Slovenian Industry Working on Reducing Consumption, but not on Carbon Footprint
Date: November 25th 2019
There is significant energy saving potential in the Slovenian production sector, as recognised a while ago by two major industry players, the aluminium producer Talum and the steel company Štore Steel. The two Slovenian companies even offer ancillary/demand response services, helping to ensure the stability of the transmission system, Energetika.NET learned at Thursday’s En.economics & Industry 019 conference, organised by Montel Energetika.NET and the Slovenian Association for Energy Economics (SAEE), which was also a closing conference of the IMEAS project. However, there is apparently a lack of initiative among Slovenian companies when it comes to achieving carbon neutrality.
The steel industry has been working on energy efficiency for a number of years, as energy represents a significant cost in these operations, explained Štore Steel’s Energy Manager, Bojan Senčič. He added that the company has already done a lot to improve its energy efficiency.
For example, Štore Steel replaced all of its lights some years ago, allowing it to save about 2-3 GWh of electricity per year. This year, it also implemented three large investments focusing on energy consumption, which are expected to reduce it by an additional 8-10 GWh (electricity and gas). One of the investments was targeted at the heating furnace for billets, which has the highest gas consumption of all the segments at Štore Steel, consuming up to 60 GWh of energy per year, said Senčič. He added that the energy costs normally come up to about 14% of the total costs, although they have been known to reach 20%.
Meanwhile, the aluminium producer Talum, the largest electricity consumer in Slovenia, has been committed to energy efficiency since the very beginning (it recently marked 65 years of operations). This was necessitated by the fact that the production of primary aluminium is a process production, which means that it operates continuously and consumes a lot of electricity, explained Talum’s Head of Energy Management, Boštjan Korošec.
“The costs of all the energy products that we use take up 50% of the total operating costs, which makes us highly sensitive to energy consumption. Additionally, we operate in most upstream and downstream markets on global exchanges, which means that we have a minimal effect on the prices of the inputs and products that we sell, so we have to be very good, diligent, and efficient to survive in this competitive environment,” stressed Korošec.
He explained that Talum’s main competitors at the moment are companies from China, which generates 60% of the world’s aluminium consumption, of which it exports 10%. “These 10% correspond to Europe’s entire aluminium consumption, which increases by about 4-5% per year. This means that without carrying out certain internal energy efficiency measures, one cannot survive,” said Korošec, noting that Talum rates second in the world with its specific electricity consumption per unit of primary aluminium produced, “which means that we are operating well and efficiently”.
“All the activities that have been carried out over the decades have focused on the installation and development of technologies, which also translates to lower energy consumption,” explained Korošec, adding that of the three electrolysis halls which have been in use in the last 30 years, only Hall C is still in operation, consuming only 13.5 MWh per tonne of primary aluminium produced (Hall A consumed 18 MWh and Hall B consumed 15 MWh). "This sounds a lot, however, we have to keep in mind that when recycling aluminium, which has been our focus for over 10 year and which represents more than 60% of our entire commodity production, we consume only 5% of the energy which we needed to produce aluminium by electrolysis,” said Korošec, adding that aluminium can be recycled indefinitely without losing its chemical properties.
Energia gas and power to offer the CO2 Free product in 2020
Meanwhile, Italy’s Energia gas and power, which also has a subsidiary in Slovenia, is trying to facilitate the industry’s transition to a low-carbon society, explained Nina Bračko Colja, the company’s Director of Market Development. “Our group is very innovative and approaches this issue using different types of leverage, especially at the EU level. We use a variety of untapped leverage tools aimed at reducing the carbon footprint, which we combine with energy efficiency measures,” said Bračko Colja.
Energia gas and power will therefore start offering the zero-carbon electricity product CO2 Free at the beginning of next year, both in the Slovenian and in the Italian market, “thereby offsetting the carbon footprint not with electricity that had been greened-up with guarantees of origin, but by using Certified Emission Reductions from projects in developing countries, issued by the UN’s Clean Development Mechanism. These reductions are a sort of leverage used to reduce global emissions by enabling large companies in developed countries to increase the profitability of environmental projects in less developed countries,” explained Bračko Colja, adding that projects which the companies can choose from do not only generate savings from renewable production, “but have significantly greater economic and social impacts”.
The second product that Energia gas and power intends to put on the market is a platform, which is currently in the implementation phase. In the first phase, the platform will mainly target households, “as large business consumers require more individualised treatment,” offering “online calculation”. According to Bračko Colja, the platform will “use the data which it receives to calculate possible savings and suggest scenarios with which to achieve them. However, we wanted to go even further and be even more innovative, so the platform also allows the user to purchase devices which can generate these savings, including solar panels, heat pumps, and air-conditioning systems. Additionally, since we are aware of the rapid technological development in this field, we are now building our own innovation incubator for sustainable development, so the platform will allow our clients to buy very advanced and innovative products”.
According to Bračko Colja, the interest in
such services is already there. She warned, however, that “compared to other EU
countries, Slovenia is lagging behind considerably in terms of reducing its
carbon footprint. We have no more than five clients whose operations are carbon
neutral or who have at least one product in their production cycle for which they
manage to offset the carbon footprint of its life cycle. In Europe, this is
already common practice. It is actually rare to find banks, institutions, and
large producers that are not operating in a carbon neutral way. Big supermarket
chains go even further by choosing carbon-neutral suppliers, thereby reducing
their own footprint. Slovenia is really lagging behind other EU members in this
Lack of initiative
Meanwhile, Evald Kranjčevič, Director of Energy Solutions for Industry at the Slovenian energy efficiency company Resalta, noted that Slovenia’s climate plants have never “been particularly ambitious” and that we are now recovering from a period of lost opportunities. However, something still needs to be done. Kranjčevič explains that there are two issues when it comes to the industry – one relates to the risk to energy supply security and to ensuring adequate production, whereas the other relates to lowering costs.
“Energy is always the main player in lowering costs, which consequently raises the environmental issue,” said Kranjčevič, adding that we need to adapt, however, the companies are mostly operating within a framework dictated by the policies and the state or the EU. “Every company likes to believe that it is sustainable and green, however, carbon neutrality costs money. This is an image which one also has to pay for,” he stressed, adding that Resalta would also like to see a bigger breakthrough in this field in Slovenia, “so that the companies would start investing more than they need to at their own initiative”. What we need here is a vision, said Kranjčevič.
Communication is one of the most essential processes in project implementation. There has been a lot of facile and simplified talk in the public about how a certain type of infrastructure will harm the environment in a certain way. When you try to present a complex project, deploy a complex solution, it can be very difficult, as the solution is not simple at all, stressed Boštjan Krajnc, Director of the Slovenian Energy Agency Kssena. He added that communication is very important – it is vital that the solutions are revealed to the public, so that everyone can take part in the process.
Eco Fund expecting further development in industrial energy savings
In 2018, Slovenia’s Eco Fund also began to apply measures in the industry, explained the fund’s Director, Mojca Vendramin. “The Eco Fund is one of the key pillars of energy efficiency in Slovenia. In the last 10 years, we mostly focused on the energy renovation of apartment buildings, whereas last year, we also began to introduce incentives for companies. Progress has been slow, however, the demand for incentives for energy efficiency measures in the industry is increasing,” she explained.
According to Vendramin, “one can see that the culture of green growth and green production is perhaps a bit weak in Slovenia, as demand for incentives to carry out energy audits – where the subsidy is 50% – is very low,” she said.
Vendramin also noted that there is significant energy saving potential in the industry. “The Eco Fund generates about 200 GWh of energy savings per year by renovating apartment buildings, whereas in the industry, a single project can help save 10 GWh. So there is huge potential on the national level. And I believe that there will be further development in this field.” Read also Mojca Vendramin: Eco Fund Is a Vital Pillar of Slovenia's Energy Policy.
Talum is now in talks with the Slovenian energy solutions provider NGEN about setting up an energy storage system, which NGEN had already done for the Slovenian steelmaker Acroni. According to Boštjan Korošec, Talum has made its infrastructure available for the installation of a system that is expected to be more powerful than the 12.6 MW, 22.2 MWh Powerpack set up at the Acroni plant. In addition to rental income, Talum hopes to use the storage system in case of anomalies in the grid, i.e. supply failures in the transmission network, to briefly bridge the gaps using the energy from the storage system. On the other hand, Talum’s generator sets could feed energy into the system to be used during periods of scarcity, thus providing ancillary services and helping ensure greater stability of the transmission system. Talum could participate in the process with its technological equipment that can offer flexibility but has just never been used for this purpose before. This is part of the company’s efforts to possibly optimise its processes further and increase its energy efficiency.
There is also opportunity in prosumer schemes. According to Korošec, Talum, being the largest electricity consumer in the country, known for its process production and a stable off-take of 110 MW “is definitely an important link in the electricity system. Our electrolysis-based production process, which uses up to 93% of all the electricity at Talum, requires a stable and safe supply of electricity and gas, which is something we have been striving towards for decades, asserting that the electrolysis process, as far as supply is concerned, is untouchable. Because this is where we generate the highest energy consumption and consequently also the highest costs”.
“However, if we want to ensure a stable energy supply and a stable transmission system to which we are connected, it is only right that we offer some of our own services to the system as well – by this, I mean demand response,” stressed Korošec. Talum has therefore been offering a tertiary control service through its electrolysis for six years now “by reducing the power of the electrolysis or completely shutting it down with a reaction time of three minutes, which is a lot less than in the case of any other aggregate. This is possible because our process includes no moving parts, so it can be adapted quickly, while still in line with certain rules which pose no real threat to our process”.
This year, the company also started offering a part of its electrolysis power for secondary control and, as Korošec noted, “it works”, so it will continue to provide this service. Talum also offers tertiary control via an aggregator with large diesel aggregators and voltage control in the electric loop in Slovenia’s Pomurje region by regulating the off-take of reactive power. “So we are now offering quite a range of ancillary services,” said Korošec.
He added that “this also means that we have to make certain sacrifices, since every time we interfere in the electrolysis process, we cool or overheat the electrolytic cells, thereby reducing energy efficiency. Since we are a company whose ultimate goal is to create value and earn some money for development, we had to learn about the flexibility limits of our rigid system, allowing us to maintain a certain level of energy efficiency and to ultimately achieve a positive effect. Every end consumer can be a prosumer, but each in their own way and in their own scope”.
Meanwhile, the steelmaker Štore Steel is also able to “offer ancillary solutions, however, we still need to find a balance between adjustment and efficiency”, explained Senčič, adding that every service means additional costs for the company. “We are more involved in increasing power than reducing it, although the resulting revenue is relatively low. We expect to see an increase in revenue in relation to secondary regulation and connecting with NGEN,” noted Senčič.
This article is available also in Slovene.