Energy prices across the world have soared over the last month or so, as once-dormant industries return (or at least attempt to return) to full production and, as Boris Johnson put it, the global economy undergoes a “giant waking up”.
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Many of us will have noticed this as private consumers (certainly in the UK at least), as our household energy bills look set to jump up in price, and we read about energy firms going bust. Whilst these price rises might be an irritation for most of us simply looking to heat our homes over the winter, the impact could be devastating for energy-intensive industries, including steel production, paper mills, and cement plants.
UK Steel Director-General, Gareth Stace, put the problem into stark contrast when he was quoted as saying: “These extortionate prices are forcing some UK steelmakers to suspend their operations during periods when the cost of energy is quoted in the thousands per megawatt hour; last year, prices were roughly £50 per megawatt hour.”1
Whilst the precise numbers vary, with different national governments offering different levels of support, the problem isn’t confined to steel, or the UK. Indeed, it was recently reported that company directors at one of Spain’s largest cement plants were considering shutting down production as energy prices surged. Luis Herrers, Cementos Portland’s Operations Director, said: “For us right now it’s a huge problem, because the cost of electricity has shot up 300%, and above all, we have crossed a red line, which is that our production cost has exceeded our selling price, so we are in a critical situation right now.”2
When looking for a silver lining to this particular cloud, one might suggest that the current crisis serves as a warning to prepare for what could come in the future. The green energy transition, though vital, isn’t going to proceed without a few bumps in the road – changing the way that the world thinks about, and uses, energy is going to be a complicated process and there will inevitably be challenges.
Though changes can’t be made overnight, the financial and environmental arguments for cement producers (and other industries) to invest more into improving energy efficiency continue to grow, especially in a world of spiking energy prices. Waste heat recovery systems and process optimisation technologies are just two ways in which plants can reduce energy costs. Some producers are even investing in their own renewable energy facilities – Calportland’s Mojave cement plant, for example, produces up to 24 MW of electricity through eight 3 MW wind turbines.
Whilst it wouldn’t be viable (or necessary) for every cement plant to have its own private windfarm, steps that can be taken today to improve energy efficiency and promote sustainable energy security will doubtless lead to dividends in the future.
1. ‘Materials firms hit by ‘eye watering’ energy prices’ – https://www.newcivilengineer.com/latest/materials-firms-hit-by-eye-watering-energy-prices-23-09-2021/.
2. ‘Europe’s energy crisis: Soaring electricity prices put strain on cement factory’ – https://www.euronews.com/2021/10/21/europe-s-energy-crisis-soaring-electricity-prices-put-strain-on-cement-factory.