Jul-2023

Reducing emissions while increasing refinery margin

A chemical heat pump that absorbs energy inside industrial waste heat has the potential to reduce pressure on refinery margin by fluctuating gas, electricity, and CO2 costs.

Bernd Van Den Bossche
Qpinch

Article Summary

European refiners are facing a significant challenge in balancing the so-called energy trilemma in providing affordable, reliable, and clean energy. Prioritising investments in energy efficiency, such as the true decarbonisation of steam supply, allows for increased future refinery margins. Against this backdrop, the proprietary Qpinch Heat Transformer (QHT) has demonstrated refinery-scale, CO₂-neutral, and quasi-Opex-free process steam, hedging the pressure on operating margin by fluctuating gas, electricity, and CO₂ costs.

Increasing margin per barrel
Following the 2015 Paris Agreement, increased societal expectations have moved most oil and gas corporates to pledge ambitions towards a future with net-zero greenhouse gas (GHG) emissions.1 The challenge of converting the ambitions into a set of executable projects comes on top of the two other main challenges the industry is facing: to supply secure and affordable energy to meet society’s increasing energy needs. All of this is in a background where global peak demand for oil products is right ahead of us or already behind us, depending on the exact forecast.²

The uncertain macroeconomic outlook makes it difficult to prioritise investments. One option is to develop projects that increase the cash margin per barrel without compromising on resilience to future demand fluctuations and reducing CO₂ emissions in parallel. A textbook example of such investment is energy efficiency. Particularly for European refiners, where energy cost is putting an ever-increasing pressure on margins, energy efficiency improvements can make a difference and prevent rationalisation.³

It is estimated that the Scope 1 and 2 emissions of oil refineries represent about 4% of global CO₂ emissions.4 Most emissions are coming from fuel combustion in furnaces, heaters, and steam boilers. Boilers contribute 20-50% of a refinery’s total CO₂ emissions.5 The exact value of a particular refinery is heavily influenced by its fuel mix used for steam generation, the level of heat integration, the refinery’s complexity, and the overall efficiency of its steam system.

Regarding fuel mix, the higher the C/H ratio in the fuel, the more CO₂ is emitted per unit of combustion heat. So, a refinery power plant running on fuel gas or natural gas will have lower CO₂ emissions than one running on heavy fuel oil or even vacuum residue. The efficiency of a boiler is mostly linked to the construction year, with more recent burners and boiler arrangements possessing higher conversion efficiencies, thus fewer CO₂ molecules emitted per unit of steam production. Steam header losses can be minimised by insulation and proper steam trap maintenance.

The more complex a refinery and the more integrated with downstream petrochemical process units, the more value is generated per barrel of crude intake, but the higher the absolute CO₂ emissions. The reason is that each conversion step has a certain heat requirement to overcome thermodynamical barriers. On the other hand, integrated and more complex refineries have more opportunities for heat integration to increase overall energy efficiency and decrease GHG intensity per ton of product generated.

Furthermore, an intensity of 30 kg CO₂-equivalent emissions per barrel refinery output has been estimated for European refiners, with top and worst performers at ±50% of this value.⁶ Taking into account a near future without free allowances and with a European Union Emission Trading Scheme (ETS) price of €100/t CO₂, this means an additional burden on the refinery margin of €3 per barrel on average, coming on top of the already reduced margin due to high energy cost. So, there is a significant investment opportunity in acquiring CO₂-neutral steam through energy efficiency.

But what exactly would be the win of a ton of steam? The value of saving a ton of steam would be the marginal cost of steam (the value of the most expensive ton of steam the refinery is consuming at a moment in time). In most cases in Europe, this will be a ton of steam coming from a steam boiler, fed with grid natural gas and without free allowance on the CO₂ emission.

Assuming 90% energy conversion in the burner, 0.2 tons CO₂ emission per MWh natural gas and boiler feed water available at 100°C, then one ton of steam represents a value of approximately €50. This value assumes a natural gas cost of €50/MWh and €100/ton CO₂ EU ETS and is neglecting header losses or the cost of boiler feed water. Translated to an average European refiner with 20% of emissions linked to steam generation and 30 kg emissions per barrel of refined product, the potential goes up to €2/barrel increase in margin. This represents significant leverage against other margin pressure factors.

Turning cooling load into CO₂-neutral, Opex-free steam
The ATP-ADP cycle is an energy distribution system that fuels all living cells on Earth. Adenosine triphosphate (ATP) and its derivative adenosine diphosphate (ADP) are used as an energy carrier to transport energy on a cellular scale. ADP, the base molecule, gets charged with an extra phosphate group and turns into ATP in areas with excess energy. In contrast, the reverse reaction releases energy in energy-poor areas. The liquid ATP and ADP are easily transported throughout the cellular fluids.

The Qpinch Heat Transformer (QHT) is an absorption heat pump which uses phosphoric acid (PA) as working medium. Under right conditions, PA forms oligomers and thus absorbs residual energy available in industrial waste heat. The reversible reaction is used to release the absorbed energy at a higher temperature so it can be reused as process heat. Useful examples of industrial waste heat are hot liquids, condensing column overheads, and excess steam that currently are condensed/cooled using air fans and cooling water exchangers. Examples of useful process heat are steam, thermal oil, and hot water.

A QHT unit consists of two heat exchangers with a closed loop of PA between them (see Figure 1). The cold reactor absorbs industrial waste heat at low temperature, whereas the hot reactor releases new process heat at high temperature. However, in both reactors, heat is transferred indirectly towards the service side, so the internal PA never encounters the waste heat source or process heat sink, respectively. Furthermore, the PA is food-grade. The system being a closed loop and PA an inorganic chemical, there is no degradation, consumption, or emission of chemicals. The PA has no other hazardous effect than its acid-linked corrosivity. So the QHT unit does not represent any flammability, toxicity, or explosion risk and, thus, does not need any flare connection.

Figure 2 illustrates the operational range and temperature lift a QHT can generate. As a rule of thumb, waste heat at 80°C can be converted to useful heat at 120°C, while waste heat at 120°C can be lifted to a maximum of 210°C.