November 13, 2007 (Business Standard) – With crude oil prices at historical highs coupled with rising costs of coal, domestic cement companies are looking at alternate sources of energy for their upcoming captive power plants (CCP).
Since cement manufacturing is a highly energy intensive process and dependence on captive power is fast rising, analysts believe such initiatives will help cap the increasing input costs.
ACC, the country’s largest cement maker, has outlined plans for biodiesel production through a drive for jatropha plantations. “We will plant 5 million jatropha saplings by 2009 in a phased manner, in and around our cement plants,” said Ramesh Kumar Suri, head, Alternate Fuel Resources (AFR) business of ACC.
On an average, for every million jatropha trees from the fourth year onwards, the plantation can supply biomass fuel equivalent to 5000 tonnes of coal. ACC which has earmarked a capital expenditure of Rs 7 crore for the initiative and expects to plant 1.7 million jatropha saplings by December.
“The jatropha fruit as a whole and the jatropha biomass is fired into cement kilns to replace fossil fuel. The maintenance cost is minimal and returns are favourable as the biomass and the fruit will be available for the full 36-year life of a cement plant,” added Suri.
The entire industry, whose cement making capacity stood at around 167 million tonnes in March, 2007, consumed about 29 million tonnes of coal to produce around 155 million tonnes in 2006-07.
The overall coal consumption is expected to double by the end of current five year plan to 58 million tonnes.
North based JK Cement is in the process of using the heat from its kilns in Rajasthan to generate 13.2 MW of electricity for its cement plants. The overall cement manufacturing capacity of the company is currently 4.5 million tonnes per annum.
A K Saraogi, chief financial officer, JK Cement, said, “We are investing Rs 110 crore on this technology at our Rajasthan plants. The process will involve transformation of hot kiln gases into steam and then to power.” The project will be commissioned by March next year. “The advantage of this process will be that our power cost will come substantially down to 50 paise per unit as against Rs 4.50 per unit that we get from the state grid.”
Expensive power from state grids has seen use of captive power rising every year. In 2006-07, the industry produced 43 per cent of entire cement from its captive power facilities, which a decade ago stood below 20 per cent. According to the estimates of the working group on cement, for the eleventh five year plan (2007-12), around 2000 MW of additional power will be required to meet the needs of upcoming cement capacities. “For minimising dependence on coal, it is necessary to use alternate fuels,” the report said.
Ultratech Cement, the country’s second largest cement maker, is believed to be undergoing trials for using tyre chips for its energy requirement. The Central Pollution Control Board has approved the use of tyre chips, which is widely used across cement plants in Western Europe.
H M Bangur, chairman and managing director, Shree Cement, said, “Now, there is a need to look for cheaper sources of energy.” In 2005-06, the average electrical energy consumption for producing a tonne of cement was 82 units.
ACC recently commissioned its first wind energy farm in Tamil Nadu of 9 MW capacity. The wind power generated will be wheeled to ACC’s Madukkarai cement plant in Coimbatore.
Vinod Juneja, deputy managing director, Binani Cement, said, “We are open to alternative sources of energy and will explore opportunities.” The company has outlined plans of reaching over 10 million tonnes in the next couple of years.