Ambitious Project to Create Single Coal Fuel Hub

Ambitious Project to Create Single Coal Fuel Hub

Through working with Studio Zeta and WITNESS, ENEL were able to test and validate the Porto Torres project, creating a single coal fuel hub, increasing profit and capacity.

Lanner is extremely proud that energy company ENEL chose WITNESS and our long standing Italian partner Studio Zeta to test and validate a proposed project to create a single Coal Fuel hub at Porto Torres, Sardinia. WITNESS is well proven in this field having been selected for many shipping studies around the globe and the work conducted by Studio Zeta enabled ENEL to confidently move forward with implementing their ambitious project.

ENEL is a multinational group with Headquarters in Italy, and is one of the most important players in the supply of electricity and gas to Europe and Latin America.

The Group is present in 40 countries on 4 continents, working in the field of generation with a net installed capacity of 98 GW, distributing electricity and gas to 61 million customers through a network of approximately 1.9 million kilometres.

ENEL is the largest Italian energy company, focusing on power generation from thermal power plants and renewable sources, with about 40 GW of installed capacity. Of these, about 3 GW of products are from renewable plants operated by EGP.

In addition, ENEL manages much of the electricity distribution network in the country and offers integrated products and services for electricity and gas to 33 million Italian customers.

In order to streamline the purchasing and transportation of coal from mines to power plants in the Mediterranean, ENEL decided to evaluate the possibility of having its own fleet and managing the logistics network around a hub at Porto Torres, Sardinia.

In an interview with Gilberto D’Ignazi, Head of Logistics Thermal Plant Development and Energy Management Division at ENEL, he discusses the requirements of the Porto Torres project.

“This is a project born from the need to reduce the cost of supplying fuel to our power plants in the Mediterranean. Today, each jetty handles the arrival of the coal from various ports of origin, according to the limits allowed by the draft of the ship and the water in the harbour. Often we have to use ocean liners of high tonnage at partial load.

Each control unit also has a specific mixture of fuel, however we can only order the quantities needed for each port, when they are actually needed.

Our idea is to build a single hub in Porto Torres, which in addition to meeting the requirement of specific water depths, will make it possible to reach all of our points of delivery within 24 hours of sailing.

To support this project, we also want to create a specialist team, capable of modelling the individual power needed to develop a flexible system for mixing fuel.

This would concentrate the supply of coal to a single port, enabling the coal to be blended to suit the specific requirements of the power plant it is to be delivered to, with the size of the vessel compatible with the channel depth of the destination port.

Imagine the savings and the reduced environmental impact created by this project?

Not only that, it would also enable us to be completely flexible: for example, after the maintenance of a boiler, a different mixture of fuel may be needed, this could be made on demand from the hub centre.

In addition, greater purchasing power would result in better bargaining power with suppliers. We would, in fact, have ability to store 1.5 million tons of raw material at Porto Torres. It would mean we can perform at our very best, whilst reducing our impact on the environment and minimize our fuel costs. Establishing self-unloading vessels within our fleet could also bring significant benefits, saving both in investment and operating costs in the future.

The project is an ambitious and far-reaching strategy, and we therefore must anticipate and quantify project risks and optimize technical solutions.

We understand that to do this it is essential to thoroughly test our plans using simulation, enabling us to gain a holistic view of the dynamic behaviour of the entire supply chain.

Only then can we assess more alternative scenarios to make decisions with confidence and effectively communicate solutions to investors.”

Introduction

Worldwide, 39% of electricity is produced from coal, and in the 27 EU countries, 33%.

In the future there will be a strong growth in electricity generated from coal, driven primarily by China and India, two countries with large populations, almost 2.5 billion people, where energy demand is growing at a remarkable pace.

Equally remarkable, however, is the technological innovation taking place at ENEL, which has allowed the energy provider to become 10% more energy efficient compared to a few years ago.

In particular, investments in the technology of “clean coal”, which is made in Italy, now allows ENEL to propose new generation power plants which meet the high standards of environmental excellence.

For example, the Torrevaldaliga Nord power plant, which opened in July 2008 at Civitavecchia, is one of the most advanced in the world. The systems in place to transport and handle the coal are completely sealed, meaning the fuel never comes into contact with air, and emissions have been reduced by up to 88% compared to the previous oil system it was using.

Background of the Project

ENEL believed that the logistics of supplying fuel to its coal-fired power plants in the Mediterranean did not have the qualifications to support the competitive challenges of the coming years.

The most obvious constraint of the logistics model was the inability of current ports with shallow waters to accommodate vessels with high capacity.

Due to each power plant reaching its maximum thermal efficiency when fuelled by a specific grade of fuel, each plant is only able to use a limited number of suppliers.

All of this creates many economic inefficiencies arising from both the cost of purchasing the fuel and the transportation logistics.

ENEL therefore decided to evaluate the possibility of completely redesigning the supply chain model, creating a large hub in Porto Torres, a port with deep water suitable to operate high-tonnage ships, and make its own fleet, optimizing the sale, transport and shipment to ports across the Mediterranean.

Porto Torres

The site of Porto Torres was the first of its size in Sardinia. During the past decade the port has seen a huge development in terms of industrial, commercial and passenger trade. Today there are programs for the renovation and expansion of the port.

Elements of the Supply Chain

A variety of vessels and ships are part of ENEL’s supply chain. Each one has a different set of requirements and needs which has to be taken into consideration.

These include:

• Capesize vessels with a dead weight tonnage of 170,000
• Panamax type ships with a dead weight tonnage of 72.000
• Panamax type ships with a dead weight tonnage of 65.000 which are also self-unloading
• Handymax type vessels with a dead weight tonnage from 12,000
• Tugs for entry and exit from the port
• Loading docks which include cranes, hoppers and conveyors

The Complexity of System Logistics

Within a supply chain such as this one, there are multiple levels of demand, as well as variations in the type of fleet needed when delivering the fuel from the ports in Indonesia, South Africa, Colombia, United States and Russia.

Each fuel supplier has its own set of rules regarding the arrival of ships to its ports, therefore the random variations in arrival times needs to be included in the plan.

The type of fleet needed for the loading of coal, bound for the various power stations is another factor which needs to be considered, as well as the viscosity of the coal, which when incorrect can result in failures or jams to unload berths.

The frequency of failures (MTTF) also needs to be modelled, as does the time it takes to conduct any repairs (MTTR). The shift patterns of the ground operators is also another consideration, as are the rules and regulations set out by each port.

Objective of the Project

Since the realisation that a single hub is a “single-point-of-failure” that could endanger the supply of fuel to the entire production system of ENEL in the Mediterranean, Studio Zeta was selected to fully analyse the system being proposed.

Studio Zeta’s task included the need to validate the capacity of the new port when loading and unloading the ship’s cargo. The model also needed to verify staff requirements and the cost of resources on-shore, which included quay and handling equipment.

Other tasks included quantifying potential demurrage charges, evaluating the performance of the logistics system and the “fleet mix”, which includes the incoming (Panamax, Capesize) and outgoing ships (Panamax, Handymax and the Panamax self-unloading).

Stress tests were also to be conducted to quantify the sensitivity to variations in weather conditions and the duration and frequency of mechanical failures. The model was also used to quantify Disaster Recovery planning.

The Solution

Following the objective for the project being set out, Studio Zeta used Lanner’s Simulation Platform WITNESS to conduct various experiments, which included the following scenarios:

• A fault-free environment with no influences from the weather
• The introduction of variability and failures within the supply chain and various weather conditions to test the robustness of the plans
• Shift patterns of ground operators
• Varying the arrival of ships to the ports entrance
• Varying the frequency of failures within the supply chain

Stress tests were also used to discover how the increase of volumes and the increase of faults would affect the supply chain, as well as the time it would take to return to normal operations after a disaster took place.

In all of these cases the logistic system studied by ENEL has proved to be robust, capable of handling the amount of projected capacity and be able to withstand unexpected events, even when they are severe.

By using WITNESS Simulation, Studio Zeta was also able to identify organisational solutions regarding the resourcing of the ground operators, significantly improving the working capacity of the port.

The study has also enabled ENEL to reconsider the requirements of minimum safety stock, thereby reducing the cost of working capital.

“The project is an ambitious and far-reaching strategy, and we therefore must anticipate and quantify project risks and optimise technical solutions. “It is essential to thoroughly test our plans using simulation, enabling us to gain a holistic view of the dynamic behaviour of the  entire supply chain.”
Gilberto D’Ignazi, Head of Logistics, ENEL