No one can predict today, what the fuel availability scenario would be like tomorrow
Captive Power Plants (CPP) have become a necessity for cement production units in the country. These plants do more than just ensuring continuous power supply, elaborates S K Kaul in an interaction with ICR. Excerpts from the interview.
Why have CPP become a necessity for cement plants?
There are two important reasons why captive power plants have become a necessity for cement plants. Various states in the country are facing huge shortage of power. Cement production is energy intensive and a continuous process. The plant requires uninterrupted supply of power. So the captive power plant becomes very important in such power deficient regions.
The other factor is the cost of power. Earlier captive power units had a cost advantage where the power cost was lower than that drawn from the grid. Now the situation is different. The cost of coal has gone up. Majority of the manufacturers have to import high priced coal or procure it from far-off places. The transport cost of coal offsets any cost advantage of captive power production.
Why is multi-fuel capability so important?
The cost of coal at some places is as high as Rs 5000 to 6000 per tonne. So we are supplying captive power plants that can generate power efficiently even from coal with very low calorific value. Low calorific coal is cheaper and allows power production at lower costs.
Besides, this type of coal produces fly ash that can be blended with PPC cement. When we design plants we make them multi-fuel compliant. Often when available, manufacturers opt for pet coke, which is much cheaper than other fuels used traditionally. So the versatility of the plant helps improve the viability of the production process. Plants with versatility not only offer price advantage but they also offer flexibility and a safeguard against ever changing market conditions. No one can predict today what the fuel availability scenario would be like tomorrow. And that is the prime reason why we recommend multi-fuel compatible plants to our clients. We take one base fuel and then we optimise the system to run on other fuels too, like, washery rejects, Indian coal, imported coal, pet coke, etc.
What is the extent of power generation that can be achieved from WHR?
The industry has been very enthusiastic about setting Waste Heat Recovery (WHR) plants. These plants capture the waste heat from the pre-heater and clinker cooler and utilise it to generate power. WHR can produce power that can meet 25 to 30 per cent of power requirements of the plant. And that too free of cost. This is a kind of power where the plant does not have any type of constraints on its availability. As soon as the kiln is turned on, one can start generating power.
Other advantage is that with this technology you are reducing your CO2 emission and are also saving fossil fuels in the process.
What CPP capacities are popular? And which states show higher demand for these CPP plants?
Most companies opt for the plants capable of meeting 100 per cent of their power requirement. Some companies do it up to a particular stage such as clinkerisation. As far as geographic demand is concerned, almost all plants today opt for captive power plants, since the power supply and availability in the country is a bit dynamic. In 1995-96, there was power shortage in Madhya Pradesh. Now the state is self-reliant. Today southern India is facing shortage of power.
For example, a few years ago in Andhra, the fuel cost was very low and setting a captive power plant was seen as an unnecessary expense. Two years after we set up a plant for a cement company in that region, the state started experiencing a power shortage of 50 to 60 per cent. Plants which did not have a captive power production unit had to either shut down production or had to buy power from the power trading exchange at a very high cost.