Regardless of industry, companies in every corner of the world are all in pursuit of the same two things – streamlining operations while simultaneously trimming expenditures. It’s a delicate balancing act that sometimes demands some out-of-the-box thinking.
Yet, once mastered, it quickly becomes the cornerstone of a business’ success – maximising return on investment (ROI). For engineering and industrial enterprises, achieving this often hinges on one key solution: dual-fuel configurations. Here, we delve into the method and explore its cost implications.
In numerous processes, fuel overheads take up a significant proportion of operating expenses (OpEx), and with several factors affecting pricing, it’s a substantial variable outlay which can significantly influence an organisation’s profitability. While it’s understood that market conditions fluctuate, in 2022, gas oil stood out as the priciest fossil fuel per weight, commanding a price of £999.97 per metric ton. For this very reason, businesses have been exploring dual-fuel procedures as a way to reduce OpEx with less expensive alternatives.
A Dynamic Duo
As its name suggests, a dual-fuel system leverages two distinct fuel sources – typically one that is economically advantageous and another serving as a reliable backup, albeit at a higher price point. In many cases, natural gas is combined with diesel, offering operators the flexibility to seamlessly transition between fuels based on facets like availability, expense and operational requirements.
While the concept has existed for nearly as long as gasoline and diesel engines, its widespread adoption in the automotive domain is a relatively recent development. Regularly running on a mixture of crude-oil-derived fuel and LPG, substituting just 25% of conventional diesel consumption with LPG can yield a remarkable reduction of up to 6% in CO2 emissions or 8 tonnes, illustrating the compelling incentives for corporations to embrace the approach.
Prior to its rollout in the vehicle sector, this type of technology proved its success in larger-scale stationary commercial applications all across the globe, like the oil and gas field and power generation, for example. Recently, they have even trickled down into more consumer-facing products, such as heat pumps, owing to their easily interchangeable fuel reserves and potential for electrification advancements.
Considerations for Implementing Dual-Fuel Systems
To fully capitalise on the advantages of these methods and mitigate OpEx, careful consideration of capital expenditure (CAPEX) is essential, which encompasses upfront investments in equipment, infrastructure and training.
Investing in the Workforce
An integral aspect to consider is the adjustment in routines for staff members. Efficient operation of dual-fuel technologies necessitates thorough education for employees to operate and maintain arrangements effectively to minimise risks of costly downtime and errors.
The Initial Investment
In multiple scenarios, attaining financial savings involves a preliminary investment. It’s frequently said that ‘to save money, you must first spend it’. For the majority, the implementation of dual-fuel infrastructures will necessitate an upfront disbursement in machinery, for instance, dual-fuel engines, fuel storage and control systems. Here, it makes monetary sense for firms to strategically assess that expenditure and evaluate ROI over time.
Fuel Supply
Most importantly, in order for the dual-fuel setups to work, they require the attainment of both types of fuel. In this context, enterprises must ensure the dependable accessibility of both natural gas and oil fuels, as well as the necessary facilities for storing, delivery and handling.
Risk Management
This brings us to our next topic: The likelihood of supply chain disturbances. When considering dual-fuel systems, it’s advised to conduct in-depth research, and this extends to the risk of fuel procurement disruptions, trading volatility and geopolitical variables that could impact fuel obtainability and rates.
Maintenance
It’s certainly important to note that dual-fuel variants may well have different maintenance needs compared to existing set ups, which should be taken into account when forecasting service costs – for illustration, inspections, repairs and potentially the need for specialised technicians or the previously mentioned element of training.
In conclusion, while dual-fuel avenues may entail short-term initial outlays, their long-term cost effectiveness, operational flexibility and environmental perks make them worthwhile contenders for those looking to reduce their OpEx.
By carefully evaluating ROI and putting into practice robust contingency planning strategies, businesses can harness the full potential of dual-fuel operations to drive innovation, competitiveness and prosperity in their ever-evolving industry landscape. Speak to a member of our team about to learn more about our dual fuel capabilities.