Energy is needed for functioning of day-to-day activities in households, organizations, factories and businesses. Without sufficient energy, work cannot be done or there is a delay in the performance of activities. This affects productivity and profits of businesses.
Energy can be obtained from various renewable and non-renewable sources. Over the years, the natural sources are depleting leading to price rise of fuels thereby increasing costs for generation of power for further use as electricity. There a huge gap between demand and supply of energy. Many countries face shortage of energy. This gives us a clear picture that energy has become of utmost importance. For managing this problem, various initiatives are being taken all over the world. Businesses have realized the need of energy management and conservation. Also other consumers of energy i.e. the customers using products or common people who need electricity are being encouraged to minimize energy consumption.
This research paper helps in studying brief overview of recent energy scenario in India. It also provides with an insight into energy management and conservation initiatives undertaken by industries of the chemical sector.
The objective of this research paper is to study energy management and conservation initiatives taken by industries in chemical sector in India.
The research study provides with an interesting insight into energy scenario in India. The focus is on energy management and conservation initiatives taken by organizations in chemical industry in India.
The study is based on the secondary data obtained from various energy reports and analysis provided by national and international agencies dealing with energy management and conservation.
Literature Review
Energy scenario
The following discussion gives an overall idea of energy production, consumption and trade in energy in the world.
Terms:
Primary production refers to the quantity of natural energy resources (primary energy sources) extracted or produced. For natural gas, the quantities flared or reinjected are excluded. Production of hydro, geothermal, nuclear and wind electricity is considered as primary production.
Primary consumption means the balance of primary production, external trade, marine bunkers and stock changes. Total primary consumption for all products gives the total energy consumption of a country. The primary consumption consists of biomass too. For the world, marine bunkers are included.
The trade balance is the difference between exports and imports. Negative value refers to the balance of a net exporter. The balance of geographic and geopolitical zones is simply the sum of the trade balance of all the countries.
Total energy includes coal, gas, oil, electricity, heat and biomass.
Statistics: Numbers Say It All
The tables give data about India’s energy production and consumption of the year 2009 in comparison with other countries in the world. The source for the data is http://yearbook.enerdata.net.
Primary energy production in the year 2009
There is a slight dip by 0.8% in World primary production in 2009. In OECD countries, which represent more than 30% of total, primary production fell by 1.6%: in the European Union it faced a noticeable drop (4.5%) while it reduced to a lesser extend in the USA (0.5%).
These reductions were balanced by a surging primary production in Japan (6.3%) due to the restart of several nuclear power generation units which had been shut down following the earthquake. Broadly, in the rest of Asia, primary production was boosted by above 5%, led by China (+6.5%) and India (+4.4%). However, among other developing countries, fossil energy producing countries in Middle East and CIS experienced a substantial cut in their primary production (-5.5%). In Latin America and Africa, energy production slightly reduced by around 2%: again, hydrocarbons producing countries was more largely impacted during 2009 (of which Venezuela, Mexico, Algeria and Nigeria). This is enlisted in the following table 1 and illustrated using Figure 1.
Table 1: Total primary production
Year : 2009
Unit : MTOE
China
2,054
United States
1,712
Russia
1,175
Saudi Arabia
517
India
489
Canada
388
Indonesia
363
Iran
318
Australia
304
Brazil
227
Figure 1: Country-wise Primary energy production for the year 2009
Energy consumption in the year 2009
Over the span of 30 years, world energy consumption for the first time saw a fall of 1.1% as a result of drop in GDP by 0.6% in 2009 due to the financial and economic crisis. This was a result of two contrasting trends.
The consumption of energy in developing nations remained vigorous, especially in Asia with a 4% rise. On the other hand, consumption drastically reduced by 4.7% in OECD countries. In North America, Europe and CIS, consumptions were minimized by 4.5%, 5% and 8.5% respectively due to the slowdown in economic activity. China became the world’s largest energy consumer (18% of the total) since its consumption surged by 8% during 2009 (from 4% in 2008). Coal accounted for 27% in the world’s total energy consumption. There has been lowering in share of oil as energy source over time yet oil remained the largest energy source (33%). This is enlisted in the following table 2 and illustrated using Figure 2 (given on the next page).
Table 2: Total energy consumption
Year : 2009
Unit : MTOE
China
2,234
United States
2,201
India
655
Russia
621
Japan
459
Germany
315
France
254
Canada
244
Brazil
238
South Korea
233
Figure 2: Country-wise energy consumption for the year 2009
Trade
In 2009, exports of energy at the world level were lowered by 5%. Middle East remained the world’s largest net exporter of energy despite its surplus reduced by 10%. All the net exporting regions experienced a cut in their trade surplus: Africa (-6%), Latin America (-4%) and to a lesser extend CIS (-2%). Russia achieved a slight fall in its exports of energy while its imports severely decreased by 18%. Imports of energy were decreased by 3.5% at the world level.
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Net importing countries in OECD achieved a reduction of their net importing position by 11%. In Europe, USA and Japan, the trade deficit was reduced by 8%, 12% and 13% respectively due to substantial cuts in energy imports. Conversely, Asia deepened its position of net importer of energy by 6%. In China, imports of energy surged by 30% while exports shrank by 43%: the trade deficit deteriorated by 55% in 2009. This is enlisted in the following table 3 and illustrated using Figure 3 (given on the next page).
Table 3: Total balance of trade
Year : 2009
Unit : MTOE
United States
558
Japan
380
China
297
South Korea
200
Germany
192
India
175
Italy
147
France
136
Spain
111
Taiwan
93.6
Figure 3: Country-wise total balance of energy trade for the year 2009
Need of Energy Management
The above presented statistics about consumption and production of energy country-wise provides with a clear picture that India is a significant consumer of oil and natural gas.
The Indian government holds licensing rounds in order to promote exploration activities and boost domestic oil production. Although there have been major new natural gas discoveries in recent years, India continues to plan on gas imports to meet its future needs. India currently suffers from a major shortage of electric generating capacity. Thus it can be said that energy management has become the need of the hour.
The most solution to this dilemma would be taking efforts on a country basis to manage energy in energy intensive sectors. Considering the restraints of lack of sufficient infrastructure, energy management can be successful if small consistent steps of energy conservation are taken.
Energy management
Energy management can be defined as
“The judicious and effective use of energy to maximize profits (minimize costs) and enhance competitive positions.”
(Cape Hart, Turner and Kennedy, Guide to Energy Management Fairmont press inc. 1997)
The goal of Energy Management is to achieve and optimize energy procurement and utilization, throughout the organization and to reduce energy costs / waste without affecting quality and production along with minimizing detrimental environmental effects.
Bureau of Energy Efficiency (BEE)
About BEE
Bureau of Energy Efficiency (BEE) has been setup in 2002 by the Government of India under the provisions of Energy Conservation Act, 2001. The mission of the Bureau of Energy Efficiency is to aid in development of policies and strategies with a thrust on self-regulation and market principles, within the overall framework of the Energy Conservation Act, 2001. The basic objective is to minimize energy intensity of the Indian economy. This is planned to be achieved via active participation of all stakeholders. As a result, accelerated and sustained adoption of energy efficiency in all sectors will happen.
Role of BEE
BEE co-ordinates with designated consumers, designated agencies and other organizations and recognize, identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act. The Energy Conservation Act provides for regulatory and promotional functions.
Regulatory functions
The Major Regulatory Functions of BEE include developing minimum energy performance standards and labeling design for appliances and equipments, developing specific Energy Conservation Building Codes. It also accredits energy auditors. It has to define the method and time cycle of mandatory energy audits.
Promotional functions
The Major Promotional Functions of BEE include creating awareness and disseminating information to people about energy efficiency and consumption. It has to promote R&D, formulate and facilitate implementation of pilot projects and demonstration projects. It also has to develop testing and certification procedures and promote testing facilities.
PAT scheme
BEE has initiated with the PAT (Perform, achieve and Trade) scheme.
According to the data illustrated in the bar chart (Figure 4) below for various sectors and corresponding energy consumption v/s contribution to GDP, activities in commercial services and industry consume the maximum energy.
Figure 4: Sectoral energy consumption and contribution to GDP
Source: Energy Conservation Guide, PCRA
Energy scenario in the industrial sector
The energy intensity i.e. energy consumed per unit of GDP for industrial sector has declined by about 1.5% per annum during 2004-05 to 2008-09 although the ratio of energy intensity in industry to agriculture & service sector hovers around 4.0 -4.4.
Reasons for change in energy usage pattern are as follows:
Increased competitiveness
Change in Technology or Retrofit Options
In-House R&D
Adoption of Energy Efficiency Techniques
Shift in fuel
Regulatory compulsion by
Energy Conservation Act, 2001
Energy Audits
Separate Energy Conservation Cell
Increase Awareness About Energy Conservation
More Publicity through various media
Rigorous Activities by various agencies
Comparison of specific energy consumption
For several industries across the world such as steel, cement, paper, fertilizer; specific energy consumption was calculated by BEE. It was observed that Specific Energy consumption in the steel industries is much higher (about 1.6 times more) than other developed nations like USA and UK. Also in other industries, it was significantly more as compared with developed nations.
Background and Scope of PAT (Perform, Achieve and Trade)
The Government would notify energy intensive industries and other establishments as designated consumers (DCs). Based on the comparison of specific energy consumption as explained above, the PAT scheme covers 563 designated consumers (DCs) in 8 sectors. All these DCs consume about 231 MTOE i.e. about 60% of total energy consumption of India. So DCs would be given certain targets to be achieved in particular time frame. The targets would be the amount of energy to be conserved within the specified time frame.
If these DCs are successful in achieving more than what is targeted, they will be provided with E-Scerts. However, if DCs are not able to achieve the targeted value, they will be required to purchase E-Scerts or else pay penalty amount.
The National target is set to be 10 MTOE at the end of 1st PAT cycle (April 2011- March 2014). There is a large band-width in Specific Energy Consumption (SEC) (As per the BEE sectoral Study).
The energy usage pattern varies widely in industries of a particular sector due to various diversities like
Scale of Production (Installed Capacities)
Use of Raw Material-Process
Technology-Vintage
O & M Practices
Type of Product Output etc.
Hence, the targets would be “Plant Specific”. The following table 4 enlists various sectors, their annual energy consumption and the number of DCs. Appendix 7.1 gives the list of Energy Intensive Industries and other establishments specified as designated consumers.
Table 4: Industry-wise annual energy consumption norm and the number of DCs
Industry Sector
Annual Energy Consumption Norm to be DC (MTOE)
No. of Identified DCs
Aluminum
7500
11
Cement
30000
83
Chlor-Alkali
12000
20
Fertilizer
30000
23
Pulp &Paper
30000
51
Power
30000
146
Iron &Steel
30000
101
Textiles
3000
128
Total
172500
563
Target is defined as the % reduction of ‘Specific Energy Consumption (SEC)’ from Baseline value. The Specific Energy Consumption refers to the ratio of Input Energy to the output quantity of products. Over the years, Baseline SEC and the target SEC will be observed and accordingly the % reduction of SEC will be noted. This will define whether the company or the designated consumer (DC) has achieved its target or not. The outcome of provision of E-Scerts or purchase of E-Scerts/penalty will be decided. The following Figure 5 explains of the concept of SEC.
Figure 5: SEC
Source: Bureau of Energy Efficiency
PAT scheme: Approach towards target setting
The Sectoral Target will be on pro-rata basis of energy consumption among 8 sectors to achieve National Target. The baseline will be established based on
Reported data of last 5 years (2005-06 to 2009-10)
Normalization Factor (capacity utilization)
Arithmetic Average of last 3 years value
Targets have been statistically calculated based on relative SEC approach after grouping the DCs suitably. Estimated targets will be justified by the saving potential available by conducting Baseline Energy Audits. The target will be reviewed by an expert committee before notification.
Estimation of Absolute Energy Saving:
The amount of energy saved can be estimated by the following formula.
Where P = Production
Status
By now, 5 years data from DCs has been collected through the notified format. Data compilation is completed & Analysis for baseline Specific Energy Conservation (SEC) is in progress. Baseline Energy Audit will kick-off from June 2011 by Certified Energy Auditors (CEAs). PAT Consultation Document has been prepared and uploaded on website (http://www.bee-india.nic.in) for comments from public. Meetings are being held with various ministries. There have been discussions with Industry Associations such as
Fertilizer Association of India
Alkali Manufacturer Association of India
Indian Chemical Council
Mini Blast Furnace Association
The methodology for M&V system, Issuance of E-Scerts & Trading is under design stage.
Opportunities
Market-based approaches to unlock energy efficiency opportunities are estimated to be about Rs. 74,000 Crores. Goals to be achieved by 2014-15:
Annual fuel savings in excess of 23 MTOE
Cumulative avoided electricity capacity addition of 19,000 MW
CO2 emission mitigation of 98 million tons per year
The market based mechanism will enhance the cost effectiveness in improving the Energy Efficiency in Energy Intensive industries through certification of energy saving which can be traded. The market transformation for energy efficiency can be done by accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable. The Energy Efficiency Financing Platform (EEFP) would include the creation of mechanisms that would help finance demand side management programs in all sectors by capturing future energy savings.
Energy management in chemical sector
To understand about energy management and conservation initiatives in Chemical sector in India, two organizations: DCM Shriram Consolidated Limited (DSCL) and Jubilant Lifesciences are chosen.
DCM Shriram Consolidated Limited (DSCL)
About
DCM Shriram Consolidated Limited (DSCL) has a turnover of Rs. 3523 crores in the year 2009. Its primary interests are in Chloro-Vinyl business, Plastic business, agri-business, energy intensive business and other businesses like textile.
Chloro-Vinyl business: Chemical business comprises of manufacture of chemicals such as Caustic Soda, Chlorine and associated chemicals like Hydrochloric Acid, sodium hypochlorite.
Plastic business: This is highly integrated, covering manufacture of PVC resins and Calcium Carbide, PVC Compounds and UPVC Fenesta Windows (a consumer product).
Agri-Business: This includes Urea, sugar, fertilizers and bio-seeds manufacture.
Other Businesses: The Company has a small textile operation in the form of 12,856 spindles spinning unit at Tonk in Rajasthan. The expansion of capacity has resulted in enhanced production from 6 tons per day to 12 tons per day. Energy Services (ESCO) business assists energy users (industrial, institutional, commercial users) in achieving efficiency in energy usage, provides engineering and project management services for biomass/ conventional fuel based power plants.
Energy conservation Measures
The following discussion informs about the energy conservation measures taken by the company.
Important specific actions taken during the year are:-
At DM plant, installation of optimum capacity pumps to supply DM Water and Process water to Fertilizer Plant.
Use of Flash steam generated from HCl Stripper in 1st distillation tower reboiler.
New system devised for timely recovery of broken and spilled carbide.
Low capacity Anolyte Blow down Pump has been installed in Chlor – Alkali Plant.
Trimming of 30% HCl Pump Impeller diameter to optimize flow and head in Chlor-Alkali Plant.
Periodical energy audits, pressure drop reduction measures and optimization of operating parameters have been done in the Ammonia Plant.
Additional investments and proposals being implemented for reduction in consumption of energy: An extensive trial of fuel additive has been carried out in Boiler No. 2 of 35 MW Power Plant and Boiler of 40 MW to reduce the unburnt carbon. Based on the results, use of coal additive has been planned in the year 2009-10 in all the boilers with an improvement of boiler efficiency by approximately 1%.
Results
The above mentioned energy consumption measures have already been undertaken and have yielded savings in energy consumption compared to the past years. The summarized position of energy reduction achieved is as under:
Substantial savings of 3.8 Lacs Kwh/Annum due to installation of new optimum capacity pump in DM Plant in Power Plant
Saving of 0.059 M.KCal/MT of Urea
Reduction in power consumption by about 44 KW/hr in Power Plant
Reduction in steam requirement by 300 Kg/ Hr in PVC Plant at Kota
Saving of around 7 KWH/MT of Carbide in electrical energy on account of timely recovery of Carbide.
Saving of 83 Th.Kwh/Annum power in Caustic Soda plant.
Saving in steam consumption by about 200 Tons/Month from the use of flash steam.
Reduction in the running hours of HCl dozing pump resulting in power saving of 23 ThKwh/ Annum in Chlor Alkali Plant at Kota.
Saving in Power of 45 ThKwh/Annum in Chlor Alkali Plant at Kota.
The following table 5 enlists power and fuel consumption over the years from 2005 to 2008. Appendix 7.2 consists of graphs which give pictorial representation of changing trends in power and fuel consumption.
Table 5: Power and Fuel Consumption
2005-06
2006-07
2007-08
1.Electricity
a. Purchased
KWH (in Lakhs)
772.7
590.6
643.7
b. Own Generation
KWH (in Lakhs)
10967.3
13688.6
14688.5
2.Coal
(M.T.)
826317
962548.1
994410.3
3.Furnace Oil
(M.T.)
45277.8
39507.1
36606.8
4.Natural Gas
(SCM)
0
86882140
10157481
Source: Annual Reports of DSCL
Jubilant Lifesciences (formerly Jubilant Organosys Limited)
About
Jubilant Life Sciences Limited (formerly Jubilant Organosys Ltd) is an integrated pharmaceutical and life sciences company. Its business can be categorized into life science ingredients and generics. Life science ingredients comprises of APIs (active pharmaceutical ingredients), nutritional ingredients and proprietary products. Generics include radiopharmaceutical products and allergic extracts. It is among top 3 in several Generics as well as allergy therapy companies globally.
Conservation of Energy
The following discussion informs about the energy conservation measures taken by the company.
Energy conservation has been an important thrust area of the management and is being continuously monitored. Important specific actions taken during the year are:-
Fuel cost minimization by using Agro-waste in place of Furnace Oil
Increase in condensate recovery at Export Oriented Unit
Flash steam was utilized in Ethyl acetate plant
Energy conservation by replacing of vapor absorption heat pump operation from live steam to flash steam
Variable frequency drive (VFD) was installed for raw water pump, Furnace Oil circulation pumps, Hydraulic Vehicle Air Conditioning, Air Handling Units and Disc atomizer in Spray driers
Heat recovery from condensate resulting in energy conservation
Rationalization of vacuum pumps of Acetic Anhydride Plant resulting in energy conservation
19 Energy efficient pumps were installed in plants
Installation of automatic power factor correction panel
Reduction in power consumption by increasing the productivity of Aq. Chorine chloride, Dry Chorine & Vinyl Polymer Latex
Optimization of lighting system
Improved performance of Triple Effect Evaporator by increasing steam economy
Other Additional investment and proposals being implemented for reduction energy consumption
Reduction in Power consumption of combustion air blower of Incinerator.
Rationalization of steam pressure, to create additional extraction demand at 8 Kg/cm2.
Installation of VFD at blower of Single Super Phosphate dryer and for Hot air generator Cold air fan & dryer ID Fan
Installation of energy efficient pumps for cooling tower
Installation of Energy efficient lighting in plants
Flat belt installation for Hammer mill, Air compressor & Refrigeration compressors
Timer based ON/OFF system for Air Conditioning
Light Emitting Diodes (LED) light fittings to be installed in place of conventional 250 W street- light fitting
Optimization of compressed air system of utility
Installation of VFD and automation of Chilled water and Chilled brine Secondary pumps
Optimization of steam consumption in solvent recovery in Plants
Conversion of Furnace Oil fired boiler to Solid fuel fired boiler
Expected investment in above initiatives is Rs. 46 million.
Impact of measures for reduction of energy consumption and consequent impact on the cost of production of goods
• Reduction in steam and power consumption norms in all plants.
• Reduction in steam and power generation cost.
• Improved consistency in production.
Savings due to conservation of energy: Rs. 37 million per annum, approximately. Savings due to implementation of additional investments and proposals is expected to be Rs. 68 million per annum, approximately.
The following table 6 enlists power and fuel consumption over the years from 2005 to 2008. Appendix 7.3 consists of graphs which give pictorial representation of changing trends in power and fuel consumption.
Table 6: Power and Fuel Consumption
2005-06
2006-07
2007-08
1.Electricity
a.Purchased
KWH (in Lakhs)
427.6
473.70
531.60
b.Own Generation
KWH (in Lakhs)
1457.1
1655.60
1759.20
2.Coal
(M.T.)
264478.17
313529.68
383829.15
3.Furnace Oil
(KL)
27051.8
18600.61
20562.20
4.Others/Internal Generation-Biogas
(NM3)
47644554
57029698.00
51074087.00
Methodology
An exploratory research was conducted in order to study energy management and conservation initiatives taken by industries in chemical sector in India. Two organizations from the chemical sector were chosen and their energy management initiatives were studied.
Design of study
The study is based on the secondary data obtained from various energy reports and analysis provided by national and international agencies dealing with energy management and conservation.
Instruments Used
The information was obtained using the Internet. Various websites pertaining to energy sectors were visited and relevant data was gathered.
For studying energy management and conservation initiatives in the industries of chemical sector, data was gathered from Annual Reports of the organizations DSCL and Jubilant Lifesciences Ltd.
The website of Bureau of Energy Efficiency (BEE) provides with innumerable resources. Classification of sectors according to energy consumption was listed. Also, concept of energy management and relevant facts of Energy Conservation Act,2001 were obtained.
Limitations of the Study
The limitations of the study are as follows:
Only Two organizations from the chemical sector were chosen.
Data for recent years 2009 and 2010 was not available.
Data of years 2005 to 2008 were studied. Due to constraint of time and availability of information, detailed information of financial investments pertaining to energy conservation was not studied.
Analysis of the data
Energy Scenario in India
For the year 2009, primary production is 489 MTOE; consumption is 655 MTOE while trade is 175 MTOE. Consumption of energy was 1.4 times the energy produced. It can be seen from the above tables that compared to developed countries India, being a developing nation, is far behind the giants US and China in terms of primary production as well as consumption of energy. However, with escalating energy demand and insufficient supply, energy management has gained prime significance. The Government and industrial associations, other International bodies and agreements are encouraging industries to take up energy conservation initiatives as soon as possible.
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For several industries across the world such as steel, cement, paper, fertilizer; specific energy consumption was calculated by Bureau of Energy Efficiency (BEE). It was observed that Specific Energy consumption in the steel industries is much higher (about 1.6 times more) than other developed nations like USA and UK. Also in other industries, it was significantly more as compared with developed nations.
Chemical sector
The chemical industry is also one of the major energy intensive industries and is part of designated consumers(DCs) list. The organizations chosen are among the top organizations in chemical industry. These have implemented energy conservation measures since a decade.
Analysis for DSCL
Energy conservation has been an important thrust area of the management and is being continuously monitored. Pumps consume most of the power and hence optimization of various pumps at different locations in plants was carried out. Also, use of flash steam obtained from one process in distillation reboiler has resulted in significant amount of savings in terms of energy and money. Unburnt carbon due to insufficient combustion decreases efficiency of boiler and so fuel additives were used on trial basis to estimate the reduction in unburnt carbon.
Disturbances in operating parameters were analyzed during energy audits. Suggestions thus provided by the auditors supported the decisions for energy conservation measures. Based on calculations of ROI, IRR and similar methods, decisions to whether go for or not go for particular suggestion was done by the company. When some of the suggestions turned out to be financially feasible, the company implemented them and gained by saving significant amount of money, materials as well as power.
Over the years (refer to Appendix 7.2), the consumption of electricity purchased is reducing and company is focusing on consuming its own power. The consumption of coal is increasing which shows the dependence on coal as fuel for boilers, power plants. However, there is a fall in consumption of furnace oil as well as natural gas although there is consistent manufacturing of products. This is a good indication of company’s implementation of energy conservation measures.
Analysis for Jubilant Lifesciences
Specific energy conservation measures include commissioning of Biogas Plant, replacement of furnace oil boiler by agro-waste boiler, installat
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