Unit 4: Benefit Estimation

33
UNIT 4
Benefit Estimation
Before projects can be ranked and evaluated, benefits must be identified
and quantified. This unit covers estimation of the control performance
improvement that is likely to be achieved by a particular installation and
translation of the change in control performance into changes in process
and economic performance.
Learning Objectives When you have completed this unit you should:
A. Be able to estimate the control performance improvement from a
specific control improvement project.
B. Understand how control performance improvement can be
translated into process performance improvement.
C. Understand how process performance improvement can be
translated into economic performance improvement.
D. Be able to estimate economic performance improvement and
present the benefits as a cash flow table.
4-1. How Much Money?
Unit 3 showed how to identify the most likely benefits from a control
improvement project. This information usually is not sufficient for justifi-
cation. Management also wants to know how much money the project is
likely to cost and how much it is likely to make. This unit presents a step-
by-step procedure for benefit estimation. Benefits are estimated before
costs in order to define the scope of a project. There is no point in specify-
ing and costing a DCS system to save $10,000 a year in operating costs.
The project should be abandoned unless a simpler implementation can be
found.
4-2. Information Requirements
To estimate the benefits from a control improvement, the following rele-
vant information is usually needed:
Knowledge of present control performance
An estimate of improved control performance
Friedmann05.book Page 33 Tuesday, June 13, 2006 11:31 AM
34 UNIT 4: Benefit Estimation
Knowledge of applicable constraints
A process model that shows the interrelationship of variables
An economic model of the process
This list is not as formidable as it appears. Relevant information is usually a
small subset of what is known about the process. For instance, suppose the
control improvement being considered is better temperature control to
improve yield. Present control performance can be observed. Historical
data are already available from log sheets, recorder traces, or computer
files. Improved control performance can be estimated from similar loops
or from the guidelines in Section 4-3 of this Unit. The applicable con-
straint, if any, is probably a temperature upper limit. The relevant process
model is simply a curve that shows the effect of temperature on yield. This
steady-state information is part of process design data and may have been
updated in plant tests. The only economic information needed, the worth
of an incremental yield improvement, has already been calculated by
plant accounting.
This information is used in the multistep procedure shown in Fig. 4-1.
Present and improved control performance are compared to estimate con-
trol improvement. If any constraints are applicable, control improvement
is used to calculate the amount by which operating conditions can be
changed. This process change and the process model information are used
to calculate the process improvement. Finally, the process improvement
and economic information are used to calculate benefits.
If the best practical economic performance of a unit can be estimated, the
difference between this value and the present economic performance can
serve as an upper bound on the economic performance improvement that
can be realized by control improvement. A range of 1-4% production
Fig. 4-1. Benefit Estimation Procedure
UNIT 4: Benefit Estimation 35
increase (or cost decrease) has been quoted. Fig. 4-2 shows experience at
one major chemical company.
4-3. Estimation of Control Performance Improvement
Control performance was defined in Unit 2 as a measure of how well the
control system achieves its objectives, expressed as a function of variabil-
ity. Control performance improvement is measured by the reduction of
variability that is achieved, expressed as a percentage of original variabil-
ity. For instance, suppose a temperature control feedback loop has been
operating with a standard deviation of 10 degrees. The addition of feed-
forward control reduces the standard deviation to 3 degrees. Control per-
formance improvement is 100 x (10 3)/10 = 70%.
Control performance improvement from a proposed control scheme can
be estimated with some precision by building a dynamic simulation of the
process and applying the proposed scheme to the simulation. The simula-
tion should include measurement noise. This effort cannot be justified for
most projects, so control improvement must be estimated from the quality
of previous performance and some guidelines.
The loops that are susceptible to the greatest improvement are those with
the worst performance, usually because they are uncontrolled. Adjust-
ment of the manipulated variable is manual and infrequent. Lack of con-
trol is often due to absence of an on-line measurement. Fig. 4-3 shows
typical effects of first adding on-line measurement, then control. When
measurement has been added but control is still manual, error decreases
but still changes sign infrequently. Only after automatic control has been
added does the frequency of set point crossing increase significantly. Man-
ual control is usually conservative. The operator seldom takes action until
he or she is sure that an error is persisting.
Fig. 4-2. Realizable Performance Improvement by Better Control (Ref. 5)
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Cost of Goods Sold, M$
If the only available information about a stream composition has come
from laboratory analyses once a shift, on-line measurement and control
can produce dramatic improvement. Reductions up to tenfold in 95% lim-
its can be expected.
Some of the improvement is attributable to more frequent measurement
and some to control.
Example 4-1: Superfractionators A and B were identical columns with
similar control performance. The effects of adding on-line measurement
and control to column A are shown in Fig. 4-4. First, an on-line gas chro-
matograph to measure bottoms composition was added, which reduced
root mean square composition error to 0.32%. Composition error for col-
umn B during the same period was 0.81%. The subsequent addition of
closed-loop control further reduced composition error to 0.17%. Total con-
trol improvement was 100 x (0.81 0.17)/0.81 = 79%.
Many loops have on-line measurement and manual control. Either no
automatic controller has been provided or the controller is left in manual
mode. Processes with long time delays (e.g., cement kilns) are often left in
manual because controller tuning is difficult. Reliable closed-loop feed-
back control can reduce 95% limits by up to a factor of 4. Maximum
improvement can be expected if the loop is difficult to control manually.
If the loop is already under automatic control most of the time, only lim-
ited improvement can be expected. Advanced control refinements (e.g.,
linearization, feedforward, decoupling) seldom have as much impact as
the initial application of a controller. Halving of 95% limits is a reasonable
upper bound on expected improvement.
Fig. 4-3. Composition Control: Effects of On-line Analysis and Automatic Control
4-4. Translation to Process Improvement
If a process has an unconstrained optimum, improved control can pro-
duce process improvements and benefits without any changes to set
points. The upper part of Fig. 4-5 shows power consumption curves for a
cooling tower. Since both pump and fan curves are concave, total power
consumption goes through a minimum at an approach (difference
between air and water exit temperatures) of M degrees. Improved temper-
ature control can tighten temperature distribution as shown in the lower
Fig. 4-4. Effects of On-line Analysis and Control on Distillation Tower Performance (Ref. 1)
part of Fig. 4-5. Temperature approach stays closer to the minimum value
M and reduces average power consumption. The reduction can be quanti-
fied by integrating the approach distribution over the total power con-
sumption curve.
Most process operation is limited by constraints. These constraints may be
physical, regulatory, or economic. Pump capacity is a physical constraint.
A limit on sulfur dioxide emission is a regulatory constraint. Price discon-
tinuities are economic constraints. Constraints can be hard or soft. A hard
constraint cannot be violated; violation of a soft constraint is possible but
incurs a penalty. The steady-state optimum of a constrained process
almost always lies on one or more constraints. Improved control allows
operations closer to a limiting constraint and, therefore, closer to the opti-
mum. The process set point must be moved closer to the constraint to real-
ize benefits.
Fig. 4-5. Effect of Temperature Control on Cooling Tower Power Consumption
Example 4-2: A reactor must be operated below a specified maximum
temperature. Yield from the reactor is a damped function of reactor tem-
perature. Fig. 4-6 shows the effects of improved temperature control and
set point change. Temperature variability decreases when control is
improved, but average yield increases only after control has been
improved and the set point has been changed. Temperature exceeds the
upper limit about as frequently as it did under original conditions. The set
point cannot be raised before control is improved, or the constraint will be
violated too often.
The same situation is shown from a different viewpoint in Fig. 4-7. Tight-
ening the quality distribution allows the target average to be shifted closer
to the specification. The specification is a soft constraint, and some points
in each distribution exceed it. The relationship between the controlled
variable and the constraint is preserved, as shown in Eq. (4-1), by main-
taining the ratio of the standard deviation and the distance from the
set point to the constraint.
(4-1)
Fig. 4-6. Operating Closer To a Constraint
1
------
2
------ =
The percentage P of the distribution that violates the constraint is held
constant (i.e., P
1
= P
2
). For this reason, this relationship appears in the lit-
erature under the name of same percentage rule (Ref. 3). Another func-
tion of variability (e.g., range, % within limits) can be substituted for in
Eq. (4-1). If the consequences of constraint violation are known and quan-
tified and the distribution is known, it may be more profitable to vary the
relationship and move the target average closer or farther away from the
constraint than is called for in Eq. (4-1). This point is illustrated in Exercise
4-6.
Even when operation is not constrained, upstream or downstream process
changes may be required to realize process benefits. For instance, better
reactor control, producing an effluent with a higher concentration of a
desirable product, may not result in a purer product until downstream
separation process conditions are changed.
Fig. 4-7. Quality Distribution Curves (adapted from Ref. 2)
4-5. Translation into Dollars
Conversion of a process improvement into an economic improvement can
be easy or difficult. The degree of difficulty depends on the type of
improvement and the economic climate. Labor and utility savings are usu-
ally easy to convert. Estimated savings per unit time, expressed in the
appropriate units (kWh, man-hours, etc.) are multiplied by the incremen-
tal unit cost. Utility incremental costs usually are readily available. Incre-
mental costs of labor may depend on contractual agreements. Raw
material savings from yield improvement are calculated by the same
method, multiplying unit improvement by unit cost.
The benefit from yield improvement of multiproduct processes (e.g., cata-
lytic cracking or ethylene production) may be hard to calculate. Increased
yield of one product is balanced by decreased yield of another, and the
resulting benefit is dependent upon relative product values.
Estimation of the profit from an increase in productive capacity is easy if
all the added production can be sold at a fixed price. The additional units
of production are simply multiplied by the incremental profit per unit.
Help should be requested from marketing if it is likely that added produc-
tion will affect the price structure. If the added production cannot be sold
at a profit, the capacity increase must somehow be used to reduce costs,
perhaps by displacing higher-cost production at another site.
An improvement that results in emission reduction may require another
step before a direct conversion into economic terms is possible. If the pre-
vious emission level has been acting as a plant constraint, emission reduc-
tion shifts the operating level at which the constraint applies and allows
higher production or more efficient operation. These benefits can then be
quantified.
Example 4-3: A power plant rated at 1000 megawatts can produce only
850 MW before overloading its scrubber, as shown by the solid line in Fig.
4-8. Control improvements to the scrubber will shift emissions to the
dashed line, allowing generation of 950 MW before reaching the emission
limit. If the incremental cost of energy at the plant is $0.10/kWh and the
added generation will replace a gas turbine costing $0.11/kWh to operate,
savings attributable to better scrubber control will be ($0.11 $0.10)/kWh
x 1000 kW/MW x (950 850)MW = $1000/hr.
Estimation of the dollar return from a product quality improvement often
requires assistance from marketing, and even then it may be hard to
define. Product improvement in a competitive market is a leapfrog pro-
cess. An improved product may be the best on the market this year and
command a premium price, but a competitor's upgrade can reverse the sit-
uation and erase the premium. Assuming that future pricing over time can
be estimated, added revenue benefits are calculated for each year by mul-
tiplying product volume by the difference in price attributable to the qual-
ity improvement.
4-6. Representation as Cash Flow Table
Management wants to know not only how much money the project is
likely to make but also when. A project that returns 10 times its invest-
ment is not necessarily attractive if the return is 30 years hence. The usual
way to describe benefits as a function of time is with a cash flow table.
Conventional representation starts at time zero and presents cash flow in
one year increments. The table extends over the life of the project.
References
1. Friedmann, P. G., and Fletcher, R. J., 1967. Control of a
Superfractionator. Instrumentation in the Chemical and Petroleum
Industries, 4, p. 49. Plenum Press.
2. Latour, P. W., 1976. The Hidden Benefits from Better Process
Control. ISA paper 76-528, presented at ISA/76.
3. Matrin, G. D.; Turpin, L. E.; and Cline, R. P., 1991. Estimating
control function benefits, Hydrocarbon Processing, 70, 6, pp. 68-73.
4. Murrill, P. W., 1999. Fundamentals of Process Control Theory, 3rd
ed. Research Triangle Park, NC: ISA.
Fig. 4-8. Power Plant Emissions
5. Trevathan, V., 2004. Notes for ISA Course MT10, Planning,
Justifying and Executing Automation + Control Projects.
Exercises
4-1. In Example 4-2, is the maximum temperature limit hard or soft?
4-2. A shell-and-tube heat exchanger is used to heat a liquid. It is desirable to
heat the liquid as much as possible, but liquid temperature must be kept
under 120C. The temperature is now controlled by a closed-loop feedback
temperature controller that manipulates a steam valve. Temperature set
point is 115C. A change to cascade control is proposed, adding a pressure
control inner loop as shown in Fig. 4-9. It is expected that this control
improvement will allow the temperature set point to be raised to 119C. Is
this expectation reasonable?
4-3. A control room consolidation eliminates four jobs. The labor contract states
that workers displaced by automation will remain on the payroll for three
years or until they reach retirement age, whichever comes first.
One of the displaced operators retires in 1.5 years. Two operators of a
similar unit retire in two years and must be replaced. Each operating job
costs the firm $35,000/year in wages and benefits. The process has a useful
Fig. 4-9. Shell-and-Tube Heat Exchanger Cascade Control (Adapted from Ref. 4)
life of ten years. What are the benefits from the consolidation project?
Present the results as a cash flow table. Assume that the consolidation is
completed in one year.
4-4. A product has an upper limit on component X of 500 ppm. The process is
operated to turn out product with an average of 400 ppm of X. More precise
flow metering will tighten the composition distribution, reducing 90%
limits (the endpoints of a range that includes 90% of the distribution) from
100 ppm to 40 ppm. In the absence of other information, where should
the new set point be located?
4-5. If each ppm increase in average X content decreases operating costs of the
product in Exercise 4-4 by $0.01/kg, and recycling product with X> 500
ppm costs $1.00/kg, how much will the flow metering project save per
kilogram?
4-6. More information is available about the process described in Exercises 4-4
and 4-5. It is estimated that after more precise flow metering is installed,
composition set point will be related to percent, exceeding the 500 ppm
upper limit according to Table 4-1. Given this added information, can a
more profitable set point than 460 ppm be specified?
Composition Set
Point, ppm
% Recycled
450 2
460 5
470 10
480 20
490 33
500 50
Table 4-1. Effect of Composition Set Point on Recycling

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