High energy prices are also causing tension in the plant engineering sector. Many companies are looking ahead with concern. But is there anything positive to be gained from the situation? In an interview with heat processing, Jörn Ludewig, Managing Director of Jasper GmbH, explains which role the gas shortage plays in the industry, how his company is strategically positioned and how crises can be seen as opportunities.
How are your customers reacting to the current situation on the gas market?
Jörn Ludewig: The gas market and the sharp rise in prices are huge issues for all our customers. It not only concerns the energy-intensive aluminum industry, where we have many customers, but all consumers with thermal processes. Many customers ask us whether this situation only brings disadvantages or also offers new opportunities. In fact, there is still a lot of potential in Europe and in Germany to modernize plants. This applies in particular to energy efficiency. Our plant systems enable energy savings between 30 and 50 percent on average, which means a significant reduction in natural gas consumption. If the gas supply from the east is further reduced, many think it will be a disadvantage. But for the upcoming months and years, it could also be an advantage, especially for the environment, because companies are now paying close attention to saving energy. This would also mean that companies that should have modernized their plants long ago are now doing so.
Could you give us an example of that?
We have recently accelerated order processing in the automotive industry. In practice, this means that orders are placed very quickly in order to achieve changes to existing plant systems within a short ammount of time. This does not always involve new systems, but often older systems. We have been chasing customers for many years to convince them to modernize. Many hesitated until recently; now the modernization business has really taken off.
Do you also notice this in the current order situation?
Yes. Some customers are very insecure and don’t know what to do - whether they will cancel orders, for example. This is especially true for small companies because they don’t know what their options are. Larger customers let existing orders continue. Basically, it can be said that there are no restrictions for us in terms of business - on the contrary, investments continue. We don’t notice that ‘long-runners’, projects that run for a year or more, are being stopped. Instead, things continue to move forward.
What is the current role of electric heating of industrial furnaces?
Our customers are looking for alternative energy sources. 20 years ago, we had a similar scenario with oil-fired processes. The oil burners required for this were gradually replaced and ultimately phased out in Germany. Oil plants that were still running were converted to gas operation by companies. Electric heating was not available as an alternative at that time.
And what is the situation today?
In recent months, the situation has changed. The questions are: Can we convert our plants to oil heating? Can we heat industrial furnaces electrically? These are the basics of the current discussion. In addition, there are hybrid solutions. A lot is possible because technically, many plant systems can be split.
How can we imagine hybrid solutions in practical terms?
Take as an example a furnace system with a high power input that has a small power input in the keep warm function. When keeping warm, it is only a matter of compensating for losses. Then hybrid heating suddenly becomes very interesting. Melting power sections with a large power input via burners of, for example, 5 MW or more are left gas-heated, and smaller sections of, for example, 350 kW, in which only losses are compensated, are left running electrically. Green electricity can be used for this purpose. The entire plant is therefore effectively separated into a gas-fired and an electricity- fired part. The next step would then be to use hydrogen in gas-fired plants. The topic of hydrogen will come up more and more.
What role does hydrogen play for you today?
For us as plant manufacturers, the topic of hydrogen needs to be considered on a customer-specific basis. If our customers want us to, we can build hydrogen plants tomorrow. The questions we always ask are: Where does the hydrogen come from? How will it be transported? What quantities must be made available to operate plants? Using hydrogen in high-temperature burner technology is not a problem for us technically. There will be a steady increase in the blending of hydrogen into natural gas. But I don’t think we’ll see, that we will be able to bring 100 % hydrogen in the gas network sonner or later. But I could imagine, for example, 20 to 50 % hydrogen being used as an admixture. We are already able to equip or plan new plants for this purpose.
Will there be parallel use of different energy sources?
I think that will the case. The importance of electric heating will increase. But natural gas will also continue to play an important role. And we will have a higher admixture of hydrogen into the natural gas grid - at least in the next few years. I don’t see us moving completely away from natural gas in the plant areas.
Do you think that the industrial use of natural gas could be replaced by hydrogen in the future?
It’s hard to say. If there are ways to transport hydrogen or make it available in sufficient quantities, natural gas consumption will probably be steadily minimized. However, I don’t see it being zero in 2035. Since many companies are working in this field, I think the development regarding the conversion to hydrogen will accelerate. But it will take at least another ten years before we can convert the supply or rely on hydrogen on a large scale. In addition, because of the importance of green power, there will be a lot of movement in the power and energy market.
Jasper has a good order situation. You are expanding your site in Quickborn. Can you briefly explain where the road is leading for you?
Let me put it this way: We have learned that vertical integration in plant engineering is important for Jasper. That’s why we want to strengthen our location by increasing the vertical range of manufacture. If we want to build a qualitative product, we need to be able to assess parts on site if possible. This will make us faster. We expect a lot from this, at least for the European market. If we look to China, America or Africa, things will certainly be different. Transport costs are now immensely high. Prices for containers and freight rates have literally gone through the roof in recent months. That’s why we’re looking for local solutions in those markets.
From which regions of the world do you receive the most orders?
In recent years, we have been very active in Germany. Now we are again receiving many orders from other European countries. Furthermore, there have been less orders from the Chinese market recently, but slowly we are getting inquiries from there again. I would call this a wave-like movement: We are moving from the national and European back to the international market. This movement changes roughly in a cycle of five years.
You have also been offering galvanizing lines for three years now. How has this area developed?
The galvanizing market is very interesting for us. We notice that here is less expertise in energy-efficient burner technology in this industry. This means that plants are very simple and few are operated regeneratively. Because of the high investment, the conversion of small galvanizing plants is rarely profitable. The costs are usually too high for that. But with the large plants, we notice it very clearly: the curiosity of the industry is getting bigger due to the uncertainties in the market. Companies want to save energy and use it wisely, primarily through plant conversions. Last year, for example, we converted one of the first galvanizing boilers with 600 t of liquid zinc to a regenerative burner system. That is currently unique. I think this will now become more established as a pilot plant in the future and arouse curiosity among other customers.
What proportion of your sales is accounted for by the modernization of old plants?
That depends on the year. I would say that business tends to be split evenly between modernizations and new plants. We don’t just do modernizations on kiln plants, but also on casting plant systems. The Jasper company will have been on the market for 40 years next year. We are now starting to modernize plant systems that we built 30 to 35 years ago.
Are you currently modernizing your own equipment from the 80s?
Exactly. We are starting to replace or rebuild the plants of which we have the plan sketches. This cycle has started recently and will grow in the upcoming years.
What is the role of safety engineering?
The problem with modernization is safety engineering. It is also the biggest hurdle in approval processes. The things that change the fastest are software and safety requirements. The big advantage here is that once we’ve built the systems, no one knows them better than we do. With the know-how of yesterday and today we are able to convert many plants. Our focus is always on optimal modernization tailored to the customer’s needs.
How did your company experience the Corona period?
What we learned during this time is that we can conduct more meetings online. In the past, our engineers would often be on the road for a day or half a week. That has sped up a lot with Zoom or Teams meetings during that time. This has helped us a lot. You save on travel while getting to the customer quickly. However, online communication does not replace face-to-face contact. But it replaces many small intermediate trips and saves us time. That’s what we’ve learned in these two years. Jasper has already had an efficient communication policy before. We had 3 sites that could communicate with each other: Electrical, Metal and Mechanical. But the digitalization that came with Corona has completely sped up everything in the whole market, and I thought that was very positive for us, despite all the negative effects of the Corona pandemic. It saved us labor and costs and made us more flexible and faster.