The cement industry in India has been going through a period of overcapacity. As per recent estimates, the industry’s average capacity utilisation during 2016 was around 75 per cent. Against an available capacity of more than 375 million tonnes per annum, the overall domestic consumption during 2016 was estimated at only 283 million tonnes (mt). Further, price realisations have been flat and there has been significant cost pressure with both selling and distribution costs as well as energy costs increasing by 5-10 per cent over the past four to five years.
In this scenario, cement players have been increasingly focusing on energy cost optimisation strategies. An overview of the power scenario in the cement industry and the key strategies being undertaken for reducing energy costs…
Energy consumption scenario
The cement industry is fairly energy intensive, requiring both thermal and electrical energy for its operation. Fuel and electricity together comprise nearly 60 per cent of the variable cost of production in cement plants. In India, the cement industry is the third largest consumer of coal after power and steel, accounting for about 10 per cent of the coal consumed by the industrial sector. It is also accountable for 6 per cent of the electricity consumed by the industrial sector. Cement manufacturing plants use this electricity to operate their mill drives, fans, conveyors, packers, lighting systems and kilns.
The specific thermal energy consumption and electrical energy consumption for state-of-the-art Indian cement plants are as low as 658 kCal per kg of clinker and 67 kWh per tonne of cement respectively. These values are comparable with those at the best cement plants in Japan, where the specific thermal energy consumption and electrical energy consumption are 650 kCal per kg of clinker and 65 kWh per tonne of cement respectively.
PAT scheme for cement industry
One of the key regulatory drivers for energy efficiency in the cement industry has been the Bureau of Energy Efficiency’s (BEE) Perform Achieve and Trade (PAT) scheme. This is essentially a mechanism intended to reduce specific energy consumption in energy-intensive industries (across eight industrial sectors including the cement industry), with an associated market-based mechanism to enhance cost effectiveness through the issuance of energy saving certificates.
In PAT, Cycle I (2012-15), which concluded in March 2015, the cement industry overachieved its energy saving target by almost 77 per cent. An analysis of the designated consumers in the industry under PAT Cycle I by think tank Shakti Sustainable Energy Foundation shows that some of the key projects that were undertaken by them pertained to retrofits and optimisation. Low and medium voltage variable speed drives (VSDs) and variable frequency drives (VFDs), and energy efficient fans and motors were some of the generic interventions that formed a major part of the optimisation projects.
The second cycle began in April 2016. The number of cement plants that are now being covered under the scheme has gone up from 85 to 111.
Technology options for improving energy efficiency
A key area for electrical and thermal energy efficiency improvements in cement plants has been kiln and preheater systems. Kilns and preheater systems have seen high levels of technology adoption and achieved high energy efficiency levels. With significantly higher productivity levels and the installation of latest energy efficiency and automation control devices, these systems are operating at one of the best performance levels in the world. India’s modern cement plants are equipped with six-stage preheaters with in-line or separate-line calciners (depending on the rated kiln output), kilns with volumetric loading of 5-6.5 tonnes per day per cubic metre and advanced automation systems. Continuous emission monitoring systems are also being deployed in new as well as existing kilns. However, while the productivity levels of the existing kilns have been increased to meet the growing demand, enhanced energy consumption due to increased velocity, resulting in higher pressure drop and reduced heat transfer, is a potential area for improvement.
The installation of high efficiency (and low pressure drop) cyclones can significantly improve energy efficiency in cement kilns. For existing plants, the installation of additional preheater stages for increased heat recovery and computational fluid dynamics studies to reduce the pressure drop in preheater cyclones along with necessary modifications can help in achieving electrical and thermal energy efficiency.
Material grinding mills at cement plants consume large amounts of energy. Thus, a reduction in this consumption would significantly affect the energy efficiency of a plant. Separators are used to separate fine particles (which are the final product) from coarser materials, to be sent back to the ball mill for further grinding. A high efficiency separator ensures that the coarse material reject contains as little fine material as possible, thus reducing the work of the grinding mill. It maintains the fineness of the final product and avoids superfluous grinding of material, thereby reducing the specific energy demand.
Installing a VSD or a slip power recovery system can help avoid loss of power, or recover lost power. High temperature VFDs (HT VFDs) control the motor speed by varying the frequency of the supply voltage. HT VFDs are considered the most suitable speed controlling mechanism because they ensure precision, control and low system energy losses.
Cement kilns can be used to safely dispose of industrial, municipal and hazardous waste. This requires the installation of pre-processing and blending facilities. Since the type of alternative fuel used affects a cement kiln’s behaviour, it is important to carefully study the type of fuel used. Tyre chips, industrial plastic and biomass are some of the readily available alternative wastes that can be used by cement kilns in India.
Another initiative for improving energy efficiency is using a higher percentage of fly ash in Portland Pozzolona Cement (PPC), which reduces the clinker factor in cement, thereby reducing both fuel combustion and limestone calcinations. Up to 35 per cent fly ash can be used in PPC manufacturing, and the resulting pozzolanic action also leads to strength development. The quality of the clinker and the addition of plasticisers help in the absorption of fly ash in concrete applications.
Waste heat recovery (WHR) was identified as an important energy efficiency measure for the cement industry. Concerns about rising power prices and power reliability have led many Indian cement plants to install on-site captive power plants and, more recently, WHR systems. According to estimates, WHR can reduce the operating costs and improve earnings before interest, taxes, depreciation and amortisation margins of cement factories by 10-15 per cent. On an average, electric power expenses account for up to 25 per cent of the total operating costs of a cement factory. WHR technology utilises the residual heat in the exhaust gases generated in the cement manufacturing process and can provide low temperature heating, or generate up to 30 per cent of the overall electricity need of a plant.
A heat recovery boiler and a turbine system can also use the hot gases from the cooler and preheater to produce power. This power generation is based on the organic Rankine cycle or Kalina process. The efficiency of such power plants is limited to a maximum of 25 per cent, but in large plants, 22-36 kWh per tonne of clinker can be generated, which is adequate to operate the kiln on a sustained basis.
Indian cement manufacturers, however, are lagging behind their global peers as far as the adoption of WHR systems is concerned. The main barrier to their wider adoption is the high investment cost of WHR (about Rs 100 million per MW, or $2,300 per kW) compared to investment costs of conventional captive power options, which range from Rs 40 million-Rs 50 million per MW, or $920 per kW-$1,150 per kW for thermal captive power plants (CPPs) and less for diesel CPPs.
In order to optimise energy costs, companies need to evaluate both the reduction in energy consumption as well as the avenues for reduction in the per unit cost of energy. One of the biggest cost levers for the cement industry in recent times has been the use of pet coke as an alternative to coal. Some firms have made a big move towards converting their usage to pet coke and reaped significant benefits. Many cement players have now substituted close to 100 per cent of fossil fuels with pet coke, thanks to the drop in crude prices. However, the recent trend of increasing pet coke prices is likely to reduce the level of savings from this lever.
That said, the performance and technology aspects of the cement sector are already among the best in the world. Hence, process innovation is the primary way to increase the energy efficiency of the sector. Also, the government’s focus on large infrastructure and other development projects are expected to give a fillip to the demand for concrete and cement in the next few years, which would ease cost pressures for them.