The challenges facing the foundry industry are significant, especially in view of the high electricity prices that are jeopardizing the competitiveness of this energy-intensive industry. Procast Handform GmbH from Kiel is taking innovative approaches to meet these challenges.
The drastic increases in electricity prices in Germany are indeed a major challenge for the foundry industry, which is already energy-intensive by nature. The fact that Procast Handform GmbH in Kiel is facing a 350% increase in electricity prices since 2019 highlights the urgency of finding innovative solutions to remain competitive.
As an electricity-intensive manufacturing company, Procast receives electricity price compensation, but this does not affect product costs, explains Björn Ploch, Managing Director of Procast Handform GmbH: “I am legally obliged to invest these compensation payments immediately in energy-saving measures. It takes several years for this to pay for itself. So, in the short term, this subsidy is useless.” Procast Handform GmbH from Kiel is one of the leading foundries for engine housings and cylinder heads in Europe. The German investment company Private Assets SE, which specializes in medium-sized companies, acquired the company in 2022 and integrated it into Procast Guss GmbH. The company has further sites in Gütersloh, Nortorf and Bilbao (Spain).
Widening price range on the stock exchange
In order to continue offering competitive prices, Procast Handform looked for options to reduce energy costs. To this end, the company introduced the use of exchange electricity prices at its Kiel site in 2023. While the electricity prices within the electricity contracts have generally risen, the purchase price on the exchange has fallen significantly in the meantime. This is due to the fact that the expansion of renewable energies in Germany is increasing rapidly. The result is a wider “price spread” on the exchange. In addition, there have always been “dips” in electricity prices at certain times, as the consumption of electricity fluctuates. For example, demand for industrial electricity falls particularly sharply at midday and in the evening. Those who consume electricity at these times save money. Procast Handform wanted to take advantage of this: The company agreed to a contract with its energy supplier for a spot market tariff.
The idea of using the electricity exchange price to reduce costs is not new. But not every foundry succeeds in making the switch. Production at Procast Handform in Kiel is designed for large castings weighing up to 55 tons. Engines are currently being cast - the timing is flexible. Ideal conditions for peak electricity consumption at times when the market price of electricity is low. In concrete terms, this works as follows: as soon as the so-called “day-ahead price” - i.e. the electricity price for the following day - is published by the “EPEX” electricity exchange, the smelting plant decides when the furnace should start smelting. If the low spot market prices are used, this is clearly noticeable: “We produce when the kilowatt-hour costs little,” says Ploch. “In this way, we get the energy costs under control again.” Timely electricity purchasing is a real competence in today's world, emphasizes Ploch.
Artificial intelligence program analyzes price fluctuations
However, a foundry is not a speedboat. In order to be able to plan the melt as early as possible, Kiel also uses its own forecasting system. It was developed by the “Digital Group” of Handform shareholder Private Assets, which is headed by Florian Feddeck. “The AI program analyzes the electricity price fluctuations of recent months and evaluates them,” he explains the principle. “Based on the data, we know before the day-ahead price is published when melting is particularly worthwhile.” With the knowledge gained from the program, Procast is able to plan production in advance. The day-ahead price is then an additional adjusting screw to set the production time to the minute.
More about the Procast Group
The Procast Group is one of the leading customer foundries in Europe. As a full-range supplier, Procast can offer its customers all services: Construction, design, casting, machining, coating and assembly of cast iron components. Procast has a production capacity of 55,000 tons of cast products. Both standardized and innovative iron casting materials are used. Procast's customers come from the mechanical engineering, commercial vehicle and toolmaking sectors. Around 400 employees work at a total of four locations. The head office is located in Gütersloh.
www.proca.st
