Dennis Williams | Commercial Director | Associated Energy Services (AES) | mail me |
Although many manufacturing and industrial companies set objectives to reduce fossil fuel use, no silver bullets exist in the green fuel space. Supply and logistics constraints, high costs and technological limitations present challenges.
Manufacturing companies can implement the green energy transition by investigating more sustainable and lower-carbon fuel alternatives. This approach helps them avoid paying carbon taxes both locally and abroad.
Decarbonisation as part of green energy transition
When a global business decides to reduce its carbon footprint or go carbon neutral, it applies this across all marketplaces. This happens irrespective of local economic pressures and technical challenges.
One of our clients is already running out of time to meet the ambitious decarbonisation target of its global parent company. We have reviewed all options, from electricity to solid fuels, liquid fuels, different gases, biomasses and agricultural residues. We have shown the capex, opex and supply dynamics on multiple occasions.
We have also considered the space needed and what each fuel choice will incur from an emissions and carbon tax perspective. Additionally, we looked at steam costs, potential ash generation and how to deal with that.
Carbon taxes are here to stay. Companies and consumers will not absorb the costs of using fossil fuels indefinitely. Companies must understand different options that suit their specific needs.
Gas – just hot air?
Gas is best regarded as an interim step on the decarbonisation journey. Supply remains an issue for gas, and it is still a fossil fuel with a carbon footprint. Companies will pay substantial carbon tax and only progress part of the way to a zero-carbon target.
There is also a cost associated with making this interim switch. This makes it a less-than-ideal option in most cases.
Apart from predicted local shortages of natural gas, converting and transporting this fuel as liquefied natural gas (LNG) is problematic. It is neither environmentally friendly nor affordable. Recent price indications show LNG at US $18 to 20 per gigajoule. This is roughly four times the cost of coal.
Biomass – why waste?
Bagasse, derived from sugar cane residues, likely served as the earliest biomass fuel used in South Africa. Business models for this fuel have evolved significantly over the years. Years ago, people saw bagasse as a problem. Today, local sugar mills maximise its use as an energy feedstock in boilers for steam and power generation.
In the timber industry, the focus shifts to maximising the useful yield from timber. Each log gets scanned to determine possible sizes, widths, and thicknesses, while also assessing potential wastage. White wood chips often get sold for board manufacture. This typically leaves contaminated wood chips, saw fines, and bark, which can be used for energy. Other options include macadamia shells, sunflower husks, and maize harvesting residues.
Seasonality and crop yields impact supply. Rural locations also increase transport costs and vehicle emissions. The potentially alkaline chemical composition of agricultural waste can damage boilers and heat transfer surfaces. Ash characteristics also pose problems.
When researching the use of sunflower husk for a client, we encountered sustainability challenges. For years, a surplus of sunflower husks flooded the market. Then, suddenly, sunflower seed pricing changed. Local manufacturers found it more cost-effective to import sunflower oil than to process sunflower seeds themselves, putting the project’s viability into question.
Wind and solar – blowing hot and cold?
The biggest challenge with this solution lies in grid constraints. Renewable energy companies cannot export electricity to the national grid without investing in additional power line capacity.
They also face challenges in wheeling electricity to an end-user for use in an electrode boiler. On-site, space availability doesn’t match the number of solar panels required. Offsetting megawatts of energy from solid, liquid, or gas fuels demands extensive space.
Operations running 24/7 require three to four times the surface area. If they use five megawatts, they will likely need 15 to 20 megawatts. When the sun shines, extra energy must get generated and stored in batteries, adding substantial costs. However, in most cases, the required space is simply not available.
The green energy transition and fuel reduction
We help clients implement a phased approach. First, they adapt manufacturing processes to use less steam. A 10% drop in steam usage directly reduces fuel consumption by 10%, leading to an immediate 10% carbon footprint improvement.
Next, they outsource steam boiler operations and maintenance to an experienced industry expert. This boosts energy plant fuel efficiency and drives further carbon savings.
When companies upgrade, we propose running boilers on different fuels. This expands their understanding of technology and the fuel supply marketplace. One food sector client, for example, uses biogas, heavy furnace oil, and biomass. This strategy creates redundancy, allowing them to shift demand between assets while enhancing risk mitigation and fuel flexibility.
We advocate for a phased carbon reduction approach. Trialling various fuel sources reveals the best fit for operational and financial viability. The urgent need to cut carbon emissions and comply with tax regulations pushes manufacturing and industrial companies to act. Those who delay risk falling behind.
