The Underlying Dynamics of Symbiotic Evolutions

Power Efficiency Guide

Ultimate Guide to Power Efficiency

Get Instant Access

Material exchange types 3, 4 and 5 have many common characteristics with the more general notion of the manufacturing network form of industrial development presented by Piore and Sabel (1984) in their analysis of the success of the artisan-based economy in the Emilia-Romagna region of Italy. Active trade associations, shared services, such as purchasing and quality assurance, and close family and community ties are among the factors that contribute to the success of such industrial districts. Still, massive quantities of materials are routinely discarded as wastes by industrial systems throughout the world. This section discusses a set of factors that both promote and inhibit the development of symbioses and industrial ecosystems.

Many visitors come to Kalundborg looking for the master plan. Despite its impressive results, Kalundborg was not explicitly designed to demonstrate the benefits of industrial symbiosis. Each link in the system was negotiated, over a period of some 30 years (see Table 27.1), as an independent business deal and was established only if it was expected to be economically beneficial. Benefits are measured either as positive flows by marketing a by-product (or obtaining feedstocks at prices below those for virgin materials) or as savings relative to standard pollution control approaches. This is the strength of the Kalundborg approach: business leaders have done the 'right thing' for the environment in the pursuit of rational business interests. The evolutionary nature can be interpreted as pointing to a need to have both positive technical and economic factors appear simultaneously, a condition that may be difficult or impossible to realize in a forward-planning process.

Besides the basic chemical and other technical compatibility requirements of symbiotic partners, both need to recognize a net cost saving relative to their options. The floor for economic feasibility occurs when the difference in cost of the by-product feed relative to virgin or other alternatives is less per unit throughput than the cost of waste management to the producer. The user can offer more than enough to the producer to offset the costs of waste treatment or disposal. In practice the differential would also have to be large enough to account for transaction costs and risks to both parties. Typical transaction costs include regulatory, discovery, contracting and monitoring costs. Discovery costs, the costs required to learn of the existence of an opportunity for interchange, can be high, and may be the major impediment for material exchange of the types discussed above. Brokerages and markets serve to reduce these costs to the point that exchange is economically rational. Exchange of material recovered from municipal waste streams (for example, paper, metals, plastics) is now increasingly managed through commodity exchanges and electronic networks. The growth of Internet exchanges is likely to be a strong factor in reducing discovery and contracting costs.

The buyer of by-products in a symbiosis takes some risk by tying the firm to a single, outside supplier and to the vagaries of the supply continuity. However, the exchange of byproducts and cascades of energy use is not inherently different from traditional supplier-customer relationships. Kalundborg's Gyproc, for example, maintains sources of gypsum other than the Asnaes Power Station so as not to disrupt operations during planned or unplanned power plant outages. Differential financial implications may be insignificant. Provisions for stand-by supplies will add cost. The seller also takes some risk owing to the possibility of upsets at the buyer's facility that could interrupt the outflow of the byproducts. If this were to happen, the by-products would instantly become wastes to the seller and would need to be disposed of according to the relevant regulatory requirements.

Interestingly, recent experience in Kalundborg reinforces the point that the needs of the individual companies are of central concern. Over the last several years Kalundborg's Statoil Refinery has doubled its capacity based on North Sea claims, the Asnaes Power Station has switched from coal to orimulsion for half of its 1350MW of capacity to comply with mandated CO2 reduction, and the pharmaceutical plant has also eliminated some product lines including penicillin and increased others. While each individual business change alters the make-up of the industrial symbiosis, they have not, collectively, diminished the spirit of it. In the case of the gypsum board plant, the changes have made the benefits stronger as more calcium sulfate is now produced.

Like most large industrial operators, the pharmaceutical plant management must meet annual continuous improvement goals in many areas, including established percentages for waste reduction (J. Christensen, personal communication 1998). Late in 2000, the enzyme business of Novo Nordisk was spun off as a separate company, Novozymes A/S. The stability of operations at Novo Nordisk and Statoil clearly depends on flows from the power plant. When asked what Statoil and Novo Nordisk would do if Asnaes were decommissioned, which is certainly plausible for a power plant, executives calmly said they would get together and build a steam plant. The cooperation that has developed has also led to non-material benefits since the companies have gotten together for personnel and planning sessions over the years.

Was this article helpful?

0 0

Post a comment