Innovative business models for addressing energy and environmental challenges of industrial boilers in China

Panel: 5. Business models and financing: established practice and innovative approaches

Authors:
Bo Shen, Lawrence Berkeley National Laboratory, USA
Yafeng Han, Henan University of Economy and Law, China
Lynn Price, Lawrence Berkeley National Laboratory, USA
Hongyou Lu, Lawrence Berkeley National Laboratory, USA

Abstract

Boilers are common but critical pieces of equipment in energy conversion systems. Industrial boilers are predominant, adopted across manufacturing sectors and systems, and operated in a dispersed manner in China. There were 467,000 coal-fired industrial boilers in China, consuming about 700 million tons of coal annually, accounting for 18% of China’s total coal consumption. China’s industrial boilers are characterized as small in size with average capacity of about 3.8 tons/hour. Overall energy efficiency of China’s industrial boilers is low, about 15% lower than the international advanced level. Together these boiler systems in China are one of the major GHG sources, producing approximately 1.3 gigatons of carbon dioxide annually. These boiler systems are also responsible for 33% and 27% of total soot and sulfur dioxide (SO2) emissions in China, respectively, making a substantial contribution to the local environmental problems.

A comprehensive study was conducted under the US-China Climate Change Working Group to evaluate the economics of various strategies for improving efficiency and maximize fuel-switching of industrial boilers and to develop a roadmap for actions including innovative business models and financing mechanisms in China. The authors will present the key findings of the study and present new business models that aim at fundamentally changing the way of using industrial boilers, thus maximizing the energy and environmental benefits. Three options were assessed: (1) fuel switching to replace coal with alternative fuels for small size of boilers; (2) retrofitting boilers through a series of efficiency improvement measures; (3) developing community-scale, distributed service center to replace otherwise scattered boilers operated by individual industrial facilities. In addition to the techno-economic evaluation, the authors will also discuss new business models and financing mechanisms that are recommended to carry out these technology options.