Tuesday, September 16, 2014


Fuel switching can be a huge
cost-reduction opportunity
Fossil fuels are used extensively for activities such as steam generation and for process heating applications such as furnaces and curing ovens. There are a range of ways to make these operations more efficient and cheaper to operate, but often the fuel employed is not given much attention. This could however be one of the most impactful ways to reduce energy costs. So what is fuel switching, and how does one determine the nature and quantum of the cost reduction opportunities it presents?
Fuel switching is simply a change in the fuel used to one of a different type e.g. a switch from coal to wood pellets. It is sometimes done for operational reasons. Heavy fuel oil is an example of a fuel that if not properly stored and handled, can cause blockages and downtime, particularly in cold weather. Safety could be another factor, for example volatile fuels in a hot climate come with risks if not stored and handled properly (not to mention losses). Some fuels are not freely available, and hence reliability problems could prompt a switch. In the absence of these challenges, the biggest motivation for a fuel switch is however that of cost reduction, and this is what this post is about.
In determining whether a fuel switch is financially viable, the first thing to understand is what the cost of the fuel you currently use is relative to the cost of the fuel it could be substituted with. I refer here of course to the cost per unit of energy, not per unit of fuel. You also need to have a sense of the efficiency with which you would be able to use the new fuel relative to current efficiency levels. By noting the energy content per unit of fuel and then applying the efficiency with which the fuel will be used, you will be able to determine the cost of delivering energy to the process you are operating, whether this be steam generation or a heating application.  This immediately conveys the quantum of the potential savings on offer, and these savings then have to be contrasted with the potential additional costs that come with making the switch to determine the net financial benefit.
The method I use is to determine the stack losses for the two different fuels, since this is the biggest loss to consider. This is a function of flue gas temperature, flue gas oxygen and ambient temperature, and different fuels typically require different levels of excess air for effective combustion. I would typically use a common flue gas temperature for the two fuels (usually just the one currently achieved), fix the flue gas oxygen content at the minimum required for the fuel being assessed and then determine the boiler/furnace efficiency I could expect when making the switch. If the plant involved is equipped to deliver low flue gas temperatures (e.g. thorough the use of economisers or air pre-heaters) you could fix the flue gas temperature for the analysis at the acid dewpoint temperature for each fuel plus a small margin of safety. Of course if you are switching to a very clean fuel and this allows use of a condensing economiser, the whole equation changes, but let's leave that for another day. The efficiency determination allows me to calculate the fuel rate required (based on heating value per unit of fuel and the heat load of my process), and I can then make a comparison of expected fuel costs to current fuel costs. Where there is a large difference, I move onto the next phase of the investigation, which is a risk assessment.
There are several issues to consider when deciding to switch fuels, and it is important that a thorough risk assessment is done before making this change. Some questions you should ask before making any proposed fuel switch include:
  • Can you lawfully use the fuel? - local air quality regulations could preclude the use of certain fuels and before doing anything, check this first.
  • Can your boiler handle the new proposed fuel, or can it be modified to do so?
  • Can your fuel handling infrastructure support the new fuel, and if not, what modifications are required and at what cost?
  • Is the supply of fuel going to be reliable, and what price changes are expected going forward relative to the price changes expected for the fuel you currently use? (you may need a crystal ball for that one)
  • What are the emission impacts associated with the new fuel, not just in terms of GHG's but also particulate matter, sulphur, mercury and other pollutants?
  • What are the water pollution risks?
  • What are the safety risks associated with the new fuel? - here characteristics such as flash point are a consideration, among others
  • What impact, if any, will the fuel have on manning requirements and operating and maintenance costs?
Note that you could spend money on mitigating some of these challenges if the economics allow. There are examples I have seen where even a change in boiler was financially viable, so keep an open mind. Once all of these issues have been addressed and you are satisfied that none of them is a barrier to the switch, you are in a position to start planning for implementation, but the process is far from finished. Ideally you should observe the fuel in operation at another location (if you haven't already seen one) and engage directly with users of the fuel and suppliers of fuel and equipment to ensure that there are no unexpected surprises. If no plant modifications are needed for the switch, you should also use the fuel on a trial basis before committing to any long-term supply contracts. All of this due diligence can sound like hard work, but I can assure you that this could be one of the biggest cost reduction opportunities at your facility, and if you haven't looked into it, you should do so without delay.

Copyright © 2014, Craig van Wyk, all rights reserved

No comments:

Post a Comment