Reducing energy costs with artificial intelligence
The foundry industry faces major challenges, particularly in view of the high electricity prices that are threatening the competitiveness of this energy-intensive sector. Procast Handform GmbH, based in Kiel, is taking an innovative approach to tackling these challenges.
The drastic rise in electricity prices in Germany poses a major challenge for the already energy-intensive foundry industry. Given that Procast Handform GmbH in Kiel has been facing a 350 per cent rise in electricity prices since 2019, this highlights the urgency of finding innovative solutions to remain competitive.
As an electricity-intensive manufacturing business, Procast does receive compensation for electricity prices, but this has no impact on product costs, as Björn Ploch, Managing Director of Procast Handform GmbH, makes clear: “I am legally obliged to invest these compensation payments immediately in energy-saving measures. It will take several years for this to pay for itself. So, in the short term, this subsidy is of no benefit.” Procast Handform GmbH, based in Kiel, is one of Europe’s leading foundries for engine blocks and cylinder heads. Private Assets SE, a German investment firm specialising in SMEs, acquired the company in 2022 and integrated it into Procast Guss GmbH. The company has further sites in Gütersloh, Nortorf and Bilbao (Spain).
Significant rise in the exchange-traded electricity price
In order to continue offering competitive prices, Procast Handform sought ways to reduce energy costs. To this end, the company introduced the use of the exchange-traded electricity price at its Kiel site as early as 2023. Whilst electricity prices under standard supply contracts have generally risen, the purchase price on the exchange has, at times, fallen significantly. This is due to the rapid expansion of renewable energy in Germany. The result is a wider ‘price spread’ on the exchange. Furthermore, there have always been ‘dips’ in electricity prices at certain times, as electricity consumption fluctuates. For example, demand for industrial electricity falls particularly sharply at midday and in the evening. Anyone using electricity at these times saves money. Procast Handform wanted to capitalise on this: the company agreed a contract with its energy supplier based on a spot market tariff.
The idea of using the exchange electricity price to reduce costs is not new. However, not every foundry manages to make the switch. Procast Handform’s production facility in Kiel is designed for large castings weighing up to 55 tonnes. Currently, the company is casting engines – the timing is flexible. These are ideal conditions for scheduling peak electricity consumption for times when the exchange electricity price is low. In practice, this works as follows: as soon as the so-called ‘day-ahead price’ – that is, the electricity price for the following day – is published by the ‘EPEX’ electricity exchange, the smelting plant decides when to start melting in the furnace. Taking advantage of low spot market prices makes a significant difference: “We produce when the kilowatt-hour is cheap,” says Ploch. “This way, we get our energy costs back under control.” Timely electricity procurement is a real skill in today’s world, emphasises Ploch.
AI programme analyses price fluctuations
However, a foundry is not a speedboat. In order to plan the melting process as early as possible, Kiel also uses its own forecasting system. It was developed by the “Digital Group” of Handform’s partner company Private Assets, which is headed by Florian Feddeck. “The AI programme analyses electricity price fluctuations over the past few months and evaluates them,” he explains. “Based on this data, we know even before the day-ahead price is published when melting is particularly worthwhile.” Armed with the insights from the programme, Procast is able to plan production well in advance. The day-ahead price then serves as an additional control to fine-tune the production time down to the minute.
Find out more about the Procast Group
The Procast Group is one of Europe’s leading contract foundries. As a full-service provider, Procast can offer its customers a complete range of services: engineering, design, casting, machining, coating and assembly of cast iron components. Procast has a production capacity of 55,000 tonnes of castings. Both standardised and innovative cast iron materials are used. Procast Guss’s customers come from the machinery, commercial vehicle and toolmaking sectors. Around 400 employees work across a total of four sites. The head office is located in Gütersloh. www.proca.stSource: Danieli