PwC report finds process heat energy efficiency gap

A new report by PwC identifies how and when businesses spend money to reduce energy use and carbon emissions in some manufacturing processes.

The Energy Efficiency and Conservation Authority (EECA) commissioned PwC to interview processors of dairy, meat, wood and other products, to find out more about their investment decisions on process heat.

Process heat is steam, hot water or gases used in industrial processes e.g. boilers producing heat to dry milk into powder, sterilise equipment, melt metal, or for heating spaces.

Fossil fuels like gas and coal supply 60% of New Zealand’s energy for process heat, and this contributes nine percent of the country’s gross greenhouse gas emissions (GHG).

EECA’s chief executive Andrew Caseley says: “Process heat is one of the best opportunities we have to reduce energy-related emissions – second only to improving the efficiency our cars and switching to electric vehicles. The PwC report makes it clear that strategic focus at senior levels to champion energy efficiency and carbon reduction projects, and improved access to capital, enables the success of such projects.”

As well as making equipment more efficient, Mr Caseley says that woody biomass and electrical technologies are increasingly becoming viable alternatives to fossil-fueled boilers when investment in new plant is being considered.

The report finds that despite the private and national benefits of making improvements such as reduced energy costs and lower GHGs, there is an energy efficiency ‘gap’ where investment in more energy efficient and renewable energy technologies and practices, is not made.

PwC’s study finds that the organisations interviewed are doing a good job of managing their energy use and are making financially-sensible decisions. But the gap exists in part because funding for energy efficiency improvement projects can be constrained by them having to compete with other capital projects.

The PwC report Business Investment Decision Making - Large process heat users and energy efficiency in New Zealand included interviews with nine organisations.

Many businesses can improve their energy efficiency by up to 20% through smarter energy use and investment in efficient technology.

* EECA and the Ministry for Business, Innovation and Employment (MBIE) are working on a process heat action plan, called Process Heat in New Zealand (PHINZ), to improve the energy efficiency of using process heat, and increase the amount of renewable energy used to supply process heat.