Power-oriented Industries
Introduction
What is a power-oriented industry?
An industry which needs to locate near the
power resources because of the large demand
for abundant energy supply with cheap
transport cost of energy can be regarded as a
power-oriented industry.
Features of power-oriented industries
1. High energy consumption in production
processes
2. Requiring reliable and consistent energy
supply for smoothening the manufacturing
processes
Case Study Aluminium Industries in Australia
Alcoa, the largest
aluminium producer in
the world, operates 2
aluminium smelters in
Australia.
Smelting is the process of extracting aluminum metal from
aluminum oxide (alumina) through electrolytic reduction. The
fundamental component of a smelting operation is the electrolytic
cell, or "pot" in which this reaction takes place. During smelting,
large amounts of current pass through molten alumina dissolved
in a 920 - 980°C cryolite bath. This process separates out
aluminum metal for removal and casting. Smelters typically
operate hundreds of pots, linked electrically in configurations
called potlines.
Aluminium smelter of
Alcoa in Australia
Aluminium Smelting Process
Why is it considered as poweroriented industry?
Evidence
1. Using power resources intensively
It requires on average 15.7kWh of electricity to
produce 1 kg of aluminium to produce 1 kg of
aluminium.
In comparison, for iron and steel industry, about
7 kWh of electricity is needed to produce same
amount of output.
A large amount of
energy is needed
2. Energy cost : Larger % of production cost
Compare to other industries, the aluminium industry
spends a much larger portion of its production cost on
energy.
8
6
energy cost
as a percent
4
of sale in
1998 (%)
2
0
Energy cost as a
large portion of
production cost
aluminium
other industries
Source: Department of Commerce, 1999
3. Non-stop operation
Smelting process has to be continuous, otherwise:
 Cooling down of alumina
 More energy for reheating
 Higher total energy cost
the nearer to the power resources,
the more stable power supply.
The need of
a reliable power
resources
Conclusion
1. A large
demand for
power
resources
2. Need for
reliable and
stable energy
supply
Power-oriented
∴ near HEP plants
•Smelting is an electricity-intensive process
•Cost of electricity is a key component of the cost of
aluminum Alcoa’s smelting facilities are usually closely allied
with power generation systems.
•In the cases, Alcoa operates its own hydroelectric or coalfired power plants that provide power both for smelting and
for municipal use.
What affects the influence of energy
on location?
Technology advancement
＊cables and pylons are used to transmit
electricity
it is mobile ∴ energy can be generated
everywhere
∴ free from power sources
↑Energy Efficiency
Methods
•ceramic fiber
•AIM (Advanced Industrial Materials)
•Combustion
∴ Old production system replaced by new equipments
 more convenient and more productive
 amount of energy used in manufacturing
processes decreases steadily
↑Energy Efficiency
E.g. in aluminium industry, in 1950’s, it took about
21 kWh of electricity to make 1 kg of aluminium
from aluminium oxide; today, only 14 kWh of
electricity is needed.
25
20
Aluminium
needed (kWh)
15
10
5
0
1950‘s
present
More substitutes
Development of different dominant types of energy
18th century
-Charcoal, Motive power
19th
20th
to
century
-Coal, Oil
Mid-20th century
-Petroleum, Natural gas, HEP,
Nuclear power, Biofuels, Wind
power, Solar energy
Decrease in
locational
effect
Conclusion
The technology advancements reduce the pull
of energy.
 Energy becomes a less important locational
factor influencing on the industrial location.
According to the recent trend, we can predict
that with the use of more and more new forms of
energy resources which are easier to be
transported or ubiquitous in nature, the role of
power supply in the location of industries
become less and less important.