Waste heat of some industries is sufficient to drive smaller businesses. What if there was a market to sell/buy that waste heat?
It is estimated that between 20 to 50% of energy input to the industrial sector is lost as waste heat in the form of hot exhaust gases, heat lost from hot equipment, cooling water, etc. which amounts for a significant carbon footprint of industries. The stack loss of glass, steel and cement industries in particular is significant enough to meet the energy demand of many other smaller industries. On the other side, vast technical studies prove the feasibility to produce assets out of medium and low temperature heat supplies. Among those technologies are organic Rankine cycles for power generation at medium temperatures and thermal catalytic decomposition of hydrocarbons for co-generation of H2 and carbon black from conventional fuels. The lack of appropriate policies to connect the waste heat energy supplier and consumer obstructs the path to reuse of this abundant source of energy. The main focus of this proposal is to offer a solution in which the waste heat suppliers and consumers can both engage in a win-win deal. With the overwhelming merits of stack heat recovery, the solution requires the intervening role of a third party, for instance the federal government, to facilitate the trade of waste heat between the suppliers and consumers. The mentioned scenario is believed to give rise to formation of a new market in which large industries compete to sell their waste heat while the small businesses seek opportunities for cheaper source of energy.
For the pilot phase, the objective of this solution is to encourage the federal government to buy the stack waste heat of large plants for a relatively cheap price and offer that waste heat for free to the potential investors who are willing to invest in hydrogen or power generation nearby those large plants. This scenario can provide the opportunity of outsourcing the heat recovery for the large industries and creates considerable incentives for small businesses that want to invest in carbon-neutral agenda.
What are the key outcomes and impact of your solution?
The big picture that this solution intends to draw is outsourcing of waste heat recovery of large industrial plants to the smaller businesses. The proposed solution addresses three areas that are equally benefiting from this strategy and are described as follows;
1) Waste heat recovery of industrial plants: As the industrial sector makes efforts to increase its energy efficiency, regenerating the waste heat losses provides an attractive opportunity for low-emission and low-cost energy supply . However, in many cases due to the cost, reliability and technical complications, large businesses avoid applying the heat recovery. The best approach for such cases is to outsource the heat recovery process to smaller industries who can thrive on the waste energy of larger industries. Outsourcing the heat recovery not only creates new revenue for large plants, but it allows the smaller businesses that can operate based on that waste energy to grow.
2) End-users of medium and low grade energy: There are various ways to utilize the waste heat as the primary source of production. The most convenient way to transport heat from stack losses to an external consumer is use of heat exchangers and oil as the medium fluid. The delivered hot oil to the end-users can be employed for a variety of productions. Electricity, hydrogen and carbon material are just a few examples of the commodities that can be obtained in a process with waste heat energy source [2-4].
3) Waste heat energy market: One of the lost pieces of puzzle in the integration of waste heat production and utilization is the absence of sufficient motives for either sides of the game to step forward . Typically, large industries such as steel or cement manufacturer are reluctant to apply heat recovery technologies that might involve higher risks. However, if there was a market in which the large industries could sell their waste heat to the small industries which can use that heat as their primary energy source, the large industries would get actively involved in the waste energy sale trades. On the other side, the small businesses such as pilot hydrogen producers could have access to a medium grade, cheap energy source which can be their primary drive. In order to commence the market, government can start by buying the waste heat of large industries and provide it to the potential investors who are eager to invest in clean energy programs.
What actions do you propose to realize your stated goals?
In this section according to the three elements of the solution, each element is given appropriate context and means of action to be implemented. Also the challenges that encounter each area of the solution will be discussed.
1) Waste heat recovery of industrial plants: The most effective action to encourage the large industries to consider heat recovery of their stack losses is to introduce the great potentials embedded in such action. This proposal majorly addresses the three energy-intensive industries which provide significant opportunity for heat recovery. Glass, cement, and iron/steel processes are chosen for evaluation as they might be identified as the largest energy consumers in the industrial sector.
I) Glass Manufacturing: The process of glass refinement, melting and molding consumes approximately 300TBtu/year in the USA. Nearly 30% of that energy input is lost through the stack heat loss. Without heat recovery, the exhaust temperature can exceed 1,300C which comprises a very high grade energy source. However, recuperators are used to preheat combustion air from exhaust thermal energy which can drop the exhaust temperature to approximately 500C which still provides a great work potential .
II) Iron and Steel Manufacturing: The steel and iron industry is responsible for 1,900TBtu/year of energy consumption in the United States. The process involves several energy intense furnaces each of which accounts for significant amount of stack heat loss. Based on the furnace type (Coke oven, blast furnace, etc.) the unrecovered exhaust temperature can vary between 430-1700C that is associated with valuable work potential .
III) Cement manufacturing: The annual energy consumption of cement industries in US is nearly 550TBtu, 90% of which is spent in the Klin heating process which amounts for 495TBtu/year. The average exhaust temperature without recovery is 450C which can be further reduced to 340C if a four-stage preheater is installed to recover the heat .
Despite all the efforts made by the major industries, the energy loss through the exhaust gases is still considerable. On the average basis, more than 80% of the waste heat from major industries is occurring at medium (230-650C) and high (650C and higher) temperatures [5, 6]. Most of this energy is not sufficiently recovered which is mainly due to the lack of interest and/or resources of the companies to implement those heat recovery programs. Also, the lack of risk-taking by the large industries avoids them to individually act on application of heat recovery technologies. In such environment, large industries would be keen to sell their waste heat to the entities that are interested to recover that energy in return for a reasonable price.
2) End-users of medium and low grade energy: Unlike the conventional approaches, the modern technologies are looking to exploit power from the source of energies that are traditionally identified as low or medium grade such as stack losses of major industries. Here, we will briefly introduce two technologies as example that can benefit from low and medium temperature energy sources.
I) Thermal Catalytic Decomposition (TCD): Looking at the path that carbon capture and storage (CCS) community has taken raises strong questions on why the focus is so much to remove carbon from exhaust gases in the form of CO2 rather than removing carbon from the fuel itself. The thermal decomposition of hydrocarbons is a mean to co-produce hydrogen and the fuel-originated carbon in the form of a solid active material which is prone to reaction and can be broadly used as the feed to the other industrial processes. The production of hydrogen via fuel decomposition is a promising alternative for traditional techniques and can introduce the benefits of production of solid carbon black alongside with the hydrogen. On the bright side, the carbon produced in the process is a valuable commodity rather than a burden as CO2 is.
For instance, methane can be decomposed into solid carbon and hydrogen through the following reaction :
CH4-->C<s>+2H2 ?H=75.6 kJ/mol
Since this process does not produce CO or CO2 as byproducts, the need for the CO2 separation, as required in conventional hydrogen production methods such as SMR or coal gasification, is eliminated.
Considering the costs of CO2 separation ($5 per ton) and storage ($1-10 per ton) , the price of producing hydrogen from traditional techniques would be 15% more than methane decomposition for the equivalent CO2 emission .
Recent efforts in the past two decades have employed catalytic environments to reduce the temperature requirement of the process. Thermal Catalytic Decomposition (TCD) makes this process compatible with low and medium temperature energy sources. By using metallic or non-metallic catalysts, the temperature of the process can be significantly reduced all the way to 500C which introduces the average energy input of 37kJ/molH2 for the TCD process versus 63.3kJ/molH2 of steam methane reforming .
Due to the lower temperature requirements of TCD, it is possible to integrate the H2 production facility with various heating sources. The energy of the reactor can be partially supplied via the stack losses of industries with high energy intensity such as steel mills (Texhaust=636oC), glass melting (Texhaust=915oC), and cement manufacturers (Texhaust=365oC) . Since natural gas infrastructure is readily available at most of these industries, this makes it economically viable to use the stack thermal capacity for supplying the thermal energy of TCD reactors.
II) Organic Rankin Cycle (ORC): Rankine cycles are matured technology to produce power out of a heat source. In the case of low temperature heat sources (300C or above), organic fluids which have higher molecular mass and lower boiling point can be employed as the replacement for steam. With the recent developments, organic Rankine cycle is known as the most promising method to recover of the waste heat of diesel engine exhaust gases to the extent that the US Department of Energy incorporates it to their latest Supertruck project.
3) Waste heat energy market: The lack of sufficient financial and technical resources often discourages large industries from implementation of extensive exhaust heat recovery. Also, the large industries are typically reluctant to undertake the risk of making any major changes due to the reliability concerns. In fact, it is the most desired for large industries to outsource their waste heat recovery to entities who are willing to do the job for them. Therefore, there would be a great potential for parties who want to mediate the trade of waste heat. Basically the role of a third party here is to facilitate the transfer of energy from the stack losses of large industries to the end-user who wants to invest in the nearby region. Since the third part is taking over the responsibilities regarding the reliability of the energy flow, both sides of the scenario (large industries and small businesses) are encouraged to take the risk of involving in this trade. As might be expected, the third party can make a fortune in this process via offering the right buying/selling price to supplier/consumer through which a margin of benefit can be secured for the mediator. For initializing this market, government can come forward and be the middleman in this trade. Due to the inherent trustworthiness of the governmental organizations, suppliers and consumers of the waste energy market would show further interest to participate in the area.
Who will take these actions?
The idea of creating a market where waste energy can be bought/sold can be pioneered by federal government which has enough resources and authorities to create the perspectives of such new energy trades. The other major role player is the large industries who opt to sell their waste stack heat losses. Their main on-the-ground involvement would be to allow the government to install heat recovery facilities within the plant which by the way would be noninvasive and do not significantly influence the functioning of the plant. End-user of the waste heat flow would be the last piece of puzzle. The processes that require medium and low temperature energy grade could be potentially the consumer of waste heat. Two important areas that can thrive on the moderate-grade heat are Organic Rankine Cycles for power generation  and Thermal Catalytic Decomposition of natural gas for co-generation of hydrogen and carbon black .
For clarification, let us assume the federal government offers to buy the waste heat energy of a steel manufacturer for a relatively cheap price. For the steel factory, this would be an interesting source of revenue since they are taking no risk and no additional cost for basically what they used to assume to be a loss. On the other side of the deal, the government, which now owns the waste heat of steel factory, can provide the opportunity of cheap or free energy to the potential investors who are willing to invest in hydrogen production nearby the steel factory. To the eyes of investors, they see reliable source of cheap energy that is secured by the government for at least 5-7 years and the availability of the natural gas and transportation infrastructures in the area. These would offer significant incentives for any investor to participate in a win-win deal.
The focus of waste energy market can be on the regions that are hosting energy-intensive industries. The USA Midwest and south area is quite rich in terms of having major infrastructures such as steel mills and cement manufacturers . For instance, only in the state of Indiana there are four major steel mills such as Nucor Steel, US Steel, Arcelormittal and Alcoa. Therefore, the proposed solution can be well introduced to the industries located in the mentioned regions.
What do you expect are the costs associated with piloting and implementing the solution, and what is your business model?
Since the core of the solution is to establish a new market based on the energy waste, implementing the idea does not impose much financial costs. However, it requires the attempt of legislators and market experts to promote the attitude.
On the structural side though, ICF International conducted a comprehensive economic study for the Oak Ridge National Lab regarding the cost of investment and maintenance of Rankine cycles designed for heat recovery purposes . In their study, they could estimate the costs associated with utilization of two technologies which are steam and organic Rankine cycles. These two technologies comprise the majority of waste heat recovery systems currently installed.
The cost analysis results are shown in Table 1.
Table 1: Waste Heat to Power Costs
Technology Cost Type WHP Capacity (1-5MW)
Steam Rankine Cycle Installed Capital + Maintenance $1800 /kW + $0.008/kWh
Organic Rankine Cycle Installed Capital + Maintenance $3000 /kW + $0.0138/kWh
Assuming the utilization of steam Rankine cycle for the heat recovery, one can roughly approximate the terms for return of the investment if the waste heat wants to be replaced with the use of natural gas. For a heat recovery of 1MW capacity, the capital cost is $1800/kW of shaft work. Considering the capital cost of gas turbine–based power plants in the U.S. market which is $931/kW , employing the Rankine cycles that are driven by waste heat makes economically sense since the energy can be freely available.
The capital investment of the government, which concerns the installing of heat transport infrastructure, could be returned through owning some allocation of the stock shares of the established business.
Years Task Description
2017-18 Identifying the large industries with significant heat losses
2017-19 Assessment of energy and environmental needs
2018 Identifying the potential investors as the end-user of the energy flow
2019 Engaging the government through solicited/unsolicited proposals
2020 Government announcement of the opportunity through a tender offer
2020 Implementation of heat recovery technology and field tests
2021-22 Construction of the pilot end-user facility
2022 Real scale measurements and testing
The solution “Optimizing global efforts towards a low carbon future” somehow can relate to my proposed solution in a sense that it also draws a big picture of the energy community involvement in identifying potential investment opportunities.
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