Opportunity Fuels Heat Recovery Systems

In coming years, waste-heat recovery systems will be saving companies of all sizes millions of dollars a year in energy costs.

“Whether you realize it or not, you’re getting close to the mother lode,” says Tom Casten, CEO of waste-heat “recycler”Recycled Energy Development (RED), about the potential of using cast-off heat to lower consumption of power.

Waste-heat recovery takes heat generated from industrial processes, power generation equipment or even air-conditioning systems, and uses it to create steam to power separate turbines.

Photo: Janusz Zlob | Flickr Open | Getty Images

The result is more energy for every dollar spent on fuel or utility-provided electricity.

Waste-heat recovery is part of a basket of technologies that harvest “opportunity fuels” — usually byproducts of the energy-consuming firm’s main product.

Aside from systems like RED’s, methane from farms and wastewater treatment plants that is used for powering turbines, as well as refining plant and animal fats from food processing into transportation fuels, could be considered “opportunity fuels.”

Unlike installing rooftop solar panels, each potential waste-heat reduction project is different and requires different technology.

“You need to get the modeling right,” says Anissa Dehamna, an analyst with boutique cleantech research firm Pike Research. “A lot of these projects are going to be bespoke.”

“It’s not really a [single] technology, it’s more of an approach,” Casten says, and often means more time spent on making sure heat isn’t lost in the recovery process, rather finding the right turbine.

He adds that every project ultimately depends on the primary use of the energy. “Do you want to do one job with each fire, or do we want to do two?” he asks.

Waste-heat solutions firms like Casten’s see the biggest benefit to the heaviest industries first — steel, glass and cement producers, for example.

But utilities and power-plant operators could also benefit. RED competitor Echogenis currently working on a test facility to harvest 250 kilowatts of energy from a power plant in Columbus, Ohio, owned by AEP.

The U.S. Department of Energy estimates that each year the nation’s power plants lose over 200 gigawatts of energy from wasted heat — about the equivalent capacity of 100 Indian Point, N.Y.-sized nuclear power plants.

Payback time would vary greatly; firms like Echogen, for instance, say they can recover costs in under three years.

That short time frame is critical, says Dehamna, because “if the payback period is over five years, as a business owner I’m likely not going to consider it.”

But Casten says the real benefit to energy-intensive commodity producers, like steel or glass, could be in their margins.

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As an example, he says one glass producer could realize a drop in production cost of 7 percent to 8 percent by recovering waste heat.

“In a commodity business, 1 percent (in cost difference) is the difference between winner and loser,” he says, adding that this is the kind of advantage that could keep some of this production viable domestically, rather than shipping it overseas.

Regulatory Wrinkle

But despite its cost-effectiveness and green approach, environmental legislation designed to protect air and water quality is a roadblock to wider adoption of waste-heat recovery systems.

Technologies to scrub airborne contaminantsneed discharged fumes from industrial processes to be cool enough to filter — robbing it of the waste heat that would be recovered.

“We’d have to be willing to reopen some obsolete rules,” says Casten, to at least reorder the processes to extract the heat first, or to allow for installation of updated technologies that ultimately extend the life of processes that pollute.

But he adds that policymakers are “scared to death” to reopen environmental legislation in today’s political climate.

What's more, most state-level green energy legislation doesn’t give utilities or large industrial energy consumers any credit for cutting power consumption, preferring instead to incentivize the provision of grid-scale renewable energy.

A veteran of the waste-heat recovery business for 35 years, Casten says he’s seen $2 billion invested in 275 projects he’s worked on; his customers have saved $500 million in energy costs per year while cutting 5 million metric tons of carbon emissions.

“It costs a lot of money to make carbon,” Casten says — so why not recover it by saving energy users $100 per metric ton, versus taxing them $20 per metric ton to produce it, he asks, in reference to the now-dead proposed legislation on carbon emissions.

But even without incentives, the cost savings alone will likely see this market grow.

An improving economy will give more executives the breathing room to contemplate investment, Carsten says.

Pike’s Dehamna agrees, calling waste-heat recovery “a very straightforward business decision” among other green energy or money-saving options for companies.

“It’s a simpler solution, with less red tape,” she says.