The cement industry can adopt solar energy to reduce greenhouse gas emissions and become cost-competitive, while meeting its statutory obligations, say KAMLESH JOLAPARA, S BHATTACHARYA and S SEN.
Power is a critical component of infrastructure, crucial for the economic growth and welfare of a nation. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.
Based on government records as of 30th September 2016, India has a total installed power capacity of 306,358 MW that includes thermal (coal, gas, and diesel), at 213,228 MW; nuclear power at 5,780 MW, hydropower at 43,112 MW, and renewable energy sources account for 44,236 MW.
Ref. Figure 1.
India is heavily dependent on fossil fuels for its energy needs. Most of the power generation is carried out by coal- and gas-based power plants which contribute heavily to greenhouse gas emission.
The Government of India´s immediate goal is to generate two trillion units (kilowatt-hours) of energy by 2019. This means doubling the current generation capacity to provide 24x7 electricity for residential, industrial, commercial and agriculture use.
A transition from conventional energy systems to those based on renewable resources is necessary to meet the ever-increasing demand for energy and to address environmental concerns in a sustainable way.
India ranks 3rd, just behind the US and China, among 40 countries with renewable energy focus, on the back of the strong thrust by the Centre on promoting renewable energy and implementation of projects in a time-bound manner.
In January 2016, the foundation stone for the International Solar Alliance (ISA) was laid in Gurugram, Haryana. The ISA has more than 120 member-countries, most of which are ideally located for solar power generation, wholly or partially between the Tropic of Cancer and the Tropic of Capricon. This emphasises the Government of India´s vision and policy thrust for future solar power generation.
The government has decided to substantially alter the energy mix that powers India in the future, such that at least 40 per cent of India´s total power capacity will come from renewable sources by 2030. This is as per the country´s targets under the Paris climate change agreement.
In order to achieve the country´s ambitious renewable energy targets of adding 175 GW of renewable energy, the Government of India is taking a number of steps and initiatives like the 10-year tax exemption for solar energy projects, and is planning to add 100 GW of solar power by the year 2022. The cumulative solar installations in India have crossed the 8.643 gigawatt (GW) mark in October 2016, according to Mercom Capital Group.
We will explore how the cement industry can integrate the renewable energy sources, especially solar energy, to reduce GHG emissions and to become cost competitive while meeting the obligations under RPO and PAT mechanisms.
Cement Industry in India
India ranks 2nd in the world in the production of cement with a total installed capacity of 378 mtpa in FY 2015.
Cement industry in India can be divided into the five geographical zones of India -North, South, East, West and Central based on localized variations in the consumer profile and supply-demand scenario.
According to Indian Minerals Year Book by Indian Bureau of Mines, TechSci Research, the South zone is largest market, with the highest installed capacity of 132.7 mtpa (FY15 Estimates) and followed by North, West, Central and East zones with installed capacity - 85.6 mtpa, 57.6 mtpa, 52.8 mtpa and 49.4 mtpa respectively. Ref. Figure 2 Currently, India has 210 large cement plants across states and is among the top ten exporters both by value and volume, says Cement Manufacturer´s Association (CMA) and TechSci Research Andhra Pradesh is the leading state with 40 large cement plants, followed by Tamil Nadu and Rajasthan having 21 and 20 plants, respectively. Major cement clusters include - Satna (Madhya Pradesh), Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh), Nalgonda (Andhra Pradesh) and Chandoria (Rajasthan).
Cement demand in India is expected to increase due to government´s push for large infrastructure projects, leading to 45 million tonnes of cement needed in the next three to four years.
India Brand Equity Foundation (IBEF) predicts that India´s cement demand is expected to reach 550-600 Million Tonnes Per Annum (MTPA) by 2025.
Energy Consumption in Cement Industry
Few Industries in India have been identified as energy-intensive industries. These are Aluminum, cement, fertilizer, iron and steel, glass, and paper. Together they account for 17 per cent of manufacturing value of output (VO) and for 39 per cent of all fuels consumed in the manufacturing sector.
Cement industry is one of the most energy intensive industries, and energy costs account for a significant percentage (approximately 30-40 per cent) of the total manufacturing cost.
The annual energy consumption by cement industry contributes close to 10 per cent of the total energy consumed in entire industrial sector.
According to the Cement Manufacturers´ Association, modern cement plants consume 68-93 units to produce a ton of cement while the older ones use up 110-120 units of electrical energy.
The cement industry has nearly 4,000 MW of installed captive power capacity, including coal-based plants, diesel generating sets and wind turbines to overcome rising power costs and uncertainty over supply.
Presently, the industry average for Captive Thermal Power generation cost varies between Rs. 3.50 to 4.50 / kWh and most plants are operating at around 30 per cent efficiency.
The major problem of the cement industry are related to ´power availability´ that includes drastic cut in the electricity, shortage of coal, inadequate availability of wagons for transport, limited availability of furnace oil.
Some cement producers like Madras Cements, have put up captive power plants to take care of all their electricity requirements, while for others, such as ACC Ltd, captive power meets 72 per cent of its requirement.
The carbon footprint is nearly 1.3 kg/kWh for Captive Thermal Power plants in India. The overall CO2 emission is 866 kg/ ton clinker produced. The CO2 emission is around 670 kg/ ton of cement (PPC).
Sustainability in Cement Industry
Climate change and energy security are global challenges and cement industry recognizes the need to contribute its equitable effort as a function of its techno-economic and socio-economic development.
The cement industry recognizes the significant threat caused by climate change and focuses to develop its own renewable energy assets. This supports the vision to complement the existing power resourcing strategy with green power, efficient energy use planning and investment for better returns with sustainable energy growth. India has joined hands with Switzerland to reduce energy consumption and develop newer methods in the Country for more efficient cement production, which would help India, meet its rising demand for cement in the infrastructure sector.
An enormous energy saving is possible in cement sector by implementing the renewable energy sources especially Waste heat recovery and solar energy plants that reduce operating cost and improve the environment.
Potential Renewable Energy Projects in Cement Plant
The Indian cement industry has realized that strong business growth can be achieved by sustaining manufacturing in an eco-friendly manner. Most of the new cement plants are adopting green processes and green power generation to reduce Green-House-Gas (GHG) emissions. Some of the following renewable energy projects can be introduced in the cement plant to achieve clean and green plant.
Power plants based on renewable sources such as wind and solar energy has a great potential to become an integral part of new cement plants.
Waste Heat Recovery System (WHRS)
WHRS has a potential to generate about 20 per cent to 30 per cent of plant power requirements (reducing purchased/captive power needs). It uses hot gases from the clinker cooler or pre-heater to heat a liquid and generate steam, to generate in turn electricity for powering the cement plant. The power generation methods in WHRS work on Steam Rankine cycle, Organic Rankine cycle and Kalina cycle.
According to IFC (World Bank Group) report, the existing WHR installed capacity is more than 200 MW in India and there is potential to achieve remaining 500-900 MW with estimated investment potential of $1.4 billion.
Solar Power Plant
Solar energy has many merits compared to conventional power sources. The solar prices have been falling, and in many parts of India, the cost of solar power is less than the tariff of power for the industrial sector.
Since the solar plants have a lifetime of typically 25 years, the energy prices are locked in, unlike in the case of power from utility companies, which is only expected to increase every year.
By installing solar power plants and solar water heating systems, cement plants can not only meet the obligations under both RPO and PAT mechanisms, but also reduce greenhouse gas (GHG) emissions.
Most cement plants in India are located in dry and hot areas with enormous solar radiation and have huge amounts of unused, un-shaded arid land. This makes cement sector very ideal for deployment of solar power generation plants. Solar energy can be harnessed either by Solar PV or Solar Thermal (CSP-Concentrated Solar Power) Technologies.
Based on the available area within a cement plant, we can install the solar power plant considering the solar technology suitable for that geographical terrain. Some of the potential applications of solar energy in cement plants are listed below:
Solar PV Technology
Some of the typical parameters need to be considered before implementing the solar PV power plant, such as:
The cement plants having captive power plants, as well as those who are purchasing power through Indian Energy Exchange (IEX) are liable for Renewable Purchase Obligation (RPO) as stipulated by the respective state governments.
Regarding captive consumer, those generating and consuming power from captive coal/natural gas power plants (primarily industrial users in cement, steel, chemical etc. sectors.). The Regulatory Commission in each state mandates a certain percentage of electricity generated through the above process to be from renewable sources.
According to Ministry of New and Renewable Energy (MNRE), the National Tariff Policy was amended in January 2011 to prescribe solar-specific RPO be increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022.
Many States have come up with up their own Solar Policy and they have their own Solar RPO targets.
Case Study - Solar PV Power Plant
Based on the typical brown-field 3000 TPD cement plant, the available rooftop area is around 18,000-19,000 m2 which shall usually cover all the roof top of the plant buildings, top of shed for material storages including the pre-blending stockpile, etc. which potentially harness rooftop solar power of appx. 1.8-1.9 MW (Open space for ground solar PV is not considered).
A typical 10 MWp PV plant example as per IFC report is given below to understand the various parameters of solar power plant.
Solar Thermal (CSP) Technology
Solar thermal technology can be used for industrial processes in several ways. It can provide warm water for processes; hot air for drying the raw materials or it can also be used in preheating the boiler feed water either in captive power plant or WHR system.
Several solar thermal power plants have been built in India, using both flat plate collectors and concentrator technologies. It will continue to provide reliable source for grid-connected power.
Solar thermal (CSP) technology can be integrated with existing (steam cycle) based plants (Coal, nuclear, CCGT, biomass) at various stages in the process (feed water heating, direct steam generation) which can save CAPEX on turbine (including auxi¡liaries) and augment conversion efficiency.
Installed Solar Power Plants in Cement Sector in India
Several cement manufacturers like Aditya Birla Group, Zuari Cement, Birla Corp and Ambuja Cement, Dalmia Cement etc. have all ventured into solar power generation in India.
Aditya Birla Group was one of the pioneers, having set up a 100 kW solar power plant in its Rajashree cement plant in Karnataka in 2012. Zuari Cement set up a solar power plant in Yerraguntla district in Andhra Pradesh in 2013.
Cement companies such as Emami cement, OCL India, Ultratech cement, Birla Corp at Satna works have installed the solar power plants of 10.06 MW, 5.5 MW, 2.5 MW, and 1.5 MW capacities respectively.
Favorable Solar Energy Regulations in India
The Indian policy for solar power plant greatly favors investors as it gives many benefits over conventional plants & machinery.
An accelerated depreciation of nearly 80 per cent as compared to 15 per cent for normal plant and machinery is considered for solar plants that results in huge tax savings for the cement manufacturers.
Favorable land laws and other subsidy for solar power generation in cement producing states such as Karnataka, AP, Rajasthan, MP and Telengana.
While cement industries in all states can explore solar projects, those in Karnataka, AP and Telengana states, can benefits due to favorable wheeling, banking and CSS charges for open access model.
As demand for power increases in India due to industrial and population growth, fulfilling the energy requirement could be a challenge in years to come. However, achieving the energy goals will become much easier with more emphasis from the Indian government and corporate world on renewable energy sources especially on solar power plants. Cement industry in India can play a major role in this area. There are many favorable factors for installing the solar power plant in cement industry such as reduction in installation cost of solar plant, increasing fuel cost, Indirect effect on PAT as the RE power is out of boundary limit, possibility for selling E-Certificate if the reduction target is fulfilled and finally but not the least, solar power will be profitable business in years to come.
The government also needs to play a major role, in fast development of this sector by providing necessary policy supports, incentives and judicious tariff plan mechanism.
There will be a few initial hurdles that will have to be crossed before the cement sector becomes truly appreciative of the solar technology for power generation.
The solar technology providers will have to educate the users regarding the feasibility of their installations.
Consultants like ERCOM will have to technically assist the cement plant owners during all stages of the projects right from initial feasibility study till successful implementation, so that the solar installations are successful.
Cement plant owners will have to get over their inhibitions and embrace new technology which will enable them to have sustainable growth while reducing their energy costs and protecting the environment for future generation.
All from Ercom Engineers
Energy mix that powers India in the future, such that at least 40 per cent of India´s total power capacity will come from renewable sources by 2030