MazerRR wrote: Ok so I'll start off by apologizing in advance for the wall of text below. It's a lot to go through, lol. But I think you'll find it well worth reading. Thank you to all the posters here who have done their DD and posted so many great links, it's what first attracted me to invest in Pyrogenesis and it made doing this research so much easier!
First off, let's speculate on the recent Iron Pelletization contract, because this is important for the next part:
In the article below, it specifically states that at an experimental facility in Lulea, LKAB will be testing plasma burners, to determine whether they will work in the unique setting of a pellet plant.
https://www.lkab.com/en/news-room/press-releases/hybrit-construction-begins--lkab-takes-the-leap-towards-fossil-free-production-of-iron-ore-pellets/ LKAB is the Iron pelletization partner within HYBRIT, the joint venture company formed by LKAB, SSAB and Vatenfall - formed with the goal of having a completely fossil-free process for steelmaking by 2035. Given LKAB's relationship with RISE Energy Technology Center, and Pyrogenesis mentioning that the Contract is with one of the largest producers of Iron ore pellets, they are the likely client Pyrogenesis is dealing with.
Now for the next part:
Did some further DD on LKAB… which led to some VERY interesting information. Please check out the link below:
https://odr.chalmers.se/bitstream/20.500.12380/256741/1/256741.pdf This document is a master’s Thesis submitted by two students at Chalmers University of Technology, in the Sustainable Energy Systems programme, in 2019. It was done in close collaboration with LKAB; Samuel Nordgren of LKAB is an assistant supervisor on the paper.
The paper researches the electrification of the heat treatment process of iron ore pelletization, specifically focusing on the heating alternative of plasma torches to replace fossil fuel burners.
The REALLY interesting part, is… jump to p.19, where operating costs of plasma torches vs fuel oil burners are discussed.
You’ll see a familiar name there: Pyrogenesis!
These studies were almost surely started prior to the RISE contract being handed to Pyrogenesis in early 2019, perhaps even before the request for proposals in late 2018; keep in mind that a Master’s Thesis of this magnitude normally takes 1 year to complete, and the Thesis was submitted sometime near the middle of 2019 (acknowledgements are dated June 2019). This makes sense, as LKAB would want an independent, in-house validation of the technology as an option for burner replacement, before paying anything - in this case through research done in coordination with Chalmers University.
On p.19 of the paper there are some very revealing numbers about
operating costs of fuel oil burners vs air plasma torches, with a 2MW torch from Pyrogenesis used in the comparison.
Those numbers show annual operational costs of $932,000 for a fuel oil burner vs $638,000 for a Plasma torch. Which amounts to savings of $294,000 for each burner replaced by a torch (savings of 23%), or $14,700,000 per plant (50 torches). I’m assuming the numbers are in USD in this report.
This amounts to significant savings, mainly due to Sweden’s low cost of electricity from hydro and the fact that LKAB through HYBRIT is partnered with Vattenfall (Swedish gov’t owned Hydro-electric company), so they’ll get the electricity at cost or near it.
If you factor in the savings made by avoiding Carbon taxes (currently 1190 SEK/ton CO2 or $121 USD/ton – the Swedish government has VERY HIGH Carbon taxes, highest in the world in fact), 7000 tons CO2 saved per torch or 350,000 tons per plant (which is consistent with the number Pyrogenesis stated in their NR on April 30
th) adds up to $42,350,000 USD.
Adding the Annual Operating cost savings ($14,700,000) + Carbon taxes avoided ($42,350,000), that’s $57,050,000 saved
PER YEAR. If Pyrogenesis prices the value of their ~1MW torches at $3 million per, the cost of the contract for one plant comes to ~ $150,000,000 (~the 2MW torches referenced in the report will cost more, but how much I cannot say).
The savings alone will pay for the replacement of all torches in LKAB’s iron pelletization plants within only a few years! Bio-oil:
Let's take a look at bio-oil (also called Pyrolysis/Biocrude oil). This is the alternate fuel LKAB discussed in the first article (linked at the top of this post) as a potential replacement fuel for the fossil fuels used by burners.
The heat content of bio-oil (75,500 BTU per gallon) is about 55% as much as one gallon of #2 fuel-oil. Therefore, one must burn 1.82 gallons of bio-oil to obtain the same amount of heat released when burning one gallon of #2 fuel-oil.
Using the fuel oil price listed in the thesis paper ($0.5/l), the price of bio-oil would need to be less than $0.275/l to be cost-competitive with current fuel costs. The U.S. government’s NREL lab estimates the
MINIMUM selling price of bio-oil made from fast pyrolysis could eventually be made as low as $1.28 per gallon or $0.34/l. That’s the lowest number they believe is possible.
https://www.biofuelsdigest.com/bdigest/2017/06/08/biomass-pyrolysis-comes-of-age/ That’s a 23% cost increase over fuel oil! Using bio-oil would therefore cost $1,144,290 annually per burner (at the minimum possible selling price per NREL) vs $638,000 annual operating costs of Plasma torches. Scaling that up for a full 50 torch plant, adds up to >
$25,314,500 in additional costs per year vs using torches.
Pyrogenesis’ torches handily win over bio-oil.
I may be missing other factors, such as the cost of the working gas for the plasma torches (and probably others things too - please indicate where the analysis is incomplete) but
all indications seem to point to Pyrogenesis’ plasma torches as being the best option for fossil-fuel burner replacement!
Even without the Carbon tax savings, as long as reasonably priced electricity is available, Plasma torch systems become a very promising solution!
Exciting times
Good luck to all and stay safe!
MazerRR