The Compelling Case for Waste Heat Recovery
As the world races to limit global warming to 1.5°C, many companies have set ambitious decarbonization targets for 2030 and even 2025. With only six years left, industrial organizations are seeking immediate, cost-effective solutions to reduce their emissions. One such avenue is the untapped potential of waste heat recovery.
The global energy landscape has undergone a profound transformation in recent years. Technological advancements, coupled with skyrocketing energy prices, have created a compelling case for harnessing waste heat. Every year, the world consumes over 418 exajoules (EJ) – or 116,000 terawatt-hours (TWh) – of final energy, primarily from burning fossil fuels and generating heat. While some of this heat is utilized for useful purposes, the majority is simply released into the environment, representing a significant missed opportunity.
Recovering this “waste heat” can greatly reduce the consumption of primary fuels and, consequently, greenhouse gas emissions. Depending on whether the recovered heat is used for heating or electricity generation, the annual global savings could reach up to €140 billion – comparable to the value of all natural gas imported by the European Union.
Overcoming Historical Barriers
Historically, the adoption of waste heat recovery technologies has been limited, despite the clear benefits. Several factors have contributed to this:
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Low Energy Prices: Over the past decade, relatively low gas, electricity, and carbon dioxide (CO2) prices have diminished the financial incentive to invest in waste heat recovery projects, as the payback periods were often too long for industrial companies.
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Technological Limitations: In the past, heat pumps were expensive and could only deliver temperatures up to 100°C, while converting low-grade heat into electricity was not economically feasible.
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Prioritization of Production: When faced with capital expenditure constraints, companies often found it more attractive to build additional production lines and burn more gas rather than invest in energy efficiency measures.
However, a combination of technological advancements and surging energy prices has now created a game-changing opportunity for industrial organizations to unlock the potential of waste heat recovery.
Technological Breakthroughs and Rising Energy Costs
Recent years have witnessed significant developments in waste heat recovery technologies, making them more accessible and cost-effective:
- High-Temperature Heat Pumps: New heat pump technologies can now increase the temperature of waste heat and generate low- and medium-pressure steam, expanding the range of potential applications.
- Heat-to-Power Conversion: Advancements in organic Rankine cycle (ORC) systems have improved the ability to recover waste heat from lower-temperature sources and convert it into electricity more affordably.
- Modularization and Standardization: The modularization of equipment and standardization of designs have reduced the costs of waste heat recovery solutions, with further reductions as the technologies scale up.
Simultaneously, the global energy landscape has undergone a dramatic shift, with energy prices soaring to unprecedented levels. In Europe, for example, electricity prices have more than doubled since 2018, reaching between €100 and €150 per megawatt-hour (MWh). Similarly, gas prices have surged to €20-€40 per thermal megawatt-hour (MWhth), and carbon prices have increased five to ten times, reaching around €100 per tonne (or €20 per MWhth of natural gas consumed).
This combination of technological breakthroughs and skyrocketing energy prices has made waste heat recovery an increasingly attractive proposition for industrial companies, providing a competitive edge and contributing to their decarbonization efforts.
Unlocking the Potential Across Industries
The potential for waste heat recovery extends across a wide range of industries, each with its unique opportunities and challenges.
Refineries
Refineries can employ heat recovery from various units, such as vacuum gas oil (VGO) hydrotreaters or diesel hydrotreaters, where temperatures typically range from 120°C to 250°C. By using this waste heat to generate medium-pressure steam at 5 barg, a refinery can potentially generate 7 to 8 tonnes of steam per hour, worth between €0.8 million and €3.5 million per year.
Cement Industry
The cement industry is another sector with significant waste heat recovery potential. Typically, a cement plant can recover around 120 thermal kilowatt-hours per tonne (kWhth/t) of waste heat from the preheater tower and 100 kWhth/t from the clinker cooler. If this energy is recovered using an ORC system in a 1 million tonnes per annum (MTPA) plant, it could result in annual electricity savings of around 22 GWh, worth between €0.7 million and €3.1 million.
Across Industries
While the examples above focus on refineries and cement, waste heat recovery opportunities exist in virtually any industry. Exhibit 5 in the McKinsey article shows a typical industrial abatement curve, where energy efficiency initiatives, including various heat recovery options, often make up 10 to 30 percent of the total abatement potential.
These opportunities can be categorized into three main segments:
- Incremental Improvements: Adding a heat exchanger or installing and optimizing advanced process controls.
- Novel Technologies: Implementing heat pumps, mechanical vapor recompression, thermal energy storage, and waste heat-to-power solutions.
- Process Redesign: Changing set points, adding reboilers, redesigning dryers, or replacing condensing turbines with electrical drives.
Capturing the Full Potential of Waste Heat Recovery
To fully realize the potential of waste heat recovery, industrial companies should consider going beyond a single plant and encompassing the entire site, crossing business units and company boundaries. This holistic approach requires challenging preconceived notions and exploring deeper into the manufacturing processes.
Three key actions can help industrial companies capture the waste heat recovery potential:
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Extend the Scope: Look beyond the standard list of levers, such as adding a heat exchanger, and delve deeper into the manufacturing process to identify innovative opportunities for waste heat recovery.
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Embrace Collaboration: Collaborate with partners, suppliers, and even competitors to identify cross-boundary opportunities and share best practices, creating a synergistic ecosystem for waste heat recovery.
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Prioritize Decarbonization: As the world strives toward net-zero emissions, companies should make decarbonization a strategic priority and actively seek out technologies like waste heat recovery to reduce their carbon footprint and support the energy transition.
Conclusion: Seizing the Moment
As the world faces the urgent challenge of addressing climate change, the time is ripe for industrial companies to harness the untapped potential of waste heat recovery. The confluence of technological advancements and skyrocketing energy prices has created a compelling business case for waste heat recovery, allowing organizations to reduce emissions, support the energy transition, and gain a competitive edge.
By embracing a holistic, collaborative approach and prioritizing decarbonization, industrial companies can unlock the full potential of waste heat recovery and contribute to a more sustainable future. The DD Plumbing and Heating team stands ready to assist you in navigating the complex landscape of heating system electrification and unlocking the benefits of waste heat recovery for your organization.
