Improving Industrial Gas Efficiency
Where are your major efficiency losses and what opportunities do you have to reduce costs, carbon emissions and improve productivity?
With the need to reduce energy costs and carbon emissions, and a myriad of equipment suppliers offering assistance, it can be hard to know where to focus first. Australia has historically seen low natural gas prices. The first step change occurred in 2016/17 with a sharp increase in price of Liquified Natural Gas (LNG) exports, and then again in 2021 due to global turmoil and energy disruptions.
The increase in natural gas costs has had a flow on to the cost of electricity, with gas peaking plants being used to firm the renewable energy supply and compensate for ageing coal fired power stations. The complexity of Australia’s energy flows can be seen in the following diagram, with the natural gas production flowing through to Exports, Gas End Uses and Power (Electricity) Generation.
Source: Australian Energy Update 2022, Department of Climate Change, Energy, the Environment and Water.
So, for large energy consumers, what is the quickest and most cost-effective method for managing increasing gas prices whilst maintaining productivity and progressing towards a Net Zero carbon world?
Energy Efficiency - Reducing how much energy we consume while maintaining output.
Conducting gas efficiency projects can help businesses to:
1. Reduce exposure to energy price volatility,
2. Reduce operating costs,
3. Reduce carbon footprint, and
4. Maintain (or even increase!) productivity and profit margins.
The Australian manufacturing sector consumed 407 PJ of gas energy during FY20/21[1]. This was for plants producing Chemicals, Non-ferrous metals, minerals processing, food and beverage products and textiles. These industry sectors are commonly using gas as a thermal energy source in the form of direct combustion, furnaces, steam systems and hot water.
There are a broad range of gas efficiency measures available including:
Combustion analysis and controls,
Waste heat recovery,
Pressure set back controls,
Economisers (both condensing and non-condensing),
Fuel switching (electric heat pumps, biomass, biogas), and
Pipe and valve insulation.
A comprehensive summary of readily implementable gas efficiency measures can be found in the Australian Manufacturing Gas Efficiency Guide published by the Clean Energy Finance Corporation (CEFC).
Gas efficiency projects can reduce energy consumption by 5-50+%, however the payback periods can also be long (5+ years), particularly when considering fuel switching projects as part of a broader long-term carbon strategy.
The timing of gas efficiency projects can be just as crucial as the type of project you are implementing. Burner upgrades and combustion controls commonly have attractive paybacks (<3 years), whilst an end-of-life boiler replacement – or upgrade to a modern, efficient equivalent – may be 5-10 years but necessary due to plant longevity. Committing to new fossil fuel assets now locks in a carbon pathway over the 20+ years asset lifetime and may limit or be counter-productive to corporate and government future carbon emissions targets.
Decisions around minor vs. major capital investment can therefore be very important to the balance of short-term cost reductions and the longer-term carbon reduction strategy.
Using independent expertise to identify and prioritise energy and carbon management activities can give your business a clear roadmap to avoid these pitfalls while maximising cost reductions. If you would like to learn more about managing gas consumption and costs, reach out to the friendly team at GECM.
[1] Australian Energy Update 2022, Department of Climate Change, Energy, the Environment and Water.