This is how difficult the transition is for companies

Dusseldorf Every day counts for the textile manufacturer Spandauer Velours from Lichtenstein in Saxony. To guarantee production, the average company wants to convert half of its gas consumption, equal to three million kilowatt hours per year, to liquid gas. But this costs a lot of money and even more patience.

The large industrial consumer has been filling out construction application documents since June. Authorities received “a whole file” a few weeks ago, CEO Steffen Martin says. The process normally takes six months, according to the experience of the company in charge of installing several underground tanks, pipes and an evaporator for liquid gas for the Saxons.

It was to be delivered by the manufacturer in October. “Evaporator delivery was postponed to February because demand is so high and parts are missing,” says Martin. The head of the company is angry about the delays. “From January we will have a brake on the price of gas, but only for 70 percent of the previous year’s consumption. If we cannot switch to cheaper liquid gas soon, we will have to pay a lot more.”

Alternatives to gas: changing the fuel becomes a game of patience

Numerous companies in Germany are trying to convert their production to other energy sources out of concern over high gas prices and a possible shutdown of the gas supply. In technical jargon, this is called a “fuel switch” – to oil, liquid gas (LPG), coal, wood, photovoltaics, or wind power.

The best works of Tagus

Find the best jobs now and
be notified by email.

In practice, however, many companies face bureaucratic obstacles in their efforts to get out of the gas shortage. Furthermore, the shortage of materials, the lack of skilled labor and the long lead times make the conversion of the energy supply a game of patience.

“Ever since the federal government put the gas emergency plan on high alert and the Federal Network Agency asked companies for their energy needs, the issue of changing fuel has rapidly increased in intensity,” says Hauke ​​Dierks. , head of the environmental and raw materials policy division at the Association of German Chambers of Commerce and Industry (DIHK).

Many DAX companies are also switching to other energy sources, according to a recent Handelsblatt survey. For example, automotive supplier Continental has been using oil and liquefied natural gas from LNG deliveries since August. The group plans to reduce gas consumption by 20%. Henkel, Covestro, Qiagen, Siemens Healthineers and Symrise are also trying to make themselves less dependent on gas.

LPG and oil: strict requirements for the transition

Since liquid gas such as propane or butane stored decentralized in tanks is explosive and heavy fuel oil is a hazard to water, companies must observe stringent legal requirements. Immission control authorities often decide on applications. But from the point of view of many companies, they work too slowly.

>> Read also: Brake on the price of gas: relief through a gradual model

DIHK has received many complaints: the approval procedures of the offices are too long, require complicated applications and numerous appraisals. In addition, many companies are also expected to demonstrate new construction and environmental standards for old burners or decommissioned tank systems.

Until now, companies had to do it to wait formally seven months, until their application was approved, in practice it often took a year or more. Meanwhile, high gas prices can lead to avoidable high costs for companies.

Fuel switch: commissioning even without authorization

At the beginning of September, as part of the third aid package, the government started to speed up and simplify the processes. Authorities can now allow companies to put systems into operation without final approval immediately after submitting the application. This should reduce waiting times to days or weeks, says DIHK expert Dierks. “However, there is a residual risk for companies of having to shut down systems again if there are no permits.”

Additionally, companies can deviate from stringent environmental standards for the duration of the gas shortage. They receive the exception for this at the request of the authority without a lengthy approval process.

Dierks reports that many companies did not make a fuel change because the regulations were too complicated for them. Recent eases could help these companies.

Schütte and Weidmüller convert to liquid gas

Cologne-based mechanical engineering firm Schütte, for example, took advantage of this regulatory change and converted to LPG. The interim solution does not need to be approved. Carl Martin Welcker, managing partner of Schütte, had a propane gas tank installed on the company’s premises. “We could use it to offset a reduction in gas deliveries for a while,” says the entrepreneur. If the system was running.

Welcker is currently waiting for an evaporator so that the liquid gas stored in the tank can be used in an emergency. It is unclear when he will receive the missing component. “All we know is that the expected delivery date hasn’t been met.”

The machine builder depends on the constant heating of his halls with gas. Since the family business produces so-called multi-spindle machines, high-precision machines, the holes must be accurate to one hundredth of a millimeter. If the temperature differences during production are too great, large metal components can deform.

As early as December 2021, Helene Derksen-Riesen, executive vice president of Corporate Development and Real Estate at connection technology manufacturer Weidmüller, was faced with the search for a new energy supplier. Your gas supplier announced at that time that it could not guarantee the supply due to the current market situation. “It was a shock to us and it was a total surprise,” said Derksen-Riesen. Within days, the company coordinated a team to find an alternative supplier and develop contingency plans for electricity and gas.

>> Read also: New crisis scenarios – In the worst case scenario, there will be a gas shortage in February 2023

When the situation worsened after the outbreak of the war in February, the topic of changing the fuel emerged. In the meantime, the company has switched to LPG and the new plants are currently being connected. Along the way, however, the company had to overcome a number of obstacles.

Gas: the transition to alternatives is particularly difficult for companies in the city

“At the moment it is extremely difficult to even get the right systems,” says the manager. Furthermore, there is a shortage of skilled workers: “Even though I have the necessary system and technology, I cannot find a service provider who can install it in a short time.” Bringing everything together is a great challenge. “Fortunately, in the summer we were able to buy the latest LPG tank we found on the market”.

It is particularly difficult for companies operating in the city center. For example for the Königliche Porzellan Manufaktur (KPM) in the heart of Berlin, near the Tiergarten. So far, the company has relied on gas, district heating and electricity and has already reduced its energy consumption by 10 to 15 percent since the start of the war.

Owner Jörg Woltmann has been waiting for approval of a photovoltaic system for two years, but so far there have been objections from the monument protection authorities that have hindered approval. The company cannot convert porcelain kilns to petroleum, which is why KPM is currently also considering the installation of liquid gas tanks. “But in the city center, this also requires approval,” explains Woltmann. “Is it very expensive.”

Symrise reactivates the old heating oil tanks

For smaller tanks of heating oil or LPG, companies do not need to apply for a permit: it is sufficient to have the system checked by an expert. Companies often still have old heating oil tanks that they reactivate. This often doesn’t even require a new permit.

>> Read here: The replacement of gas with hydrogen should secure the future of the bathroom manufacturer Duravit

This is also the case with Symrise. The fragrance and flavor maker didn’t dismantle its old boilers when it switched from oil to gas a few years ago. In another part of the plant, the Dax group, which supplies many large consumer goods producers, wants to build a new oil infrastructure by the end of the year. This in turn is subject to approval due to its size.

There have been no bad experiences with the authorities, sustainability chief Bernhard Kott told the Handelsblatt. The group still has to wait – for deliveries: the boilers ordered in the summer are not expected to arrive until this month. The new infrastructure is therefore expected to be operational in December, more than six months after the start of Symrise’s planning.

The group paid between one and two million euros for the conversion of the technology. At best, it should never be used, but Symrise will continue to rely on gas, at least for the time being. “It would be much more expensive if we had to stop production for a few days due to a lack of gas. The new oil infrastructure is part of our risk assessment,” says Kott.

Moreover: According to the weather services, this is how long the gas lasts in winter.

First published: 18/10/22, 04:09.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent News

Editor's Pick