Case Study: Fonterra coal boiler conversion

A fuel-switching project from New Zealand’s largest dairy cooperative has ticked all the boxes: eliminating carbon emissions, reducing costs, improving efficiency, and delivering multiple environmental benefits. All while improving bottomline economic performance.

On 25 August 2020, Fonterra took a bold step in the use of renewable energy for milk processing at its Te Awamutu factory. A $12 million investment had been completed during the prior months with numerous COVID-19 restrictions in place, to convert the site’s 43 megawatt coalfired boiler to an entirely sustainable, renewable source of energy – locally sourced wood pellets. EECA supported this project with co-funding of $200,000 through the Technology Demonstration Fund. For the next seven months of the milk processing season the boiler ran continuously on a steady supply of wood pellets, reliably delivering 43 megawatts of steam to process 2.8 million litres of milk every day.

By switching to wood pellets and modifying the boiler to do so, the boiler’s thermal efficiency improved by approximately 4 per cent and carbon emissions from the boiler have been cut by 98.4 per cent – a reduction of 89,000 tonnes of carbon dioxide equivalent per annum based on the first year of operations using wood pellets. Sulphur dioxide emissions have also been reduced.