Efficiency booster retrofit: Reducing energy costs through modernization

On April 15th, the remaining three nuclear power plants were taken off the grid. Whatever one may think of nuclear energy, the fact is that the technological diversity of power generation has been reduced - and this in the midst of an energy crisis that has been going on for years. Whether energy-intensive production is still possible in Germany in the future will be determined by the flexibility and inventiveness of the industry. A smart approach is the modernization of existing plants - retrofits can become a saving efficiency booster in difficult times.

With the elimination of nuclear power from the German energy mix, possible bottlenecks, for example in the coming winter, will have to be offset primarily by fossil fuels. This is because the expansion of renewables in Germany is still comparatively sluggish. But there is an additional problem with natural gas: Russia has turned it into a weapon in the war against Ukraine. Instead, the government is relying on LNG, which, however, remains comparatively expensive despite fixed-price contracts and gas price brakes.

The price of electricity also remains at record levels. In a recent statement, Tanja Gönner, CEO of the Federation of German Industries (BDI), criticized the fact that the energy price brakes are not being implemented by many companies. The stock exchange prices for electricity are still more than three times higher than the average for the years 2010-2019. The DIHK also emphasizes: "Although the price level for electricity and gas has fallen slightly recently, it continues to weigh on international competitiveness.

Industry calls for industrial electricity prices

Hard hit by the price jumps on the energy market are energy-intensive companies in the steel and aluminum industries, heat treatment and foundries in particular. Some companies have already had to shut down or convert their production. In the supplier industry, only around one third of all companies rate their current situation as "good", according to a recent report by the Supplier Industry Working Group.

In an interview with the trade journal Prozesswärme, Dr. Georg Geier, Managing Director of Siempelkamp Foundry, already emphasized in the summer: "At some point it will no longer be economical to operate energy-intensive production at the location Germany. But our incentive is to push this limit further and further by means of intelligent solutions." However, this will only succeed if the industrial policy framework conditions are also right. That's why Dr. Geier demands, "We need a uniform industrial electricity price. This instrument would be suitable for accelerating the transformation in industry towards renewable energies."

But as long as the demand for an industrial electricity price remains unheard, the industry will have to come up with its own solutions. One sensible long-term approach is to modernize existing plant technology through retrofits.

Reducing operating costs through energy savings

For companies in the metallurgical plant engineering sector, the trend towards retrofits is opening up new growth potential. This is because they play a key role in the topic of modernization: "Saving or replacing gas in industrial processes is only possible with the help of technologies from mechanical and plant engineering," explains Matthias Zelinger, Head of Climate and Energy at VDMA. "That's why gas burners in industrial furnaces and heating processes are currently being modified, control systems are being reprogrammed and gas mixing equipment is being installed throughout the country."

In particular, he said, converting processes to alternative energy sources - including oil, propane-butane gas, biogas and electricity - is in demand in the short term to reduce dependence on natural gas. "This applies to energy-intensive customer groups, but also to mechanical engineering itself," Zelinger explains. On average, he says, mechanical engineering is not a large consumer. "But gas is used in crucial production steps, so the willingness to invest is also high."

30% less energy consumption thanks to modernization

Like every crisis, the energy crisis also holds opportunities: it accelerates the switch to other energy sources, especially renewable energies. More and more plant engineers are examining which processes can be converted from gas to electric heating. Often, a long overdue modernization of the plant park also helps to reduce energy consumption by up to 30 percent, explains Jörn Ludewig, Managing Director of Jasper GmbH.

The higher the energy costs, the faster investments in retrofits pay for themselves. "We have been chasing customers for many years to convince them to modernize. Most of them hesitated until recently; now the modernization business has really taken off," Ludewig emphasizes. All companies in the industry are currently working on solutions to make their production more energy efficient, he says. They are also trying to implement long-planned energy-saving measures sooner.

Faster amortization with higher energy costs

This observation is also made by Dr. Olaf Irretier, Managing Director of Industrieberatung für Wärmebehandlungstechnik (IBW) GmbH. Dr. Irretier advises companies planning modernization measures or investments in plant expansions and conversions. "Across the board, the topic of heating is clearly in focus because of the cost pressure and acute supply fears of many companies. Many businesses are now being challenged to find new ways of doing things," he explains. "A return on investment of three to five years is realistic. For gas-fired systems, one can assume similar orders of magnitude. You get the investment back through optimized processes and also through plant safety."

Even climate neutrality is conceivable by modernizing plants. If electrical heating based on renewable energies and hydrogen heating were added, this would result in a climate-neutral hardening shop. "Nobody thought of that a year ago," explains Irretier.

Modernization during ongoing operation?

Even though conversions and conversions are currently in demand, the implementation of such projects requires considerable planning effort. "Particular tact is also required whenever the conversion has to take place during production and there must be no disruptions so as not to impair product quality" emphasizes Dirk Mäder, authorized signatory and head of Technology & Sales at Noxmat GmbH.

"In the case of retrofits, the required conversion effort is significantly more complex." This is because retrofits are usually very extensive projects. The conversion of systems from gas to electric heating is particularly popular: "Conversions with electric heating systems are currently a real hit," says Mäder. Even if the conversion is costly, no company should hesitate to plan new projects in the current situation and implement them as soon as possible: "Energy prices will not fall back to pre-war levels. Therefore, investing in efficiency measures is always worthwhile."

Successful example: Aichelin modernizes at SKF

SKF GmbH produces various rolling bearing products in Lüchow, Lower Saxony. Aichelin equipment and services have been used for decades in the heat treatment of these products. SKF commissioned Aichelin Service to comprehensively modernize five of these plants in the course of 2022. SKF declares that it will have fully achieved its project goals with their recommissioning at the end of 2022. Production reliability has been ensured during ongoing operation, while productivity has been increased in the long term.

To increase part throughput in the heat treatment facilities, Aichelin designed a new stacking gantry with the SKF project team and an external partner. It is being used for the first time at SKF and now enables rolling bearings to pass through two to a maximum of three layers in a single heat treatment process instead of the previous single-layer process. In addition to expanding production capacity, this now allows SKF to respond more flexibly to additional demand. And most importantly, the plants can be utilized in a much more energy-efficient manner. FOCOS 4.0, Aichelin's Industry 4.0 application for monitoring and quality verification of process values, has also been newly integrated.

Significant increase in productivity and flexibility

The course of the project is exemplary for a successful modernization: As general contractor, Aichelin Service was responsible for the project management as well as the execution of the services of all partners and subcontractors involved. The general conditions were challenging: The project was originally scheduled to run from November 2021 to June 2022. This was considered time-critical, as production reliability had to be ensured in parallel. The plants were therefore converted step by step one after the other.

By increasing its productivity in the heat treatment sector, SKF's Lüchow site is now strengthening its competitiveness. SKF is also already in talks with Aichelin Service for further plant modernizations - among other things, to ensure and increase plant safety.

Investment inhibited by planning uncertainty

Two factors are still limiting project business for modernization and retrofit: First, numerous plant operators are uncertain and are waiting to see how the situation on the markets will develop. They are holding back on investments for fear of stranded assets. A second limiting factor is the capacity utilization of the plant manufacturers responsible for retrofits. As the current situation entails an enormous need for advice, the number of inquiries is skyrocketing. Plant engineers cannot process this in a short time. There is a lack of time, components and personnel resources - a brake on comprehensive modernization.

But in the long term, the political goal is clearly defined. In 2045, industrial process heat must be generated in a CO2-neutral manner. "With the goal of climate neutrality, industries are probably facing the biggest transformation in their history," says Friedrich-Georg Kehrer, Global Portfolio Director at Messe Düsseldorf GmbH. And operators and plant engineers must implement this transformation together - albeit under increased pressure.

Sources

BDI on nuclear power phase-out:

https://bdi.eu/artikel/news/bdi-zum-kernkraft-ausstieg-zubau-neuer-kapazitaeten-nach-wie-vor-zu-langsam [Accessed 04/20/2023]

VDMA: Outlook cautiously optimistic:

https://www.vdma.org/viewer/-/v2article/render/77563427 [Accessed 04/21/2023]

DIHK formulates essentials for energy supply by 2030: https://www.dihk.de/de/aktuelles-und-presse/aktuelle-informationen/dihk-formuliert-essentials-fuer-sichere-energieversorgung-2030--92910 [Accessed 04/21/2023]

ArGeZ online press conference in the context of the Hannover Messe. For more information, see https://argez.de/ [Accessed 04/21/2023]

Aichelin modernizes at SFK:

https://www.aichelin-service.com/news-events/aichelin-modernisiert-anlagen-bei-skf-in-l%C3%BCchow [Accessed 04/21/2023]