Stakeholder Views on Barriers to
Utilisation of Low Grade Heat for Process
Efficiency Improvements
Stakeholder Views on Barriers to
Utilisation of Low Grade Heat for Process
Efficiency Improvements
Report on a workshop at the PRO-TEM Network
Industrial Forum
26 March, Wilton Centre
Prepared by Dr Conor Walsh & Dr Patricia Thornley, Tyndall Centre for
Climate Change Research, University of Manchester
May 2010
Report number R108105/2010/rep001r01 Deleted: ¶
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Page Break
Executive Summary
This report outlines the key outcomes of the PROTEM workshop held on 26th
March
at the Wilton Centre, Middleborough. The aims of the workshop were:
• To identify key barriers to improving low grade heat use from industrial
processes
• To prioritize the most important barriers for the process industry and the most
relevant for the PROTEM network to address
• To gain insight into how the barriers are viewed by different stakeholders
• To discuss and share experience of how these barriers might be addressed
The barriers identified by the participants covered a wide range of issues, which were
collated into 21 different categories. The most dominant of these were “location”,
“cost”, “lack of investment return” and “performance/quality”. However, risk was
also a frequently mentioned issue in different contexts (financial, performance, impact
on existing process, market/policy etc.).
The barriers which participants rated as most important echoed this pattern to some
degree, with the following rated as the 3 most important barriers to address:
• Lack of pipe infrastructure
• Capital cost
• Location
However, the issues which participants felt it was most appropriate for the PROTEM
network to address were quite different, highlighting the following 3 most important
issues:
• Communication and awareness
• Suitable end users
• Technology and performance risk
Based on these findings, small groups then discussed the following key issues:
• Technology and performance risk – this highlighted the balance of risks and
rewards, the concerns of industrialists over disruption to established processes
and the consequent need for pre-implementation confidence and assurances
• Communication or user-based barriers – this focused on the difficulties of
matching users and suppliers of low grade heat, expectations and mutual
understanding of what is being ventured and potentially gained, the need for
return on investment and market failure to date to incentivise efficiency gains
or foster demand for low grade heat
• Finance and fiscal incentives - discussions on the efficacy of voluntary and
involuntary financial instruments, incentives and penalties. There was concern
that rate of return calculations were and inadequate assessment vehicle
Overall the workshop confirmed that economic viability is a key factor in facilitating
heat recovery; but other interconnected barriers are also important. There is a need
for candour and a long term perspective amongst stakeholders and hopes that
PROTEM might be able to address communications between heat users and potential
suppliers. Other themes for future PROTEM work which emerged from the analysis
included “Policy Incentives” and “Risk”.
1 Introduction
The PROTEM Network was established in 2009 to further stakeholder involvement
and interaction in advancing energy management and efficiency within the thermal
processing industries. One opportunity for improving thermal management in the
process industries is to make better use of low grade heat. While the recovery of
process heat forms an integral part of any thermal management system, streams at
higher temperatures are more amenable to heat recovery. Consequently while low
grade heat is quantitatively abundant and an under-exploited resource, there are a
number of practical, economic and other challenges in making better use of this
resource.
While these barriers to exploitation are documented to a limited extent in the
scientific literature (and a full review of this is given in a separate report), a workshop
was held as part of a PROTEM meeting to investigate this area with key stakeholders.
The PROTEM meeting and workshop were held on 26th
March at the Wilton Centre,
Middleborough. The workshop objectives were:
1. To obtain an up-to-date perspective from all the industrialists and other
stakeholders present on the barriers associated with the use of low grade heat
in the process industries
2. To prioritize the barriers, both in terms of how material they are to
development of thermal management initiatives and the extent to which they
should be a future focus of the thermal network
3. To discuss in detail some of the key barriers
The first 2 objectives were addressed in a plenary session with all attendees invited to
contribute to identifying their own (unprompted) priorities and then to prioritize the
areas that the group had collectively identified. The third objective was dealt with in
smaller interest-led groups, each of which contained academic and industrial
representatives, in which discussion and recording was facilitated by University of
Manchester staff.
2 Definition and classification of barriers
Barriers to implementation of low grade heat recovery and utilisation are issues that
impede or block progress. Barriers are more than just problems or difficulties (such
as fouling or economic costs, which may be addressed by technological solutions or
appropriate design). Instead barriers are intrinsic constraints or limits that impact on
the capacity of the industrial sector to engage with low grade heat recovery. This may
relate to institutional competency, regulatory enforcement, financial incentivises as
well as the perception of the stakeholders themselves. Barriers cannot be removed
simply by investment or improving technology within an isolated area. Conversely
addressing existing barriers may not directly remedy any individual site or plant
specific issues. However removing barriers will provide a more productive starting
point from which individual constraints (technical or otherwise) can be examined.
For the purpose of barrier classification within the workshop, four broad categories
have been identified, based on previously published work1.
2.1 Structural barriers
Structural barriers are evident when a new entity is attempting to develop within a
space that was fashioned to suit a previous incumbent. As the characteristics and
needs of the new entity are different, its progress will be impeded by boundary
conditions that were previously not material. An example relevant to the use of low
grade heat may be the lack of an established heat distribution infrastructure. This is
nto necessary when a process serves only its own needs, but becomes essential if
trying to match waste process heat to an external user. However, structural barriers
can also be less tangible, for example related to regulatory and permitting procedures
that may act as obstacles to project initiatives to improve process efficiency.
2.2 Market barriers
Market barriers arise when the services provided by a new technology are not
adequately valued within the existing market. This makes it difficult for the benefits
of any new technology to be monetized or be shown to offset the cost of their
implementation. With regards to low grade heat an example would be that in many
cases the costs required to recover energy may exceed the costs associated with
wasting lower-grade energy and consuming additional energy and the carbon savings
associated with the improved efficiency are not valued by the market in the same way
that, for example, carbon savings related to renewable energy may be valued.
2.3 Interaction barriers Interaction barriers may occur when the development of the new element necessitates
coordination (in terms of skill sets, products or services) between sectors and industries
which may not have experience in cooperating and cannot benefit from established
linkages. This can result in disagreements regarding project priorities and the optimal
means to overcome specific constraints. This is particularly relevant for projects
which seek to use low grade heat as it will be necessary to match low grade heat
supply with demand. This will require communication between many stake holders,
including producers and consumers of such heat.
1 Thornley, P., Prins, W., “Barriers to European Bioenergy Expansion”, European Biomass
Conference, Hamburg, 29 June – 3 July 2009
2.4 Performance barriers
Performance barriers perhaps represent the most relevant constraints for the use of
low grade heat. Because of its low thermal quality, the recovery of such heat will
invariably pose technical problems. Producers and consumers of low grade heat may
have specific expectations which may exceed the capacity of existing technology to
deliver. It may be the case that low grade heat recovery based on some technologies
will be unfeasible, uneconomical or have a marginal benefit. Identification of
performance barriers may inform future research by highlighting the areas where
efficiency gains may be more readily achieved. This may include a review of working
fluids, heat exchanger materials or indeed designing processes which minimize the
amount of heat wasted in first place.
3 Barriers analysis and characterization
3.1 Identification of barriers
At the start of the workshop participants were asked in the meeting to identify what
they considered to be the key barrier(s) to utilisation of low grade heat in the thermal
process industries. Table 1 shows the raw responses received in the first column,
which are then aggregated into collated headings in the second column.
Table 1: Barriers to utilisation of low grade heat identified by workshop
participants
Raw responses Collated responses
Lack of long term view re project payback periods.
(Industrialists do not have long term confidence
they will still be in business to make long term
energy investments
Company strategy (interaction)
Lack of time for considering creative activities
Corporate capacity and strategy
High cost of moving/extracting/upgrading low
grade heat vs. its value
Development costs of new technology & risks (big
bet)
Cost of implementation
Temperature and therefore the cost of heat exchange
equipment
Cost
Cost
Low pay back/cost
Cost
Cost
Cost effective technology
Cost
Cost
Cost to process and supply
Putting a value on energy efficiency best practice Policy incentives
Price for carbon Price of energy/carbon
Economics/IRR/payback of projects using low-
grade heat
Payback on investment
Project cost (capital/payback)
Return on investment
cost/payback period
No rate return investment for low value commodity
e.g. DH
ROI
Low value
New technology doesn't fit industry payback times
Low pay back – cost
Payback constraints
Lack of investment return
Use = market
Lacking interest
Low demand
Difficulty finding partners to use LG heat
Lack of market interest
Capex/availability/lack of funding
Difficulty in gaining capital
Access to capital
Inconsistent government policy!
Long term regulatory framework is uncertain - no
interagency joined up thinking
Regulatory uncertainty - lack of confidence in the
legal framework that governs key “?” E.g. revenue
stream (green credits)
Policy inconsistency
Appropriate infrastructure
Transport
Infrastructure
Structural
Lack of pipes/infrastructure
Who pays for infrastructure - what legislates to
drive investment?
Infrastructure of networks not available/affordable
to distribute low grade heat to suitable users
Infrastructure financial support
Can't use the heat recovered anywhere
Distance to end user of low grade heat and cost of
supply infrastructure
Lack of customers with correct requirements in
close proximity
Physical location – distance
Expensive to export off-site
No consumer in close proximity
End user (remote site)
The location of end users in relation to industrial
installations
Distribution infrastructure
Infrastructure to transfer & capture low grade heat
to allow pathway to end user
No one wants it/needs it nearby the source
Remoteness from users
Local use of low grade heat (lack of)
Transport of energy from low grade heat technology
Distribution
Companies & people who can use low grade heat do
not locate close to chemical plants
Logistical
Geography of the existing plants
Location
Risk
Risk
Risk
Risk
Low capital return combined with business
interruption
Capital cost of investment in new technology
Cost of capital
Cost of being able to supply
Capital effectiveness
Equipment capital cost - end use does not exist
(academic)
Capital cost
Production constraints
Process restrictions
Effect on process
Lack of technical solutions to heat recovery/the cost
of the technologies
Too expensive to recover, size, corrosion
Quality of low grade heat: too low temp/too
corrosive
Use of new technology for production of electricity
Proving new low grade heat recovery devices off-
Performance/quality
line so that they can be installed with confidence
during a shutdown
Extraction?
Quality
Performance
Performance: whether one available
process/manufacturing will be selected depends on
its performance or customer whether accepts it
Adequate frequency of supply
Ageing current equipment not frit for technology Ageing equipment
Reuse: integration with other processes
Degradation of process if used internally?
Need to compromise our operating practices to
enable economic downstream use of low grade heat
Alternative internal use
Unproven technologies i.e. capital risks
Risk of new technology
Flexibility of application
Technology and performance risk
Reliability of supply
Long term viability of low grade heat customers -
risk of changing markets
Having guaranteed long-term users next door to
long-term low grade heat suppliers
Reliability of long term supply
Awareness
What technology would use it?
Lack of users for the type of heat available
Finding suitable consumer for LGH
Matching source to consumer
Use of low grade heat (structural)
Suitable end users
Communication
Difficulty in all working together for common good
Co-operation between parties
Interaction
Awareness
Communication/interaction between different
disciplines
Communication difficult across range of
independent commercial organizations
Communication and awareness
3.2 Classification of barriers
Figure 1 shows a mapping of these barriers across the different sectors discussed in
sections 2.1-2.4. Some constrains are recognised as representing more than one
category and were therefore assigned to areas of overlap. Initially participants
assigned their own barriers to these categories, but Tyndall representatives then
allocated individual barriers to the relevant collated groupings, removed any
duplication or disparity and in this process some barriers were reassigned to other
classification sectors.
Structural
Interaction
Market Performance
Lack of pipe infrastructure
Lack of market interest
Production constraints
Ageing equipment
Reliability of supply (long
term)
Capital costLocation
Paying for infrastructure
Policy incentives
Policy inconsistency
Cost to process &
supply
Performance/quality
Risk
Alternative internal use
Suiting end users
Communication awareness
Technology risk
Corporate strategy
Access to capital
Lack of return
Figure 1: Map of barriers to low grade heat use.
As can be seen from Figure 1 a number of barriers are placed at the intersection of
two or more categories. “Risk” was seen to be a barrier common to all four categories
and therefore centrally placed, although it should be noted that this covers a wide
variety of different types of risks and an alternative approach would be to subdivide
the barrier into different types of risk. Tyndall Centre have subsequently highlighted
the linkages between individual barriers by adding arrows to join barriers which may
have a direct impact on each other. This serves to illustrate the interconnected nature
of many of these barriers and draws attention to how sometime addressing connected
barriers may be an effective way of realizing progress with adjacent barriers. This
can be particularly effective if the connected barrier is upstream of the one being
addressed or, in some cases the most efficient results may be achieved by addressing
the most highly linked barriers, which will realize multiple impacts.
3.3 Ranking of barriers
Figure 2 shows how 25 of the participants at the workshop (note: some who had
contributed to the earlier barrier identification had left by this stage) ranked the
importance of the collated barriers identified above and how important they
considered it to be that the PROTEM network address these barriers.
Summary of Ranking of Non-technical Barriers identified by
Attendents of Pro-Tem meeting.
0
1
2
3
4
5
6
7
8
9
10
Lack
of p
ipes
/infra
stru
ctur
e
Infra
stru
ctur
e fin
ancial s
uppo
rt
Lack
of i
nves
tmen
t ret
urn
Lack
of m
arke
t int
eres
t
Policy in
cent
ives
Cos
ts to
pro
cess
& s
uppl
y
Price
of e
nerg
y/ca
rbon
Acc
ess to
cap
ital
Policy in
cons
iste
ncy
Cor
pora
te cap
acity
& s
trate
gy
Com
mun
icatio
ns &
awar
enes
s
Suita
ble
end
user
s
Techn
olog
y an
d pe
rform
ance
risk
Reliabi
lity
of lo
ng te
rm s
uppl
y
Perfo
rman
ce/q
uality
Agein
g eq
uipm
ent
Alte
rnat
ive
inte
rnal u
se
Risk
Cap
itla
cost
Loca
tion
No
. o
f in
div
idu
al v
ote
s
Important barrier
Important barrier forPROTEM to address
Figure 2: Ranking of barriers to low grade heat use.
In general terms, (lack of) financial support, capital costs and the problems associated
with location were considered the main impediments to low grade heat use. The lack
of communication and awareness, the difficulty in finding suitable end users, and the
risks associated new technology are seen as being of greatest relevance to the
PROTEM network.
4 Detailed discussions of key barriers
Based on the results described in the previous section, the meeting then moved into
discussion groups to address three of the key issues: 1) technology and performance
risk, 2) communication or user-based barriers and 3) finance and fiscal incentives.
4.1 Discussion group on technology and performance risk
The industrialists within this group reaffirmed the importance of proving the efficacy
of any new technology before adoption. This included a clear indication on timescales
(e.g. during shutdowns) involved and assurances that any technology would behave
predictably and perform within requirements. Equally (if not more) significant were
concerns regarding how existing processes would be affected by any new technology
or process modification. The group was reminded of the margins involved in many
installations and clarified that within industry there is little tolerance of modifications
that could impact any existing process operation.
In relation to low grade heat processing it was mentioned that many modern industrial
processes are configured such that the continuous rejection of heat is vital in order for
the process to maintain in operation. This represented a very serious concern which
was not highlighted previously, indeed the prospect of not being able to reject heat
and thereby interfering with process operation would be seen as a significant risk by
plant managers. Leading on from this, the balance of risks and rewards was discussed.
It was the general view that the recovery of low grade represented significant risks
(such as discussed in the previous point) and that the perceived rewards for modifying
any process to improve efficiency are relatively small.
Following the above point it became clear that before any modification can be put into
operation, there is a manifest need to establish if the process can be reversed (i.e.
“Can we switch it off if it doesn’t work?”). The security of knowing that a previous
(and proven) configuration can be returned to with relative ease, was considered by
the group to be a important prerequisite to process modification. Specific examples
were then discussed. It was pointed out that the Organic Rankine Cycle had the
benefits of allowing for a modular design which could be removed without
significantly impacting on process integrity. The group was asked whether any risk-
sharing mechanisms would be appropriate for addressing this concern. While some
participants would consider a consortium based approach with financial risk sharing,
it was generally regarded as unfeasible as the financial benefits were insufficient to
justify accepting such a risk, even collectively.
The discussion branched into the advantages and disadvantages of process
optimisation. Participants generally felt the need to include a caveat when discussing
the integration of systems in a bid to increase or optimise process efficiency. An
adaptable process which allows different elements to be slotted in and out was clearly
the preferred option. This was reaffirmed by another participant who stated (via
email) that any equipment required must not reduce the operating capabilities of the
industrial processes it becomes a part of. However the participant accepted that most
opportunities will be in modifying existing operations. The heat recovery equipment
must therefore be flexible enough in application to work with a wide range of existing
process configurations.
Timescales were discussed briefly. New ideas needed to be introduced gradually,
which contrasts with the quick decisions that appear necessary in order for
commercial success. However, the respondents felt that larger companies require
assurances (particularly for investors) that their company is in “safe hands.” This
meant incremental change and minimizing business risk. In reference to some of the
earlier points, ‘build, own, operate’ was considered a suitable mechanism for risk
sharing for the sort of plant described which allows process elements to installed and
removed if necessary. Finally it was pointed out that it was important to first build
confidence at small scales.
4.2 Discussion group on communication and user-based barriers
This discussion began by stating the need for a clearer indication on who will (or can)
lead on establishing infrastructure for low grade heat use. This may include the
division of responsibility between the generator and users of low grade heat such as
areas supplied with low grade heat. The potential role of the user was reinforced as
industry will be unlikely to act without external impetus. (It was agreed that some
form of public funding would likely be necessary). Some participants felt that return
on investment remains the elephant in the room. Companies are very unlikely to
engage in a process that is not profitable. This needs to be made clear to the
proponents of low grade heat recovery. Concurrently companies need to be made
aware of any additional benefits; quite separate from monetary remuneration such as
improved public relations etc…This may be helped by highlighting, for example, how
district heating based on low grade heat use has been applied in other countries more
economically than the UK. (Although one participant stated that this is only possible
through significant state intervention and relates to areas in which gas is not as readily
available).
In terms of end users it was agreed that that no-one wants to move an estate near a
factory. In that regard, making effective use of low grade heat cannot be done
retroactively. It was agreed that it should be discussed at the earliest planning stages,
involving all stakeholders or not at all. It was felt that as it stands, low grade heat has
no suitable end users in close proximity and there is no incentive to change that. It
was strongly agreed that integrated thinking was essential, as an ad-hoc approach will
be counter productive. For example it was felt that there was a need to look beyond
the obvious user. For example certain sites in Europe pump CO2 into nearby
glasshouse installations. One participant felt that perhaps the barriers had been
overstated and that there was a need for clearer resolution that these problems remain
engineering problems and can be solved if sufficient support or demand is available.
With regards to the inequality between supply and demand, there was again
reasonable consensus that one of the main issues remains geographical disparity
between sources and users. Low grade heat represents an ample supply for which
there is no demand. Therefore finding users and matching them to a suitable supply is
paramount. Potential users need to be made aware of the existence of low grade heat
and its benefits. This was seen as a problem that is best tacked on a regional basis. It
was agreed that there is a need to identify which processes have the optimal capacity
to supply low grade heat and market towards these areas. In that regard energy
mapping is crucial. Some of the participants stated how low grade heat may be
perceived by industry as “unglamorous”, not particularly modern or easily
marketable. Another participant, communicating via email, felt that some industries
were not given sufficient recognition. Petrochemical and oil refinery complexes, for
example, already seek to utilise as much low-grade heat internally as is economically
feasible. This participant suggested that best practice for designing such processes is
essentially to design the whole system (including the hot initial step and colder later
steps) so that it is in balance, allowing as much heat to be recovered as practically
possible. In particular, academic or regulatory bodies need to appreciate that energy
suppliers are generally conservative. There was an accepted need for constructing
demonstration plants along with guarantees for both suppliers and users. This was
suggested that the costs associated with such a project may be supplemented by the
issuing of green certificates, which may alleviate industrial concerns regarding
process disruptions.
One of the participants felt that the development of suitable infrastructure should be
the responsibility of government, much like the maintenance of roads. The participant
continued that the presence of an under-exploited yet available resource constitutes a
market failure. The responsibility for addressing a market failure ultimately rests with
the government. Therefore the government needs to be made aware of issues at hand
and how it could intervene. However it was felt that government intervention could
only be practical on a large scale and can assist in fostering significant centralized
demand such as hospitals, universities etc This necessitates proper planning and
zoning as well as considering low grade heat at the earliest design stage. It was
accepted that there will always be incentives for big business to locate in a particular
area, and if the use of low grade heat can be placed in the context of other potential
benefits, it may increase its acceptability within the industry. The potential for low
grade heat use will, of course, vary amongst different industries. It was suggested that
while district heating may be seen by generation companies as being “high cost”, but
also “low risk” if properly managed, supply confidence must be maintained with in-
built redundancies.
4.3 Discussion group on finance and incentives
The discussion revolved around the pros and cons of regulatory versus voluntary
measures to encourage process energy efficiency and much of what is reported below
was said by two participants within the group (one academic and one from industry).
The participant from an industrial background argued in favour of voluntary measures
such as capital write downs in the first year as opposed to the existing 20% applied
annually and only to specified technologies. A more general incentive for thermal
processing efficiency was suggested, incorporating carbon emissions. For example it
may be useful to derive incentives for co-location, including making it an intrinsic
part of planning.
The participant from an academic background argued for penalties and regulation as
well as incentives. This included taxes which, it was felt, are currently inadequate.
The attempt to reduce the pay-back period (and aid cost-effectiveness) was
highlighted. A payback period for return of investment of five years is considered by
industry to be too long, in many cases two years is expected. There is an element of
tension with the need to remain internationally competitive. Another contributor
(communicating via email) agreed that investment return was an important issue. It
was suggested that even when oil and gas prices rise dramatically the return on
investment estimate will not actually change accordingly. One of the reasons
suggested was that when energy prices increase, so do steel and concrete prices, since
energy is a major constituent of their prices. Other participants felt that there is ample
existing regulation e.g. EU Emission Trading Scheme, climate change levy, etc.
Therefore a further tax is not needed but further persuasion or if necessary “arm-
twisting” should be considered. Another participant agreed that manipulating
incentives can work, but it is important to get them right. One of the potential efforts
of the PROTEM network could be in ensuring that regulatory bodies properly
understand the issues surrounding low grade heat. Proper awareness of such issues
may assist voluntary regulation in playing a part in addressing barriers. Returning to
investment, the participant replying through email stated that a five year payback
represents a 20% rate of return. (Although this has been questioned as it doesn't
subtract the cost of capital, which most companies would do). Energy projects with
similar rates of return are not being invested in, while for comparable rates,
acquisitions are being invested in that may not perform as well as expected, between
10-15% for example. This was seen an indictment of the quality and numeracy of
some firms. For that reason it was suggested that firms should be required to declare
their investment returns. This will allow for different standards for different types of
project. However differences between firms must also be acknowledged. Scale, for
example, is an issue as for some companies; a five year return may be too long. This
may not be the case for other firms.
It was felt that ‘short-termism’ pervades across society, including government
authorities e.g. ISO accreditation can mean nothing in terms of actual quality; but is
merely seen as perfunctory box-ticking, which promotes “carbon badge hunting”.
Generally, an associated carbon footprint is not taken into account within the payback
calculations of energy projects. Another participant bemoaned the apparent obsession
with “flashy fashionable gizmos” over more grounded approaches such as proper
insulation, stating that a well-located photovoltaic in the UK requires over a decade to
pay back its carbon debt. For that reason it was felt there was a strong need to
monetize carbon savings – emission trading schemes makes these savings saleable,
despite increasing energy costs by 10-20%. Yet typically this is not accounted for.
The potential issue of firms leaving the country if taxes are tightened was also raised.
Towards the end of the discussion it was suggested that energy projects are generally
not seen as desirable for individual’s careers. This was agreed but wider support could
formalise a mandatory requirement for a declaration of rates of return. A mandatory
declaration might lead to greater awareness amongst shareholders and provide weight
to the arguments of non-governmental organisations pressuring for change. Although
another participant issued a caveat on putting too much faith on such estimates,
stating that companies set rate of return benchmarks essentially to prioritise projects
as opposed to a belief that the calculations are accurate. A figure somewhere in the
teens is likely to allow projects proceed to consume the capital they can practically
afford. This suggests that projects to save energy rarely compete economically with
projects which produce material commodities. This was agreed by another participant
stating that due to increasing global competition the consequences of not satisfying
the objectives of any investment project would be significant. The development of
any new heat recovery process must therefore include steps which identify existing
capabilities and reduce potential risks. While the potential energy recovery
opportunities of low grade heat are large, the value of accessing this is unlikely to be
significant. Given the likely payback criteria which will be applied (as suggested
earlier in this discussion) keeping capital costs low must be a major development
objective.
5 Discussion
As can be seen from Table 1, the perceived barriers to the utilisation of low grade heat
are varied and involve numerous factors. Many of the points raised are duplicates and
hence are aggregated into consolidated categories. Quantitatively, the issues of cost,
location and return on investment were seen to generate the most responses. Needless
to say an individual participant’s background will determine what barriers are chosen
or deemed to be significant. However failing to take cognisance of the individual raw
responses may ignore some potentially important and relevant points. For example,
the collated category “Performance/quality” incorporates such individual elements as
the stream temperature, installation size as well as potential corrosion. While these
may be anticipated, other barriers such as the need for new technologies to be proved
offline (allowing effective installation during shutdown periods) may not be readily
apparent to some observers. Correspondingly, a small number of responses within a
category should not be seen as equating to an inherent lack of significance. For
example, “Access to capital” is seen to represent two ‘raw’ responses within Table 1.
However the importance of gaining investment for the implementing of any process
adaptation is unlikely to be disputed by industrialists.
The mapping of barriers should be provided with a caveat as the exercise is inherently
subjective. However proposing reasonable linkages between individual barriers may
assist in illustrating that any individual barrier must not be viewed in isolation and has
an associated root-cause and effect. In other words, no individual barrier was seen as
being unrelated to all others, and indeed the linkages suggested should not be seen as
being exhaustive. As can be seen from Figure 1, some barriers are linked directly to
other barriers within the same category, whereas others, such as location, will impact
upon barriers within different categories. It is worth noting that some of the linkages
appear to be circular. For example, the difficulty in raising capital will reduce the
likelihood of funding for new infrastructure, which in turn may be seen as a constraint
on production and hence reduce the performance of the installation. This may been
seen as an additional risk and reduce the possible of securing capital in the future.
This of course is just one example but it does demonstrate how attempting to address
one barrier may, in-turn, have an effect on others. Alternatively addressing a number
of key barriers in tandem (such as communication and corporate strategy) may be
more effective than addressing a number of disparate barriers individually.
Neither the distribution of individual barriers within collated groupings, nor the extent
of linkage between individual barriers should be seen as an incontestable metric for
the significance of any given constraint (although cross sectional linkages could
arguably be seen as reflecting importance.)
Figure 3 summarizes the results of the workshop prioritization activities.. The
grouping “barrier” in yellow shows the distribution of the initial responses of
participants across the different barrier categories. This represents a sum of
individual perspectives on which are the significant barriers to address. Location is
seen as most significant, followed by “costs to process & supply” and then
“investment return”.
Distribution of Responses to Barrier Identification and Ranking.
0%
5%
10%
15%
20%
25%
30%
35%
40%
Lack
of p
ipes/in
frast
ructure
Infra
structu
re fi
nancia
l supp
ort
Lack o
f inv
estm
ent re
turn
Lack o
f mark
et inte
rest
Policy
ince
ntives
Costs to
pro
cess &
suppl
y
Price o
f energ
y/carb
on
Access
to ca
p ital
Policy
inco
nsist
ency
Corpora
te c
apacit
y & st
rate
gy
Com
municat
ions & a
ware
ness
Suita
ble e
nd u
sers
Techno
logy a
nd p
erfo
rmanc
e risk
Reliabilit
y of l
ong te
rm s
upply
Perform
ance/
qua lity
Age ing e
quipment
Altern
ative
inte
rnal
use Risk
Cap
itla c
ost
Locatio
n
Co
ntr
ibu
tio
n o
f in
div
idu
al
ba
rrie
r to
ov
era
ll r
es
po
ns
es
Important barrier
Barrier for PROTEM to address
Barrier
Figure 3: Summary of initial identification of barriers, prioritisation for the
industry and prioritization for PROTEM
When participants were able to view all the collated priorities and asked to prioritize
across these (but with no indication given to the participants of how many people had
identified each barrier) “Infrastructure and financial support” was rated by far the
most significant followed by capital cost and location. There are many obvious links
between these barriers, since capital costs related to location issues could often by
expended on infrastructure.
When participants were asked to prioritize what PROTEM should address the top 3
responses were:
• Communications & awareness
• Suitable end users
• Technology and performance risk
The first seems to be an obvious role of a network, but the emphasis appeared to be on
communication between different stakeholder groups and to address this effectively it
is likely that PROTEM would have to significantly expand its stakeholder base
(which is presently focused on industrialists and academics) to include local
authorities, building services providers, energy service companies, social housing
providers, regional development agencies etc. This role is echoed in the second
priority of “suitable end users”. This could be seen as possibly linked to a perceived
role for PROTEM in matching heat supply and demand, vendors and customers or
just an anticipation that the contacts and information database embedded within such
a network would be useful in addressing geographical matching issues. While the
EPSRC thermal management project linked to PROTEM will carry out some mapping
of heat loads that may be useful to industrial participants, identifying end users did
not seem to be a key original objective of the PROTEM network. The third item on
technology and performance risk is something that could be addressed by PROTEM
in future meetings and events. Other areas that were considered significant for
PROTEM and might be areas to explore at future meetings were “Policy Incentives”
and “Risk”.
At the workshop, three barrier groupings were identified as being the most pertinent
overall and would therefore benefit from closer examination by stakeholders in
breakaway discussion groups. These were:
• Technology and performance risk
• Communication or user-based barriers
• Finance or fiscal incentives
One of the main points that pervaded the discussion amongst the breakout groups was
the perceived need for greater candour and clarity, by all stakeholders, in discussing
low grade heat.
5.1 Technology and performance risk
Within the discussion on technology it became clear that industry requires assurances
that low grade heat can be recovered without becoming detrimental to the process
itself. When dealing with industrialists, proponents of low grade heat may not be
sufficiently aware of the need for process predictability and that may in fact
necessitate the emission of low grade heat. The point that significant process changes
will by necessity take time is an important one and its inclusion within the corporate
strategy barrier in Table 1, may be understating its importance. This discussion in
essence relates to the risks perceived by the supplier of low grade heat, which perhaps
are not clarified, and (as seen in Figure 1) intersects with all barrier categories. Indeed
it seems that the perception of multiple different types of risks by stakeholders is in
fact related to this perceived need for greater candour and clarity. This would
obviously be linked to the issue of communication particularly between the process
industries and heat customers (including any intermediaries.)
5.2 Communication and awareness
The discussion regarding communication followed on from this by expressing a need
for clarification of the division of responsibility within low grade heat use. There was
a need for explicit guidance on who could lead implementation of such a change. In
this case industry was seen to be reactive and requiring greater clarity from potential
users of low grade heat as well as regulatory bodies. The statement that the lack of
low grade heat utilisation represents a market failure is a serious indictment, implying
a fundamental flaw within the industrial sector. Because of the difficulty in matching
low grade heat supply to demand, the need to consider it in the earliest planning
stages was made clear. As with the issue of time, the lack of a long term corporate
view was considered an element of the corporate strategy barrier, especially as it
appears that a purely fiscal incentive in isolation may not be effective.
5.3 Financial and fiscal incentives
The point above about fiscal incentives was also raised within the third discussion
group where the necessity of further involuntary penalties was debated or whether
greater persuasion, even if in the form of “arm-twisting”, would suffice. The need for
greater openness particularly in terms of declaring the expected and actual return on
investment was seen as a potential means of making incentives more effective. Many
non-energy projects fall below the targeted return on investment, which may suggest
that comparing an energy recovery project against an “ideal” target may represent an
unfair comparison. As with the other discussion groups the issue of time or lack of
planning, referred to as “short-termism” was seen as a significant barrier to both the
use of incentives (which may simply result in “box-ticking”) and the recovery of low
grade in general. It is interesting that the issue of time and a lack of planning were
highlighted within each discussion group but the collated indicator grouping, namely
corporate strategy, was not seen as being significant either in general or specifically in
relation to PROTEM. This should not be seen as a reflection of the individual choices
but rather a consequence of the aggregation or classification, which is in itself
necessary to succinctly convey the underlying trends.
6 Conclusions
Based on the information received within the workshop it is clear economic viability
is essential for industrialists and is influenced by numerous factors. These barriers are
sometimes cyclical which may prove a significant impediment if left unanswered but
have the potential for substantial progress if the “vicious circle” can be effectively
broken. The workshop did not extend to considering the implications or effectiveness
of particular measures to address some barriers e.g. carbon tax or fiscal incentives.
This is something that could be considered further in the project, particularly once
carbon balance calculations have been completed for different technologies/industries.
What is apparent is the need for honest and clear engagement amongst all
stakeholders at the earliest juncture of the planning stage with acknowledgement of
the industrial concerns related to return on investment and process stability alongside
adequate recognition of the greenhouse gas and energy balance benefits. Risk was
identified as playing a key role in many different ways in these discussions and to
some extent all of the barriers discussed represent a facet of the risk involved in
undertaking any change. Until the relationship between risk and reward (i.e. cost and
benefit) is changed, low grade heat will remain an abundant but under used
commodity.