Decarbonisation Whisky Distilleries
Electrification
Electric boilers are considered as the electrification technology. They produce heat from electricity, and this is used to raise steam. Electric boilers are not currently in use in the whisky industry in Scotland. However, the technology is available and used by other industries.
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Electric boilers were selected as they simply require a boiler replacement which reduces the downtime required for installation. Another electrification option is heat pumps. Heat pumps cannot provide the temperatures required to raise steam at the pressures required for distillation [1]. Heat pumps may be used in distilleries to reduce heating energy demand but are not considered an alternative fuel in this project.
Why Electrification?
Electric boilers are more efficient than gas boilers and can be up to 99.99% efficient. This lowers the energy demand for the distillery as less energy is wasted.
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Most distilleries are connected to the grid, and this means there are no other infrastructure instalments required other than a new boiler. Therefore, it is quick to install and requires less floor space. It will also not require new supply chains to be designed for distilleries.
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There are many green electricity suppliers for both home and business use. The cost is usually comparable to regular electricity suppliers so should not cost more to use a green tariff than a regular tariff. This is because green electricity is one of the cheapest to generate [2].
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Green electricity is also becoming more popular. Because of the interest in green electricity there is also a profitable area to invest. As a result, large asset management and investment companies are increasingly investing in renewable infrastructure. This has been accelerated in 2022 with the invasion of Ukraine and many countries looking to be independent of Russia’s fossil fuels [3]. These focused investments will help to reduce the cost of green electricity as well as making more green electricity available.
Carbon Emissions
The carbon factor used for electricity is the UK government value for 2021 of 0.2123 kgCO2e/kWh [4]. This was taken to avoid “greenwashing” the results of electric boilers as it is assumed most distilleries would take their electricity from the grid. There is the option for users to change the value themselves on the tool.
It is expected that the carbon emissions factor will decrease over the next few decades as renewable energy is used more in the national grid.
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[5]
This means that the carbon savings can be even greater for distilleries over the new few decades.
Problems with Electrification
Electrification is often the most expensive option. It is expensive to run as electricity costs are typically more per kWh than natural gas [6]. Therefore, unless distilleries have access to electricity that is cheaper per kWh than gas it will be more expensive to run with electric boilers.
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Many distilleries are located in more remote areas without access to the grid. This means that electrification may not be a suitable option due to unreliable supply. However, technology advances may result in an increase in the availability of mini grids. One successful example is the Isle of Eigg which built a mini-grid based on renewable energies. This provides reliable, round the clock electricity to supply the island [7].
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Green electricity is regulated by Ofgem. They give renewable electricity generators such as wind farms a Renewable Energy Guarantee of Origin (REGO) certificate for every megawatt hour of electricity generated. When suppliers buy from generators, they can also buy the REGO. Importantly, this is not the only way REGOs can be purchased as they can also be bought by anyone on a separate market [8].
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Ofgem does not regulate the trading of REGO certificates and also does not track them. It is common practice among large energy companies to buy the REGO certificates, either as well as buying directly from the generators or instead of. This has led to criticisms of energy companies greenwashing and misleading customers by selling green energy tariffs. Therefore, it can be uncertain for distilleries to say how “green” the electricity really is [8].
Calculations
1) Calculate heating demand if not given.
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Operational Costs
2) Calculate new heating demand.
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Where Efficiencynew boiler is taken as 0.99.
3) Multiply by electricity costs.
The tool assumes that they will increase with inflation. As with energy costs, at the time of building the tool, inflation in the UK was 7% which is unusually high. The Bank of England predicts that the UK inflation rate will return to 2% in 2 to 3 years time [9]. This is also the target set for the Bank of England. The tool is designed to model over several decades so should not be significantly influenced by short term trends. Therefore, the value of 2% was used for the tool but this can be manually changed if required.
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Where n is the last 2 digits of the year i.e. 30 for 2030.
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There are reports such as EU Reference Scenario 2016 Energy, transport and GHG emissions Trends to 2050) that predict that energy prices beyond 2030 will remain broadly stable due to improvements in technology [10]. However, this report was written in 2016 and did not account for the recent worldwide event that have had significant impacts on the global energy market such as the global pandemic or Ukraine crisis. Therefore, the simpler approach of increasing with inflation has been taken for this tool. This also accounts for a worst case scenario and accounts for future uncertainties of prices.
Therefore, the equation used to calculate operating costs is
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Capital Costs
4) Calculate boiler rating if not given
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5) Calculate cost of boiler from supplier data.
Working with suppliers it was found that electric boilers are typically 1.3 times more expensive than natural gas boilers [11]. Therefore, the method to calculate the capital cost of an electric boiler using the Coulson and Richardson method to cost a natural gas boiler [12]:
This gives the purchase cost of a natural gas boiler in 2004 as:
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Where boiler rating is given in kg/h
To calculate the total boiler cost, inflation for the past 18 years (1.02918) [13] as well as design and installation costs (3.6975) have been taken into account to give a total cost of:
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This can then be applied to a costing for electric boilers by
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This is the equation used in the tool to generate the capital cost of the electric boiler.
References
[1] Scotch Whisky Association. (n.d.). Scotch Whisky: Climate Change. [online] Available at: https://www.scotch-whisky.org.uk/insights/sustainability/climate-change/ [Accessed 27 Apr. 2022].
[2] Parker, G and Pickard, J. (2022). Boris Johnson insists he will not scrap ‘green levy’ on electricity bills. [online] Financial Times. Available at: https://www.ft.com/content/5fd74838-0052-4cec-ac13-e024de6bdd5d [Accessed 4 Apr. 2022].
[3] Agnew, H. (2022). Ukraine war increases urgency for renewable energy, says Schroders chief. [online] Financial Times. Available at: https://www.ft.com/content/8e98393b-13d1-4ab7-a584-cec5a6c8fbff [Accessed 4 Apr. 2022].
[4] Department for Business, Energy & Industrial Strategy (2022). Government emission conversion factors for greenhouse gas company reporting. [online] GOV.UK. Available at: https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting [Accessed 16 May 2022].
[5] www.nationalgrideso.com. (n.d.). FES 2020 documents | National Grid ESO. [online] Available at: https://www.nationalgrideso.com/future-energy/future-energy-scenarios/fes-2020-documents.
[6] Octopus Energy. (2022). Octopus Energy Tariffs. [online] Available at: https://octopus.energy/tariffs/ [Accessed 4 Apr. 2022].
[7] Chmiel, Z. & Bhattacharyya, S.C., 2015. Analysis of off-grid electricity system at Isle of Eigg (Scotland): Lessons for developing countries. Renewable energy, 81, pp.578–588.
[8] Thomas, N. (2019). Energy groups risk ‘misleading’ customers over renewable claims. [online] Financial Times. Available at: https://www.ft.com/content/5db43966-e064-11e9-9743-db5a370481bc. [Accessed 4 Apr. 2022].
[9] Bank of England (2022). Why are interest rates in the UK going up? [online] www.bankofengland.co.uk. Available at: https://www.bankofengland.co.uk/knowledgebank/why-are-interest-rates-in-the-uk-going-up. [Accessed 4 Apr. 2022].
[10] EU Reference Scenario 2016 Energy, transport and GHG emissions Trends to 2050. (2016). [online] European Commission. Available at: https://ec.europa.eu/energy/sites/ener/files/documents/20160713%20draft_publication_REF2016_v13.pdf. [Accessed 4 Apr. 2022].
[11] Daglish, E (2022) Email to Rachel Morse, 27 April.
[12] Sinnott, R., Coulson, J.M. & Richardson, J.F., 2005. Chemical Engineering Design, Jordan Hill: Elsevier Science & Technology.
[13] Bank of England (2021). Inflation calculator. [online] Bankofengland.co.uk. Available at: https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator. [Accessed 4 Apr. 2022].