, we absolutely had to complete our project before May 1, 2002. We were fortunate to have the full support of our executive management, which meant we could request the services of internal resources such as key programmers and specialists from various locations in North America for temporary assignment to our project.

Our IT staff worked closely with both corporate management and the mill energy managers to determine exactly what their needs were. Our design and programming staff from various divisions worked together to build applications specifically to fit those requirements.