James Lee, an associate professor at the Rochester Institute of Technology, recently spoke with IndustryWeek about the pros and cons of alternative energy use in manufacturing.
Lee says that manufacturers are investing in combined heat and power systems that allow them to produce electricity directly from biofuels, hydrogen and solid municipal wastes. Companies are also burning alternative fuels directly in boilers.
According to Lee, manufacturing operations with the greatest alternative energy growth potential are those that have ahigh energy cost to raw material cost ratio. Industries such as agriculture, food processing, metal refining, paper manufacturing and the chemical industry are more involved in developing alternative energy strategies. Whereas industries like product assembly and printing are less engaged.
However, alternative energy still face the cost hurdle, especially its cost relative to conventional fossil fuels. Lee says there is an abundance of agricultural waste that could be converted to biofuel, but its cost is still more than petroleum-based fuels, leading to a limited biofuel market.
Recent drop in oil prices dulled enthusiasm for investment in renewable energy. In October, New Energy Finance reported that between the second and third quarters of 2008, investment in renewable energy companies and capacity fell 24 percent.