Powering up while bringing emissions down: Manufacturing process heat
We are already well underway with shifting our manufacturing operations to renewable energy sources. Over the past six years, we have carried out decarbonisation projects at five different sites and we’re looking forward to continuing this momentum.
Like all businesses decarbonising we need to account for cost and accessibility of the energy source, how secure the supply is and how much it reduces emissions and creates efficiencies.
We use the energy trilemma to help guide a lot of our approach in terms of what and when we decarbonise across our sites. This approach is similar to what the World Energy Council, and the International Energy Agency, as well as numerous other organisations and Governments use globally to help guide decision making.
Looking at the energy trilemma:
- Security of supply is paramount to Fonterra as we need to ensure we have a secure and reliable supply of energy to collect and process our farmers’ milk.
- What does it cost? We need to ensure it is economic as we have a large amount of changes required across our sites. There is about 1300 MW of installed boiler capacity across all of our manufacturing sites. This is similar to two Manapouri power stations.
- Across our 28 sites we have about 100 different plants. This means we have to look at each of these sites, what energy it needs, what the opportunities or constraints may be in each locality, to inform what the decarbonisation pathway is for that site, then bring this up to a national level to prioritise our transition.
- We are focusing on our coal transition first – this is a challenge – but one that we’re up for. It requires a significant amount of change, as well as resources – not just capital but people – both internal and external.
- Emissions reduction: The third part of the trilemma is sustainability – which is ensuring we reduce our emissions and use our natural resources efficiently – which is essentially via energy efficiency and fuel switching.
So we’ve considered the energy trilemma, what happens next?
Fonterra has two main approaches to decarbonisation – either use less energy or fuel switching.
- Use Less: the most renewable energy source is energy that isn’t used at all – hence energy efficiency is often called the first renewable energy.
- In 2003 we set an energy efficiency target of a 20% reduction by 2020. Through achieving this we saved enough energy to power all the households in New Zealand for one and a half years.
- There are three main principles –
- Optimise: operating our assets efficiently (such as minimising idle running time, repairs and maintenance practices) and what assets we run (as across the 28 sites and 100 plants, there is different technology & different ages, resulting in differing efficiencies of their operation).
- Reduce: energy efficiency opportunities to reduce and reuse energy such as heat recovery – despite being on energy efficiency journey since 2003 there are still some good heat recovery and energy efficiency opportunities that we are pursuing, such as our lactose heat recovery project at Clandeboye that is our first co-funded project within our EECA agreement.
- Integrate: opportunities to integrate heat pumps as part of refrigeration upgrades, as well thermal energy storage to manage peak loads.
- We’ve installed heat pumps at Whareroa and a heat pump and solar at Palmerston North to be more efficient with our process heat.
- We are also continually looking at new technologies and further ways to reduce our energy use, such as our partnership with MAN ES to undertake a steam heat pump study to see how we can use this technology in our operation.
- There are three main principles –
- Then we’ve got emit less or fuel switch:
- Asset condition: To start our fuel choice journey we start with looking at the condition of the boiler.
- Convert vs build: If the boiler is in good condition, we will look to keep the boiler and see what type of wood biomass is required.
- If the boiler is an ageing asset we consider building a new asset considering what energy supply is most accessible and cost effective for the site – eg. a wood biomass boiler electrode boiler.
We've been tracking our decarbonisation work progress since 2003, here's a snapshot of our progress.
What’s the right energy source?
- We look at what energy source is most readily available near that site at the right cost – wood pellets, wood chip or electricity.
- The main driver for the use of wood pellets versus wood chips is mainly due to the energy content and storage density, because of this we don't have to make as many changes to the boiler as the pellets are similar to coal so a lower capital cost.
- Electrode and electric steam generators are nearly 100% efficient in energy use and can operate well across variable loads. They are economically viable with relatively-low upfront capital costs and low operations and maintenance costs – especially compared to solid-fuelled boilers. This means that despite their ‘fuel’ costs being higher than alternatives, in some situations their total operating costs can be comparable to, or lower than, other boiler options especially if operating hours are low.
- Fuel handling system considerations: The main changes we need to make to the boilers aren’t actually to the boilers themselves but rather the storage facilities and the mechanism that feeds the fuel into the boiler. For woodchips we have to build a whole new system to cope with the larger volumes of fuel that needs to be stored and fed into the boiler. For pellets as the energy content and storage density is similar to coal we typically do not need to replace or add additional storage ahead of the boiler.
- Prioritisation and timeline: We then look across our national plans to prioritise activities, again using the energy trilemma to help guide this prioritization, as well as ensuring that we meet our 2030 commitments, as well as ensuring that we meet the 2037 deadline for coal cessation.