"Energy is always a major cost factor."

“One very important way to reduce energy consumption is in the process design and layout stage.  A simple process flowsheet with fewer stages will have much lower energy demand.”  

Karl Hornhofer, Member of the Executive Board, Pulp & Paper – Capital Equipment

“In any discussion on energy, papermakers must balance the discussion about fiber supply and utilization as well. These are important considerations and trade-offs.”

Humbert Köfler, Member of the Executive Board, Pulp & Paper – Service and Units

 Authors Makris and Ringqvist from McKinsey say that the days of low-cost energy are numbered, if not gone completely.  Are there regional differences that you see?  

Köfler:  Rising energy costs are crippling some of our customers’ operations.  In mechanical pulping, the high costs in Eastern Canada and Northern Europe are stifling.  We are now seeing the impact in emerging markets such as China.  The one region that seems to be in a better position is Russia, with its abundant wood resources and a surplus of energy.  That said, it’s important to stress that energy has always been a major cost factor.  As a supplier to the industry, we have focused on energy efficiency for years, since it is a major component of cost.

Hornhofer:  With the price of oil now approaching US$ 120 a barrel and dynamic growth in developing economies such as China and India, we don’t anticipate that the cost of energy will become much lower.  Security of supply and the efforts to reduce greenhouse gas emissions are placing a big emphasis on biofuels – which puts pressure on wood supplies.  We can’t un-bundle the energy discussion from the other major components of cost – where fiber supply, labor costs, other raw material costs, water consumption, and environmental costs enter the picture.  These can be seen partially as threats, and partially as opportunities.

 The threats are real.  How real are the opportunities?  The McKinsey authors talk about lower energy-intensity papermaking using recycled fiber as an example.

Hornhofer: The opportunities are very real and vary in their overall impact by the furnish being produced.  For example, the electric power consumption of dried chemical pulp is 600-700 kWh/adt (incl. pumping, process equipment, bleaching chemicals, etc.) and the consumption of heat is 11-13 GJ/adt for heating fluids, acceleration of reactions, and evaporation of water.  At the same time, a modern kraft mill generates 900-1100 kWh/adt of electricity from its own turbines. So the excess electricity, 200-500 kWh/adt, can be sold to the grid or can be utilized in integrated paper production.  

That said, there is still a lot of unutilized low-value heat in flue gases and water/filtrate streams.  The wider use of variable speed motors, operating processes as they were originally dimensioned, pre-heating incoming raw materials and air, keeping heat surfaces clean (sootblowing in the boiler, cleaning of evaporator elements, etc.), operating at lower temperature levels, and using steams and condensates all contribute to energy savings.

Köfler: TMP consumes 1500-3300 kWh/adt electric power (refining, pumping, process equipment, and bleaching chemicals).  If the line has a heat recovery system, about 3-4 GJ/adt of low-pressure steam is recovered.  

From an energy standpoint, recycled fiber processing is the most efficient.  Typically, deinked pulp consumes 400 kWh/adt of electric power (pumping, process equipment, and bleaching chemicals) and some 1.5 GJ/adt of heat for heating of fluids.  More than half of the world’s papermaking fibers are based on wastepaper recycling.  But we can’t base everything on waste- paper.  Gradually, we’re reaching the maximum 55-60% recovery rate. A certain portion of fresh virgin fibers is required to keep RCF quality satisfactory enough for papermaking.

Also, papermakers must balance wood utilization as well.  The wood yield from mechanical pulping is about twice that of chemical pulping.

 What is Andritz doing to help pulp and paper producers capitalize on their opportunities?

Köfler:  Our customers are looking for faster paybacks than they can achieve with conventional investments – typically one year or less.  Andritz has technology solutions and services that reduce power consumption, increase energy recovery, and increase the generation of electric power.

One of the simplest solutions for mechanical pulping is to install a heat recovery system.  There are still production lines running without this most basic heat recovery. We can recover one ton of steam for every one mega-watt of applied energy.  Energy savings are in the area of 30%.  Another simple solution is the application of the right refiner plate design. By simply making this change, we have seen mills reduce their TMP energy costs by 10% in some cases.  The basic refining process RT-RTS saves up to 20% in energy costs (or allows for 20% increased production).  Significant savings for hardwoods using the PR-C APMP are also achieved.  The pulp quality from these hardwood lines is such that for certain paper grades, it can be substituted for softwood.  Energy savings for this conversion is 900-1300 kWh/adt.

We are working now on solutions to extract another 10-20% energy savings using low consistency refining and the addition of special chemicals in the stock preparation process.

In the service area, when our experts go into a mill to perform an audit, we typically see opportunities to reduce energy consumption by up to 5%.  We have developed special bearings and new lubricants that reduce energy.  We identify idle power consumers and can optimize the pumps to reduce energy consumption.  This is all done in cooperation and partnership with the mill.

Hornhofer:  One very important way to reduce energy consumption is in the process design and layout stage.  A simple process flowsheet with fewer stages will have much lower energy demand.  For example, an important step was taken when fine screening was installed after the oxygen stage and coarse screening was also moved to the same position. We innovated a combined fine/coarse screen with multi-stage DD washers. One pump moves the pulp from the oxygen stage blow tank through the screenroom to the post-oxygen washer without any booster pumps. The reject content is lower and screening can be done with three stages and a reject washer – instead of four screening stages.  

In the recovery area, our HERB (high energy recovery boiler) considerably improves power generation per tonne of pulp produced and improves the profitability of pulp production with the potential sale of green electricity.  We also recover/reuse heat energy by flashing the green liquor from the recovery boiler to generate steam for our ARC chloride removal process.

The transfer of materials (pumping) typically represents 50% of the electric power consumption of a mill. We have introduced a new generation of MC pumps which substantially lower energy consumption.    

 McKinsey cites industry partnerships as a way forward.  They also talk of external partnerships as a way to encourage breakthrough advances in technology.  Does Andritz participate in any of these?

Hornhofer:  On many occasions we hold seminars with specific customers at a group level to discuss energy efficiency improvements for their mills.  In Finland, we are part of national energy programs and work closely with research institutions dedicated to energy issues (such as VTT).  Another example is the joint development work we are doing with UPM to gasify forest residues and create second generation biofuels.

Köfler: We also have our periodic user seminars where we provide the forum for customers to share their experience and best practices.  With regards to McKinsey’s comments about the monetizing of our R&D investments, there are situations where we do partner the development of a technology directly with a customer.  Both parties have to bring something to the development table and then we grant exclusivity to the customer for a defined period of time – often this helps them gain a competitive advantage.