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Journal of Cleaner Production 23 (2012) 138e146

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Journal of Cleaner Production

journal homepage: www.elsevier .com/locate/ jc lepro

Barriers to improving energy efficiency within the process industries with a focuson low grade heat utilisation

Conor Walsh *, Patricia ThornleyTyndall Centre for Climate Change Research, School of Mechanical, Aerospace and Civil Engineering, Room H3, Pariser Building, University of Manchester,Sackville Street, Manchester M13 9PL, UK

a r t i c l e i n f o

Article history:Received 11 February 2011Received in revised form4 October 2011Accepted 27 October 2011Available online 9 November 2011

Keywords:Industrial efficiencyBarriersLow grade heatMapping

Abbreviations: EEM, energy efficiency measures;greenhouse gas; CHP, combined heat and power.* Corresponding author. Tel.: þ44 0 161 2754332.

E-mail address: conor.walsh@manchester.ac.uk (C

0959-6526/$ e see front matter � 2011 Elsevier Ltd.doi:10.1016/j.jclepro.2011.10.038

a b s t r a c t

Process industries are significant global energy consumers, contributing substantially to global green-house gas emissions. There is a need to reduce the energy intensity of production and correspondinggreenhouse gas emissions, but there are significant technical and non-technical barriers to achieving this.Consultation with industrial and academic stakeholders in the UK established that cost, return oninvestment and technology performance were key barriers to process industry energy efficiencyimprovements. However, for low grade heat utilization, stakeholder engagement and strategic mappingfound that ‘location’ and the need for capital support for infrastructure were the most critical factors. Alarge number of institutional issues were also identified which help to explain why, even when efficiencymeasures deliver environmental and economic benefits; they are not implemented by industry.

� 2011 Elsevier Ltd. All rights reserved.

1. Introduction

Process industries consume 37% of global primary energy andcontribute about 25% of global greenhouse gas (GHG) emissions(Metz et al., 2007). Despite a globally accepted need to reduceenergy use and associated GHG emissions, global industrial GHGemissions are projected to increase from around 12 Gt CO2 in 2004to 14 Gt CO2 by 2030 (ibid.), with much of the growth taking placein developing countries. Historically substantial reductions inindustrial energy and emission intensity have been achievedthrough adoption of energy efficiency technologies, but full use of(financially viable) mitigation options is not currently being made.(ibid.).

It is therefore vitally important to identify the barriers that arepreventing uptake. While previous studies have identified somebarriers, such as financial constraints, the perceived risks associ-ated with process alteration, the availability of relevant informationand other issues (Dyer et al., 2008; Henriksson and Söderholm,2009; Howarth and Andersson, 1993; Jaffe and Stavins, 1994;Luken and Van Rompaey, 2008; Lutzenhiser, 1994; Reddy, 1991;Schleich, 2009; Umstattd, 2009; Zhu and Geng, in press), few

LGH, low grade heat; GHG,

. Walsh).

All rights reserved.

have involved stakeholders to verify the applicability of differentbarriers. Those who have, generally focus on very specific industrysectors eg. CHP in New York (Bourgeois et al., 2003) small industryclusters (Nagesha and Balachandra, 2006), Swedish non-intensivemanufacturing industries (Rohdin and Thollander, 2006) andsmall Greek industries (Sardianou, 2008). This paper adds toexisting knowledge by illuminating why so many industriesconsistently ignoremitigation options and by highlighting themoststrategic barriers for policy interventions.

2. Background: reported barriers to energy efficiencyimprovements in the process industries

The viability of potential energy efficiency measures (EEMs)depends on the nature of the specific processes involved, theindustrial sector serviced, specific fuel or feedstock demands, thelifespan of installed equipment etc. (USEPA, 2007). Therefore iden-tifying technical barriers to process energy efficiency improvementsis complicated by the huge array of technical options availablewithin the heterogeneous process industries sector.

This can be simplified by considering four very broad categoriesof EEMs (USEPA, 2007):

� Use of cleaner or more efficient fuels.� CHP or onsite generation.� Equipment/process retrofit or replacement.� Research and development.

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146 139

While it could be argued that these categories are not entirelycompatible, utilisation of existing waste low grade heat (LGH) canusefully be considered as involving process retrofit with the possi-bilityof onsite generationorCHP,which arediscussed further below.McKenna and Norman (2010) suggest that the industrial market forsurplusheat inUK is 108PJ, in comparison to a total heat use of 650PJ(the latter concentrated in key sectors such as steel and chemicals).While the former figure has been suggested as a potential estimateforheat recovery in theUK, concrete evidence for the actual extentofwaste heat utilisation is very lacking. In examining the Europeanheatmarket,Werner (2006) suggests that the delivery of heat in theNetherlands, Finland and theUK amounts to 97.7,159 and 75.1 PJ perannum. In the Netherlands heat is normally delivered from local(mostly industrial) combined heat and power plants to a third party.The Finnish estimate includes heat delivered to both industrial anddomestic customers. It is estimated that district heating representsabout 50% of the domestic heating market, 80% of which beingproduced fromboth CHP and traditional power plants. In theUK it issuggested that most heat deliveries are due to local CHP plants(Althoughmore traditional district heating systemsexist in Sheffieldand London-Whitehall).

2.1. Generation of energy onsite

The generation of electricity for onsite consumption is oftenunattractive for smaller industries because of security of supply and/or grid access issues. However, depending on demand, small-scaleelectricity generation at the point of consumption can be viableand reduce losses during transmission from supplier to consumer.

Combined heat and power (CHP) generation suffers from similarbarriers and additionally the temperature of the heat is often toolow to facilitate process integration. While the heat could be usefulfor space heating, the lack of a consistent heat sink is a considerablebarrier, particularly given the high engineering costs (DTI, 2006).While most industrial installations have optimized heat use athigher temperatures often through complex heat exchangernetworks, the recovery of LGH is generally an under-exploitedresource. Whileoptimisation in the process industries coulddecrease the amount of low grade heat available in future, this hasnot been the case historically and seems unlikely to have a majorimpact within the next 5e10 years.

Barriers to LGH utilization include the amount of heat availableand the efficiency of recovery, but the quantity of heat recoveredand associated primary energy cost savings must be sufficient forfinancial viability (Crook, 1994). In instances where there is no usefor heat recovered onsite, ‘over the fence’ solutions are requiredand dispatch of heat to users can involve a variety of techno-economic barriers related to the heat distribution network(Reidhav and Werner, 2008).

2.2. Process improvement or retrofit

Where systems are well established there may be a perceptionthat existing process inefficiencies constitute normal plant opera-tion or ‘business as usual’. Sardianou (2008). Also the adjustmentcosts associated with process disruption, lack of physical space, thelimited window for installation, the non-depreciation of primaryequipment and the condition of ancillary equipment may impedeprocess improvement. Often the additional complexities associatedwith process modification are perceived as reducing the flexibilityof existing systems (Ren, 2009). Similarly reliance on provenconfigurations and maintaining operation control is perceived asmore important than the potential benefits from adopting EEMs. Insome cases increasing capacity may be perceived as moreeconomical than improving energy efficiency/reducing demand.

Therefore the existence of technologically and financially viableEEMs may not provide sufficient incentives to act (Gillett, 2006).This could also be influenced by differing perspectives on whatconstitutes financial viability and stakeholder views on this arereported in Section 3.3.3. However, it is also important to under-stand the other barriers that deter process industries from imple-menting energy efficiency improvements. This paper combinesboth direct stakeholder engagement and a theoretical frameworkby involving stakeholders in a barrier identification and prioriti-zation process, utilizing categorization and mapping techniques toclassify the barriers and then using stakeholder engagement todevelop a more detailed understanding of the nature of and rela-tionship between key identified barriers. However, first a review ofthe existing state of knowledge in relation to barriers to EEMs isgiven in Section 2.3.

2.3. Review of applicable barriers

In assessing stakeholder opinions, Nagesha and Balachandra(2006) highlight a lack of reliability, financial support mecha-nisms and proper training or management (In contrast, Mitchell(2006) describes how the misapplication of financial support mayengender ‘donor-dependence’, such that firms take a passive role inchanging their management and operational behaviours). OverallNagesha and Balachandra (2006) found financial and economicbarriers to be the most ‘intensive’. Interestingly, it was seen thatfirms do not operate in the sameway as individuals, so they tend toact in a way that satisfies their profitability objectives or targets,rather than attempting tomaximise the profits from their activities.Rohdin and Thollander (2006) consider the barriers to energyefficiency within the Swedish (non-energy intensive)manufacturing industry and emphasize uncertainty regarding thepotential balance of risk and rewards, since respondents wereunconvinced that future energy prices would rise. Hidden costswere considered significant particularly given the time involved ininvestigating and evaluating potential EEMs. This was corroboratedby Rohdin et al. (2007) in relation to privately owned foundries.However the main barriers faced among the group-ownedfoundries (apart from access to capital) related to organizationalproblems such as process disruption, long decision chains, thebuyer/user divide and a lack of priority within management.Sardianou (2008) highlighted the lack of funds, high costs and slowinvestment return as barriers to investment in EEMs. The lack ofinformation (70% of respondents cited a lack of awareness of neworexisting technologies) meant that investing in EEMs was not rec-ognised as being essential or as providing a sufficient return.

While cost concerns are also highlighted within theoreticalframeworks, further emphasis is placed on the difficulties ingenerating and diffusing information. Jaffe and Stavins (1994)demonstrate that the market is unlikely to sufficiently compen-sate the investor for knowledge creation resulting in a positiveexternality. This is complicated when the most relevant informa-tion (such as process data) is held by a single entity, which may bereluctant to disclose energy data to third parties as it is perceived asendangering their competitive advantage (Henriksson andSöderholm, 2009). Massound et al. (2010) also identify the“uncertainty of outcomes and benefits” as a significant barrier tointroducing environmental management systems within industry.Other barriers include uncertainties regarding future energy priceswhich impede effective cost benefit calculations or may necessitatea high discount rate. Dyer et al. (2008) specify how inaccuratebaseline energy and cost data may fail to illustrate the potentialrevenue and result in economically viable projects being rejected.In effect this means that the actual costs of current (material andenergy) inefficiencies are not clearly recognised and therefore firms

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146140

often do not accept the value of EEMs (Mitchell, 2006). This ischiefly relevant in instances where the qualitative attributes of thenew technologies (such as reliability/availability) may make exist-ing, less efficient (but perhaps better understood) technologiespreferable. The diversity of process industries themselves meansthat an EEM which is deemed to be financially viable, “on average”will not be acceptable for a large number of installations whichmayhave a significant cumulative energy demand.

A summary of the barriers discussed above is shown in Fig. 1,classified by whether they have been recognized by theoreticalframeworks, practical studies or both (e.g. finance or knowledgebased barriers). In other cases barriers identified by one method-ology could be considered as manifestations of a related barrieridentified by the other approach. For example, the theoreticalframeworks may note that the new technology has less desirableperformance attributes, but that this is seen by stakeholders as lossof availability, reliability or disruption. Similarly the inadequateinvestment in knowledge may be because of the lack of manage-ment appreciation or focus on production delivery not efficiency.

It is possible that industrialists tend to see the closest, mostrelevant barrier to their daily experience. However, where barriersare linked, with one leading to another, the most obvious/evidentbarrier may not necessarily be the “root cause” (Thornley and Prins,2009). For example, while finance is a common barrier from bothapproaches, practical studies focus on acquiring finance, whiletheoretical studies note the cost of acquiring knowledge andmaking the adoption decision. Both aspects merge in considerationof financial viability, which can be thought of as a balance betweenthe risks and financial rewards associated with implementing anenergy efficiency measure.

This paper presents views on barriers to energy efficiencymeasures gained from the experience and views of stakeholders,but analyzes their views in a framework that will highlight the rootcauses rather than the effects, facilitating identification of the mostproductive points for intervention.

3. Stakeholder priorities

The stakeholder views reported in this paper are those ofparticipants at a workshop on process industry energy efficiencyheld by the PROTEM Network in Middlesborough, UK in March2010. The PROTEM Network was established in 2009 to further

From surveys/practical studies

Financial

– Financing.

Strategic/motivation

– Firms satisfy not maximize profits. – Lack of management appreciation. – Focus on production as opposed to efficiency.

Capacity

– Focus and attention – Lack of specialist knowledge and resources.

Technology

- Availability, reliability and disruption.

Financial

– Risk/return balanceadopter’s perspectiv

Knowledge

– Lack of informationfacilitate decision.

– Lack of knowledge.

Knowledge trans

– Inadequate transferdiffusion.

Fig. 1. Classification of barriers to impr

stakeholder involvement and interaction in advancing energymanagement and efficiency within the thermal processing indus-tries, including interdisciplinary research. The stakeholders includerepresentatives of process industries or engineering researchgroups in the UK with an interest in process industry operation,energy efficiency or energy management, who had chosen toattend the openworkshop. Themain objective of theworkshopwasto obtain up-to-date (un-led) perspectives from the stakeholderson addressing and prioritizing the barriers associated withimproving energy efficiency in industry. The rest of the meetingwas taken up with breakaway sessions which focused on the mostsignificant barriers with specific relevance to utilisation of LGH inthe process industries. However wider issues, more genericallyapplicable to EEM’s were also raised. Therefore the results dis-cussed below provide a comprehensive overview of barriers to (lowgrade) heat recovery generally and give some considerations rele-vant to EEM’s generally.

3.1. Stakeholder identification of barriers

Stakeholders were asked to identify what they considered to bethe key barrier(s) to the adoption of EEMs (such as LGH recovery) inthe thermal process industries. Tables 1 and 2 show the rawresponses received in the first column. Identical raw responses aredepicted as multipliers, and as many of the points raised areessentially duplicates and they are aggregated into consolidatedcategories in the second column.

From Table 1, the issues of cost, location, technology perfor-mance and return on investment generated most responses. Theissues of cost and return on investment are closely linked and theirprioritisation is consistent with section 2, where financing wasnoted from theoretical studies and the risk/return balance wasa common theme in both theoretical and practical studies. Locationdoes not feature in any of the literature reviewed and this is anissue which appears to be either particularly applicable to lowgrade heat or to the process industries. It focuses on the difficultiesassociated with the mismatch between the typical location ofindustrial processes and the potential demand for LGH. This reflectsthe perception that internal process optimisation has, in manycases, already been performed and remaining opportunities lie inmatching surplus heat to external users.

from e.

to

technology

fer

and

From theoretical frameworks

Financial

– Costs of acquiring knowledge and deciding on adoption.

Capacity

– Institutional inertia.

Technology

– Less desirable qualitative attributes.

Knowledge

– Inadequate investment in knowledge establishment. – Not incentivised by ordinary markets.

Market potential

– Limited number of customers for whom the technology will be cost effective.

oving industrial energy efficiency.

Table 1Barriers to EEMs as identified by workshop participants.

Raw responses Collated responses

Lack of long term view re project payback periods.(Industrialists do not have long term confidencethey will still be in business to make long termenergy investments

Corporate capacityand strategy

Company strategy (interaction)Lack of time for considering creative activitiesHigh cost of moving/extracting/upgrading low

grade heat vs. its valueCost to processand supply

Development costs of new technology and risks(big bet)

Cost of implementationTemperature and therefore the cost of heat

exchange equipmentCost (X 6)Low payback/costCost effective technologyPutting a value on energy efficiency best practice Policy incentivesPrice for carbon Price of energy/carbonNo rate return investment for low value

commodity e.g. DH (X 7)Lack of investmentreturn

Project cost (capital/payback)Low valueNew technology doesn’t fit industry payback

timesPayback constraintsUse ¼ market Lack of market interestLacking interestLow demandDifficulty finding partners to use LGHCapex/availability/lack of funding (X 2) Access to capitalInconsistent government policy! Policy inconsistencyLong term regulatory framework is

uncertain - no interagency joined upthinking

Regulatory uncertainty - lack of confidence inthe legal framework that governs key “?”E.g. revenue stream (green credits)

Can’t use the heat recovered anywhere LocationDistance to end user of low grade heat and cost

of supply infrastructure (X 7)Lack of customers with correct requirements

in close proximityPhysical location e distanceExpensive to export off-siteNo consumer in close proximityDistribution infrastructureNo one wants it/needs it nearby the sourceTransport of energy from low grade heat

technologyDistributionLogisticalGeography of the existing plantsRisk (X 3) RiskLow capital return combined with business

interruptionCapital cost

Capital cost of investment in newtechnology (X 4)

Capital effectiveness

Table 2Barriers to EEMs as identified by workshop participants, continued.

Raw responses Collated responses

Appropriate infrastructure (X 2) Lack of pipes orinfrastructureTransport

StructuralWho pays for infrastructure - what legislates

to drive investment?Infrastructurefinancial support

Infrastructure of networks not available/affordableto distribute low grade heat to suitable users

Ageing current equipment not frit for technology Ageing equipmentReuse: integration with other processes Alternative

internal useDegradation of process if used internally?Need to compromise our operating practices to

enable economic downstream use of lowgrade heat

Unproven technologies i.e. capital risks (X 2) Technology andperformance riskFlexibility of application

Reliability of supply Reliability of long term supplyLong term viability of low grade heat customers - risk

of changing marketsHaving guaranteed long-term users next door to

long-term low grade heat suppliersAwareness Suitable end-usersWhat technology would use it?Lack of users for the type of heat availableFinding suitable consumer for LGHMatching source to consumerUse of low grade heat (structural)Difficulty in all working together for common

good (X 2)Communicationand awareness

InteractionAwarenessCommunication difficult across range of independent

commercial organizations (X 3)Production/process constraints (X 2) Effect on processLack of technical solutions to heat recovery/the

cost of the technologiesPerformance/quality

Too expensive to recover, size, corrosionQuality of low grade heat: too low temp/too

corrosive (X 2)Use of new technology for production of electricityProving new low grade heat recovery devices

off-line so that they can be installed withconfidence during a shutdown

Extraction?PerformancePerformance: whether one available

process/manufacturing will be selecteddepends on its performance or customerwhether accepts it

Adequate frequency of supply

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146 141

3.2. Ranking of barriers

Fig. 2 shows how participants at the workshop ranked theimportance of the collated barriers to process energy improve-ments identified above.

In general terms, the lack of infrastructure, financial support,capital costs and the problems associated with location wereconsidered the main impediments. Lack of infrastructure relatesprimarily to the (non) existence and quality of piping for thetransportation of heat, although in electrical generation it may alsopertain to the local electricity grid infrastructure.

Capital costs incorporate equipment, engineering and opera-tional costs associated with technological measures to improveenergy efficiency. Financial support incorporates the existence offinancial structures to reduce the risks in altering existing processesor integrating new technologies and the establishment of adequateincentives for improving energy efficiency. Support may beprovided at plant or company level and may be provided externallythough government initiatives such as grants or rational energy (orcarbon) pricing. Alternatively a number of companies may entera risk sharing initiative which reduces the risks anticipated by anyone company. Such initiatives may also include the availability ofloans and guarantees including innovative financing solutionstailored to the specific funding requirements.

The issue of location may reflect the often disparate locations ofprocess industry heat availability and heat demand, once onsiteopportunities have been exhausted, and transporting LGH overlarge distances to end-users may be unfeasible or costly (Reidhavand Werner, 2008). The physical and institutional gaps associatedwith heat infrastructure in the UK was highlighted by stakeholders,

Summary of Barrier Ranking

0 2 4 6 8 10

Lack of pipes/infrastructure

Infrastructure financial support

Lack of investment return

Lack of market interest

Policy incentives

Costs to process & supply

Price of energy/carbon

Access to capital

Policy inconsistency

Corporate capacity & strategy

Communications & awareness

Suitable end users

Technology and performance risk

Reliability of long term supply

Performance/quality

Ageing equipment

Alternative internal use

Risk

Capital cost

Location

No. of individual votes

Fig. 2. Ranking of barriers to process energy efficiency.

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146142

particularly in relation to.issues of ownership, initiative, liabilityand cost.

3.3. Stakeholder discussion of key barriers

Detailed discussions with stakeholders were held in small, self-selecting groups, in order to allow participants to:

� Elaborate on the nature and applicability of the barriers thathad been identified.

� Identify areas where barriers may be linked or influence eachother.

� Make suggestions of possible methods of addressing barriers.

Guided by the prioritization above, one discussion groupfocused on finance and incentive based barriers (which covers 2 ofthe top 3 rated items), one on communication and user-basedbarriers (based on consideration of the issue of gaps betweenindustry and end-users discussed above) and one on technologyand performance risk, which, it was considered, was one of the keycontributors to financial risk.

However, as anticipated, the open nature of the discussionsresulted in each group actually also discussing some of the otherrelated issues, which was a key objective of the session. A summaryof the main observations and conclusions in each area is givenbelow.

3.3.1. Technology and performance risksThe industrialists within the group discussing technology and

performance based risks reaffirmed the importance of proving theefficacy of any new technology before adoption. Concerns werevoiced regarding how existing processes would be affected by anynew technology or process modification. Specifically in relation toLGH processing it was mentioned that many modern industrialprocesses are configured such that the continuous rejection of heatis vital in order for the process tomaintain in operation. Therefore it

was the general view that the recovery of LGH represented signif-icant risks, with small perceived rewards. It was consideredimportant to establish if the process can be reversed or has a proventrack record before making process alterations. The group wasasked whether any risk-sharing mechanisms would be appropriatefor addressing these concerns. While some participants wouldconsider a consortium based approachwith financial risk sharing, itwas generally regarded as unfeasible as the financial benefits wereinsufficient to justify accepting such a risk, even collectively. Anadaptable, modular process was preferred, ideally supported byflexible EEMs which are sufficiently flexible to work with a numberof process configurations without reducing operating capabilities.

Timescales were discussed briefly. It was felt that new ideas ortechnologies would need to be introduced gradually, whichcontrasts with the quick decisions that appear necessary in orderfor commercial success. However, the respondents felt that largercompanies require assurances (particularly for investors) that theircompany is in “safe hands”. Finally it was pointed out that it wasimportant to first build confidence at small scales with energyefficiency measures. This may be difficult if the environmental andfinancial benefits are less and less significant at smaller scales.

3.3.2. Communication and user-based barriersStakeholders felt there was a need for a clear indication of who

will (or can) lead on establishing infrastructure for low grade heatuse, perhaps with a division of responsibility between the gener-ator and users of recovered energy. Industry was consideredunlikely to act without some form of government intervention.Companies are very unlikely to engage in a process that is notprofitable, although it was agreed that companies need to be madeaware of additional benefits; such as improved public relations orreduced environmental impact. It was also suggested that theenvironmental benefits such as greenhouse gas reductions areexperienced by the end user, not the LGH provider. Therefore theindustrial partner, who is more likely, for example, to be engaged inemissions trading schemes or environmental audits or reports does

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146 143

not record any direct environmental benefit from provision of LGH“over the fence”. Suitable end-users in close proximity will invari-ably already have a form of energy supply and somay not be readilyidentified as potential customers by the process industries or havemuch incentive to change things. In contrast one view expressedwas that many of these issues can be solved if sufficient support ordemand is available. Potential users need to be made aware of theexistence of LGH and its benefits. This was seen as a problem that isbest tacked on a regional basis. It was agreed that there is a need toidentify which processes have the optimal capacity to supply LGHand market towards these areas. Energy mapping is extolled asmeans of addressing location based constraints and pre-empt thecommunication/awareness issues outlined in Fig. 3.

Stakeholders within this group felt that academic or regulatorybodies need to appreciate that energy suppliers are generallyconservative. There was an accepted need for constructingdemonstration plants along with guarantees for both suppliers andusers. It was suggested that the costs associated with such a projectmay be offset by the issuing of green certificates, which may alle-viate industrial concerns regarding process disruptions. One of theparticipants felt that the presence of an under-exploited yet avail-able resource constitutes a market failure. Therefore the responsi-bility ultimately rests with the government who needs to be madeaware of the issues at hand and how it could intervene.

3.3.3. Finance and incentivesThe discussion of this topic revolved around the pros and cons of

regulatory versus voluntary measures. A participant from anindustrial background argued in favour of voluntary measures toincentivise LGHrecovery including accounting for carbonemissions.Aparticipant fromanacademicbackgroundargued for penalties andregulation as well as incentives. This included taxes which, it wasfelt, are currently inadequate. The importance of reducing thepayback period (and aiding cost-effectiveness) was highlighted. Apaybackperiod for returnof investmentoffiveyears is consideredbyindustry to be too long, in many cases two years is expected.Although another participant issued a caveat on putting too muchfaith on such estimates, stating that companies set rate of returnbenchmarks essentially to prioritise projects as opposed to a beliefthat the calculations are accurate. It was suggested that energyprojects with similar rates of return are not being invested in, whilefor comparable rates, acquisitions are being invested in thatmaynot

Fig. 3. Mapping of barriers identified for utilization

perform as well as expected. For that reason, it was also suggestedthat firms should be required to declare their investment returns.This was agreed but wider support could formalise a mandatoryrequirement for a declaration of rates of return. This may lead togreater awareness amongst shareholders and provide weight to thearguments of non-governmental organisations pressuring forchange. This would allow for different standards for different typesof project, accepting differences between firms and project scales.

Other participants felt that there is ample existing regulationand further persuasion or if necessary “arm-twisting” should beconsidered. Another participant agreed that manipulating incen-tives can work, but it is important that they are correctly applied.Another viewwas that “short-termism” pervades society, includinggovernment authorities, which promotes “carbon badge hunting”.

4. Analysis of barriers

One method of classifying barriers is to focus on their origin andthis can be valuable in providing insights into how strategicallyimportant barriers cited by stakeholders actually are and whattechniques can most appropriately be deployed to address them(Thornley and Prins, 2009; Thornley et al., 2009). The classificationof the barriers into the following broad categories can give someindication of the most likely solutions that can be adopted toaddress the barriers.

4.1. Structural barriers

These apply when a new entity is attempting to develop withina space that was fashioned to suit a previous incumbent. As thecharacteristics and needs of the new entity are different, its prog-ress will be impeded by boundary conditions that were previouslynot material, for example any existing infrastructure that impedesthe integration of the EEM. Structural barriers to EEMs may bephysical (i.e. infrastructural) or less tangible such as the existentcapacity to trade heat or electricity.

4.2. Market barriers

Another reason for barriers to many new technologies is that thenew technology addresses a need or provides societal benefits thatare not valued by the currentmarket, making it difficult for the new

of low grade heat to improve process efficiency.

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146144

technology to compete. For example, the current market might notadequately value the carbon savings or energy conservation effec-ted by implementing an energy efficiencymeasure. Unless carefullytargeted, government assistance or initiatives fail to result in self-regulation at the factory level (Shi et al., 2008).

4.3. Interaction barriers

A third cause of barriers is that the developing entity drawsupon the knowledge, skills and products of different sectors andindustries which are not strongly bound with a common goal. Thisresults in development being delayed or obstructed by a lack ofknowledge transfer and/or non-alignment of the different parties’objectives. This is relevant, for example, where process industrieslack the knowledge or insight to make an implementation decisionon new energy efficiency measures. Alternatively interactionbarriers may not be the result of company level reluctance toimplement EEM targets, but denote a lack of engagement with thecompany in formulation of targets (Mitchell, 2006).

4.4. Performance barriers

These are areas where the technology falls short in some way indelivering the end user’s requirement. These are likely to beparticularly important in energy efficiency measures in the processindustries where the efficiency measure will normally be inte-grated into the overall process scheme and so there is the potentialto impact on the existing process performance.

Shi et al. (2008) state that it is also important to make thedistinction between internal and external barriers. In that regardstructural and market barriers may be considered externallyinfluenced, while interaction and performance barriers may beconsidered internal barriers. Addressing structural barriers gener-ally requires readjustment of the space that suited the previousindustry to be more accommodating to the developing alternatives.Often this requires direct intervention within the industry bycapital investment, reorganisation or legislation. Market barrierswill generally respond to policy interventions, which attempt toadjust the market to take into account the non-economic attributesof fuels or technologies. Performance barriers either require tech-nical development or a readjustment of market focus to circumventa technical constraint. Addressing interaction barriers is chal-lenging as open communication between diverse bodied may beperceived as being commercially damaging. A forum for commu-nication and exchange is needed but also a common alignment ofobjectives so that participants see both the benefits to themselvesand the need for involvement of other parties to more effectivelyachieve their own/joint objectives.

4.4. Barrier mapping

Fig. 3 shows a map of the barriers identified at the workshopbased on the barrier categories discussed above. This was initiallycarried out at the workshop and presented to stakeholders.However, it is important to realize that stakeholders will oftenreport the item that is most relevant to their own experience andthis may not necessarily be the root cause or barrier. Barriers aregenerally linked and understanding the linkages can help in iden-tifying the most strategic barriers and the most appropriate pointsfor intervention to address barriers. Reddy (1991) cautions againstthe dangers of a ‘one-barrier-one-measure’ approach to improvingenergy efficiency as each in effect consists of a number of inter-connected sub-barriers. Therefore the barriers map was subse-quently revised, based on further consideration of linkages and, inparticular, based on the reports from the parallel discussion groups,

outlined in sections 4.1e4.3. Revision included insertion of arrowsto connect those barriers which directly contribute to each other.For example, a lack of infrastructure is in itself a barrier to imple-menting EEMs, but it also results in increased capital costs forimplementation and increased levels of project risk. This is anexample of a particular barrier being linked to multiple otherbarriers, suggesting that it could be strategically important toaddress since doing so should yield multiple benefits. Also,understanding the linkages can help in identifying the mostappropriate point to intervene in a chain, while the categorizationcan inform which type of intervention will be most effective.

Considering Fig. 3, the most highly linked barrier is “Lack ofpipes or infrastructure” and the only identified barrier further“upstream” that contributes to this is “Location”. “Infrastructure/financial support” is also highly linked so that addressing it couldyield multiple benefits. However, the only barrier that directlyprecedes “Infrastructure/financial support” is “Lack of pipes orinfrastructure”. This suggests that addressing infrastructuralbarriers would be most effective but requires a caveat as this willhave location specific constraints and may necessitate a widerresponse than purely onsite actions.

The next most highly linked barriers are “lack of investmentreturn” and “capital cost”, which are also directly linked to eachother. This would suggest that addressing the lack of investmentreturn or the high capital cost would be particularly effective(although high capital cost in part contributes to the lack of invest-ment return and so may be the more productive issue to address).

5. Discussion

The barrier mapping exercise suggests that “lack of pipes orinfrastructure” is the most strategic barrier to address to increasedeployment of energy efficiency measures in the process indus-tries. With the exception of Shi et al. (2008), this has not beenhighlighted in any previous studies and is reinforced by infra-structure financial support being rated as the most importantbarrier by the workshop participants. This is particularly pertinentto LGH but is also a general issue for process industries, which areoften located remotely from other developments. As stated aboveaddressing structural barriers generally requires readjustment viadirect intervention within the industry by capital investment,reorganisation or legislation. Organisation of investment partner-ships (perhaps with local or regional bodies) for heat distributioninfrastructure may be an effective way of addressing this barrier.Although it is also recognized that establishment of LGH infra-structure has the potential to create technology “lock-in”, where itsexistence becomes a barrier to future energy efficiency measures.

It seems clear that industry will not act on this issue withoutsome form of government intervention and there is a need toestablish who can lead on infrastructure establishment. Adjust-ment of legislation to allow companies to claim credit for emissionsavoided by others utilizing their waste heat might also help. Finallyan energy mapping initiative could be an effective support measurethat intercepted the linkage from location to lack of market interest,lack of corporate capacity and communications/awareness issues,as illustrated in Fig. 3.

It is estimated that 2% of homes in the UK are connected todistrict heating (DECC, 2009). In a recent planning policy statementthe department of Communities and Local Government (DCLG)emphasised the need for proper heat mapping in order to informspatial development, particularly in informing developers duringthe planning and zoning procedure (DCLG, 2010). For example,integrating existing buildings into new developments whichinclude district heating can provide economies of scale. The life-cycle costs associated with establishing district heating systems

C. Walsh, P. Thornley / Journal of Cleaner Production 23 (2012) 138e146 145

exceed individual gas condensing boilers and electric heating.However once infrastructure is in place, the heat supplied isgenerally at a lower cost (DECC, 2010). This may help explain thestakeholder’s expressed need for clarification on how infrastruc-ture costs will bemet and justify some public investment or sharingof costs. The next most highly linked barriers are “lack of invest-ment return” and “capital cost”, which are also directly linked toeach other. Capital cost is characterized as a structural/performancebarrier and so could be addressed by direct intervention within theindustry by capital investment, reorganisation or legislation, whileperformance barriers either require technical development ora readjustment of market focus to circumvent a technicalconstraint. Options to address this barrier include readjustment ofthe scope of energy efficiency measures to effectively reduce theimpact of the capital expenditure e.g. further development ofcommon infrastructure facilities for process industries. Suchmeasures could also help address the issue that taken individually,projects are small and results insignificant, but when the outputs ofa number of facilities are combined there is a much higher impact.

The mismatch between the focus of the barriers mapping oninvestment return, but the industrialists on capital cost is inter-esting. Ultimately investment return is dependent upon several ofthe other barriers identified: namely energy/carbon price, risk,capital cost and performance/quality. Therefore it seems that theissue of lack of investment return is important, but that stake-holders perceived the component parts as the discrete barriers. Theprice of energy/carbon can be addressed by a variety of economicpolicy measures mostly focused around taxation or permits andthere have been many different taxes and subsidies applied by theUK government over the years. Analysing the perspectives andexperiences of workshop participants seems to indicate that thesemeasures are insufficient to offset the impact of the very significantbarrier of capital cost, which requires a more direct approach,especially given the importance with which it is ranked by stake-holders. It is perhaps worth noting that many process industriesoperate as distinct commercial, manufacturing entities. However,many of these have emerged from larger state or private organi-sations. Within such larger structures there may have been moreopportunities for physical cross-industry links e.g. sharing ofenergy, utility and infrastructure services. However individualprocess industries operate as single commercial entities usuallyproviding their own raw material and energy requirements. Inmany cases the balance between risk and reward may only beassessed at aggregated scales such as company level reviews. Thismay not place risk in proper context, particularly in instanceswhere the potential gains may be advantageous to the specificprocess in question, but small. Also from an investor’s perspective,the lack of quantifiable risk may act as a significant hindrance toassessing prospective investments. Historically, different regionshave capitalised on the benefits of co-locating different industrialprocesses in a single site, such as Wilton in the UK and Schwarzepumpe in Germany. Indeed the Chinese government has histori-cally adopted a strategy of co-locating industrial sectors, partly sothey can support each other. Specific policy initiatives focusedaround such integration may be one way to encourage improvedprocess industry energy efficiency in the future.

When comparing the barriers identified and prioritised by UKbased stakeholders to those previously reported in the literature theimportance of location and associated infrastructure costs is verysignificant and has been discussed in some depth above. However,another significant difference is the importance of timescales inaddressing barriers to EEMs. For example, the paramount impor-tance of continuous process operation may results in a restrictedtime window in which EEMs can be implemented. The groupdiscussions reaffirm the conservative backdrop in which these

decisions are made. New ideas will likely have to be introducedgradually in order to allay the fears of processmanagers. By contrast,emerging or novel technologies face a struggle in order to besuccessfully demonstrated within a specific time scale, and will notbe afforded a subsequent opportunity if not successful. This “short-termism”was seen as a significant barrier as itmeans that EEMsmaynot be considered in the earliest planning stages or may not fullyreflect the longer term benefits of improving energy efficiency.

In discussing timescales it is important to clarify that the supplyand demand for LGH utilization is not static. Technical improve-ments and process alterations may reduce both the supply of anddemand for recovered heat. Given the demand for surplus heat(McKenna and Norman, 2010) it is unlikely that this LGH willbecome wholly unavailable in the future, but the demand for LGHmay be modified by efficiency gains in other areas, which cannegate the relative benefit of LGH recovery. It is therefore difficultto predict the nature of the future market for recovered heat (eitherin the UK or elsewhere). Consequently, while it is clear that utilizingLGH offers opportunities to improve fuel efficiency and reducegreenhouse gas emissions there are also very substantial non-technical barriers to its implementation. Addressing such barrierswill necessitate both policy initiatives and flexible infrastructuredevelopment, but care must be taken to ensure that potentialtrade-offs e.g. with respect to waste heat availability and efficiencygains are taken into account.

6. Conclusions and recommendations

Barrier analysis for process industry energy efficiency measuresand low grade heat utilization has reinforced previously identifiedbarriers e.g., balancing risks with rates of returns. A strategicmapping exercise found barriers relating to location, cost and theavailability of infrastructure to be the most significant, augmentedby a number of institutional issues relating to company strategy andpriority. Barrier mapping and stakeholder engagement both rein-force the key importance of appropriate infrastructure availability ifenergy efficiency measures, including utilisation of low grade heat,are to be implemented in the UK. Stakeholders confirmed thatthere is little commercial appetite in this area and this was echoedby the importance laid by stakeholders on the barrier of capital costrather than project rate of return. Therefore some strategic lead orpolicy framework that encourages private investment in this areawould be needed to facilitate deployment. Regional heat loadmapping may be an effective method of identifying the mostpromising regions for such infrastructure development and couldalso help to match suppliers and potential users. Process inter-ruption risk is a major disincentive to implementing energy effi-ciency measures in the process industries and a key technologydifferentiator was perceived to be the ability to extract/remove anEEM during and after installation. The combination of processinterruption risk with new technology and financial risks aresufficient to deter alteration to existing processes, based on thecurrent risk-reward balance. This could be addressed by incentiv-isation of deployment. However, to justify this environmentally, itis essential to be confident of the actual fuel and greenhouse gassavings being delivered by the EEM’s. Specific quantitative researchis therefore recommended to investigate this for different processindustries and EEM’s by combining energy, life-cycle and techno-economic analysis to identify the most promising options.

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