Recycled Energy Development
The web’s resource for energy recycling news and information
Conventional wisdom tells those of us in the industrial sector that climate change legislation should be feared. New government regulations will strangle business, drive up energy prices and push all remaining production overseas.
But conventional wisdom is wrong. Embracing change, while counterintuitive, can be exceedingly profitable for many traditional manufacturers, especially since energy is often a major expense. Moving towards greater efficiency—whether driven by economic self-interest or our need to cope with climate change—presents the greatest opportunity for the American industrial sector in generations.
Consider a typical production facility. Massive quantities of electricity are required to drive the equipment that produces the product. Substantial thermal energy is then needed to convert raw materials such as sand and quartz into metal, glass, paper and gypsum. Add to this the need to heat or cool buildings and, finally, any energy required to cool hot exhaust gases before pollution control equipment can be used. Ultimately, many factories acquire energy two, three or even four times in the normal course of operations when getting it once and using it more efficiently would be more profitable.
This dilemma is not confined to manufacturers. The U.S. electric generating system itself has been stuck at a miserable 33 percent efficiency rate since Dwight Eisenhower was president. For every three units of fossil fuel consumed, the average U.S. power plant throws away two-thirds of its energy in the form of waste heat.
Despite our current economic woes, few spend much time thinking about this massive inefficiency. Yet more than 100 years ago, Thomas Edison recognized that the process of converting fossil fuels to electricity also produced substantial amounts of heat. Wanting to maximize his profits, the great inventor “recycled” his waste heat by selling it to nearby buildings and factories. Unfortunately, this type of energy recycling faded away in the U.S. because energy was cheap and federal regulations discouraged and, in many cases, prevented this kind of efficiency.
To get a sense of how such energy recycling could work in an industrial facility, consider ArcelorMittal’s steel plant in East Chicago, Ind., a blue-collar town historically dependent on manufacturing jobs. Through a process known as waste heat recovery, the plant captures vast amounts of excess heat and other wasted energy and converts it into 100 percent clean power, thus recycling energy instead of throwing it away. In total, energy recycling generates more than 220 megawatts of fuel-free electricity, roughly the equivalent of a small coal plant. Perhaps more important for manufacturers, ArcelorMittal saves nearly $100 million each year in energy costs and reduces carbon emissions by more than 800,000 tons a year. That’s the equivalent of removing 140,000 cars from the road.
Another project demonstrates how this can pay off, even in the cheap energy heart of coal country. West Virginia Alloys Inc. (WVA) melts quartz rock and converts it into silicon, a metal that’s used to make semiconductors, steel alloys and hundreds of other products. The furnaces used in this process produce a steady stream of exhaust gases hotter than 1,000 degrees Fahrenheit.
For more than 75 years, the company vented this waste energy into the atmosphere after running it through a six-story cooling radiator and pollution control equipment. But in a move designed to slash both power costs and pollution, Recycled Energy Development LLC is working with WVA to recycle this wasted thermal energy into a nearly endless source of clean electricity. Once completed, this project will save the plant enough on energy costs to expand production, increase its workforce, and bring more silicon manufacturing back to the United States.
Opportunities for similar industrial efficiency gains abound. Through techniques such as waste heat recovery and cogeneration, which involves putting a power plant on site at manufacturing facilities and using both its electricity and waste heat, the U.S. industrial sector could become far more efficient. More importantly, it could become more profitable.
Many of the United States’ international competitors recognized long ago that they could not afford such waste, and have promoted greater efficiency. Japan, Germany, France, and Russia recycle far more of their energy, with Denmark offering perhaps the best example.
Shortly after the oil shocks of the 1970s, the Danes decided to shift away from centralized, electric-only power plants to smaller cogeneration facilities that use just one fire to supply customers with both heat and power. Environmentalists cite Denmark for its green profile but what is more notable for American manufacturers is Denmark’s ability to produce a dollar’s worth of gross domestic product using 60 percent less energy. That means lower costs, lower pollution and more profit.
With such obvious benefits, the question most ask is: why hasn’t the U.S. embraced this approach? How did we forget the wisdom of Thomas Edison so quickly?
The most discouraging answer would involve physical limits. Is there an Einstein-like “speed of light” limit making it impossible to convert more than 33 percent of a fuel’s potential energy to electricity? Happily, the answer is “no.” Efficient plants around the world and even some in the U.S. achieve energy efficiencies more than twice the American average.
The primary causes are pretty simple. Government, in its quest to quickly electrify rural areas in the early 20th century, created electric utility monopolies. These utilities were insulated from competition and guaranteed profits based almost entirely on how much they spent on building plants and distribution systems, with all power production costs simply passed along to consumers.
Responding to those signals, utilities found themselves with every incentive to build large, expensive facilities and no incentives to generate power efficiently. Add vast fossil fuel resources and generations of cheap energy, and the result is institutionalized waste.
And yet, as Arcelor Mittal and others have shown, change can be profitable. All of the benefits these companies have realized occurred without any price on carbon. With some form of climate change legislation in the offing, efficiency may soon be the hottest commodity in the industrial sector. It’s worth considering, especially if a plant can cut its costs, reduce its pollution and sell pollution credits in a cap and trade regime.
Does that mean all manufacturers have nothing to fear from living in a carbon-constrained world? Of course not. Just as buggy whip producers suffered when the automobile came along, those manufacturers and energy producers that cling to the old ways will suffer as we wring out energy waste. But that’s how progress happens in America. And for American industry, this may be just the kind of pain needed to catapult manufacturers into a more efficient, productive and prosperous future. GHG
Dick Munson is senior vice president at Recycled Energy Development LLC, a company that assists industrial businesses in profitably reducing GHG emissions by capturing and recycling heat and other forms of waste energy. For more information, visit www.recycled-energy.com.
Contact us to discuss how energy recycling can help your organization.
