DETA Consulting, an engineering consulting firm in Christchurch, recently conducted a survey of process heat users in the South Island and reported the findings in a webinar presented on 26 August. Budyong and Tom attended the webinar, which is recorded and can be viewed at: https://carbon.deta.global/webinar-recordings .
The survey looked at process heat sites of greater than 500KW, which would include most industrial users but exclude small users, such as schools. Users were asked what they had installed and what plans they have to convert from fossil fuel to renewable sources. Due to the low cost and availability of coal on the South Island, most process heat is from coal.
Some of the key findings were:
1. The great majority of respondents claimed to have plans to shift fossil fuel use (coal or oil) to renewable sources (biomass or electricity) by 2030, before the government date to phase out coal use by 2037. The predominant shift will be from coal to wood chip to fire boilers. Very few respondents planned to switch to wood pellets, presumably due to the higher cost of pellets. Some sites with low temperature needs (<85°C), such as for space heating, planned to switch to high temperature heat pumps (HTHPs).
2. The shifts will significantly increase overall electricity demand on the South Island and will greatly increase the demand for wood chip to fire boilers. In the two example regions presented, anticipated wood chip demand represents a significant portion of the local production forestry estate, suggesting the need to expand wood chip production from mill and forestry residue into export grade wood fibre. A small survey of wood chip suppliers suggests wood chip prices will rise as demand grows, as wood chip production consumes logs otherwise planned for milling or export. Wood chip from residue has been cheap but prices are rising as demand increases and wood waste becomes recognised not as “waste” but as an important renewable energy source.
3. Overall South Island process energy use is projected to decline by 100MW (from 1450MW today to 1350MW) due to efficiency gains. 350MW of process heat will be shifted to HTHPs and the other 1000MW will be converted to biomass or electric boilers. It is suggested that this is perhaps a ‘largest demand scenario’ because process heat demand will decline if dairy and beef demands decline, as anticipated.
4. The principal barrier to the shift to renewable process heat is economic and not technological. In other words, the renewable resources are anticipated to be available but companies will likely struggle to raise the money for the capital investment for the shift. Another important barrier will be people and industrial capacity, because the shift will require a factor of five increase in the production of new boilers and HTHPs, for example.
5. The recommended next step in this transition is to organise workshops between government (EECA, MBIE), renewable energy suppliers (electricity generators, Transpower, lines companies, forestry companies, industrial suppliers, etc.) and process heat users to foster business linkages and develop a coordinated transition strategy.