"I am a Cement Plant Manager and I only pay for the produced electricity”

May 28, 2018 Zvonko Ikic

 

The cement manufacturing process is an extremely energy intense process. You can basically say that energy is the raw material for cement. The entire industry is highly affected by increasing energy prices and CO₂ penalties. The need for adaption of a more environmentally friendly and cost-effective energy solution is urgent.

Cement plants generate large amounts of waste heat from their manufacturing process. Solutions to recover parts of this otherwise wasted heat, into clean electricity, are already existing in the form of Waste Heat Recovery Systems (WHRS). To be successful, not only today but also in the future, the cement companies need to utilize as much energy as possible from their current production process.

Nowadays, with Heat Power being more cost effective than Solar, one possible step forward to accelerate the implementation of expensive Waste Heat Recovery Systems could be the collaboration with ESCOs (Energy Service Companies) or in our case - Heat Power Operators.

What is a Heat Power Operator?

A Heat Power Operator owns and operates the power generation equipment selling the produced electricity to the cement plant (the consumer). You might already be familiar with the process from your monthly mobile phone subscription. Typically, there are two different mobile phone subscription types:

Fixed Monthly Fee: You pay a fixed amount each month, that covers network service fees plus a set number of minutes, texts and data.

Pay as you go: You pay only for the minutes, texts and data that you use.

Let´s take the “Pay as you go” case as a sample scenario for the cement industry and replace minutes, texts and data with kWh (Kilowatt hours).

Now we have a solution where the cement plant only pays for the produced electricity. The Heat Power Operator has the total responsibility for the power plant, including project implementation, performance and maintenance. The main benefit to the cement company is that they do not need to think about CAPEX (Capital Expenditure) and OPEX (Operational Expenditure) for the power plant, instead paying solely for the produced electricity.

The required business infrastructure for this business model is already standard for ESCO’s (Energy Service Companies).

The following diagram shows how such a setup could work:

What are the advantages?

- Access to the latest and most efficient process improvement technology

- Decreased energy costs & improved CO₂ balance sheet

- No capital lock-down

- Heat Power Operator is responsible for feasibility

- Heat Power Operator is responsible for Civil Works

- Heat Power Operator is responsible for performance

- Heat Power Operator is responsible for maintenance

- You only pay for the produced electricity

 

What do you think about this business model? 

In your opinion, what are the pros? What are the cons?

For more information about Heat Power vs. Solar, click here

If you like to learn more about Climeon Heat Power within the cement industry, feel free to contact me directly (zvonko.ikic@climeon.com) or click here

About the Author

Zvonko Ikic

Head of Sales - Maritime Container. Head of Sales Cement and Industry

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