December 1, 2014 Richard Jarrell

What Every Manufacturer Should Consider BEFORE Starting A Boiler Conversion Project

For a great many industrial plants, it just makes sense to convert old coal fired boilers to natural gas for a multitude of reasons.  Regardless of what drives those decisions at your facility, the cost of such a conversion project is always closely correlated to the necessary thermal output capacity for the converted boiler.

Unfortunately, many teams fast-track projects like these before optimizing steam demand, thus forming an incomplete picture of both cost and ROI.

An optimized steam demand means a reduced conversion cost;  and less capital in the front prepares for an outcome of greater sustained financial success over the short and long term.  Quite often we see instances of brilliant engineering and energy teams overlooking one simple fact: That the best way to reduce energy cost is to use less energy.  Thus, they design the boiler conversion project to meet (and sometimes exceed) consistently obsolete steam demand metrics.

The power of conversion projects lies in the reutilization of existing boiler and burner assets, at a fraction of the cost of an entirely new natural gas boiler system and generally with only a marginal difference in efficiency.  In both boiler conversion and replacement projects, the team must first account for the amount of thermal energy that is required for the facility, and the volume of natural gas supply required to produce this energy at both a daily level and on a peak hourly basis.

If you have not optimized your steam demand, both conversions and new installations WILL require more capital.  Here’s why:

Project Requirement Why It’s Important Why Optimization Matters
Supply Infrastructure: New or upgraded natural gas supply pipeline as well as associated equipment (pressure regulation, measurement and controls, gas heater, odorizer, safety valves, remote communications, etc.) will be required. The smaller the capacity requirements, the lower the overall costs for piping and associated infrastructure. For many industrial boiler conversion projects, a new high pressure 4” to 8” gas pipeline may be needed for many miles to connect to the nearest reliable source of natural gas. Costs can range up to $1M per mile and are directly impacted by the size of the pipeline required.  The smallest pipeline that meets your needs is better for your project financials.
Pipeline Capacity: Demand charges paid to utilities and interstate pipelines for firm transportation of natural gas to your site are on a per MMBtu basis. Many pipelines require a commitment of up to 10 years for the reservation of each MMBtu of firm pipeline capacity. The less volume of natural gas required, the lower the demand charges.
Commodity price volatility: Commodity pricing is an uncontrollable variable that can sap profitability very quickly. Overconsumption acts as a multiplier to price increases. When less fuel is required to achieve the same output, price spikes are far less noticeable on the bottom line.
Greenhouse Gas (GHG) Emissions: Environmental responsibility and stewardship are simply expected in today’s business environment. When you burn less, you emit less.

So don’t be afraid to advocate for sidelining the pending conversion of a coal or an oil boiler at your facility in order to undergo a conscientious demand reduction exercise.  In this process, your team should commit to:

  • Being honest about your operation and the opportunities that may exist.
  • Connecting with outside resources to assist with your evaluation as needed.
  • Optimizing energy consumption and establishing a baseline BEFORE endorsing capital projects.