Landmark effort to replace coal as an energy source shows way ahead for many businesses.

Since 1938, the Whakatane Mill has been rumbling away, turning radiata pine log pulp into cardboard through the liberal use of coal to power the process.

The focus has always needed to be on building production capacity but, for the past few years, change has been in the wind.

When the mill's European parent company, SIG, was sold in 2015 to Canadian-based packaging giant Onex, it came with a renewed focus on sustainability in all areas of the organisation. Last year, SIG produced billions of liquid packaging cartons – the kind in which you buy juice or milk – with 80,000 tonnes of the cardboard used to make those cartons produced at Whakatane Mill Ltd (WML).

The scale of production puts WML in the top 20 of New Zealand's largest energy-consuming sites, spending in excess of $21 million per annum on electricity, coal and gas. About 70 per cent of that cost is tied up in fossil fuels.


In 2016, the Energy Efficiency and Conservation Authority (EECA)* and WML entered into a three-year partnership to invest in best-practice energy efficiency across the WML site. A target was agreed: annual energy savings of 25 gigawatt hours (GWh) by 2019, worth an estimated value of $2.5 M per year.

That energy target was reached ahead of time, though the savings totalled "only" $1.7m. The forecast for 2018 shows a significant improvement, with a 35 GWh/year and 11,900 tonnes of CO2 saving expected.

The partnership with EECA was supported by DETA consulting, a Christchurch-based organisation delivering energy efficiency solutions and design advice.

Following a site-wide energy audit by DETA, WML employed a recently graduated mechanical engineer, Keith O'Connor, for two years. O'Connor's job is to identify inefficiencies and work with WML staff to rectify them.

"Having Keith on site is just excellent," says WML Head of Projects Dave Hodder. "He has the inclination, the time and the ability to go through all this stuff and unravel it. If you don't have that dedicated resource, it can just get lost in 'business as usual'."

Hodder also suggests that, particularly for large organisations, it can be difficult to get a handle on true costs of energy use.

"In our case, the costs of burning the coal were not easily visible. They were hidden all over the place in multiple budgets. For example, fuel preparation and the loading of the boilers were not part of the coal budget.

"It makes it difficult. You have to be ruthless and persistent in unravelling where the costs lie and what the true cost is."


Hodder and O'Connor have worked on a number of projects during O'Connor's 10 months on the job so far. Many are relatively minor improvements – an obscure valve releasing hot water down the drain instead of returning it to the system; pumps working when they don't need to be – but they've also been working through a longer-term, major project.

That's the conversion of the plant from coal to natural gas.
Although planning for the conversion preceded the partnership with EECA, the process has benefitted the partnership's success with O'Connor revealing some impressive statistics.

"WML used to burn about 12,000 tonnes of coal a year. Now, in terms of the performance of the boilers, this year we can expect savings of approximately 35GWh and a CO2 reduction of 11,900 tonnes of CO2 equivalent. To put that into perspective, that's like saving the energy used to power 3800 homes for a year and taking more than 5000 family cars off the road."

Hodder says the plant now has the ability to burn coal, natural gas or biomass – in the form of waste bark.

"Currently our boilers, built in 1955, are inefficient at burning bark – particularly if it's wet. Most of it is transported offsite to Tasman [Pulp and Paper Mill], where it is burned in boilers far more efficient at dealing with that material."

Despite this, Hodder says that it's WML's intention to convert to 100 per cent biomass: "We are aiming to achieve that within the next 10 years, possibly sooner," he says.

Hodder says geothermal energy is also on the table but much work is needed to quantify its cost-effectiveness.

"If the price is right," he says, "it would be even better than biomass."

*EECA says many New Zealand businesses can shave up to 20 per cent off their energy costs with smarter energy use. The best place to start is on the EECA Business website which offers a variety of tools and tips on how to start an energy management journey and find funding to help.