Although many manufacturing and industrial companies have stated objectives to reduce use of fossil fuels, there are not yet any silver bullets in the green fuel space, says Dennis Williams, Commercial Director at steam and boiler operations and maintenance service provider, Associated Energy Services (AES).
Supply and logistics constraints, high costs and technological limitations are just some of the challenges encountered by AES, as they assist an increasing number of clients to investigate the use of more environmentally sustainable, lower carbon fuel alternatives – thereby obviating the requirement to pay carbon taxes both locally and abroad.
“When a global business decides to reduce its carbon footprint – or even go carbon neutral – this decision seems to be applied across all marketplaces, irrespective of the local economic pressures and technical challenges.”
One AES client 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 – and shown the capex, opex and supply dynamics on multiple occasions. We have also considered the amount of space needed – and what each fuel choice will incur from an emissions and carbon tax perspective. In addition, we have looked at how much the steam will cost, the ash which could be generated and how to deal with that.”
Williams’s key message is that carbon taxes are here to stay – and that companies and consumers will not be able to absorb the costs of using fossil fuels indefinitely. Companies must be educated about different options that suit their specific needs.
Gas: just hot air?
For Williams, gas is best regarded as an interim step on the decarbonisation journey: “Not only is supply an issue in terms of gas – but it remains a fossil fuel with a carbon footprint. Companies will still pay substantial carbon tax and find themselves only part of the way to a zero carbon target. There is naturally also a cost associated with making this interim switch – so it is a less than ideal option in most cases.”
Apart from the predicted local shortages of locally available natural gas, converting and transporting this fuel as liquefied natural gas (LNG) is not environmentally friendly and is expensive – with recent price indications at US $18 to 20 per gigajoule, which is probably four times the cost of coal.
Biomass: why waste?
Williams says bagasse, derived from sugar cane residues, was probably the earliest biomass fuel used in South Africa: “The business models for this have changed substantially over the years. Years ago, bagasse was regarded as a problem. This view has been turned on its head – to the point where local sugar mills maximise its use as energy feedstock in their boilers for steam and power generation.”
In the timber industry, the focus is on maximizing the useful yield from timber. Each log is scanned to determine the sizes, widths and thicknesses which can be cut; as well as the potential wastage. White wood chips are often sold for board manufacture, typically leaving mainly contaminated wood chips, saw fines and bark. These can be used for energy.
Other options are macadamia shells, sunflower husks and residue from maize harvesting. Seasonality and crop yields impact supply – while rural locations increase transport costs and vehicle emissions.
The potentially alkaline chemical composition of agricultural waste can damage boilers and heat transfer surfaces. The ash characteristics are also problematic, Williams notes.
When researching the use of sunflower husk for a client, AES found it challenging to find a workable and sustainable solution: “For years, there was a glut of sunflower husks in the market. Then, suddenly, sunflower seed pricing turned and it became more cost-effective for local manufacturers to import sunflower oil than to process sunflower seeds themselves. This put the viability of the project into question,” Williams recalls.
Wind and solar: blowing hot and cold?
The greatest challenge with this potential solution is grid constraints, with renewable energy companies unable to export electricity to the national grid without investment in additional power line capacity and challenges in wheeling the electricity to an end-user for use in an electrode boiler.
On site, Williams also points out that there is a big disparity between space available for the amount of solar panels realistically required to offset the megawatts of energy input from solid, liquid or gas fuels: “24/7 operations are looking at three to four times the surface area. If these are using five megawatts, they will probably need 15 to 20 megawatts. When the sun is shining, they will have to generate the extra energy and put it into battery storage. That comes at a substantial cost, but the space is simply not available in most cases” he argues.
The best of different worlds
AES is working with some clients to implement a phased approach. First is adapting their manufacturing processes to use less steam. A 10% drop in steam usage equates to a 10% reduction in fuel – and an immediate 10% carbon footprint improvement.
Next is outsourcing their steam boiler operations and maintenance to a seasoned industry expert such as AES to further increase energy plant fuel efficiency – another carbon saving.
When companies can upgrade, Williams proposes running boilers on different fuels to better understand the technology and the fuel supply marketplace: “One of our food sector clients is using bio gas, heavy furnace oil and biomass. This creates a lot of redundancy and opportunities for them to shift demand between those assets, providing substantial risk mitigation and flexibility on the fuel side,” he explains.
“We recommend a phased carbon reduction approach; as well as trialling various fuel source options to see which fits best in terms of operational and financial viability.
The need for a reduced carbon footprint – and the taxes associated with enforcing this – are an unequivocal rallying call to manufacturing and industrial companies to get their houses in order, before they are left behind. AES is there to assist every step of the way,” Williams concludes.
Shadowfax
Wendy Luhabe\’s first step into entrepreneurship came in 1991 when she launched Bridging the Gap, a consulting firm that assists young black South Africans entering the working world. In 1993, she launched Women Investment Portfolio Holdings, the first fund to provide capital to women-owned businesses in South Africa. In 2002, she launched Africa\’s first Women-Focused Private Equity Fund. She also published her first book entitled: Defining Moments: Experiences of Black Executives in South Africa\’s Workplace. Luhabe launched her Foundation in 2002, to educate young disadvantaged black women, particularly from rural areas. In 2011, Luhabe was asked by Hillary Clinton to join the International Council on Women\’s Business Leadership (ICWBL). In 2014, she was appointed Member of the Board at The Abraaj Group, a global investment firm. In 2014, she was awarded Woman of Worth from the Jewish Achievers Awards in South Africa. In 2014, she was awarded the Lieutenant of the Victorian Order (LVO) by the British Royal Family. In 2015, she was awarded Lifetime Achievement Award at the Standard Bank Top Women Awards.