1
Preliminary Analysis of Sector-Based Proposal: Case Study for India
Atul KumarTERI, India
Dialogue on Future International Actions to Address Global Climate Change
Lima, Peru13th October, 2005
Presentation outline
Energy and GHG Emissions Overview of IndiaOverview of the Indian Cement, Iron and Steel Industry, and Power SectorFramework of AnalysisAnalysis and Preliminary Model Results
2
India’s energy overview
0
50
100
150
200
250
300
350
1970/71 1980/81 1990/91 2001/02
Mto
e
Coal Lignite Crude Oil Natural GasHydro Nuclear Wind Net Imports
•TPES (2002) 538 mtoe (India) World (10376); China (1245), USA (2290)
•TPES/cap: India 0.51 (toe), World (1.67), China (0.97), USA (7.97)
•Primary commercial energy supply - increase ~ 5 times
• Coal ~60% of commercial energy
•Natural gas use increasing
•Energy imports increasing rapidly
Sectoral Energy Consumption
42%
20%
13%
9%
6%
10%
Industries Transport ResidentioalAgriculture Commercial Non-energy uses
• Industry largest consumer followed by transport
Source: TEDDY, 2003-04
51%
22%
10%
4%
3%
10%
Industries Transport ResidentioalAgriculture Commercial Non-energy uses
2001-021990-91
3
Relative CO2 emissions from Energy Sector Activities
Source: NATCOM India, 2004
CO2 emission (2002)India 1017 (million tonnes), World (24102), China (3307)USA (5652)
CO2 emissions/capita (2002):India 0.97 (tonnes), World (3.89), China (2.57), USA (19.65)Source: (IEA, Statistics, CO2emissions from Fuel Combustion 197-2002, 2004)
Share of CO2 emissions from LPS (1995)Fossil power (94): 47%Steel (11): 6 (%)Cement (85): 9%(Source: Garg and Shukla, 2004)
52%
22%
12%6% 3% 5%
Energy and transformation industries IndustryTransport ResidentialCommercial Others
1994
GHG mitigation potential in key sector till 2012
Source: CDM Implementation in India, The National Strategy Study, 2005
4
Cement Sector Overview
World cement production (2000)
India is the world second largest cement producing country after ChinaPer capita cement consumption
India 110 kg, World average 273 kg, Japan 540 kg, south Korea 1090 kg, Taiwan 745 kg, Thailand 300 kg
Cement production Country Amount (million tonnes) Percentage
China 586.20 36% India 104.31 6% USA 87.85 5% Japan 85.95 5% Korea 52.20 3% Other countries 728.54 45% Total 1645.05 100%
Source: Basic Data – 2003, India Cement Industry
5
Indian cement industry
29 32 36 39 4249
54 55 56 58 61 62 6773
8290
100106109
117
134138
21 23 25 29 31 34 37 41 42 45 49 51 53 58 6269
75 7992 96 98
110
0
20
40
60
80
100
120
140
1980 1985 1990 1995 2000 2005
Year
mill
ion
tonn
es
Capacity Production
•Installed capacity is 149 million tonnes (138 mt large plants)
•95% production from large plants (0.2 MTPA and above)
Energy consumption
•Heat – 665-800 kcal/kg clinker (1300-1600 in 1950-60’s)
•Power – 68-95 kWh/t cement (115-130 in 1950-60’s)
•World best: 640kcal/kg clinker, 66kwh/tonne cement
Source: Basic Data – 2003, India Cement Industry
Trend in Variety Wise Cement Production
•Share of blended cements increasing ~57%
•Policy for utilization of flyash
•Blending reduces clinker requirement (OPC: 95%, PPC: 80%, PSC: 65%)
69% 71%63%
52%
37%
25%19%19%
11%12%10%12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1996 1998 2000 2002
Year
Perc
enta
ge
Ordinary Portland Cement Portland Pozzolana Cement Portland Slag Cement
Source:Basic Data – 2003, India Cement Industry
6
Process profile of Indian cement industry
Process Year Number of kilns
Capacity (000’ tonnes per day)
% of total
Wet process 95 40 41.1 Semi-dry process 9 6 5.7 Dry process
1983
50 51 53.2 Wet process 32 13 3.7 Semi-dry process 9 6 1.6 Dry process
2003
125 349 94.7
Source: Cement Manufacturers’ Association, India
Cement Manufacturing Process
CLINKER
Kiln
Jaw
Double Rotor
Mining
Crusher
Ball-Mill
VRM
Raw Mill
4 stage + PC
5 stage + PC / PH
6 stage + PH + TSP + Pyro C
Coal Mill BM/VRM
BM
VRMCement
Mill
Ball-Mill
VRM
CEMENT
PC : Precalcinator, PH : Preheater, TSP : Twin stream Precalcinator,Pyro C : Pyrtostep cooler, VRM : Vertical Roller Mill, BM : Ball Mill
7
Specific energy consumption in different types of cement plant
PC : Precalcinator, PH : Preheater, TSP : Twin stream Precalcinator, Pyro C : Pyrtostep cooler
Process/Plant Heat consumption (kcal/kg clinker)
Power consumption (kWh/kg cement)
Investment cost (US$/tonne)
Wet 1450 123 - Semi-dry 950 117 - Dry – 4 stage PH/PC 850 110 78 Dry – 5 stage PH/PC 720 80 83 Dry – 6 stage PH,TPS, Pyro C 665 68 84
Iron and Steel Sector Overview
8
Iron Steel Production RouteDirect Reduction Route
Iron ore Fuel
Direct reduction shaft
Sponge iron
Secondary Steel Route
Scrap
Electric arc furnace
Steel
C-electrode
Cold rolling
Finishing
Various steel products
Crude-steel
Casting (ingot/ continuous)
Hot rolling (profile, strip, wire)
Blast furnace
Primary Steel Route
Iron ore
Coal Limestone
Preparation Coke oven
Pig iron
Basic oxygen furnace
Open hearth furnace
Oxygen
Overview of Indian Iron & steel Industry
• Production of finished steel 36.91 million tonnes (2003-04) increased from 15.2 in 1993-94 (growth rate 9%)
• 41% of finished steel production in integrated plants (7 major plants)
• 59% of production is secondary steel
• 55% of crude steel production in BOF, 37% in EAF and 6.9% in OHF
9
G Cal / tcs9.29
8.99 8.98.8 8.7 8.68
8.398.28
8.097.96 7.9
7.747.59 7.54
7.28
7
7.5
8
8.5
9
9.5
10
1990
-91
1991
-92
1992
-93
1993
-94
1994
-95
1995
-96
1996
-97
1997
-98
1998
-99
1999
-00
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
Specific Energy Consumption in Integrated Steel Plants
Source: Steel Authority of India Ltd.
Iron & Steel – GHG Mitigation Options
Use of:• Coal moisture control process (CMCP) in coke ovens
• Heat recovery from sintering and sinter cooling
• Pulverised coal injection (PCI) in blast furnace
• Coke dry quenching technology
• Oxy-fuel burners in Electric Arc Furnace (EAF)
• Scrap pre-heating (Consteel and FUCHS processes) for EAF
• Corex process for Iron smelting
• Direct Reduction (do not require coking coal)
10
Power Sector Overview
Electricity Sector 2003-04
183Nuclear
75 30 Hydro
2011Diesel & Wind
73 15 Gas
447 74Coal
Generation (TWh) Installed Capacity (GW)
Source: General Review, Central Electricity Authority, India
11
Growth of Installed Capacity & Gross Power Generation
0
20
40
60
80
100
120
1945 1955 1965 1975 1985 1995 2005
Year
Capa
city
(GW
)
0
100
200
300
400
500
600
Gen
erat
ion
(TW
h)
Capacity Generation
Source: General Review, Central Electricity Authority, India
•Installed capacity 1950: 1.7GW 2004: 112.7 GW
•Generation 1950: 5.1 TWh2004: 565 TWh
Technology Characterization of Thermal Power PlantsDescription
Start year
Investment cost
(million US$/GW)Efficiency
(%) Coal-based plants
Existing coal fired plant 2000 - 29 New sub critical coal plant 2005 877 32 CFBC 2005 1013 39 IGCC 2015 1170 46 Super critical coal plant 2005 945 38 Ultra Super critical coal plant 2015 1134 44 Lignite power plant 2000 887 29 Gas-based plants
Existing open cycle 2000 - 28 Existing combined cycle 2000 - 44 New open cycle 2005 354 39 New combined cycle 2005 399 54
12
Investment cost of Hydro, Nuclear, Solar and Wind Power Plants
Description
Start year
Investment cost (million US$/GW)
Large hydro power plant 2000 887
Small hydro power plant 2000 1996
Nuclear power plant 2000 1331
Solar Photovoltaic power 2000 4437
Wind turbines 2000 843
Framework of Analysis
13
Broad Assumptions
Time-Frame of Analysis: 2000-2030
Assumptions on growth rates of Population & Gross Domestic Product(“Case A” & “Case B”)
Discount Rate :10%
Model Structure
14
Model Assumptions
High GDPLow GDP GDP
Medium Variant (UNPP)High Variant (UNPP)Population
Case - B Case - A
Population projection• Population increases from 1017 million (2000) to 1642 million (case A) & 1416 million (Case B) (2030)
1000
1100
1200
1300
1400
1500
1600
1700
2000 2005 2010 2015 2020 2025 2030 2035
Year
mill
lion
Case A Case B
Source: UNPP
15
Gross Domestic Product (GDP)
0
500
1000
1500
2000
2500
3000
1995
2000
2005
2010
2015
2020
2025
2030
2035
Year
billi
on U
S$
CASE-A CASE-B
• GDP for India in 2000 was US$ 266 billion
• Expected growth 8% in case B and 6.7% in case A
Domestic availability coal
Fuels 2000 2035
Coking coal (million tonnes) 27 50
Non-coking coal (million tonnes) 299 550
Lignite (million tonnes) 25 50
16
Natural gas availability (MMSCMD)
2005 2010 2015 2020 2025 Domestic availability 84 123 125 125 125 LNG import 25 65 95 125 135 Transnational Pipelines Iran-Pakistan-India 0 30 90 90 90 Myanmar-India 0 0 30 30 30 Total imports 25 95 215 245 255 Total 109 218 340 370 380 Source: TERI estimates
Installed capacity of nuclear and hydro power plants under reference and new policy scenarios
Installed capacity (GW) Scenario 2000 2010 2020 2030
Reference 2.80 6.78 6.78 6.78 Nuclear New Policy 2.80 12.80 32.40 69.80
Reference 24.9 35.0 35.0 35.0 Hydro New Policy 24.9 60.0 108.0 150.0
Source: Planning commissions, Government of India
17
Fuel price scenarios
Constant prices
Price trajectory
Fuel prices (Constant price)PriceFuel
Unit Value
Import US $/tonne 60
Non –coking coal Domestic US $/tonne 35
Import US $/tonne 85 Coking coal
Domestic US $/tonne 59
Lignite Domestic US $/tonne 25
Import US $/bbl 62 Crude oil
Domestic US $/bbl 60
Domestic natural gas U S$/mmbtu 3.21
Import of natural gas by pipelines US$/mmbtu 3.515
LNG import at terminals US$/mmbtu 4.10
18
Fuel prices (Price trajectory)
Year OilUS $ per barrel
Natural Gas (wellhead price)(US $ per thousand cubic feet)
Coal US$ per tonne
2000 29.20 3.89 17.79 2005 33.99 5.30 18.61 2010 25.00 3.64 17.30 2015 26.75 4.16 16.89 2020 28.50 4.53 17.25 2025 30.31 4.79 18.26
Source: CCAP
Demand projections under case A & B
31 31 63 76 128 175248
360
107 107204 245
405551
833
1211
0
200
400
600
800
1000
1200
1400
Case A Case B Case A Case B Case A Case B Case A Case B
2000 2010 2020 2030
Year
mill
ion
tonn
es
Steel Cement
Growth rate are 7.1% and 8.5%
Per capita consumption in 2030
Cement: 588 kg and 737 kgWorld average (2003) 273 kg, Japan 540 kg, Taiwan 745 kg
Steel: 175kg and 219 kgWorld average (2003) 149 kg, China 178 kg, Malaysia 251 kg, South Korea 955 kg
Source: Steel Statistical year Book 2004
19
Analysis and Preliminary Model Results
Energy requirement for steel & cement industry under various cases
18 1828 33
5472
100
143
8 8 13 15 25 3349
71
020406080
100120140160
Case A Case B Case A Case B Case A Case B Case A Case B
2000 2010 2020 2030
Year
mto
e
Steel Cement
20
CO2 emissions from steel and cement industry under case A & B
0
100
200
300
400500
600
700
800
900
Year
mill
ion
tonn
es
Iron and Steel 68 68 130 158 262 362 508 744
Cement 82 82 141 168 275 372 553 801
Case A Case B Case A Case B Case A Case B Case A Case B
2000 2010 2020 2030
Steel: Growth rate 8.3% (11 times)
Cement : Growth rate 7.9% (10 times)
CO2 emissions intensity of cement production
0.76
0.690.67
0.66
0.64
0.66
0.68
0.70
0.72
0.74
0.76
0.78
2000 2005 2010 2015 2020 2025 2030 2035
Year
kg/k
g of
cem
ent
13% reduction in emissions intensity
21
CO2 emissions intensity of steel production
2.16
2.08
2.06 2.06
2.04
2.06
2.08
2.10
2.12
2.14
2.16
2000 2005 2010 2015 2020 2025 2030 2035
Year
kg/k
g of
tcs
5% reduction in emissions intensity
CO2 emissions from power utility case B
0
1000
2000
3000
year
mill
ion
tonn
es
New Policy 384 435 568 1268
Reference 384 521 890 2027
Price trajectory (ref) 384 650 1371 2527
2000 2010 2020 2030
22
CO2 emissions intensity of power sector (case B)
0.76
0.630.56
0.73
0.76
0.52
0.36
0.45
0.76 0.78
0.870.90
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1995 2000 2005 2010 2015 2020 2025 2030 2035
Year
kg/k
Wh
Reference New Policy Price trajectory (ref)