The realities of managing a steam system at an industrial site

A common complication around steam decarbonisation originates in the organisational complexity of steam systems, with steam producers often not being part of the same division or even company.

This means that companies or departments simply can't pursue initiatives on their own. Additionally, this may lead to a conflict of interest that hampers or blocks initiatives, as costs and benefits don’t accrue to the same party or department.

Below are real-life examples of how a steam value chain can be spread across different players, with each setup creating its own challenges.

Key organisational challenges around steam grid management

Another organisational issue is the staff shortage industrial players have also been facing for the past few years, but the issue is becoming more critical considering the upcoming transformation of the sector.

The leaders we interviewed for our report Full steam ahead: The opportunity for industry in decarbonizing its steam grids agreed that new operators are in high demand but in short supply, while the existing staff is often ageing.

According to Accenture, chemical companies will soon face waves of retirement since c. 30% of employees in the industry are 50 years of age or older and are due to retire within the next decade.

And when it comes to dealing with change, industrial companies encounter more challenges.

Large industrial plants have ample experience implementing small changes regularly, updating their plant layouts, and incrementally adjusting to the latest technologies.

Today, they face a large-scale transformation in the near future due to both decarbonisation and flexibilisation efforts. Such a level of change calls for mindset changes as well, bringing both operators and management teams on board to think about the changes that are to be made to the sites.

What kind of approaches can organisations implement to manage steam more efficiently while realising their decarbonisation objectives?

Best practice 1: Make it a team effort, collaborating and managing performance with your technology partners and players across the steam value chain

Steam value chains are often dispersed across a site, including multiple stakeholders with varying priorities. This is why it’s essential to align incentives across the chain to implement efficiency or sustainability programs.

The decarbonisation process may require increased collaboration, closely working together and sharing site planning with players in the production, transmission and use of steam.

Leaders we interviewed also pointed to performance management as an area that calls for improvements. Today, performance is often focused on output rather than efficiency across the chain. But for decarbonisation programs to work, benefits need to be shared.

“The biggest challenge is to get the investments and additional costs for the transformation process back as revenue or cross-finance them.”

Energy Business Developer, Petrochemical Company

Bookkeeping matters

An example that was mentioned in the interviews was related to ensuring how steam costs are allocated fairly to production assets on a site.

If an asset manages to reduce its steam demand but is then “penalised” through a fixed cost allocation for the steam network, the incentive to actually take steps is reduced. This often results in an accounting exercise, but successful implementation hinges on a successful business case that is not blocked by mismatches in cost and benefits.

“Our successful energy solutions only worked if we included the whole site; solutions for individual factories would not have a business case.”

(Former) Energy Optimisation Manager, Steel Plant

Best practice 2: Institutionalise the incredible tacit knowledge of current operators and keep building new capabilities as technologies transition

Current operators often hold significant tacit knowledge of systems and can often carry out a first-order optimisation of steam systems based on their experience.

The leaders we interviewed pointed to a practice among top-performing companies to capture this knowledge in systems and operating procedures. Such organisations also develop standardised procedures to test and convert operator suggestions into actionable improvement initiatives.

When processes are standardised, automated, and optimised, operators can spend less time on daily system operations and more time on driving performance. All the while, they are supported by increasingly digitised systems that were properly trained.

With systems that, at times, require minute-by-minute adjustments, this can free up significant time to focus on real value-adding roles.

“Those who work with the production every day usually have the best ideas for how to improve things – so we work with them often to find new ideas.”

Head of Site, Chemical Player

Wrap up

Managing steam systems efficiently for industrial sites is complicated by the fragmented nature of steam grids, often involving multiple divisions or companies, which can lead to conflicts of interest. Additionally, workforce shortages and an aging staff present challenges, particularly as the industry faces a large-scale transformation due to decarbonisation efforts.

Key strategies for overcoming these issues include fostering collaboration across the steam value chain to align incentives and improve performance, and institutionalising operators' tacit knowledge through standardised processes. This helps ensure continued optimisation and adaptation to new technologies.

To gain deeper knowledge of effective strategies for decarbonising steam grids, check out our report Full steam ahead: The opportunity for industry in decarbonising its steam grids, based on interviews with 35 industrial leaders across Europe.