Meemanshi Rangacharya, Group Head, Power Management Department in TECHPORT-Thane
Recently, Indian Cement Review had a tete-a-tete with Meemanshi Rangacharya, Group Head, Power Management Department in TECHPORT-Thane, a manufacturing support service division for LafargeHolcim-owned two major cement manufacturing companies: ACC Ltd and Ambuja Cement. Both ACC and Ambuja have vast captive power plant (CPP) networks, catering power requirements of their respective cement manufacturing units in India.
Rangacharya is looking after operational excellence of all CPPs of ACC & Ambuja Cements installed at their various CMU locations.
We tried to understand what Rangacharya feels about the growth of CPP in existing cement plants as well in all future cement project proposals of various cement manufacturing companies of India. Excerpts from the interview:
What are the prime considerations to be taken into account before setting up a captive power unit for a cement plant?
In India, the gap between power supply and demand is quite high. As a result, all power-intensive industries look for stable, reliable & cost-effective electrical energy security measures.
Unlike other European, American and British countries, the word ´CPP´ is synonymous with cement industry in India. The power utility in cement plant amounts to around 30-35 per cent of the total required feed-stocks for cement manufacturing process and is considered one of the major power-intensive industries.
The key considerations for setting up CPP are:
i)Long-term cheaper fuel resources with flexibility to switch over other alternate similar nature fuel sources.
ii)Availability of water source in neighbouring areas, without affecting government-sponsored priority projects like agriculture & eco-balance, etc.
iii)To include a proper water harvesting scheme such that own installation becomes at least water neutral, over an initial period of 4-5 years.
iv)Maximum updated water conservation measures need to be adopted, as cement plants are located, where sufficient lime-stone reserves are there in nearby areas, which will normally be water scare area.
v)Own captive power generation system has to be competitive to grid-power discom tariff, quality, reliability, availability, including scope of availing open access facility (purchase or sale of power to third party) through grid connectivity.
vi)In all states, the grid discom is the primary source of electricity distribution, for any industry.
vii)Discoms´ performances get affected, mostly for poor cash flow due to low billing collection rate, unreliable and high cost of operations of state/central government-owned power producing agencies and severe transmission & distribution losses across the distribution network.
viii) On consideration of above factors around our cement plant locations, opting for own CPPs is obviously considered as strength for the cement industry.
ix)Plants need to be designed and installed, keeping in mind for full compliance of environmental and all other statutory norms, applicable to location site.
If there is excess power generated and the same is sold to state grid, is it remunerative enough as in the past? If not, why?
Normally CPP in cement industry is not installed with surplus capacity, aiming for earning revenue through sale of surplus power i.e. generation, excess of their captive consumption. This is mainly to remain focussed on their core cement business. However, at times, for changes in the demand side, there may be scope of generating some surplus power and selling that surplus power-either to grid or to any third party consumer-may fetch additional revenues.
With a gradual growth of mega-size IPPs in India, the cost of saleable power from our size of CPPs seldom look to be competitive. To avail this facility, grid connectivity infrastructure with CPP paralleling facility should be available, even though full power demand of cement plant, can be met with CPP. This leads to high-fixed cost component, even though very little power drawal is there, from grid. Some states, also impose CPP paralleling charges, in addition to fixed connectivity charges. There are several cement plants in India, operating only on CPP.
After delinking of coal in 2016, what will be the effect on captive generation and the overall profitability of captive generation?
With delinking of coal, the Government will neither control coal price nor quota allotment to any consumers. To combat this situation, bulk industrial coal consumers are looking for winning coal blocks through government-sponsored e-auction process, which will guarantee long term coal availability for their core industry. Others will have to look for other alternative cheaper fuels-may be fossil or non-fossil from indigenous sources-suiting to their type of CPP units, including fuel rejects from other industries, like coal washery rejects, coal fines & dolachar from sponge iron industries, biomass, municipal solid waste, etc.
With coming up of so many captive coal mining by mega industrial houses, mushrooming of coal washeries are expected to segregate high & poor quality coals, thus making more availability of poor quality coal including washery rejects for power plants. On the other hand, this may be a threat for the existing CPPs, as mega-size IPPs will be forthcoming with competitive power tariff. Switching over to imported fossil fuels for CPPs, may be another viable option, provided the fuel quality is compatible to our CPPs.
Since coal delinking process of government is presently in a very nascent stage, it is too early to say how long the type & size of CPPs that are typically installed in cement plants-normally with multi units, each of 15-30 MW capacity-will be cost viable to remain operative.
Your opinion on the cost of power through CPP.
Typically, the total cash cost of net power generation in solid fossil fuel fired conventional Steam-Rankine thermal cycle-based CPPs in cement plants-with each unit in the range of 15-30 MW capacity-comes to around Rs 3.50 to Rs 5.50 per unit, depending on the locations. Major cost differentiation factors location-wise are fuel cost, fuel logistic cost, and state electricity duty & taxes.
However, going for captive power, as primary sources is always evaluated with respect to cost, availability, reliability and quality power, is compared to any other available sources. For the next at least 10 years, captive power will be considered as the most economic & reliable primary power source for all major cement manufacturing companies in India.
Are there any technological changes happening in CPP scenario. If yes, what?
There has been a lot of technological advancement in all types of thermal power plants, which depends primarily on size of the plant and availability of suitable cheaper fuels from the neighbouring areas, finally to emerge as cost viable projects. There has been advancement in manufacturing FBC type boilers, suitable for low cost & low quality solid fossil fuels. Efficiency optimisation in typical small size STG-Sets (normally of 15-30 MW capacity range for cement plants) with re-designing thermal roto dynamics, modifications in thermal cycles, etc.
Cement plant locations are normally water scare areas, for there being lime stone mineral reserves - lots of advancements have taken place in evolving/adopting complete air cooling systems against typical conventional design of water cooled thermal power plants.
There has also been lots of progress for venturing to non-convention sources of energy sector, even for tapping by small producers/consumers like wind power, solar power, biomass plants, small hydro power plants; enhancing sustainability index of the company.
Please comment on the quality of power and on the environmental norms, required to be followed by CPPs.
As far as quality of power is concerned, technically it is very much maintainable to the desired level and that is the reason most of the power intensive industries in India like chemicals, petro chemicals, oil refineries, fertilizer, steel, etc. are having big network of captive power generation facilities.
Environmental norms-both for air & water pollution controls-are becoming stringent day-by-day and small size CPPs also need to invest a lot in air & water pollution control measures for statutory compliances. Most of the major CPPs, operating in India, have or planned to install on line CEMS (Continuous Emission & Effluent Monitoring System) with access to SPCB through SCADA system.
What are your views on recent trend of installing WHRS-based captive power generation facilities in cement industry.
Quite a considerable amount of waste heat is generated in cement manufacturing process from pre-heater & clinker cooler, with little recovery, out of the total waste heat, sometimes in raw feed section only, thus major portion of the heat goes away to atmosphere with the waste hot gases.
Moreover, at some plants, additional energy is consumed for water quenching on clinker conveying belt conveyors, to bring down the clinker temp to desired level for further processing to cement production. This is the reason most of bigger cement plants are installing WHRS-based power generation facilities. It helps reduce electrical energy cost and enhances over all thermal efficiency of the plant, own energy security and sustainability index, being green energy.
We would like to have your opinion on all proposed future cement projects [whether to come along with captive power generation facilities or not] that are in the pipeline. Any greenfield cement project, which is being blue-printed now, will come to commercial production, at least after around five years from now. We need to take decision to go for CPP, in the broader concept of fuel & power scenario in the country, in the next 8-10 years.
With the ongoing delinking of coal policy, low quality & low cost indigenous fossil fuels, which makes sense to go for CPPs, will be scarce for smaller generators/consumers, in the next 8-10 years and hence fuel security will always be haunting. Bigger industrial houses, including mega power producers, will be looking for own coal-blocks or the IPPs will look for business agreement with the coal block owners, to set up coal beneficiation plants, so that the coal rejects can be used for power generation, in mega scale.
Looking for some alternate fuel sources, either fossil or non-fossil, may not be a stable proposition as cost structure of imported fossil fuels always remain volatile and non-fossil fuels like biomass, agro wastes, etc. are seasonal commodity. Fuel security will be a big question mark. The best option is to have partly electrical energy security for cement industry of which power is not the core business, gradually to build up captive renewable energy generation facilities like wind power, solar power, small hydro power and biomass or waste to energy-based power plants - subject to convertible input potential data, in the neighbouring area, will suffice our optimised plant size requirement.
Key considerations for setting up CPP
Delinking of coal to CPP
On technological changes
On environment norms
Regarding installation of WHRS-based power generation