• Tuesday, April 16, 2024
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BusinessDay

Cement makers race to alternative energy to tame rising power costs

Dangote Industries sets new standard for sustainability

Nigerian cement makers are racing to switch to renewable energy sources in order to reduce their soaring power and fuel bills (especially diesel), BusinessDay’s findings have revealed.

In Africa’s biggest economy, cement manufacturers mostly self-generate their own power as the country’s national power grid infrastructure does not generate enough stable power to meet their needs.

Data gleaned from the firm’s latest financial statement showed Dangote Cement’s energy cost grew by 21 percent to N157.02 billion in the first six months of 2023 while BUA Cement’s energy cost grew 10 percent to N47.91 billion in the first half of 2023.

Lafarge Africa didn’t outline energy costs but its production fixed costs which include personnel expenses, by-products costs, and electrical energy expenses increased to N13.55 billion in H1 2023 from N11.34 billion in the same period of 2022.

To change the narrative, cement makers are investing heavily in alternative energy projects in a bid to diversify their energy mix and reduce reliance on diesel, coal, and Low Pour Fuel Oil (LPFO) energy sources.

“There is unison across the industry in efforts to rein in these high energy costs by adopting alternative energy sources,” Cardinal Stone said in its latest report on the cement sector.

For instance, BUA Cement has announced it has begun utilising locally sourced Liquefied Natural Gas (LNG) at its Sokoto plant.

Read also Cement dealers await BUA’s price cut to reflect in markets

“This initiative has helped to diversify its energy mix and reduce its reliance on imported coal, low-pour fuel oil and diesel,” CardinalStone said.

In addition, BUA Cement signed an agreement with Wartsila OY of Finland, in 2021 to construct a 70-megawatt dual-fuel power plant for its Obu Line 3 project in Edo State to improve energy utilization.

“Currently, we have phased out the use of coal across our factories and are shifting to gas-powered plants. As we ramp up our capacity, there is a need to complement it with an efficient power supply and Wartsila’s technology is durable,” Abdul Samad Rabiu, Chairman of BUA said.

Another player, Dangote Cement, mentioned that the firm is fully exploring the feasibility of increasing the use of alternative energy in its cement production through the co-processing of wastes such as agro wastes, waste lubricants, tire-derived fuels, sawdust, and packaging materials.

According to Eseosa Ighile, the head of sustainability at Obajana Plant, Dangote Cement Plc, the company is racing to cut dependence on fossil fuels by 25 percent by 2025.

She stated that so far, the plants have initiated several innovative strategies to cut emissions of Green House Gas, and part of its commitment to Sustainable Development Goal 12 is to adopt alternative fuels.

“The Alternative Fuel project aims to achieve a thermal substitution rate of 25 percent in all plants by 2025. We are working towards installing AF feeding systems in all our operation lines by 2024,” she said last September.

Read also Cement price war in the offing as BUA pledges cut to N3,000

“The resources utilised for fuels currently at the DCP Obajana include tyre chips, waste oils, and agricultural waste such as palm kernel shells and rice husks. We are also undergoing technical studies on the use of refuse-derived fuels as a fuel source.

“Between January and July 2023, we’ve consumed over 34,800 metric tonnes of alternative fuel materials for our operations.”

Ighile noted that presently, the company’s climate action activities included monitoring water, waste, and GHG emissions, creating a decarbonisation working group, and following the guidelines of both local and international organisations.

According to a statement from Dangote Group, the company has deployed technology and other measures to mitigate the emission of greenhouse emissions and its impacts, in all its subsidiaries.

Apart from BUA and Dangote, Lafarge Africa has also disclosed its substituting fossil fuel with renewable energy (fuels from biomass and other wastes) at its Sagamu and Ewekoro plants.

“There were plans to spread the renewable energy successes in Ewekoro and Sagamu to other plants in the company,” CardinalStone said.

In addition, the company also implemented gas-powered trucks that run on Liquified Natural Gas (LNG) for its distribution to reduce reliance on diesel as a primary energy source.