02

STEEL This sector has a very high energy-saving potential vis-a-vis best available techniques. However, there is limitation to realise this saving potential because of the process route chosen to make steel and because the plants use coking and non-coking coal with high-ash content and iron ore with high silica and alumina content.

For this sector, the future after 2020 is a cul-de-sac. What should be done? Should steel companies begin to opt for BF-BOF from today itself? Who will import the coking coal this more efficient process route requires. India has no reserves of this raw material? Emissions intensity (MT CO2-e/tcs)

Primary energy consumption (GJ/tcs) *Best available techniques

2.4 27.3

2.2

BAU

16.6

2

BAT*

India

2008-09

2020-21

LC

2.2

2 2030-31

INDUSTRYINDEX

Steel production in India today is dominated by the Blast Furnace-Basic Oxygen Furnace (BF-BOF) route. In the future, production will shift decisively towards Direct Reduced Iron-Electric Furnace (DRI-EF) process route. The problem is DRI-EF is less efficient than BF-BOF and their emissions-saving potential is also not as high as that of BF-BOF. Secondly, the emissions-saving potential of a DRI-EF plant can be easily implemented by 2020-21 in BAU. The result is the emissions intensity reduces by about 8 per cent in BAU and 17 per cent in LC between 2008-09 and 2020-21. After 2020-21, emissions intensity stagnates.

39

1 INDUSTRY OVERVIEW India was the world’s fifth largest steel producer in 2008, producing 55.16 million metric tonnes (mMT) of crude steel that year.1 Finished steel production was 56.07 mMT in 2007-08 and 56.41 mMT in 2008-09.2 Imports of finished steel totalled 5.71 mMT in 2008-09 and 3.65 mMT of finished steel were exported during the same year.3 Production of finished non-alloy steel grew at 9.8 per cent during the tenth plan (2002-2007) and demand for steel is expected to be about 70 mMT in 2011-12.4 As for primary metal, 28.83 mMT of pig iron was produced in 2007, while 0.82 mMT was exported and 0.02 mMT imported the same year.5 Merchant pig iron (pig iron for sale) traded was 5.28 mMT in 2007-08.6 India is the largest producer of sponge iron or Direct Reduced Iron (DRI) in the world and 20.38 mMT of the same was produced in 2007-08.7 The total primary iron production was 49.05 mMT in 2008.8 About 207 mMT of iron ore was mined in 2007 while 93.7 mMT was exported and 1.1 mMT was imported during the same year.9 As of 2008, there were 11 integrated steel plants in the country with a total capacity of 34.55 million metric tonnes per annum (mMTpa). Blast furnace-basic oxygen furnace (BF-BOF) and BF-twin hearth furnace (THF) remain the preferred production routes in integrated steel plants, with a capacity of about 24.55 mMT. EAFs contributed 10 mMTpa to productive capacity (see: Table 1). The remaining steel production in the country was contributed by electric induction furnaces (EIFs), electric arc furnaces (EAFs) and energy optimizing furnaces (EOFs) (see: Table 2).10 Classifying steel by its process route, the BF-BOF route accounted for 49 per cent of steel production in 2008, followed by coal based DRI-EF (electric furnace; both EAF and EIF) which contributed 26 per cent; 11 per cent and 14 per cent were the respective contributions of gas DRI-EF and the scrap-EF routes (see: Figure 1).11

1.1 GLOBAL SCENARIO

The per capita steel consumption in India is onefourth of the global average. Massive growth in infrastructure and in the housing sector, as projected by the government agencies, will lead to very high growth in the demand of steel products in the future 40




02

Table 1: Integrated steel plants in India (2008) Capacity (mMTpa)

Process Route

SAIL, Bhilai

3.925

SAIL, Durgapur

1.802

BF-BOF

SAIL, Rourkela

1.9

BF-BOF

SAIL, Bokaro

4.36

BF-BOF

SAIL, Burnpur

0.5

BF-THF

RINL, Vishakapatnam

BF-BOF/THF

2.91

BF-BOF

5

BF-BOF

Tata Steel, Jamshedpur

POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

Plant

JSW, Bellary

3.8

Corex/BF-BOF

Essar, Hazira

4.6

HBI-EAF

Ispat, Dolvi JSPL, Raigarh

3

DRI/BF-EAF

2.4

DRI/BF-EAF

Note: BF: Blast Furnace, BOF: Basic Oxygen Furnace, THF: Twin Hearth Furnace, EAF: Electric Arc Furnace, EIF: Electric Induction Furnace, DRI: Direct Reduced Iron, HBI: Hot Briquetted Iron. Source: Anon 2008, Energy and environment management framework in Indian steel sector, APP-STF Meeting, Beijing.

Table 2: The steel industry in India (2008) Type of plant

Number of units

Total capacity (mMTpa)

BF-BOF based integrated

8

24.55

EAF based integrated

3

10.00

EAF/EOF based mini

33

4.30

EIF

970

20.90

Coal based Sponge

350

18.50

Gas based DRI

3

6.50

31

9.00

1,619

28.10

Mini BF based Pig Iron Hot Re-rolling conversion Cold Re-rolling conversion

53

7.10

Galvanizing coating conversion

18

3.78

5

4.70

Colour coating conversion

Note: BF: Blast Furnace, BOF: Basic Oxygen Furnace, EAF: Electric Arc Furnace, EOF: Electric Oxygen Furnace; EIF: Electric Induction Furnace, DRI: Direct Reduced Iron, PI: Pig Iron Source: Anon 2008, Energy and environment management framework in Indian steel sector, APP-STF Meeting, Beijing.

Figure 2: Crude steel production (2008)

2500 1304

2,115 2000

1200 kg/annum

800

1000 671

500.5 500

400

Japan

EU

China

India

World

0

Source: Anon 2009, Steel Statistical Yearbook 2008, World Steel Association, Brussels.

0

World (2007)

118.7

Qatar (2007)

68.5

214

48 Japan (2007)

91.4

373

US (2007)

55.2

Russia

200

US

198

321

447

EU (2007)

600

1500

China (2007)

million MT

1000

India (2008)

1400

Figure 3: Per capita steel consumption

Source: Anon 2009, Steel Statistical Yearbook 2008, World Steel Association, Brussels& Anon 2009, Annual Report 200809, Ministry of Steel, New Delhi.




41

2 THE STUDY We obtained data on energy consumption for all eleven integrated steel plants15 and greenhouse gas emissions data for nine of them.16 For one of these companies, Ispat Industries Ltd, detailed lifecycle data was also obtained. In addition, detailed lifecycle data was acquired for one of India’s largest sponge iron producer, Tata Sponge Iron Ltd. Of the 54.52 mMT of crude steel produced in 2007-08, the sample covered 33.8 mMT, or 63 per cent of total production. In the sample, 77.3 per cent of the primary metal was produced by the blast furnace (BF) route, 14.1 per cent through the gas based-DRI route, 3.2 per cent through the coal-based DRI route and 5.4 per cent by the COREX route, a deviant of DRI (see: Figure 4). About 75.6 per cent of the steel was produced by the BOF route while the remaining 24.4 per cent was produced by the EAF route (see: Figure 5).

Figure 4: Primary metal production routes in plants surveyed

Figure 5: Crude steel production routes in integrated steel plants surveyed BOF-75.6%

Coal DRI-3.2%

Corex-5.4%

Gas DRI-14.1%

Blast Furnace-77.3%

EAF-24.4% Source: Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

2.1 ENERGY CONSUMPTION In the BF-BOF route, energy is consumed in coke making (the production of coke from coal for use as a fuel and reducing agent in the blast furnace); sintering (preparation of iron ore for use in the blast furnace); in the blast furnace for iron making (this is where major energy in the BF-BOF route is consumed); in the basic oxygen furnace (for melting of iron, scrap and additives in addition to blowing oxygen); and for casting. Coal is the primary energy source in a BF-BOF plant and its by-products at each stage, such as coke oven gas and blast furnace gas, are also used as fuel. In the coal DRI-EF route, energy is consumed as coal to produce sponge iron. Electricity is consumed for steelmaking. In the gas DRI-EF route, thermal energy is consumed for pellet-making and natural gas is consumed as a fuel and reducing agent in the sponge iron kiln. Electricity is consumed in the electric arc furnace for steelmaking. In the scrap-EF route, energy is consumed primarily as electricity for melting and steelmaking. The average primary energy consumption in the plants surveyed was 27.3 Giga Joule/tonne crude steel (GJ/tcs). The Best Available Techniques (BAT) indicate a primary energy consumption of 16.4 GJ/tcs for the BF-BOF route, 19.3 GJ/tcs for the smelt reduction (Corex)-BOF route, 19.0 GJ/tcs for the coalbased DRI-EAF route and 15.9 GJ/tcs for the gas-based DRI-EAF route (see: Table 3).17 Based on the mix of process routes the integrated steel plants have

42




02 POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

adopted, the primary energy consumption associated with the BAT for the plants surveyed was calculated to be 16.6 GJ/tcs. Thus, the actual energy consumption of 27.3 GJ/tcs indicates an energy saving potential of about 65 per cent. However, benchmarking energy consumption in integrated steel plants is very complex, and usually only individual processes (sintering or oxygen steelmaking) are benchmarked. Further, energy consumption depends on the quality of feedstock and fuel. Indian plants use high ash coking and non-coking coal; iron ore mined in India is high in silica and alumina content. These factors partly account for the high consumption of energy. The plant consuming the lowest energy was Ispat Industries Ltd’s Dolvi plant, based on the gas-DRI/BF-BOF route. It consumed 21.9 GJ/tcs, as compared to 16.2 GJ/tcs associated with the BAT for its process mix, thus showing an energy saving potential of 35 per cent (see: Table 4). Jindal Steel and Power Ltd’s (JSPL’s) Table 3: Primary energy consumption associated with the Best Available Techniques in steel production Process

Material Preparation

BF-BOF GJ/tcs Sintering

Smelt Reduction-BOF GJ/tcs

Gas DRI-EAF GJ/tcs

0.8

0.8

12.6

9.5

5.6

5.6

2.1

Pelletizing

0.8

Coking Iron making

Coal DRI-EAF GJ/tcs

1.0

Blast Furnace

11.8

Smelt Reduction

17.0

DRI Steel making

Basic Oxygen Furnace

1.0

1.0

0.4

0.4

Electric Arc Furnace Refining Continuous Casting Total

0.1

0.1

0.1

0.1

16.4

19.3

19.0

15.9

Notes: For EAF, The IISI’s Ecotech plant has been used. For gas DRI, values are from the manufacturer’s specification of 10.4 GJ/MT DRI. The values in the reference have been provided per tonne of finished steel with the assumption that 1.05 MT crude steel yields 1 MT finished steel. These have been converted to per tonne crude steel. For DRI, it is assumed that 0.9 MT DRI and 0.1 MT scrap yield 1 MT crude steel. Source: Ernst Worrell, Lynn Price, Maarten Neelis, Christina Galitsky and Zhou Nan 2008, World Best Practice Energy Intensity Values for Selected Industrial Sectors, LBNL, Berkeley & Green Rating Project 2009, Centre for Science and Environment, New Delhi

Table 4: Plant-level performance Plant

Production (mMT)

Process Route

Specific energy consumption (GJ/tcs)

Specific Deviation Specific CO2 energy from BAT emissions consumption (per cent) MT CO2/tcs associated with BAT (GJ/tcs)

SAIL, Bhilai

5.06

BF-BOF/THF

28.1

16.7

68

2.82

SAIL, Durgapur

1.91

BF-BOF

29.0

16.7

74

2.64

SAIL, Rourkela

2.09

BF-BOF

30.9

16.7

85

3.16

SAIL, Bokaro

4.13

BF-BOF

28.8

16.7

72

3.03

SAIL, Burnpur

0.46

BF-THF

34.0

16.7

104

5.50

RINL, Vishakapatnam

3.13

BF-BOF

27.3

16.7

63

3.18

Tata Steel, Jamshedpur

5.01

BF-BOF

27.8

16.7

66

2.04

JSW, Bellary

3.62

COREX/BF-BOF

28.9

18.0

59

2.50

Essar, Hazira

3.37

Gas HBI-EAF

25.0

15.6

60

1.55

Ispat, Dolvi

2.74

Gas DRI/BF-EAF

21.9

16.2

35

2.45

JSPL, Raigarh

2.16

Coal DRI/BF-EAF

23.4

17.7

32

Tata Spongea

0.39

Coal-DRI

25.0

14.0

79

* 2.10

Note: *Value is unavailable. aAll data is for sponge iron. For Ispat values, which are based on CSE calculations, are based on the plant’s unfinished (pig iron and sponge iron) products as well as finished steel products such as hot rolled and cold rolled coils. Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.




43

The Indian steel industry has very high specific energy consumption, with a overall saving potential of 65 per cent. The performance of blast furnace units indicates a saving potential of nearly 74 per cent. While all the potential may not be realizable in Indian conditions, much capital investment will be required to reduce the energy intensity of the sector

Raigarh plant, based on the coal DRI/BF-EAF route, consumed 23.4 GJ/tcs as compared to the BAT value of 17.7 GJ/tcs for its process mix and had the lowest deviation from the best practice, 32 per cent, of all the plants surveyed. The highest energy consumer was Steel Authority of India Ltd’s (SAIL’s) Burnpur plant, consuming 34.02 GJ/tcs or almost double the energy consumption associated with the BAT: it is a very old unit, with two blast furnaces that began operating in the 1920s, and is also a small plant (about 0.5 mMTpa capacity) that has faced several barriers to modernization, such as finance and trade unionism. A large 10-year project for modernization and expansion of the plant began in 2006. The best performer using the BF-BOF route was the Vishakapatnam plant of Rashtriya Ispat Nigam Ltd (RINL), consuming 27.3 GJ/tcs as compared to 16.7 GJ/tcs associated with the BAT. This plant utilizes the efficient coke dry quenching technology and was the largest plant in India to use 100 per cent continuous casting when it was set up. Tata Steel’s Jamshedpur plant, which consumed 27.8 GJ/tcs, also utilizes continuous casting, recovers energy from at least one blast furnace using a Top Pressure Recovery Turbine and is in the process of converting all its coke oven plants to utilize coke dry quenching. Overall, in terms of deviation from primary energy consumption the performance of the plants based purely on blast furnaces, with an average primary energy consumption of 28.5 GJ/tcs and indicating a saving potential of about 74 per cent, was poor in comparison to the ones based on the mixed routes of direct reduction, smelt reduction and blast furnaces. The latter had an average primary energy consumption of 25.1 GJ, indicating a saving potential of about 47 per cent. The four plants using mixed routes--JSW Steel Limited, Essar Steel Ltd, Ispat and JSPL--are much newer and vintage also plays a role in the low energy consumption. In comparison with the average 27.3 GJ/tcs surveyed plants consumed, the Japanese steel industry had an average energy consumption of 23.3 GJ/tcs (2004).18 The value was 17.8 GJ/tcs in the EU-15 (2002), 20.1 GJ/tcs in the US and 25.6 GJ/tcs in China (2001).19 However, higher scrap recycling rate in the west, over 60 per cent in the US and 50 per cent in the EU compared to the order of 5 per cent in India, partly accounts for lower energy consumption — steel from scrap only requires 40 per cent of the energy of the BF-BOF route.20 The specific energy consumption in the BF-BOF route for the OECD countries was about 20 GJ/tcs (2007).21 Historically, the primary energy consumption for crude steel making has been decreasing in India, from 42 GJ/tcs in 199022 and 36.4 GJ/tcs in 199523 to about 27.3 GJ/tcs in this study. Thus, the steel sector has reduced its energy consumption at about 2.5 per cent annually in the last two decade. This is due to both improvements in existing plants and better efficiencies in new plants.

44




POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

02

2.2 GREENHOUSE GAS EMISSIONS Greenhouse gas emissions data was available for nine of the eleven integrated steel plants,24 accounting for about 76 per cent of the crude steel production in the integrated plants and 48 per cent of total steel production. Average specific emissions was calculated to be about 2.7 MT CO2/tcs. The value ranged from 5.5 MT CO2/tcs in SAIL’s Burnpur plant to 1.55 MT CO2/tcs in Essar’s gas DRI-EF plant at Hazira (see: Table 4). Among the plants using the BF-BOF route, Tata Steel’s Jamshedpur plant had the lowest specific emissions of about 2.0 MT CO2/tcs. ● In 1994-95, the emissions intensity of steel production in India was 3.7 MT CO2/tcs in the integrated steel plants,25 all of which were then based on the BF-BOF route. Current emissions intensity from plants using the BF-BOF route is about 2.8 MT CO2/tcs (See Table 5). ● For coal-based DRI-EAF units, emissions intensity in 1994-95 was 3.37 MT CO2/tcs. This has lowered marginally to about 3.1 MT CO2/tcs at present.26 ● For gas-based DRI-EAF plants, emissions intensity has remained constant at 1.55 MT CO2/tcs27. ● For scrap-EAF units, emissions intensity in 1994-95 was 1.4 MT CO2/tcs, reducing to about 0.5 MT CO2/tcs now28. The International Energy Agency mentions a current average of about 1.7 MT CO2/tcs for the BF-BOF route, about 1.4 MT CO2/tcs for the advanced BF-BOF route, about 0.4 MT CO2/tcs for the scrap-EAF route and about 2.5 MT CO2/tcs using the coal DRI-EAF route.29 This means the BF-BOF process route in India is such that it emits 65 per cent more CO2 than current average global emissions. The coal DRI-EAF route emits about 25 per cent more than the current average global emissons. In conclusion, integrated steel plants in India are more emissions intensive than the global average. This may be attributed to multiple factors such as large production from old integrated steel plants, poor coal quality, high silica and alumina in iron ore, lower utilisation of scrap, lower penetration of modern energy-saving and energy recovery technologies and a large number of small scale plants. Table 5: Specific emissions from steel production in India (2008) Process Route BF-BOF

Specific emissions (MT CO2/tcs) 2.8

Coal DRI-EF

3.1

Gas DRI-EF

1.55

Scrap-EF Average--all India

0.5 2.42

Source: U. Sreenivasamurthy 2008, Domestic Climate Policy for the Steel Sector, India, University of Cambridge & Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

The CO2 emissions intensity of the Indian steel industry is very high compared to the global average. Specific emissions from the BF-BOF route are 65 per cent higher than the global average. Emissions from coal DRI-EAF route are about 25 per cent higher. There is also a wide variation in specific emissions of different plants of the same type, indicating large potential in emissions reduction




45

3 TECHNOLOGY OPTIONS FOR THE SECTOR It is difficult for this sector to realise best practices related to energy consumption. The difficulty is related to fuel and feedstock, such as the non-availability of low ash coking coal (steel grade coking coal in India may have up to 18 per cent ash after beneficiation) and non-coking coal (non-coking coal in India has up to 40 per cent ash) as well as high silica and alumina content in the iron ore: 2-4 per cent in lumps and 4-6 per cent in fines on an average, may even be 15 per cent in some cases. While high ash coking coal results in higher energy consumption in coke oven plants, high alumina and silica content result in the formation of a very viscous slag that severely affects the performance of the blast furnace. Nevertheless, the sector has potential to lower its energy consumption and improve its emissions profile. While comparison with levels achieved in other countries may be misleading because of the multiplicity of process routes and the low rate of scrap recycling in India, comparison with the best available techniques reveals an overall saving potential of 65 per cent in energy consumption. In 2005, the International Energy Agency estimated an average saving potential of 7.3 GJ/MT steel and an emissions reduction potential of 0.61 MT CO2/MT steel for the Indian steel sector.30 Improvements in the blast furnace are expected to contribute most to emissions reduction.31 There is a trend in India and China to use less capital-intensive electric arc furnaces (EAFs) to make steel from pig iron produced in mini blast furnaces.32 The trend is visible in integrated plants, too (such as Ispat and JSPL), which depend on blast furnaces for at least half the primary metal they produce. While EAFs are appropriate to produce steel from scrap and sponge iron, they consume nearly six times as much energy as the basic oxygen furnace, which is more appropriate to process pig iron. Even in 2007,33 India produced 34 per cent of its steel by ingot casting, an energy intensive process obsolete in developed countries. It is expected continuous casting will be adopted as old machinery becomes redundant. The energy saved by adopting continuous casting is estimated to be 1.8 GJ/tcs.34 Globally, scrap contributed 33 per cent35 to steel production, so bypassing the energy-intensive primary metal production process; in India, however, the scrapEAF/EIF route contributed, as of 2008, only 14 per cent to steel production.36 High scrap prices and low availability of scrap in the country are expected to impede more scrap utilization. 3.1 BLAST FURNACE-BASIC OXYGEN FURNACE ROUTE In conventional coke oven plants, water spray is used to cool the coke. There is a concomitant loss of heat as the resultant steam is let out into the atmosphere. The coke may be cooled by an inert gas (coke dry quenching or CDQ), with the heat recovered used to raise steam in a boiler and generate electricity. Energy so saved is an estimated 1.2 GJ/MT pig iron.37 The quality of the coke also improves, and up to 2 per cent coke used can be saved, equivalent to 0.6 GJ/MT coke used.38 CDQ offers additional environmental benefits such as reduced dust emissions. Globally, about 60 CDQ-based coke oven plants were operational in 2004, with the penetration of the technology being 10 per cent in India, compared to 95 per cent in Japan and 90 per cent in Korea.39 About 10.5 mMT of coke was produced in India in 2007-08;40 assuming a recovery of 1.5 GJ of steam per tonne of coke, efficient power generation at 30 per cent efficiency41 and an emissions factor of 0.85 kg CO2/kWh, if CDQ is adopted, CO2 emissions avoided annually could be 1.1 mMT. At least three CDQ projects of Indian companies, with a total abatement claim of 2.1 mMT of CO2 over ten years, are at various stages of the Clean Development Mechanism process.42

46




02 POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

A Top Pressure Recovery Turbine (TPT) is a power generation system which converts the physical energy of the high-pressure blast furnace top gas into electricity. About 40-60 kWh/MT of pig iron43 may be generated, representing over 30 per cent of the total electricity needed in a blast furnace. About 36.8 mMT of pig iron was produced in the country in 2008.44 Assuming electricity generation of 50 kWh/MT of pig iron and the standard emissions factor from electricity for India, CO2 emissions avoided annually by adopting TPT is an estimated 1.6 mMT. At least four TPT projects of Indian companies with a total abatement claim of 1.9 mMT of CO2 over 10 years are at various stages of the Clean Development Mechanism process.45 Pulverized Coal Injection (PCI) into the blast furnace, to partly replace coke, results in saving energy and emissions during coke-making. In 2005, the average coke injection rate in India was about 115 kg/tonne of hot metal (thm), compared to a global average of 125 kg/thm, 160 kg/thm in South Korea and a maximum practical rate of 180 kg/thm.46 Energy saved is expected to be about 2.5 GJ/MT of coal injected,47 and the additional saving in India by increasing coal injection from 115 kg/thm to 180 kg/thm will be about 0.2 mMT of coke. Emissions of about 0.6 mMT of CO2 could be avoided. Waste heat recovery from various sources represents the greatest potential to save energy in this sector (see Table 6). There is huge potential for waste heat recovery from sinter plants, using technologies such as Emission Optimized Sintering; coke oven plants; and blast furnace stoves.48 Sensible heat recovery is the relevant indicator for low temperature steam generation, while exergy (a measure of the actual potential of a system to do work) is the relevant indicator if power production is the objective. Table 6: Waste heat recovery options in the steel sector Source of heat

Sensible heat (GJ/tcs)

Exergy (GJ/tcs)

Hot coke

0.25

0.15

Coke Oven Gas

0.25

0.13

Coke making

Sinter plant Cooler Gas

1.02

0.29

Exhaust Gas

0.24

0.13

Hot stove

0.86

0.35

Slag

0.41

0.27

Blast furnace

Basic Oxygen Furnace BOF gas

0.20

0.13

BOF slag

0.02

0.01

1.46

1.11

Casting Cast steel slab

Note: The values have been provided per tonne of rolled steel and have been converted to crude steel equivalent. Source: Anon 2007, Tracking Industrial Energy Efficiency and CO2 Emissions, IEA, Paris

Introduction of three mature technologies–CDQ, TPT and PCI–and waste heat recovery from various sources can significantly reduce energy intensity in BF-BOF plants. However, poor coal quality and high silica & alumina content in the iron ore will be an impediment in realising the full energy saving potential


47

There is limited potential in reducing energy intensity in coal based DRI production plants. Electricity generation from waste heat and char provide the bulk of the energy savings. Implementation of these two technologies is also essential to reduce air pollution from these plants and should be mandated as part of environmental regulations

Coal-DRI Kilns: For the coal-DRI route, the low quality of Indian coal does not allow for much reduction in coal consumption. The major energy-saving potential in DRI kilns lies in electricity generation from waste heat. As a recent CDM project49 for a small sponge iron producer in India informs, power generation potential is an estimated 400 kWh/MT sponge iron, while the potential for GHG mitigation is an estimated 0.45 MT CO2/MT sponge iron. In addition, about 100 kWh of power could be produced by the utilization of char, produced as a by-product in coal DRI kilns, in Atmospheric Fluidized Bed Combustion Boiler. If all coal DRI units in India had adopted waste heat recovery and also utilized char to produce power, the steel sector’s carbon footprint could have reduced by about 8 mMT in 2007-08. At least one company, JSPL, plans to set up a coal gasification-based DRI plant but the performance of the technology with Indian coal is questionable, for the experience of coal gasification in India has been mixed. 3.2 ELECTRIC ARC FURNACES There is great potential to reduce power consumption in electric arc furnaces (EAFs). Usually, scrap or sponge iron from gas-based kilns are the feedstock the world over; in India, though, much of the feedstock is from coal-based DRI, which has a high level of impurities such as iron oxide. The potential of individual technologies to reduce power consumption cannot be accurately assessed, for the increase of DRI in the feedstock by one percentage point increases power consumption by an estimated 0.8 kWh.50 Some saving is possible by charging the DRI into the furnace while it is still hot, but in India the kiln and the furnace are usually not at the same location. A combination of technologies such as Ultra High Power transformers, doorjet burners with supersonic oxygen lances for enhanced oxygen injection and utilisation of waste heat for scrap pre-heating can substantially reduce electricity consumption51 Expensive technologies such as oxyfuel burners, various types of scrap pre-heating using waste heat and calorific value of flue gases (such as “post combustion, CONSTEEL, and FUCHS) and insulation of furnaces also promise energy saving.52

4 PRODUCTION PROJECTION India has a very low per capita steel consumption, but the industry is growing. As of 2006, 116 MoUs were signed with various state governments promising a total capacity addition of 150 mMT.53 ● Since liberalization of the Indian economy in 1991-92, production of crude steel has grown at a Compound Annual Growth Rate (CAGR) of 7.7 per cent. At this rate, the total crude steel production in 2030-31 is expected to be around 300 mMT (see: Figure 6). ● Steel production through the investment-intensive BOF route has grown at a CAGR of about 5.5 per cent since liberalization and production in 2030-31 is expected to be about 90 mMT (see: Figure 7). ● The gas DRI route had a working capacity of 6 mMT in 2009,54 this figure has remained constant over the last 15 years. Due to the low availability of natural gas in India, no growth is expected in this segment and production is likely to remain at this level even in 2030-31 (other than production through the coal gasification route, if that becomes viable). ● The scrap-EF route contributed 14 per cent to total crude steel production in India. In a “high growth-low steel base” economy such as India’s, scrap

48




123

132

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

150 100

302

280

260

241

224

208

179

166

114

143

106

73

78

98

67

91

63

84

58

200

154

250

193

300

2008-09

2030-31

2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

2023-24

0

2022-23

50 2021-22

Production (million MT/annum)

350

POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

02

Figure 6: Projected crude steel production

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

58.3

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

60.0 50.0 40.0 30.0

89.6

84.9

76.2

72.2

68.5

55.2

2009-10

70.0

64.9

52.3

37.9

49.6

35.9

47.0

32.2

34.0

44.5

30.5

42.2

28.9

40.0

27.4

80.0

61.5

90.0

2008-09

Production (million MT/annum)

100.0

80.4

Figure 7: Projected crude steel production via BOF

20.0 10.0 2030-31

2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

2023-24

0.0

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

available is expected to be low. Assuming the average life span of a steel object is 20 years, if all the steel produced in India were recycled, about 60 mMT of scrap would be available in 2030-31. About 10 per cent scrap is usually added during steel production from primary metal, and the same will consume about 27 mMT of the scrap, leaving only about 33 mMT of scrap for total steel production of 302 mMT in 2030-31. Environmental issues associated with ship-breaking, presently an important source of scrap for industry here, will ensure this activity will not contribute greatly to scrap being available. The share of scrap-EF to crude steel production is expected to come down to 10 per cent in 2030-31. Production will grow from about 8 mMT in 2008-09 to about 30 mMT in 2030-31 (See: Figure 8). ● Capacity expansion in the coal DRI-EF route is relatively less investmentintensive. Plants are easy to set up, for scarce coking coal and scrap are not required. This segment has been growing fast over the past few years, primarily as a substitute to the scrap-EF route. The balance of crude steel production is expected to come from this route, indicating an average growth rate of 11.3 per cent: production grows to about 176 mMT in 2030-31 (see: Figure 9). The Basic Oxygen Furnace route is expected to contribute only 30 per cent to production in 2030-31, down from the current 49 per cent, with coal DRI-EF contributing the lion’s share, up from 26 per cent at present to 58 per cent (see: Figure 10).




49

30.2

26.8

25.2

23.7

22.4

21.0

19.8

17.6

16.5

15.6

14.6

13.8

12.2

11.5

10.8

10.2

9.6

8.5

10.0

8.0

15.0

9.0

20.0

13.0

25.0

18.7

30.0

2030-31

2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

2023-24

2022-23

2021-22

2020-21

2019-20

2018-19

2017-18

2016-17

2015-16

2014-15

2013-14

2012-13

2011-12

2010-11

0.0

2009-10

5.0 2008-09

Production (million MT/annum)

35.0

28.5

Figure 8: Projected crude steel production via scrap-EF

Source: Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

35.7

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

40.0

147.0

134.0

111.0

91.6

75.2

31.7

2009-10

60.0

68.0

28.1

49.7

21.9

24.9

44.6

19.1

39.9

16.6

80.0

55.3

100.0

61.3

120.0

83.0

140.0

100.9

160.0

122.0

180.0

2008-09

176.5

20.0 2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

2023-24

2022-23

2021-22

2020-21

2019-20

2018-19

0.0

2030-31

Production (million MT/annum)

200.0

161.1

Figure 9: Projected crude steel production via coal DRI-EF

Source: Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

Figure 10: Projected process routes in the Indian steel Industry (2030-31)

The process route for steel production in India will decisively shift towards coalbased DRI-EF route largely because of the non-availability of coking coal and less capitalintensive nature of the coal DRI-EF route. By 2030-31, close to 60 per cent of the steel will be produced through DRI route. Scrap-EF route, though less emissions intensive, will only contribute 10 per cent to the total steel production because of the lower availability of scrap 50




Gas DRI-EF 2%

Scrap-EF 10%

BOF 30%

Coal DRI-EF 58%

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

02

5 FUTURE EMISSIONS SCENARIO 5.1 BUSINESS AS USUAL SCENARIO 5.1.1 Technology Profile BF-BOF Route: In 1994, the estimated saving potential in integrated plants in the US, which then consumed 26 GJ/tcs, was 7.4 GJ/tcs, with a commercially feasible reduction of 4.3 GJ/tcs using various technologies.55 We assume the same technologies to be applicable to India, where energy consumption is 28.5 GJ/tcs, in BAU. We also consider TPT and CDQ to be commercially viable technologies, since the steel industry has begun adopting them. In addition, variable speed drives are now fairly common, so are considered BAU technologies as well. Due to the unavailability of natural gas in India, natural gas injection is considered unviable. Thin slab casting, while applicable to a large number of plants, is not considered for it is a substitute to continuous casting and the real saving is from integrating casting and rolling functions, the latter being an operation performed on crude steel. Based on the applicability of the technologies, we calculate an average saving potential of about 5.04 GJ/tcs (See: Table 7). In BAU, all new BF-BOF plants are assumed to be using these technologies, while all old BF-BOF plants adopt them through retrofits by 2020-21. The specific energy consumption in the BOF route reduces from the present 28.5 GJ/tcs to 23.5 GJ/tcs in 2030-31. Since all emissions are from energy use, we assume the same rate of reduction in emissions, which fall from the present 2.8 MT CO2/tcs to about 2.3 MT CO2/tcs in 2030-31. Gas DRI kilns: For the gas DRI-EF route, no change in technology profile is expected in either BAU or the low carbon scenario. Specific emissions will remain constant at the present 1.55 MT CO2/tcs. Table 7: Steel sector technologies considered in Business As Usual scenario Technology

Average saving (GJ/tcs)

Applicability

Adopt continuous casting

0.97

34 per cent

PCI

0.16

From present 115kg/thm to 180kg.thm

Increase bed depth

0.02

100 per cent

Preventative maintenance

0.49

100 per cent

Energy monitoring and management

0.14

100 per cent

Programmed coke heating

0.05

100 per cent

Controlling oxygen levels and VSDs on combustion air fans

0.29

100 per cent

Automated monitoring

0.76

100 per cent

Reduction of sinter plant air leakages

0.10

75 per cent

Efficient ladle pre heating

0.02

100 per cent

Sinter plant process control

0.01

100 per cent

BF gas recovery

0.10

100 per cent

Sinter plant heat recovery

0.12

75 per cent

TPT

0.55

100 per cent

Variable speed drives on Flue gas controls, pumps and fans

0.06

100 per cent

Variable speed drives (VSDs) on ventilation drives

0.01

100 per cent

Coke dry quenching

1.20

100 per cent

Total

5.04

Source: Ernst Worrell, Nathan Martin, and Lynn Price 1999, Energy Efficiency and Carbon Dioxide Emissions Reduction Opportunities in the U.S. Iron and Steel Sector, LBNL & Green Rating Project, 2009, Centre For Science and Environment, New Delhi.




51

Scrap-EF route: Due to small plant size and low expected growth in the scrap-EF segment, no change is expected, under either scenario, from the present value of about 0.5 MT CO2/tcs. Coal DRI-EF: For the coal DRI-EF route we assume all new plants are equipped with boilers for waste heat recovery from the DRI kiln (producing about 450 kWh/MT DRI) and Atmospheric Fluidized Bed Combustion (AFBC) boilers to produce power from waste char (about 100 kWh/MT DRI). Since char disposal is a huge environmental problem in the Indian sponge iron industry, the environmental clearance process will require new units to install AFBC boilers. For all old coal DRI plants, we assume AFBC boilers are adopted between 2012 and 2017 to satisfy pollution control norms. Adoption of waste heat recovery boilers in all old plants by 2020 is also expected. For the EAF, we assume a mix of big and small plants, which together consume, on an average, 800 kWh/tcs, down from the present figure of nearly 1000 kWh/tcs. The projected specific emissions in 2030-31 is expected to be 2.6 MT CO2/tcs for steel produced from old DRI kilns and 2.45 MT CO2/tcs for steel produced from new kilns. 5.1.2 Emissions scenario In BAU, the average emissions intensity of steel produced in India decreases from 2.4 MT CO2/tcs in 2008-09 to about 2.2 MT CO2/tcs in 2030-31 (see: Figure 11). It is important to note, here, that despite introduction of all technologies assumed in BAU, emissions intensity reduces only by about 8 per cent and there is no improvement in such intensity after 2020. The primary reason for this is the

Figure 11: Specific emissions in Business As Usual scenario 3.0

Specific emissions (MTCO2-e/tcs)

2.5

2.4 2.2

2.2

2020-21

2030-31

2.0 1.5 1.0 0.5 0.0

2008-09

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

By 2030, in the Business As Usual scenario, the emissions intensity of steel production reduces only by about 8 per cent. There is no improvement after 2020. The primary reason is lower reduction potential in the coal DRI-EF route, which will dominate steel production in the future

52




POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

02

potential to reduce, in the coal DRI-EF route which will dominate steel production in the future, is limited. In BAU, total emissions from the steel sector grow five-fold from 142 mMT of CO2 in 2008-09 to 668 mMT in 2030-31 (see: Figure 12).

221

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

400 300 200

530

491

454

421

389

333

309

208

288

185

196

269

175

251

154

165

236

142

500

360

600

2008-09

Total emissions (million MT/annum)

618

700

573

800

668

Figure 12: Total annual emissions in Business As Usual scenario

2030-31

2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

2023-24

2022-23

0

2021-22

100

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

In the Business As Usual scenario, total emissions will grow at a Compound Annual Growth Rate of 6.7 per cent till 2020. Between 2020-2030, emissions will grow at a much faster rate of 8 per cent 5.2 LOW CARBON SCENARIO 5.2.1 Technology Profile BF-BOF route: All new BF-BOF plants adopt best available techniques in addition to the ones covered in BAU. Some of these technologies are: cogeneration systems, installing recuperator hot blast furnaces, insulation of furnaces and coal moisture control (see: Table 8).56 Hence, all new plants are assumed to operate at about 21.1 GJ/tcs. All old plants achieve this value by 2020-21 through retrofits. Assuming the same rate of reduction for emissions as for energy, the BF-BOF plants will have specific emissions of about 2.1 MT CO2/tcs in the Low Carbon (LC) scenario, compared to 2.3 MT/tcs in BAU. Table 8: Additional technologies considered for BF-BOF in the Low Carbon scenario Technology

Energy Saving (GJ/tcs)

Cost of capacity (1994 USD/tcs)

Cogeneration

1.18

14.52

Recuperator hot blast stove

0.07

1.25

BOF gas heat recovery

0.92

22

Coal moisture control

0.09

14.69

Total

2.26

52.5

Source: Ernst Worrell, Nathan Martin, and Lynn Price 1999, Energy Efficiency and Carbon Dioxide Emissions Reduction Opportunities in the U.S. Iron and Steel Sector, Lawrence Berkeley National Laboratory, Berkeley & Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

Scrap-EF route: As in BAU, no change is expected in LC owing to the small-scale nature of the segment and low expected growth.




53

Gas DRI-EF route: As in BAU, no change is expected. Coal DRI-EF route: For coal-based sponge iron plants, no further improvements beyond BAU technologies are expected in the kiln. The small-scale nature of the industry, along with coal quality in India, makes kiln technology improvement hard. We, however, assume all new electric furnaces operate at an electricity consumption of 500 kWh/tcs. No change in fuel consumption in EAFs is assumed. A reduction of over 300 kWh/tcs in electric steelmaking will require adopting new technologies such as better process control, flue gas monitoring, Ultra High Power (UHP) transformers, bottom stirring/inert gas injection for stirring, use of foamy slag to reduce radiation heat losses and oxyfuel burners (see: Table 9).57 Table 9: Electric Arc Furnace Technologies in Low Carbon scenario Technology

Power saving (kWh/tcs)

Cost of capacity (1994 USD/tcs)

Improved process control

31

1

Flue gas monitoring and control

14

2

Ultra high power transformers

17

2.75

Bottom stirring/stirring gas injection

19

0.6

Foamy slag practice

19

10

Oxy-fuel burners/lancing

39

4.8

Eccentric bottom tapping

14

3.2

Scrap pre-heating by post combustion of flue gases- FUCHS Shaft Furnace

119

6

Total

272

36.3

Source: Ernst Worrell, Nathan Martin, and Lynn Price 1999, Energy Efficiency and Carbon Dioxide Emissions Reduction Opportunities in the U.S. Iron and Steel Sector, Lawrence Berkeley National Laboratory, Berkeley & Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

Technology options for reducing emissions intensity over and above the Business As Usual in BF-BOF route is largely about recovering low grade wasteheat, better insulation and improvements in cogeneration system. There are no major emissions reduction options in Gas or Coal DRI plants. However, electricity consumption in electric furnaces can be reduced by adopting new technologies.

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02 POWER STEEL ALUMINIUM CEMENT FERTILIZER PAPER AND PULP

5.2.2 Emission scenario In a Low Carbon scenario, the average emissions intensity of steel produced in India decreases from 2.4 MT CO2/tcs in 2008-09 to about 2.0 MT/tcs in 2030-31, compared to 2.2 MT/tcs in BAU (see: Figure 13). Figure 13: Specific emissions in Low Carbon scenario 3.0 2.4

Specific emissions (MTCO2-e/tcs)

2.5

2.0

2.0

2.0 1.5

The emissions intensity of steel production stagnates after 2020 even in the Low Carbon scenario. The technology options remain limited

1.0 0.5 0.0 2008-09

2020-21

2030-31

Source: Green Rating Project, 2009, Centre for Science and Environment, New Delhi.

In LC, total emissions from the steel sector grow from 142 mMT of CO2 in 2008-09 to 608 mMT in 2030-31, compared to 668 mMT in BAU (see: Figure 14).

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

300 200

608

564

522

449

416

357

307

209

284

187

197

266

170

178

250

162

235

155

221

142

2009-10

400

331

500

385

600

484

700

2008-09

2030-31

2029-30

2028-29

2027-28

2026-27

2025-26

2024-25

0

2023-24

100 2022-23

Total emissions (million MT/annum)

Figure 14: Total annual emissions from steel sector in the Low Carbon scenario

Source: Green Rating Project 2009, Centre for Science and Environment, New Delhi.

The total annual emissions of the steel sector increases four-fold by 2030 in the Low Carbon scenario. Emissions will grow at 6 per cent annually till 2020. After 2020, emissions will grow at a much higher rate of 7.9 per cent. Essentially, the steel industry will find it difficult to reduce emissions after 2020


55

5.2.3 The cost of Low Carbon scenario The cumulative emissions avoided by opting for LC over BAU is about 558 mMT of CO2 by 2030-31. Due to the capital-intensive nature and low capacity turnover of the steel sector, the cost is hard to estimate in current terms. The cost of emissions avoidance in the BF-BOF route (see: Table 8) is about US $52.5/ tcs of capacity at 1994 prices — about US $10.3 billion at 2010 prices, assuming 5 per cent inflation — for the installed capacity of 90 mMT in 2030-31. For improvements in EAF, the cost of emissions avoidance (see: Table 9) is about US $36.3/tcs of capacity, or about US $6.4 billion (1994) — US $13.9 billion (2010), assuming 5 per cent inflation. The total additional cost of LC over BAU for the steel sector is about US $24.3 billion at 2010 prices. This yields a cost of about US $43/MT emissions avoided for the expected cumulative emissions avoidance of 558 mMT of CO2 by 2030-31.

56