Thank you Keith. As Keith said, I'm a proud Welshman and English is my second language, so please bear with me. Welsh is my first language, I'm going to attempt to do this presentation in five languages, and if you can spot the languages as we go there's not going to be a price, it's just a little side game for us.
So I'm here today to represent N+P. I have my own company, but I'm representing N+P today, and the topic we're talking about is alternative fuels but a new development that we've managed to create, only these last few months within N+P, where we are using pelletized SRF to displace chip tires.
But first of all, about N+P, N+P is an alternative fuel supplying company that majors in cement, lime and coal fire power generation. I'm actually getting involved with coal fire power generators now, it's quite interesting. The similarities are interesting between cement and coal fire power generation.
The company has a very strong strong presence in Europe but now wants to expand further into the Mediterranean area and into North Africa and the Middle East and any other regions. I was to talking to somebody earlier about Russia that would definitely an interesting place for N+P to expand into. Is it a new company? Have they only just started doing this? No, the company has been in operation for over 20 years, and in my previous role with Cemex, we used to use N+P extensively to supply the kilns in Europe, and they have invented a new material called Subcoal.
So its SRF which is formed into pallets and I'm going to tell you to a bit more about that later. The great thing for me is that already the issue of Subcoal is gaining momentum and cement plants are burning this fuel now and so are coal fire power stations and I'll come on to that point shortly.
Just so we clear the terminology and make sure we all know what we're talking about, I heard it mentioned before earlier of refuse derived fuel, we take that as being fuel of a lower energy content and N+P do supply that kind of fuel to waste energy plants, but we focus on SRF which is above 15 gigajoules per ton, this is the fuel that's focused on the cement industry, and we can sell a fuel ranging from about 16 gigajoules up to about to about 23, 24 gigajoules.
So it's quite high energy material if it's needed, and the new material the third material that we sell is Subcoal as I mentioned to you, and I'll go into that in some detail shortly, and let's remember where this comes from, it is a waste derived fuel, but we focus on commercial and industrial sources not municipal sources, it allows us to create a much higher energy content, a drier fuel, a much better fuel for cement plants.
But you can make such fuels from municipal wastes but it's a lot more difficult, and the quality is not as good. What's the N+P group's alternative fuels strategy? I think I've mentioned it to you were already. We are currently supplying about one and a half to 2 million tones a year of fuel, into the three major industries.
And the consumers are primarily in Germany, UK, Latvia, Belgium, France, Portugal and Holland. We're just starting up into Cyprus as we speak, and we will shortly be starting commercial supplies into Poland and Spain. The main production facilities for N+P are based in the UK, and now we're developing, we also have a big production facility in Holland, but we're also looking at developing in France and in Italy.
Ans as I said, the next focus is to look at this Mediterranean area, and as I said, we've started supplying it to Cyprus as we speak now. The other thing that N+P want to do as part of their strategy is not just focus on the UK, Holland, France and Italy for the production base.
We currently export to these countries, but what we're looking to do is to develop production facilities in those countries. We can only do it though, when the finances are right, but we've already found some parts of the world, where the finances are right and the economics are right, so this allows us to build facilities in new countries and the plan will be to produce the fuel from local waste and deliver it to local cement plants and power stations.
And the main focus is lime, cement and coal fired power stations. This repeats the points I've just made. These are the areas that we're focusing on to deliver to and this is where we're producing from at the moment. And who form N+P and who do N+P supply to? These are just some of the names.
My old company is up there, Cemex, but as you can see there's a whole host of cement companies up there and you can see, we've got these two power generators and GDF here, that's showing great interest in this fuel now. They have not moved as quickly as cement companies. When I worked in the cement industry full time, I thought that we were slow in adopting alternative fuels.
Well we looked like greyhounds compared to the power generation industry, they're very, very conservative. Now this slide is a little bit like your first slide, three some obvious things that people know about alternative fuels. I've got another presentation I gave it to another conference about the myths surrounding the use of alternative fuels and cement plants and one of the things I've tried to do in my life is to destroy the myths.
This just gives you an insight into what's happening in the alternative fuel industry and the cement industry. The best performers seemed to be in Northern Europe, again with Cemex it was the UK and Germany and Latvia,these were the strongest performers, and we as a company had factories consuming 100% alternative fuels.
I can remember somebody telling me that this was not possible, it is, and it's happening today, so that is achievable, it's not achievable in every plant but if the conditions are right that is certainly something to target. The typical consumption in Northern Europe is about 60 to 70%.
Again I can remember in the early days people saying you'll never get to a situation where the alternative fuel will be the majority fuel, well in my old company Cemex, if you didn't get to that 50% consumption rate, something is seriously wrong, and big questions would be asked.
And in achieving this high tonnages we managed to achieve it and the industry does now, without affecting production levels, any quality issues or affecting emissions. And within N+P now, for companies who new to this field, we have in house expertise that assists companies to achieve high substitution rates without affecting production quality and emissions so I don't think I know any other company that offers that level of support to the consumer.
And this is a standard slide, you'll all know about this, the impact on emissions. I can remember when we first started doing this, back in the day Keith, what was going to happen to a emissions, well there is so much data out there now that says, we can manage this, there isn't a problem if it's managed properly.
I know the data is on public record now so there is no secret behind this, it's not like a black art and the authorities now are warming to the concept of using these fuels on cement plants. One of my favorite stats is you look at the NOx reduction that you see on cement kilns and I've got a slide in a moment that shows you a clear example of how the NOx emissions do reduce and it's interesting on power generators.
We also see NOx reduce, not as much as in cement plants but it's a benefit suddenly that the power generators are honing in on. No impact on metals emissions because I say to people when they first ask of this, if you went to your coal supplier and told him that you wanted less than ten parts per emission, ten parts per million of mercury he would look at you as if you were talking Latin.
They just can't manage that but we can in the alternative fuel side. So heavy metal emissions will be the same more better and organic emissions the same. The organic content is completely destroyed. But again, we advice cement companies who are new in this part of the business on these issues as well and that's some real data from the rugby kiln.
We, sorry. [xx]. Yes, at Cemex, we took all the learning's from the previous kilns that we converted onto alternative fuels and it took us 30 days to achieve 30% substitution on this kiln and that kiln now is achieving about 85% substitution but the NOx improvement is clear. Now we come on to the real message, the real reason I formed up the guys here to ask if I could speak at the conference is the new fuel that we have which is called Subcoal, substitute coal. So what we do is we take SRF, this is the high grade, commercial industrial alternative fuel and we pelletize it.
The process that we have is in Holland and we have the process patented, so nobody else can do this. We've discovered, this wasn't part of the patent, but we have discovered this, that you can now mix Subcoal with ordinary coal and mill it on conventional mills, be the horizontal or vertical and the milling efficiency is very very good.
Now I'm going to come out as a statement made by somebody shortly. So now we know we can just mix coal and also these pellets together and use them in the same way as you would with ordinary coal. So this is of great interest to people starting out in the alternative fuels business because the level of capital required is quite low, very low and in some cases no capital.
And that's the point I make here, it's a way for cement plants to move into this area. This also is of huge interest to the generators because, you can imagine the investment they are looking up to, at alternative fuels is colossal, I was at Drax Power Station last week, they've just invested 600 million Sterling to start burning biomass and then I came along and told them about this coal, you can imagine the look on their faces.
When you mill Subcoal with coal, what you find is that the particle size is maximum 5 millimeters and down. Now for those of you who use SRF you know that people look at maybe 30 millimeter particle size, some people go down to 20 millimeters, but to get to that level at that size is extremely expensive, so it's prohibited but, it's not with Subcoal.
So you just feed it in with your coal and you end up with particles of less than five millimeter. It means that this fuel is highly reactive and it burns out five times quicker than standard coal. We did some work with Stuttgart University and that is what was discovered, it's is very, very good flame especially for the front end of the kiln.
And what does the fuel look like in terms of heat content and moisture content? Well that line there is the 20 gigajoules or kilojoules per kilogram whatever you want to call it. So that's the benchmark level that everybody aims for, to get over that level. Well you can see Subcoal now this is the latest data from our production facility in Holland, its running at about 24 gigajoules, I have seen it above 25 gigajoules.
So it's really, really energy intensive and you can see the moisture content it runs at about 5%, that's always the case. Now the suitability of milling Subcoal, we've done some tests with Loesche, Aushtom[sp?] and VDZ and all three conclude that this material, it can be milled on conventional mills, and they've all concluded that the particle size is as I've said to you.
Now the latest tests that we've done have been with Loesche and this guy here is Daniel Reid he's the Managing Director of Energy Systems Limited Loesche, this is the division that focuses on the power generators. So they carried out trials with us only about two weeks ago in Dusseldorf on their pilot plant and very quickly it became clear that this material can mill very, very efficiently, and they've gone to the extent now that they're going try now and carry out full commercial trials with one or two of their clients.
And they're looking to market this as a feature of Loesche mills so that they mills can mill this alternative fuel and you can imagine that the companies that they supply the mills to, many of them still don't burn alternative fuels, this is another incentive for those companies to to try this fuel and move into the alternative fuel business.
So I found this extremely exciting. Then moving on to the particular example I mentioned, the new development that we came across and that's the possibility of displacing chipped tires. The reason we looked at this was because there's a view out there that cement guys love chipped tires.
Well, I'm a cement guy, I hate cheap tires because the processing of it is difficult. The price is going in the wrong direction totally and if you sit down with kiln operators they just don't like to use tires because it makes the process too variable. So I suggested to N+P that we should see if we can displace chipped tires and then move into that market.
So we've now carried out four burns and each one has come to the same conclusion, this is anonymous data I'm giving now because all four companies that have done this want to keep the secret to themselves, so I'm just going to tell you what happened. So in this case, we used to fuel on a four stage pre heater kiln, which was typically burning 50% alternative maybe up to 60% at times, and within that they were burning chipped tires and they were very unhappy about the tires because the price is getting very prohibitive.
So, we use the existing chip tire handling system so we stop the tires, and then just put the pallets on the conveying system, and the kiln transferred over them to burning Subcoal pellets. We store the material, and this is another property which I found extremely interesting, we stored the material of Subcoal pellets outside and during the trial, this isn't the kiln by the way, because there's blue skies here, this particular kiln it rains almost constantly in the area, and during the trial it rained and I was very confident that this would demonstrate another property of Subcoal which is that it's hydrophobic, so it doesn't absorb water.
We carried out a test, we took a jar of water, very scientific and just dropped the pallets in the jar and kept them there for two weeks took the pellets out and the pellets were in exactly the same form as they were when we put them in the water. So they survived flood conditions, so we're now very confident that they are hydrophobic nature is enough so you can store them outside.
The other thing with the pellets is they're dust free, so again there's no need to invest in special storage areas, and again that shows how we can confidently blend it with coal and store this material as you store coal. The pellets that we used were eight millimeter diameter, so they were eight millimeter diameter by about four centimeters, these particular pellets, but we can offer different size of the pellets.
And we fed the pellets using the walking floor trailers, the convectional way of feeding alternative fuels to cement plants. Apologies for the typo there.So what did we see? What did we see on the kiln? This is the interesting thing. Well the first thing I noticed, I sat there throughout the entire trial, was that the kiln suddenly, the preheater tower suddenly became much more stable in terms of it's temperature profile. When tire chips are fed into a kiln, they come in bursts of energy well Subcoal is much more discrete and the operator, he commented very quickly you can see, that the temperature profile of the tower, the variation slowed down and it was much easy for him, and I think the other thing with Subcoal is, it seems to be self cleaning in the systems we don't get the issue of bits of metal holding up, bits of tire and causing blockages.
Subcoal is quite a hard pellet and it keeps shoots clean. The next thing I noticed, I thought we've solved the problem in the preheater tower, what's going to happen to the kiln and the fear was that the kiln would starting to cool down, it didn't it started to heat up so this was very good for the kiln burner, so his problem was that the kiln was getting hot so we have to cool the kiln down which is a great place to be, but it said to me then that the pallets are burning in a very efficient manner in the preheater tower and in such a way that it doesn't put extra pressure on the kiln, so again, age in process stability.
Hot mill, calcination stayed very similar to what it was before, at about 6%, so we didn't see a dip and we didn't see an increase but what I did notice was the calcination rate throughout the two day trial was extremely consistent. There's a bypass on this kiln and what we said to them because there's chlorine in this fuel, we said let's really test this and not open the bypass and see really what happens and that's what happened.
That's what they did and we saw that the hot mill chloride went to about 1.6% and we all know that if it gets higher then that could be an issue in terms of blockages, there was nothing, nothing at all, and then the next thing you look for it's the amount of chloride in clinker and it went up to .04%, you can see it's very, very low chlorine levels, and the way this is done is by managing the chlorine in the tower, there are things that we can advise cement companies as to what they should do, things that we did when I was at Cemex in order to manage chlorine in the system.
And the great point here, I say on this slide that we reached 16% substitution in a day, that's not true we actually reached 24% substitution. So 24% of the energy was taken up by Subcoal in the spate of 24 hours. We had to come back from that figure and stabilize at 16 because the tire handling system wasn't designed to run at those levels so we had to cut the tire handling back.
We've since revisited the kiln and we've repeat the trial, and we've gone to higher levels of substitution. So it says to me that this stuff burns very easily. What other developments do we have when we think of Subcoal? I mentioned to you we have one facility now in Holland, we are now looking to build new facilities, and the focus at the moment is the UK.
We'll build one facility for the cement plants there. One facility for the power generators, and maybe a third facility for export, and then we'll look for other countries to build these facilities in. This is the name N+P, I remember when I was a consumer with N+P they operate in a very fair manner commercially, they look at the benefits on both sides and I can remember all the time I worked with them, it was a pleasure because you didn't feel as if they were trying to steal every pound from you.
If they made savings, they'd pass on the savings to the consumers. And that's truly what these guys want to do, and that's one of the reasons why they want to build facilities close to other cement plants in other countries. This is a point I'm repeating from previously, it is clear to me that when you burn Subcoal the process is helped, it's much more stable and the finances are far better than burning tyres.
One thing I should mention here is that we've got two clients now, and I've not seen this yet, I'm going see it next week, who are burning pellets, very small pellets in the front end of the kiln without milling even, just feeding pellets in so that is another thing that we want to have a look at to fully understand how this is working.
Already we have six kilns burning pellets and there is four more coming online and the market is developing very quickly, I should add to this, we also have six power stations that are burning this stuff now as well, and when one power station burns it they take huge volumes.
There is one particular who wants to remain anonymous, they're burning 5% substitution and they're burning 200, 000 tons a year. That's their target at 5% so you can imagine when they get up to the real tonnages they should achieve then the volumes are very big. Now I was talking with N+P about Subcoal and really I was trying to understand what are the ways of entry, why should people use Subcoal on a cement plant and I think they're four.
First of all, is the one way you want to start burning alternative fuel quickly, and for a low investment. That's a clear weigh in, a clear reason for using Subcoal. We now know that Subcoal can be used to displace tire chips which are getting very expensive. Now this third one we haven't tried this yet, but I know kilns that I used to be in charge of, that the burning solvents, the problem with solvents is that the market is getting smaller, the price is going against the cement company and the chlorine level is extremely high.
Well I think we have a great case here for milling sub coal with coal and displacing solvents on the front end of kilns. So that's another means of access. And the final one is this one, is when you've achieved a very high burn rate, let's say 80%, how are you going to get that file 20%, how are we going to achieve the 100% burning? Well, I told you that the Subcoal can be milled to five millimeters, I think we can mill Subcoal, in fact I know we've done this, feed it into the front of the kiln and that has allowed certainly one kiln, if not two kilns that I know of, that have achieved 100%.
So this could be the fuel that bridges that final gap. So, just what can N+P offer? We can offer RDF if you want RDF, SRF if you want it and now we can offer Subcoal. We have a partner, we have a number of partners, Loesche is one now, and another partner is Sewers Environnement, we have an agreement with those guys, they got lots of wastes of high quality, but they don't make the fuel that we make so we have a partnership with them they supply the waste to us so we have access to high levels of waste material.
We could also offer to plants the full logistics support so, we've got a big logistics back in Holland who look after this. We can also manage the regulatory situation so transfer, entry shipment documentation etc. We can discuss the use of alternative fuels with local authorities who haven't come across the issue before.
We have that in-house expertise now. We want to go and develop fuel locally from locally produced waste in other countries and we can offer, as I said to you earlier, we can offer technical support to the factories so they can maximize their burn rate and obviously that's going to make N+P happy as well because we're selling more fuel.
So we're going to go two slides left please. So in summary, the N+P group are a major provider of alternative fuels and to the three industries coal, lime and now power stations and I've underlined this point and I've said it a few times but I just want the message to get home, that we want to build facilities in other countries. N+P haven't been doing this just for a few years they've been over 20 years in the business now so, they are well respected.
Just to underline that point we at Cemex we negotiated a 15 year deal, exporting from UK to Latvia, if they weren't a good company that deal would not have come off. So, that is a testimony of how good N+P are. And I hasten to add as well that, with other companies N+P are more than happy to sign long term agreements, 10 years and above that's not an issue to them.
And the final point is a statement, I make to the cement industry and it's clear as this, the business case it says that cement plants need to burn coal or petcoke to make clinker as dead, you've got to be in this business because, everybody is moving in that direction and moving quickly.
And the reason this is my second language, this is Latin, Keith? Cape diem, this is seize the day and I've put this there because I've mentioned to you a few times that the generators are moving into this area, well when they go, they'll go big time, there's millions of tons of capacity that they'll suck in so when I was at Cemex we took the view, this was going to happen so struck some long term deals and in fact one of the deals we also struck was a 25 years supply deal into the UK. The trick is guys to get into this business, and start contracting, because when the generators come in they'll mop up a lot of this material, and they will affect the price.
So it's a long term contract with some good pricing and that's the trick in my opinion, so far there is only been two language Kieth, so I'm going to go for my personal best on the final slide I'm going say many thanks English, I'm going to say [xx] German to when in the Austria.
The next one is thank you in Dutch I'm not going to pronounce that one but the final one is the [xx] that is thank you very much in Welsh and thanks for listening, thank you very much, any question?.