Learning from history, the aluminium foundry industry energy conservation imperatives by Dr Tony Patterson, AFSA

1. MCST Third Foundry colloquium 26/27 th OCTOBER 2011 Learning from US history The aluminium foundry industry energy conservation imperatives. Dr A E Paterson – Aluminium Federation of South Africa

2. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

3. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

5. The aluminium foundry industry energy conservation imperatives. Energy sources used are not restricted to electricity They also include natural gas, lpg, heavy and light oils and coke. Measured against reliability of supply, where possible, multi source energy could be attractive. RSA foundries measured in three independent pilot studies showed low efficiency relative to world leaders - as may be expected for a high capital cost, low energy cost country. The change to a high capital/cost high energy cost base brings challenges; local pilot studies have indicated capacity of improvement. Measured against increasing cost of energy, energy can be saved. The cost benefit ratio increases with greater savings. Embedded capital equipment requires consideration.

6. The aluminium foundry industry energy conservation imperatives. The electrical energy problem – not enough, incorrectly priced

7. The aluminium foundry industry energy conservation imperatives. The graphs assume a 4% annual supply growth to underpin a planned 6% annual growth in GDP. This implies a strategic move from supporting primary industry to supporting down stream value adding industry. To maintain surety of supply Eskom require a minimum of a 10% buffer to allow for foreseen and unforeseen maintenance requirements. Savings are essential if the country is to avoid a crisis in the next few years until new supply comes on stream – Madupi has been delayed. Also - Existing power stations come to end of life in the mid 2020’s Pricing – the electricity price, previously kept artificially low and not reflecting the replacement value of the capital equipment, escalated dramatically doubling every four years as Eskom seeks to significantly finance expansion costs from current cash flows.

8. The aluminium foundry industry energy conservation imperatives. Demand reduction options Supply constraints Country image Climate change Financial sustainability S A Economy Probability of desired outcome Load Shedding Rolling Blackouts Prioritisation of new load With pcp Intensified “energy efficiency” DSM good but slow Severe NMD penalties Suspend new applications Short term Power conservation programme Positive impact Neutral Negative impact

9. The aluminium foundry industry energy conservation imperatives. Four main option types to effect behaviour change were considered: Load shedding - unfair and unsustainable. Substantial price increases - useful in conjunction with rationing Demand supply management programme – useful alongside . rationing Power conservation programme - Rationing the right to purchase . (of supply) seen as best option PCP is the core underpinning principle linked to pricing penalties

10. The aluminium foundry industry energy conservation imperatives. The (electrical) energy conservation scheme targets a 10% energy saving phased in over three to four years with a 50% saving in the first year. Failure to meet the 10% savings targets was planned to result in punitive energy tariffs in the form of a steeply inclining power curve block tariff approaching and exceeding the replacement value cost of electricity. This approach is in the background. The decline in growth has given breathing space. A phase in period of about two years was anticipated.

11. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

12. The aluminium foundry industry energy conservation imperatives. The foundry industry is a base industry. Castings form the basis of many products in many markets The value chain involves casting, machining, manufacture and packaging giving added value of the order of 50x at industry level. Energy is required to melt and cast metals Pilot foundry studies show RSA to be a relatively inefficient energy user in both the iron and aluminium sectors. This is to be expected bearing in mind the existing capital equipment decision circumstances. There appears to be considerable opportunity for up to 50% saving Energy rationing and sharply increasing price forms a challenge The 1970’s USA crisis that followed energy rationing and price increases will be explored to gain insights.

13. The aluminium foundry industry energy conservation imperatives . Scrap to final product represents a 60 times value addition to the collected unsorted scrap metal The casting is a carrier that supports other industries and provides job opportunities Value stream from scrap through various inputs – More jobs/ton Associate Industries Inputs /process Value chain Bought in cost R/kg Inputs/ product Value R/kg Man-hours/kg Replace after market Finished component Pirate OEM OEM Value R313 R1000 R350 Packaging/ tpt/ inventory Packaging Packaging 3 Plastic / card / Board R30 OEM R155 aftermarket 560 Bought in hang on parts Cap equipt Manufacturing 1 65 Fitted parts to complete R200 470 Final shape Cap equip/ maint/tools/lube Machining Consumables 8 1 R130 Casting operation Cap equipt / tools / maint Casting 3 6 Equipt / maint inserts. R90 Secondary smelter Capital equipt / tools / lubes Specification ingot 21 R21 Metal merchant Sorted scrap R11 Scrap collector Raw scrap R6

14. The aluminium foundry industry energy conservation imperatives. Pilot studies show RSA to be a relatively inefficient energy user: The pilot study was a screening assessment based on a three year input of records of two purchases: Energy of all forms purchased – recorded in volume units of purchase and reduced to calorific value in terms of joules. (1J= 1ws) Net purchase of metal (net of scrap sold – excluding dross) The tacit assumption was that the quantity of metal on the shop floor and in storage remains more or less constant. This gives the energy required to produce one unit of sold product 60% was taken to represent furnace demand. This is an approach that can be used by any foundry to assess own energy costs and compare these to the 700kWh/ton for melting suggested.

15. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

16. The aluminium foundry industry energy conservation imperatives. Foundries are capital and energy intensive The major energy-using equipment, furnaces, last a long time. Capital choices reflect specific foreseen circumstances made at the time of choice. The three issues affecting choice are the interplay between the costs of capital and energy and whether to choose for batch or continuous processes In a cheap energy, expensive capital country, the natural bias has been towards less energy efficiency (as was the case in the USA before the 1973 oil crisis). In expensive energy, cheap capital countries energy saving equipment is used. The technologies exist.

17. The aluminium foundry industry energy conservation imperatives. Crucible furnace – batch process

18. The aluminium foundry industry energy conservation imperatives. Crucible furnace - note lid Molten metal energy loss reduced Still energy loss through flue

19. The aluminium foundry industry energy conservation imperatives. Crucible furnace - note lid Eastern foundries have adopted crucible furnaces by trapping flue gas to pre.heat the charge Fresh air added to to reduce flue gas temperatures to around 400 o C

21. The aluminium foundry industry energy conservation imperatives. Striko furnace

22. The aluminium foundry industry energy conservation imperatives. Note that energy is not only used for melting It is also used for holding and for casting Holding – the structure may lose heat through the foundations, . the walls of the flue. - holding practice may hold molten metal for too long. Casting – too large a runner and riser system requires extra . metal melted and remelted - poor practice which results in a high defect ratio . requires extra energy in remelting. - impact of poor metal quality or temperature These are the controllable aspects.

23. The aluminium foundry industry energy conservation imperatives. The question is both what to do and in what order . The majority of energy (about 60%) is used of melting and holding The majority of energy use depends on the type, insulation and installation of the furnace. Some aspects are uncontrollable, some may be modified. Energy in the form of heat is lost through inefficient conversion, through furnace walls and through the flue. Looking to similar energy challenge circumstances the USA response after the 1973 oil crisis will be considered Energy availability declined rapidly and prices accelerated rapidly.

24. The aluminium foundry industry energy conservation imperatives. How much energy do we theoretically require to melt aluminium and steel starting at day temperatures? Consider physics laboratory - Heat from day temperature (specific heat) - melt – change from solid to liquid (latent heat) Aluminium Laboratory 945 MJ/kg This implies 261 x 10 -3 MWh/ton about 1,8% of 14,2 MWh/ton for primary smelting) Note that preheating aluminium to 400 o C takes about half the energy Material Melting temperature Specific heat MJ/kg o K Energy to heat from 20 o C to melt T MJ/kg Latent heat MJ/kg Total energy MJ/kg Aluminium 630 o C 0,900 549 396 945 Iron/steel 1460 o C 0,448 645 267 912

26. The aluminium foundry industry energy conservation imperatives. This is not realistic. How much energy do we actually require to melt aluminium and steel starting at day temperatures? If we want the liquid metal to be 100 o C > melt temperature (adds 10% to Al requirement to 0,286Mwh/ton, 5% to steel to 0,264MWh/ton) The best known practical energy use is around 0,45 – 0,55 MWh/ton In practice consider 5% of primary smelting i.e. 0,7MWh/ton as a target for aluminium (World”s best practice 0,5MWh/ton) For same efficiency for steel also consider 0,7MWh/ton (Wbp 0,54)

28. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

29. The aluminium foundry industry energy conservation imperatives. The early 1970’s USA industry had generally chosen equipment that assumed cheap plentiful energy in the form of cheap oil. The energy crisis that faced the USA at that stage is not dissimilar to that faced locally today. The crisis reflected a shortage combined with rapidly rising prices. A 1976 aluminium foundry industry workshop was called to concentrate on metal melting as both the most energy intensive and the one that offered most potential for returns. The focus was on retrofitted solutions.

30. The aluminium foundry industry energy conservation imperatives. US oil production peaked in 1973 In October 1973, as a result of Yom Kippur War tensions, OPEC members stopped exports to the USA Oil prices rose from $3/barrel in 1972 to $12 in 1974 By the second oil crisis in 1979 prices had risen to $35/barrel an over ten times escalation over seven years!

31. The aluminium foundry industry energy conservation imperatives. Response It was realised that the era of cheap oil had passed. The Energy Department, later to became a cabinet office, was created. (The drive for light weighting of cars grew from the energy crisis as transport in most western world countries uses more than half the energy USA 56% in mid 70’s.) The aluminium industry energy conservation workshop was held in 1976 to share lessons learned.

33. A major factor that needed to be taken into account was the reality of embedded capital equipment. Within this reality the concern was on retrofitted solutions to recover heat. Two systems were discussed: Recouperation through radiation Recouperation through Heat wheels. Typically the heat captured was cooled to about 400 o C by dilution with ambient air before use and used to preheat (aluminium) charge metal or to preheat furnaces or burner air. The aluminium foundry industry energy conservation imperatives.

39. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

40. The aluminium foundry industry energy conservation imperatives. Most 800 o C to 1500 o C high temperature furnaces are inefficient Thermal efficiencies can be high but can be as low as 10% because as the heating or melting of metals requires high waste gas temperatures leaving the furnace makes it difficult to design. Typically over 50% of the heat input may be lost through the flue If this could be recaptured, it could be used to preheat combustion air for burners (fossil fuel fired) or to preheat charge metal. The focus on this presentation is on heat trapping in the flue and recouperation. Within the overall energy flow we need to understand what is needed, where improvement is possible and where loss is unavoidable

43. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

45. The aluminium foundry industry energy conservation imperatives. The twenty four foundries were offered consultation assistance to reduce energy demand. The overall results were positive in terms of reduced costs and reduced energy demand. Partnering has been developed An energy committee has been formed A waste sand committee has been formed The current EffSAFound project is underway

46. The aluminium foundry industry energy conservation imperatives. The new reality of energy rationing and increasing cost of energy prices warrants serious attention. New more energy efficient equipment exists. Retrofit solutions are well understood and available The difficulty at present is cash flow. The combination of the world economic crisis and tight lending conditions by the banks begs the affordability questions. On the other hand if foundries do not invest into energy efficiency for the future, increased prices (and penalties) come into play. The dti is offering financial and other support to the foundry sector

47. The aluminium foundry industry energy conservation imperatives. Looking to overseas practice and a medium to long term solution one is struck by the way in which foundries have been rearranged to route and bundle energy intensive equipment and needs together to gain best benefit. Similarly considering other environmental legislation, clean air and water legislation, the realisation that cleaning processes are volume related has led to concentration (bundling) of environmentally sensitive activities. The overall point is the need to develop a longer term strategy to manage energy and environmental matters which looks beyond replacing one piece of equipment with another towards a more integrated approach to energy saving and environmental responsibility.

48. CDM is a process through which developed countries can fund developing countries to implement emission reduction strategies that promote sustainable development, are measurable and additional, and do not divert funds from government development programmers. Current value ϵ 23x0,9/MWh. (0,9MwH/CO2e) Minimum criteria 10 000 tons CO2e per annum. As individual foundries probably do not meet the minimum volume criteria a foundry group approach may be required. The aluminium foundry industry energy conservation imperatives. The foundry sources of energy are all fossil fuels. The contribute to global warming. (1 kWh = 1 ton CO2e) The RSA government is proposing a carbon tax on producers and users of fossil fuels – this will further affect the foundry cost base The 1997 Kyoto protocol Clean Development Mechanism (CDM)

49. The aluminium foundry industry energy conservation imperatives. Outline: Introduction The foundry industry The aluminium industry 1976 energy conservation workshop Furnace efficiencies What is the local foundry industry doing at present How does the foundry industry pay for it Conclusion

52. MCST Third Foundry colloquium 26/27 th OCTOBER 2011 Learning from US history The aluminium foundry industry energy conservation imperatives. Dr A E Paterson – Aluminium Federation of South Africa