With non-core tasks absorbing increasing amounts time for cement producers, Xavier d’Hubert looks at the trend towards ‘X’ as a service for the cement sector...
The business of making cement in the 21st Century is more complex than ever before, with new ‘non-core’ activities that must be considered. As well as trying to act upon vast quantities of new data to satisfy new sustainability reporting requirements, new activities include dealing with decarbonation and the energy transition. These represent both a business response to rising energy costs, but also a conscious choice due to increasing pressure from the general public, government procurement departments and large corporations in the Voluntary Credit Market, for cement producers to act sustainably.
In this context, the part of the plant that actually makes clinker has shrunk relative to the size of the operation. The main job - making consistent, high-quality cement - runs the risk of being lost. Indeed, many plants lack the necessary resources to handle all of the core and non-core tasks, in terms of expertise, time, money or some combination of these.
Even worse, the cement industry must also navigate the numerous new technological options available or under development for future requirements, not only for short-term projects but also those with a view up to 2050. It can even be hard for experts to identify the best solutions at times, and near impossible for a cement producer, especially smaller ones, to keep abreast of all of the options.
This is particularly difficult when there is too much hype, which can surround any paradigm shift. There is also the potential for unscrupulous players and those who claim to have rewritten physics... “The planet can breathe again thanks to our partially-explained, patent-pending XYZ technology that makes cement plant fuel from thin air. Here’s a diagram that leads to more questions than it answers!” Such claims distract cement producers in the search for appropriate solutions.
‘X’ as a Service
An approach that can help cement and lime companies lost in the swamp of non-core tasks, is ‘X as a Service’ (XaaS), where ‘X’ stands for energy, resilience, environmental compliance, decarbonation and many more sides of what is often the same die. The concept is to place the rising number of non-core functions in the hands of external entities. XaaS suppliers, which would be able to use any proven technology and supplier, would find the best way to supply X to the cement plant in question. Their expertise in their given domain will make them better placed than individual cement companies to decide on the best approach, especially as they are committed for the long term. Contracts with XaaS companies will be in the form of power purchase agreements or similar, and will cover 10 - 20 year periods. The cement producer can return to its core business of actually making cement.
XaaS incorporates the ability to spread risks across different cement sector partners, locations and technological solutions. By optimising their most appropriate solutions, XaaS suppliers, often joint ventures formed by unregulated utilities, large equipment providers, well-funded investors and diversification arms of oil and gas companies, will be able to carve out a margin. Backed by financiers, XaaS providers can take a long-term perspective when it comes to return on investment, as long as the project provides the internal rate of return (IRR) needed to satisfy the investors. By way of contrast, cash-strapped cement plants now often seek projects that pay back in just 1 - 2 years.
Looking at the ‘X’s
Energy as a Service: The ‘biggest X,’ and the one that is most developed, is ‘Energy’. With such a strong emphasis on energy efficiency in the global cement sector, it is easy to lose sight of the fact that cement plants will actually need a lot more energy in the future. EaaS will enable them to cope with these demands.
With Energy as a Service (EaaS) external companies would handle all of the electrical and / or thermal fuel requirements of the cement plant, which will pay a contractually agreed amount. The contractor supplies energy using methods appropriate to the plant in question, drawing from a series of solutions from a range of suppliers.
For electrical power, EaaS could incorporate different forms of captive renewables and waste heat recovery (WHR) systems. These could be connected within microgrid arrangements that also incorporate energy (battery) storage to smooth out the inevitable peaks and troughs of using renewables. The connection to the grid could go both ways. We can already see the beginnings of this trend with various captive solar and wind projects announced in the US, the Middle East, India and some other places. In the future, such microgrid-based systems would be able to operate in ‘island’ mode, isolated from the grid for a few hours or days.
When it comes to thermal energy, EaaS suppliers would take over the sourcing and supply of thermal fuels to the plant, meeting agreed quality and volume criteria, potentially to include limits on embodied CO2 emissions. Operators may also decide to develop their own alternative fuel handling systems within the plant site. To reach 100% alternative fuels, a EaaS supplier could combine solid alternative fuels (biomass and waste), methane-based renewable gaseous fuels with some hydrogen (and oxygen) boosting. Co-processing, by allowing the direct use of lower grade coarse, wetter, lower calorific value alternative fuels in the precalciner, thanks to a drying/pyrolysis/gasification intermediary step, could be integrated within a behind-the-meter microgrid.
Resilience as a Service: Some participants, as part of the discussion surrounding EaaS, also speak of Resilience as a Service (RaaS). This goes beyond the concept of the ‘business as usual’ supply of energy to incorporate ‘cover’ in the face of natural disasters, weather phenomena and climate change. For example, wildfires in California have the potential to interrupt grid supplies. As these become more prevalent, industrial users are looking at ways to guarantee power. The same effect was seen recently with extreme cold weather, also in the US. RaaS suppliers would develop contingencies, including microgrids that operate in ‘island’ mode, to allow the cement plant to experience zero (or only very limited) disruption to supply during extreme events.
Environmental Compliance as a Service: Specialist companies with the right experience and financial resources could handle part or all aspects of environmentally-focused projects in the cement sector. This is known as Environmental Compliance as a Service (ECaaS), which would encompass energy efficiency improvement, air and water pollution controls, all the way from a concept to detailed studies, permitting, tax implications, financing, and the operating expenditure over a period of 10 - 20 years. The responsibility to meet environmental emissions limits is passed to the ECaaS provider. The contract would allow the ECaaS provider to provide the necessary changes to meet more stringent future regulations. They could also be the interface between the plant and carbon-capture firms, supplying ‘carbon capture ready flue gas.’
Decarbonisation as a Service: Various companies, ranging from engineering firms to utilities, oil and gas providers and industrial gas companies are developing the ECaaS concept further, to reach Decarbonisation as a Service (DaaS). In my view, DaaS is the area where cement producers will be most reliant on XaaS service providers. There are currently four main technologies for carbon capture: absorption, membrane separation, cryogenic and adsorption. Within each, there are numerous variations to choose from. The choice of technology will depend on many parameters specific to the plant condition and the intended use of the captured CO2. Outside of sequestration, current utilisation / transformation possibilities include accelerated carbonation and mineralisation, photosynthesis and electrocatalytic conversion.
Optimised decarbonisation technologies require plants to decrease their SO2, NOx and dust emissions and flue gas temperatures which should approach ambient temperatures. This is to lower capex, opex and footprint. WHR systems also have an important role to play, to lower the flue gas temperature and provide a portion of the much-needed energy to run the carbon capture plant.
If properly handled by an EaaS / DaaS provider, both short- and long-term solutions will be optimised, as the decarbonisation technology would only receive a decent return on investment if it offered an effective solution. While there may be an overall technological ‘winner’ in the CCUS race, the winner won’t be the same everywhere. It is up to the DaaS contractor to decide, based on each plant’s location and surrounding environment, including cost of energy, value of CO2, proximity to pipelines and other factors.
Other... as a Service: The ‘as a service’ model is not necessarily limited to large projects. Smaller projects like leakless graphite kiln seals, regenerative solid fuel handling cranes, air floating belt conveyors, low-pressure-drop bag filters, on-line free lime analysers, oxygen enrichment of the rotary kiln burner primary combustion air, on-line gypsum and lime content measurement in cement … all types of smaller projects with short pay-back times can be incorporated into the bigger picture.
XaaS finds the best technology
XaaS companies, being technology and supplier neutral - but attentive, will be able to weed out dubious start-ups that distract from the main aim of reducing CO2 emissions. Some examples include the claim that cement plants could run on green hydrogen from 100% renewable energy, as hydrogen is sometimes dubbed the ‘new oil.’ However, converting ‘excess’ solar and wind power into hydrogen and back into electricity at 70% efficiency in each direction with intermittent power for short periods of time make this somewhat uneconomic, even if it is technically feasible.
Other potentially distracting ideas include replacing power plants with batteries only to omit the charging step of using batteries, or running a kiln directly with concentrated solar power just because the receiver can reach 1500°C. Others propose using waste heat to charge a thermal battery (usually a container full of pebbles) and then transporting the ‘battery’ elsewhere to heat buildings. Sometimes these ideas might work, but let’s let XaaS providers figure it out.
Conclusions
By finding and developing the most effective - and lowest CO2 - solutions for energy supply, environmental compliance, decarbonisation and many other tasks, the XaaS approach has the potential to take on some of the largest challenges faced by our industry. It will show the most effective solutions, rather than just what is technically feasible.
There will be important discussions about what constitute the ‘best’ drivers to encourage XaaS. Economics is key, but the role of policy-makers in setting out regulations, permits, feed-in tariffs, tax credits, carbon trading, etc, will also be crucial. By providing lower electricity prices, increasing resiliency and reducing carbon emissions, XaaS presesnts a strong value proposition. Therefore, regardless of the operational landscape that the global cement sector finds itself in during the coming years and decades, this author believes that the arrival of new XaaS players in the cement making business will lead to a major reshuffle of the industry by 2035.
