Concrete

Being Proactive about Sustainability

Hard-hitting facts such as scarcity and price hike of fossil fuels and challenges of waste management warn of difficult times ahead for the Indian cement industry, unless the players increase their efforts at increasing the capacity of Waste Heat Recovery Systems to meet their energy requirements.

Published

3 years ago

April 14, 2022

admin

Waste heat recovery has long been the base standard for setting up cement manufacturing units. In China, a cement kiln will not get an official sign-off unless it has waste heat recovery systems. In Europe, any industry requiring large quantities of heat input for manufacturing must have waste heat recovery as a natural corollary, and sometimes its use could be extended to providing heat input to the neighbourhood and community for simple needs such as room and water heating systems.

The economics of Waste Heat Recovery Systems (WHRS) is preceded by sustainability concerns, as cement manufacturing in kilns continues to produce 8 per cent of the global greenhouse gas (GHG) emissions. The conversion of limestone to clinker is where the bulk of the heat energy is expended. However, this bulk of heat energy that is generated in six-stage preheater kilns by burning of any fossil fuel input actually gets wasted as shown in the pie-chart Fig 1, and only 58 per cent is used in the conversion process yielding clinker.

Theoretically 710 Kcal needs to be generated to convert 1 kg of clinker, out of which actual conversion process would need 410 Kcal, the rest ending up as losses, which can be recovered. In reality, the Indian cement industry average is 744 Kcal of heat input for producing 1 kg of clinker, which means the actual losses are even more than the theoretical possibility.

Out of the total generated heat there are some unavoidable losses, that include radiation loss, loss for evaporation of residual moisture in fine coal and raw meal and some part of heat going with clinker from cooler. The balance loss in pre-heater exhaust gases and the cooler exhaust gases are completely recoverable through WHRS.

Let us look at some statistics from the Indian cement industry. On an average, Indian cement plants require electrical power of 20 billion kWh per year. The coal needed for generating this much power accounts to 32 million tonnes per year. A significant portion of this power could be replaced by the WHRS that will use waste heat from the kilns to generate electricity.

In sustainability terms, this is equivalent to replacing a large component of the 32 million tonnes of coal to be otherwise burnt for producing electricity. WHRS are also very stable systems that operate on the Rankine cycle and it provides an avenue for utilising waste water from the process as well.

Balancing the investments

Let us now see the economics of putting up a captive power generating unit versus putting up a WHRS. The capital investment for WHRS is high at Rs 8 cr per MW going by the current costs, whereas the CPP units can come at Rs 4.5 cr per MW. However, the project Internal Rate of Return (IRR) would be very different as the cost of generation would be as low as Rs 0.40 per unit for the former while Rs 4.5 per unit for the latter, which given the current trajectory of fossil fuel prices is already under severe stress of upward correction. It is only the initial cost that continues to act as a deterrent for putting up a waste heat recovery unit.

The Indian cement industry must act responsibly and move quickly to put in investments that could raise the waste heat recovery installed capacity to cross the minimum threshold of 25 per cent of electricity consumption. That will still be far from the 20 billion KWhr of total electricity consumption by the industry.
The other area of concern is the price trajectory of fossil fuels, which would continue to move northwards. WHRS is one of the simpler ways of insulating the industry from the vagaries of future price increases.

Thus WHRS could be the natural hedge to fossil fuel price increases for a substantial portion of the electrical consumption. As matters stand today most WHRS would be the highest IRR projects that the industry as an ensemble can think of.

-Procyon Mukherjee

Up Next

Holcim Group to sell Ambuja Cement and ACC Ltd

Don't Miss

Our goal is to ensure complete customer satisfaction.”

Concrete

Construction Costs Rise 11% in 2024, Driven by Labour Expenses

Cement Prices Decline 15%, But Labour Costs Surge by 25%

Published

2 days ago

November 19, 2024

admin

The cost of construction in India increased by 11% over the past year, primarily driven by a 25% rise in labour expenses, according to Colliers India. While prices of key materials like cement dropped by 15% and steel saw a marginal 1% decrease, the surge in labour costs stretched construction budgets across sectors.

“Labour, which constitutes over a quarter of construction costs, has seen significant inflation due to the demand for skilled workers and associated training and compliance costs,” said Badal Yagnik, CEO of Colliers India.

The residential segment experienced the sharpest cost escalation due to a growing focus on quality construction and demand for gated communities. Meanwhile, commercial and industrial real estate remained resilient, with 37 million square feet of office space and 22 million square feet of warehousing space completed in the first nine months of 2024.

“Despite rising costs, investments in automation and training are helping developers address manpower challenges and streamline project timelines,” said Vimal Nadar, senior director at Colliers India.

With labour costs continuing to influence overall construction expenses, developers are exploring strategies to optimize operations and mitigate rising costs.

Concrete

Swiss Steel to Cut 800 Jobs

Job cuts due to weak demand

Published

3 days ago

November 18, 2024

admin

Swiss Steel has announced plans to cut 800 jobs as part of a restructuring effort, triggered by weak demand in the global steel market. The company, a major player in the European steel industry, cited an ongoing slowdown in demand as the primary reason behind the workforce reduction. These job cuts are expected to impact various departments across its operations, including production and administrative functions.

The steel industry has been facing significant challenges due to reduced demand from key sectors such as construction and automotive manufacturing. Additionally, the broader economic slowdown in Europe, coupled with rising energy costs, has further strained the profitability of steel producers like Swiss Steel. In response to these conditions, the company has decided to streamline its operations to ensure long-term sustainability.

Swiss Steel’s decision to cut jobs is part of a broader trend in the steel industry, where companies are adjusting to volatile market conditions. The move is aimed at reducing operational costs and improving efficiency, but it highlights the continuing pressures faced by the manufacturing sector amid uncertain global economic conditions.

The layoffs are expected to occur across Swiss Steel’s production facilities and corporate offices, as the company focuses on consolidating its workforce. Despite these cuts, Swiss Steel plans to continue its efforts to innovate and adapt to market demands, with an emphasis on high-value, specialty steel products.

Concrete

UltraTech Cement to raise Rs 3,000 crore via NCDs to boost financial flexibility

UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore

Published

3 days ago

November 18, 2024

admin

UltraTech Cement, the Aditya Birla Group’s flagship company, has announced plans to raise up to Rs 3,000 crore through the private placement of non-convertible debentures (NCDs) in one or more tranches. The move aims to strengthen the company’s financial position amid increasing competition in the cement sector.

UltraTech’s finance committee has approved the issuance of rupee-denominated, unsecured, redeemable, and listed NCDs. The company has experienced strong stock performance, with its share price rising 22% over the past year, boosting its market capitalization to approximately Rs 3.1 lakh crore.

For Q2 FY2025, UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore, below analyst expectations. Revenue for the quarter also fell 2% YoY to Rs 15,635 crore, and EBITDA margins contracted by 300 basis points. Despite this, the company saw a 3% increase in domestic sales volume, supported by lower energy costs.

In a strategic move, UltraTech invested Rs 3,954 crore for a 32.7% equity stake in India Cements, further solidifying its position in South India. UltraTech holds an 11% market share in the region, while competitor Adani holds 6%. UltraTech also secured $500 million through a sustainability-linked loan, underscoring its focus on sustainable growth driven by infrastructure and housing demand.