Absolutely. According to European Aluminium, electricity prices in Europe have quadrupled since last summer with aluminium smelters caught in the eye of a perfect storm of economic, regulatory, and geopolitical factors.
It is clear the situation facing European aluminium producers has become untenable for many with half of the region’s producers forced to curtail or stop production .
The toll on output is in the area of around 1m tonnes of primary aluminium production. Although EnPot cannot completely buffer aluminium smelters from sky high electricity costs, it does enable them to vary their energy use to match electricity generation fluctuations.
In today’s market, this newfound control could make the difference between making metal at a loss, or a profit.
EnPot can have a positive impact on aluminium smelters’ carbon footprint; particularly those predominantly relying on energy from fossil fuels.
Heat balance control allows smelter power usage to be modulated both upwards or downwards by up to 30%, without disturbing the delicate heat balance required to make aluminium.
This is made possible by retrofitting pot shells with enhanced temperature regulation via insulated heat-exchange jackets. It’s a simple concept with significant impact.
Power can be modulated around +/-20% immediately to work with power supply variability and up to 30% (with minor process changes) as a solution for longer term issues such as dry periods in hydro generation. In this way, smelters can increase the use of variable renewable energy (VRE) in their energy mix to reduce the carbon footprint of smelter operations and produce green, low-carbon aluminium. With some of the world’s largest buyers of aluminium committing to buying a minimum of 10% near-zero carbon metal by 2030, it is evident demand for green aluminium is only going one way.
By operating flexibly, aluminium producers also become a valuable tool for electricity grid operators grappling to support, or ‘firm’, a greater mix of intermittent renewable energy sources such as wind, solar, tidal and hydroelectric power.
As the European Union marches towards its goal of net zero emissions all eyes are on the rapid expansion of wind, solar and hydro generation and the necessary firming of these intermittent energy sources.
Firming of VRE can be performed by several technologies such as battery storage, pumped and stored hydro or gas turbine peaking plants.
A less well-known option is large industrial users operating like a 'virtual battery', capable of providing large volumes of energy back to the grid with the flick of a swith.
EnPot enabled aluminium smelters show potential to be the cheapest method to firm up to 40% of smelter energy needs (by 20% up or down on demand) and the capability to provide energy services similar to both grid-scale batteries – at 100% of capacity for a short duration - and pumped hydro, at lower capacity for longer duration.
As a technology company in the business of reducing aluminium smelters’ reliance on costly energy derived from fossil fuels, we are experiencing increased demand for our product. This may be in part due to the situation in Ukraine contributing to the European energy crisis, however we were already seeing smelters moving towards a more flexible operating model before tensions escalated.
EnPot can be very useful under the right economic circumstances – where smelters wish to reduce production at times of very high cost, typically involving high intra-day variations from VRE generation.
But it is also useful to reduce production and power consumption over a long period, when there is an expectation that profitability will return in future, such as dry periods in hydro generation.
EnPot has great application when these circumstances are forecast to last for up to, say, one year. Beyond this time frame another option on the table is to cut out pot lines completely, as the restart cost may be less than the losses incurred even at the approximate 30% reduced production that EnPot could enable.
The value smelters’ can derive from EnPot during the current energy crisis very much depends on the expected duration of high power prices, balanced against restart costs and employment losses.
Every smelter operates within their own unique set of circumstances. Some are lucky enough to run off hydro power, whereas others are reliant on coal or expensive natural gas to operate.
In both scenarios EnPot technology can relieve pressure on aluminium smelter bosses. In the hydro scenario, EnPot can enable smelters to dial down production during ‘dry years’, to provide more power back to the grid when needed.
This capability should be supported and incentivised at the national and European level. For those smelters relying on energy from grids still in the process of pivoting towards more renewable energy, adopting technology that enables them to operate a ‘virtual battery’, if they choose to do so, can be financially and environmentally rewarding.
EnPot can help assist the European aluminium industry by making smelters more compatible with future power sources, which are likely to be renewable and variable in nature, especially as the current energy crisis has shown the dangers of relying on gas and international power or fuel imports.
As European nations build more VRE generation and become more self-sufficient to overcome the crisis, smelters could at the same time install EnPot to both benefit from cheaper VRE power prices, and provide firming services to the grid.
These services are likely to be valued and recompensed by grid operators attracted to a low cost firming solution for variable generation from valuable, well-established existing assets.