Displaying items by tag: Energy

Europe: The European cement association, Cembureau, has 'welcomed the objectives' of the European Commission's new Green Deal industrial plan. The Green Deal attempts to create a predictable and simplified regulatory environment in which to scale up the production and implementation of net-zero CO₂ technologies.

Cembureau also issued its advise for a successful Green Deal implementation. The association said that the framework must match the US Inflation Reduction Act in its provision of tax rebates and other incentives. It said that the plan must establish stable renewable energy prices and rapid permit procedures, with a focus on deployment of renewables at industrial sites. It also called for funding under the plan to finance the development of infrastructure for CO₂ transport and storage.

Iran: The Iranian Cement Industry Employers Association (CIEA) has warned that 50 cement plants are ‘on the verge of closure’ in early 2023. Asia News has reported that plants’ electricity supply has dropped by 50%, while their gas supply has dropped by 80%. Low winter temperatures have diverted the utilities supplies towards heating homes. Cement producers outside of urban areas are licensed to use fuel oil to power their operations. This would increase their costs, however, due to high transport fees.

India: Shree Cement has commissioned captive solar power plants with a total capacity of 40MW in Bihar and Jharkhand. A Shree Cement facility in Banka, Bihar, hosts a 30MW solar power installation, while another in Seraikela Kharsawan, Jharkhand hosts a 10MW installation. Press Trust India News has reported that Oriana Clean Energy carried out design, engineering, procurement and construction on both projects.

Vietnam: Vietnam National Coal and Mineral Industries Group (Vinacomin) has forecast 6.1% three-year growth in national coal demand to 115Mt in 2025 from 108Mt in 2022. Four main industries – cement, fertilisers, metal and power generation – are expected to retain over 90% of the combined share of domestic consumption. Vinacomin expects national coal production to increase by 1.3Mt/yr over the period, retaining a 40 – 45% stake in the domestic market. Five-year consumption of imported lignite is forecast to rise to 70 – 75Mt throughout the period up to 2026.

Thailand: Siam Cement Group (SCG) will invest US$2.89bn in new renewable power infrastructure across its businesses. Major growth areas include 3000MW of solar power generation capacity. This will increase group solar capacity by a factor of 15. Saur Energy News has reported that the renewable power projects will support the company’s on-going decarbonisation investments in cement and other businesses.

SCG is committed to achieving a circular business model and net zero CO₂ emissions by 2050.

Pakistan: National Transmission and Despatch Company (NTDC) has secured a US$46.6m loan from German state-owned bank KfW for construction of a new 500kV grid station in Chakwal, Punjab. The German government loaned NTDC a further US$2.55m for power capacity expansions. The investments will go towards increasing the availability of electricity in Chakwal, primarily for the benefit of the district's multiple cement plants.

Bestway Cement, DG Khan Cement and Gharibwal cement operate four cement plants with a total capacity of 8.5Mt/yr in Chakwal.

Vietnam: The Vietnam National Cement Association (VNCA) has spoken about the difficulties that would arise from a proposed power price rise by state-owned Electricity Vietnam (EVN). VNCA chair Nguyen Quang Cung said that cement producers foresee 'business havoc' ensuing from any further cost increase to their operations. The industry says that reduced demand has prevented them from raising cement prices amid already high costs. Coal price growth is a significant contributor, and now accounts for 60% of the industry's operating expenses.

Cung said "Many companies are suffering losses and have suspended the operations of many production lines." He continued "We understand that EVN is claiming force majeure because they face the same challenge relating to the input cost burden."

This week’s Virtual Global CemPower Seminar included an assessment on how interventions in European power markets might affect efforts to decarbonise industry. The presentation by Thekla von Bülow of Aurora Energy Research outlined how different countries in the European Union (EU) were implementing the forthcoming electricity price cap on ‘inframarginal’ producers to 180Euro/MWh. Each of these different proposals will entail differing levels of structural change to the wholesale energy market. For example, the Agency for the Cooperation of Energy Regulators (ACER) has recommended establishing a series of frameworks including a stronger focus on Contracts for Difference (CfD) schemes to promote renewable energy sources.

These changes are a consequence of the EU’s response to the Russian invasion of Ukraine. Gas prices surged and then pushed up other energy prices in turn to record levels. As this column covered in September 2022, the price of electricity shot up in the summer of 2022 whilst at the same time Russian gas imports ceased. Cembureau, the European Cement Association, called for urgent action to be taken to support cement production due to large increases in the cost of electricity. For example, in its latest overview of the German cement industry, the German Cement Works Association (VDZ) said that the sector has an electrical consumption of 30TWh/yr. Clearly energy policy is of great interest to the industry.

Since then, in late September 2022, Heidelberg Materials’ chief executive officer Dominik von Achten told Reuters that his company was preparing to shift production at its Germany-based plants to times and days when power prices are lower including at the weekend. However, this was dependent on negotiations with the unions. Von Achten also warned of plant closures being a possibility. Then, in November 2022, it emerged that Zementwerk Lübeck’s grinding plant in northern Germany had reportedly been only operating its grinding plant at night and at the weekend due to high electricity prices. Also in November 2022 European energy news provider Energate Messenger reported that Heidelberg Materials was preparing its cement plants in Germany with emergency backup power to keep critical services running in the case of electricity power cuts. One view from the outside came from equipment supplier FLSmidth’s third quarter results where it noted it had, “...started to see the first cases of budget constraints imposed by customers to counter the increasing energy cost. A high utilisation is still driving service activity in Europe, but some customers have put large capital investments on stand-by and we have experienced a slowdown in decision-making processes.” On the other hand it also pointed out that this trend is driving sales of products that helped reduce energy usage and/or switch to alternative fuels.

On the financial side, Holcim reiterated in its half-year report that, on the country, level the group uses a mixture of fixed price contracts, long-term power purchase agreements, on-site power generation projects and increased consumption of renewable energy at competitive prices to reduce the volatility from its energy bills. Both Cemex and Heidelberg Materials said similar things in their third quarter results conference calls. Cemex said that nearly 70% of its electricity requirements in Europe were fixed in 2022 with nearly 30% fixed for 2023. It went on to reveal that around 20% of its total costs for cement production in Europe derived from its electricity bill. Interestingly, it added that a higher proportion of its electricity costs in Germany were fixed than elsewhere in Europe, due to the use of a waste-to-electricity system owned by a third party that is fed with refuse-derived fuel (RDF), but that it was more exposed to floating fuel rates in Spain. Heidelberg Materials added that it supported energy price caps in both Germany and the EU whether they affected it directly or not.

So far it has been a mild start to winter in Europe. This may be about to change with colder weather forecast for December 2022. This will stress test the EU’s energy saving preparations and in turn it could force the plans of industrial users, such as the cement sector, to change. Some of the cement producers have commented on the financial implications of rising fuel costs but they have been quieter publicly about how they might react if domestic consumers are prioritised. Plant shutdowns throughout cold snaps are the obvious concern but it is unclear how likely this is yet. The variety of energy policies between fellow member states, their own supply situations and the differences between cement plants even in the same country suggest considerable variation in what might happen. If large numbers of cement plants do end shutting throughout any colder periods, then one observation is that it will look similar to winter peak shifting (i.e. closure) of plants in China. The more immediate worry in this scenario though is whether these plants actually reopen again.

The proceedings pack from the Virtual Global CemPower Seminar is available to buy now

UK: C-Capture won an IChemE Global Award in the Energy category for its solvent-based carbon capture system. C-Capture's model differs fundamentally from currently commercially available systems, offering a lower energy penalty than technologies including amine-based capture. It is robust in handling impurities in flue gases, including O₂, SO_x and NO_x, while offering competitive cost and safety performance.

CEO Tom White said “Being shortlisted was honour enough, but to win the global Energy award is fantastic recognition for the C-Capture team and our unique carbon capture technology. The IChemE Global Awards represent the pinnacle of excellence in chemical process engineering. This achievement is testament to our exceptional team and their commitment to accelerating the global adoption of carbon capture and storage to achieve net zero by preventing greenhouse gases from entering the atmosphere.”

Egypt: Suez Cement has partnered with Intro Power and Utilities for the construction of a 20MW solar power plant at its Suez cement plant. From its commissioning in early-mid-2023, the installation will provide the plant with 45GWh of energy annually, 20% of its annual consumption. Suez Cement says that this will eliminate 22,000t/yr-worth of CO₂ emissions. Construction is expected to cost US$350m and commence in 2023.

Suez cement aims to achieve specific CO₂ emissions of 400kg/t of cementitious product by 2030, down by 47% from 1990 levels.

Managing director Mohamed Hegazy said “Through transitioning to renewable solar energy, we are looking at long-term economic benefits, laying the foundation for a low-carbon business and energy security, without jeopardising the health of our environment. We are proud about this new milestone and to be one of the few cement players in Egypt taking this step towards using a more affordable and cleaner energy."