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Table of Contents

Table of Contents............................................................................................................................ i
About WADE................................................................................................................................. ii
Acknowledgements ....................................................................................................................... iii
Executive Summary ...................................................................................................................... 1
Introduction ................................................................................................................................... 4
The Cement Industry .............................................................................................................. 5
International Cement Markets ................................................................................................ 6
Onsite Power Benefits .......................................................................................................... 11
Environmental Impacts of Cement Production .................................................................... 13
Onsite Power and Cement .......................................................................................................... 19
Technologies ........................................................................................................................ 20
Baseline ................................................................................................................................ 23
Potential................................................................................................................................ 25
Barriers and Driving Forces ................................................................................................. 27
Conclusions .................................................................................................................................. 32
References .................................................................................................................................... 34
Annex 1. Selected Companies Involved in Onsite Power in Cement Plants.......................... 36
Annex 2. Statistics and the Cement Industry........................................................................... 37
Annex 3: The CDM and Cement............................................................................................... 38

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About WADE

The World Alliance for Decentralized Energy (WADE) was established in 2002, as a non-profit
organization, to accelerate the worldwide development of high efficiency decentralized energy
systems that deliver substantial economic and environmental benefits. WADE represents the
interests of those involved in the entire value chain of combined heat and power (CHP) and
renewable decentralized energy (DE) systems.
WADE believes that the wider use of DE is a key solution to bringing about the cost-effective
modernization and development of the world’s electricity systems. With inefficient central power
systems holding a 90% share of the world’s electricity generation capacity, and with the DE share
at only about 10%1, WADE’s overall mission is to have this share reach 14% by 2012. A more
cost-effective, sustainable and robust electricity system will emerge as the share of DE increases.
WADE undertakes a growing range of research and programs on behalf of its supporters and
members:

Cutting-edge research and analysis on energy and the environment;

Global advocacy of policies and programs designed to level the playing field for DE;

Organization of events and activities designed to promote and advance the market
for DE technology and showcase member product offerings;

Communications and public relations that delivers the DE message to policy-makers
and the general public;

Dissemination of market intelligence and breaking news to keep members informed
of the latest developments in the global DE marketplace.

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Acknowledgements

The author would like to thank the following individuals for their help in the researching and
writing of this paper:
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Peter Bell, International Cement Review
Michael Brown, Delta Energy and Environment
Stefano Campanari, Milan Polytechnical
Edouard DeLafarge, Lafarge
Sytze Dijkstra, WADE
Ihab Elmassry, Carbon Capital
Hanno Garbe, Siemens
Sandeep Junjarwad, Cogen India
Dr. Howard Klee, WBCSD Cement Sustainability Initiative
Ludovic Lacrosse, EC-ASEAN COGEN Program
Eliane Lacroux, Cembureau
Arul Joe Mathias, EC-ASEAN COGEN Program
Dr. Brahmanand Mohanty, Asian Institute of Technology
H. Nagasako, Kawasaki Heavy Industry
Jonathan Sinton, International Energy Agency
K Sivaram, Confederation of Indian Industry
Ahmet Sonmez, Turbomach
Vivek Taneja, Thermax
Hendrik van Oss, US Geological Survey
Ernst Worrell, Lawrence Berkley National Laboratory

All efforts have been made to ensure that the data contained in this report is the best available at
the time of publication. If you are aware of any omissions or errors in the data used to make the
calculations in this report, please contact WADE and bring the error(s) or omission(s) to our
attention.
Lead Author:
Jeff Bell, the World Alliance for Decentralized Energy

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The process of making cement is among the most energy intensive of any industry. in many cases. the other half of the sector’s emissions results from the combustion of fossil fuels for heat and power. About half of these emissions are a result of the chemical reaction necessary to transform the raw material into the finished product. significant untapped potential for onsite power remains. extremely high temperatures must be reached. In order to catalyse the chemical reaction. FIGURE E-1 GLOBAL ANNUAL CO2 PRODUCTION. both to society in general and. BY INDUSTRY (30GT CO2) Manufacturing Excluding cement 17% Other sectors 14% Calcination 50% Road transport 18% Cement manufacturing 5% Non-road transport 6% Energy industry 5% Fuel 40% Heat and power 34% Electricity/transport 10% SOURCE: 5. However. distribution and 1 . most of the fuel input is for heat. for the cement plant managers.Executive Summary The cement sector represents approximately 5% of total global CO2 emissions (see figure E-1). Therefore. Onsite power offers many benefits. Power accounts for less than 10% of the sector’s emissions. 25 While generating electricity on cement manufacturing sites is a common practice in many areas of the world. yet electricity supply is fundamental to the process. System level benefits include significantly reduced capital expenditure for transmission.

suggests that onsite plants are installed at a minority of the world’s cement plants. Opportunities for either top or bottom cycle cogeneration. 2 . allows higher kiln utilization and increases quality of the finished product. In the top 20 cement producing countries alone it is estimated that the overall potential to generate electricity at cement plants is about 57 TWh annually.41% of total global electricity demand in 2003 (including all sectors: other industries. although imperfect. while the cement sector is responsible for a disproportionately high percentage of global GHG emissions.generation infrastructure. WADE has compiled documentation of over 2. exist at many of the world’s cement plants.3 Mt CO2 of total global emissions could be displaced every year. also offer considerable promise to the industry. etc). top cycle cogeneration and onsite power-only applications. Data. may have the most potential for reducing the environmental impact of the cement sector. Bottom cycle applications. At a plant level. residential agriculture. or both. either in cement manufacturing or for a neighbouring facility. where fossil generators are placed on the cement plant site and the waste heat is used for some useful purpose. This is certainly an underestimation. Finally. standby plants in power only applications can also offer valuable benefits. decreased vulnerability to fuel price volatility and vastly reduced smog and climate change causing emissions. where heat from the kiln is recovered to generate electricity. onsite power guarantees against production interruptions from utility failures. If all or even some of the potential were realized considerable emissions from the central power plants serving these cement plants could be displaced.3 TWh/year or 0. Top cycle plants. If it is assumed that all power displaces coal then about 68. In short.900MW of installed electric generating capacity in cement plants worldwide (see table E-1). increase reliability and reduce environmental damage. there remains significant potential for investment in onsite power technologies that can improve competitiveness. Three types of onsite power are discussed in this report: bottom cycle cogeneration. Total potential is estimated to be about 68. saves energy costs.

8 0.939 0 572 0 0 0 1.5 1.4 2.5 KWH OF GENERATION/TON CLINKER (SEE TABLE 3) SOURCE: WADE COMPILATION.628 3.1 1. ** CALCULATED BASED ON AVERAGE POTENTIAL OF 32.1 1.494 7.TABLE E-1 EXISTING ONSITE POWER CAPACITY* AND GENERATION IN CEMENT PLANTS BY TOP CEMENT PRODUCING NATION Country # plants China India USA Japan Korea Russia Spain Brazil Italy Egypt Mexico Thailand Turkey Indonesia Iran Germany Saudi Arabia France TOTAL 570 365 109 # plants with Capacity onsite power MW* 63 65 4 33 2 569 1.981 486 10.4 1.541 5.1 1.609 150 281 19 0 0 Gen (GWh)* purchased (GWh) 4.7 57 * INCLUDES TOP AND BOTTOM CYCLE COGENERATION AS WELL AS POWER ONLY APPLICATIONS.264 Potential Onsite Power (TWh/year)* * 27.127 3.0 2.3 1.4 2.0 0.9 3.WHERE CELLS ARE BLANK DATA IS UNAVAILABLE 3 .300 9 37 93 12 30 11 29 50 38 1.3 1.1 1.6 1.759 5.5 1.144 10.344 0 1 0 2 1 0 250 0 49 12 2 1 1 174 2.307 38.6 4.

Introduction Question The cement industry is one of the most important industrial sectors in the world both in terms of the benefits it brings to society and the phenomenal impact it has on the environment. Little public data exists on the potential for onsite power in the cement industry to combat air emissions and increase economic competitiveness. and market researchers. Justification The cement industry is a highly energy intensive industry. price volatility and environmental impact of inefficient energy use. It will interest plant engineers. Cogeneration of heat and electricity is one such means. The primary intended audience of the report are those less familiar with the cement industry. but this is the first report looking at the potential from the perspective of the sector as a whole. Energy use is a key ingredient of plant productivity and efficiency. After the power sector and transportation sectors cement uses more energy than any other industry. There is scope for improving energy efficiency in the cement manufacturing process and there are various means of realizing this great promise. Because the ∗ 2-5% depending on source 4 . as well as environmental organizations and the general public.5 Given increasing issues of energy supply reliability. Similarly. integrated cement plants and grinding-only plants. This report aims to improve the general knowledge base so that better decisions on the appropriateness of investment in onsite power in the cement industry can be made. In 2004 it is estimated that fuel consumption and electricity use in the cement industry accounted for about 3%∗ of total global primary energy consumption2. commodity financiers. the impetus to improve efficiency in every sector is pressing. managers. The main questions this study sets out to answer are: • What are the benefits of onsite power? • What potential exists for onsite power in the global cement industry? • What proportion of the potential has been realized? • What needs to be done to realize the remaining potential? Audience The report’s ultimate beneficiaries will be the many companies active in the cement industry: clinker-manufacturing companies.3. Many of these companies will have in-house research on onsite power relevant to their business. but who care about the impact the industry has: governments and policy makers. power sector professionals.4 (See figure 1) and 5% of total global CO2 emissions. little information exists in the public domain on the extent to which onsite power is already being employed.

cement industry uses so much energy around the world it makes sense to re-examine the potential for efficiency improvements in every aspect of the cement making business. From a customer perspective the various types can often be substituted for one another. one of the most common construction materials in the world. Taking a global perspective may lend new inspiration to those involved in the cement industry and encourage people to look beyond the local industry to see what precedents exist in other countries. 5 . Efficiency improvements in production can translate into important increases in competitiveness.3 &4 Cement manufactures operate in a highly competitive environment both at a local and international level. The purpose of this report is to examine the potential of one type of energy efficiency gain that has not been fully realized: onsite power generation in the cement industry. The Cement Industry Cement is the binding material that. FIGURE 1 TOTAL GLOBAL PRIMARY ENERGY CONSUMPTION (EXAJOULES) (2002) All other sectors 64% Industrial sector (excluding cement) 33% Cement sector 3% SOURCE: 2. forms concrete. Other uses include plasters mortars and other widespread building materials. Portland cement is the most common type of cement but various others also exist as illustrated in table 1. There are both economic and environmental gains to be made by optimising investment in onsite power in the cement industry. when mixed with an aggregate such as sand or gravel.

g. in some cases rapidly. etc. Specialty Cements Cement that has been especially prepared for specific end uses such as high salt water resistance.6 TABLE 2 SELECTED TOP CEMENT PRODUCERS WITH RECENT PRODUCTION DATA Company Lafarge Holcim CEMEX HeidelbergCement Taiheiyo Cement Italcementi Buzzi Unicem Cimpor Gujarat Ambuja Cement Ltd Cementos Molins Annual Cement Production capacity (MT in 2004) 130 111 66 65 53 52 38 24 13 2 SOURCE: WADE COMPILATION 6 . ash from power plants. Over the last five years total clinker capacity has increased 20% and cement production 22%. China’s annual cement production. for example. etc. residential commercial and industrial buildings are all expected to result in steady increase in demand for cement in the long term all around the world.) or natural materials (e.g. Most markets around the world are expected to continue to expand cement production. and there is every indication that growth will continue. Table 2 shows some of the top cement manufacturers in the world with total production for 2004. slag from steel furnaces. more than doubled between 1994-2003.TABLE 1 TYPES OF CEMENT Ordinary Portland Cement Most common type of cement made of ground hydraulic calcium silicates Aluminous cement A cement based on calcium aluminates rather than calcium silicates Blended cement A cement where portions of the unmilled cement has been replaced with waste materials from other industries (e. volcanic ash). SOURCE: 7 International Cement Markets Growing demand for roadworks. waterworks. Tables 3 and 4 show the top 20 countries for cement and clinker production over the last half decade.

000 35.700.000 46.000 24.000 62.000 46.000 48.000 49.000 35.000 24.360 90.000 78.120.000 33.000 60.000 35.000 850.000 44.000 40.000 62.000 40.000 35.000 26.000 40.000 65.000 100.000 35.000 35.000 120.000 330.000 45.000 106.000 90.000 45.000 48.000 n/a 24.000 300.000 45.000 74.000 50.000 2.000 40.000 24.000 33.000 40.000 46.000 46.000 42.000 102.700.000 40.000 120.000 22.000 22.000 40.000 45.000 62.000 850.000 50.000 31.000 2.000 31.000 24.000 40.000 % growth 2000-2004 35 27 14 -30 0 0 0 0 0 31 0 4 6 -7 26 -39 0 -9 -1 20 SOURCE: 19 7 .000 33.000 22.000 50.000 22.000 110.100.000 40.700.000 46.000 45.000 31.000 22.000 150.000 40.000 50.000 40.000 42.000 330.000 1.000 1.000 65.000 45.000 28.000 120.000 1.000 30.000 62.000 550.000 320.000 30.000 65.000 150.000 24.228 96.000 76.000 58.000 37.000 65.000 550.000 91.000 105.000 102.000 35.000 40.000 31.TABLE 3 HISTORIC CLINKER CAPACITY BY YEAR AND COUNTRY Year end clinker capacity (Thousand metric tons) Country China India United States Japan Korea Russia Spain Brazil Italy Egypt Mexico Thailand Turkey Indonesia Iran Germany Saudi Arabia France Other countries World total 2000 2001 2002 2003 2004 2005 550.000 750.000 65.000 1.000 65.000 43.000 33.000 33.000 31.000 40.000 24.000 46.000 350.000 35.960.000 346.

110 33.027 34.518.000 2.679 32.913 31.000 661.200 France 20.077 38.593 34.097 76.019 Brazil 39. In figure 2.000 30.000 38.550 71.255 52.080 933.000 United States 89.789 31.015 Japan 81.700 41.790 Russia 32.417 45. The most common manufacturing processes include shaft kiln.009 32.363 18.000 1.514 59.000 2.320 Saudi Arabia 18.954 Iran 23. Various types and qualities of end product exist.450 19.000 Egypt 24.000 Country % growth 36 24 10 -20 5 18 25 6 -3 -2 23 28 5 -11 20 14 47 22 4 8 24 22 SOURCE: 20 Cement Making Cement production is an intensive practice involving huge amounts of natural resources.885 World Total 1.143 24.640 35.674.499 27.183 1.512 42.000 1.046 55.828 68.300 37.TABLE 4 HISTORIC CEMENT PRODUCTION BY YEAR AND COUNTRY World Cement Production (Thousand metric tons) 2000 2001 2002 2003 2004 China 597.510 90.441 1.660.000 Indonesia 27.419.450 91.125 32.992 Germany 35.7 A variety of manufacturing processes also exist depending on the age of the technology and type of cement.530 35.927 38.700 28. dry kiln and precalciner.300 34.839 19.880 26.766 67.577 35.640 28.137 19.960 Taiwan 17.266 94.118 31.050 Top 20 Total 1.228 32.107 20.154 40.349 31.690 India 95.337.850. 8 .572 18.128 19.900 Spain 38.329 99. a diagram of the general simplified process is illustrated.626 Mexico 33.010 38.825 30.400 35.000 38.660 20.000 23.750.474 19.767.000 Turkey 35.000 Thailand 25.000 23.608 22.040 725.372 33.298 16.983 1.414 32.208 38.000 125.000 43. capital.155 26.073 21.369 Korea 51.000 36.194 53.000 46.600 30.282 25. wet kiln.000 862.000 Italy 38.000 123.130. labour and energy.000 115.804 40.000 Vietnam 13.121 23.020.639 28. below.718 1.925 39.000 105.

which is then cooled. crushed. small amounts of gypsum or other additive can be added to the cement prior to sale to control setting time. on the other hand.FIGURE 2 SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM Quarrying Crushing Clinker Cooling Blending Drying Milling Heating in Kiln Preheating/ Precalcification Blending Clinker Milling Finished Cement Packaging and Shipping SOURCE: WADE FROM VARIOUS In all processes first the raw material. Out the other end of the kiln emerges the new material. In the dry process. ground and blended with various additives depending on the type of cement being produced. For example. The finished product is then ready for shipping. With the precalciner process some of the waste heat from the rotary kiln is used to preheat the raw materials on their way to the kiln but much scope typically exists for improved energy recovery (see figure 3). a gradual shift 9 . limestone. is quarried. which is then fed into preheaters and then a large rotating kiln. are much less energy efficient. although still more common in some regions than the newer dry process. Within the rotary kiln the mineral mix undergoes chemical reaction under extremely high temperatures (between 1480°C and 1870°C) fuelled by a coal. The wet kiln process and shaft kiln process. transported to the mill. along with much smaller quantities of clay or sand. the mixture is fed into the preheaters and kiln in a dry state. With the aim of improving the efficiency of manufacture. clinker. blended and milled. With the wet kiln process the mixture is mixed with water to form a slurry. oil or gas-fired burner.

heat Quarrying Crushing Blending Drying Milling fuel for heat 2. heat 3.from wet technology to dry technology has been occurring around the world.8 Other cement processes that are being phased out include hollow rotary kilns and earthen vertical kilns once common in smaller cement mills in China. FIGURE 3 SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM WITH MAIN ENERGY FLOWS 1. heat 4. heat heat Clinker Cooling fuel for heat Heating in Kiln fuel for heat Blending Clinker Milling Finished Cement Preheating/ Precalcification Packaging and Shipping = Indicates electricity input requirement SOURCE: WADE FROM VARIOUS 10 .6 New solutions for overcoming technical challenges which prevent economic heat recovery are constantly being sought and much progress has been made in the last 20 years.6 Old shaft kilns are being replaced with new suspension preheater (NSP) kilns.

depending on local laws. and the revenue potential from export of excess power. however.9 These savings. Thus.localpower. In some cases these savings in capital expenditure may completely offset the cost of the waste recovery equipment. however. utility supply. For example. By installing an onsite power application cement plants can reduce the GHG emissions of their own operations independent of the far greater potential of displacing dirty electricity that would otherwise be ∗ See for example other WADE reports at www. that in some circumstances investment in onsite power can have a quick payback or offer even more important qualitative benefits such as a secure and reliable power supply. In the case of a new build. and equally applicable whether the power is generated at a cement factory. Benefits can certainly be accrued at a project level but perhaps even more significant. transformers and switchgear for interconnection and distribution. Project Level Cost Savings Estimating potential cost savings at the level of an individual cement plant is a complex issue because the only way to determine if an onsite plant is suitable is to examine the variables particular to the plant. Distributed power generation from many multiple sources can help overcome reliability concerns associated with large central power generation facilities. are the many benefits at a larger system level. age of plant and upgrade schedule. Environment In modern plants with 5-6 preheater stages. or elsewhere power is required. existing and expected fuel and electricity prices. the economics of heat recovery equipment can be improved in periods when major upgrades or replacements of plant hardware are being considered. There is no question that in some countries.Onsite Power Benefits The benefits of onsite power are numerous. local power cost. the efficiency of the plant is already quite high. These savings do not apply to existing plants unless the electrical conversion equipment is reaching the end of its lifespan. the Shree cement plant in India generates sufficient power onsite to meet its own needs and also export additional power to the grid. such as China and India. In some cases it will be still higher with the addition of power generation equipment. There is no doubt.org/resources 11 . the use of waste heat to generate power onsite may reduce capital requirements for gear such as line capacities. and often overlooked. it makes sense to list a few of the benefits here in order to provide context to the cement industry.∗ Nevertheless. there is a strong motivation to install power generation because the local system is relatively undeveloped and unreliable. local regulatory framework. are highly site specific. including quality and temporal availability of waste heat. The diverse benefits have been catalogued extensively in other reports.

can offer significant environmental benefits compared to even the most efficient central electricity generating facility.4 billion of avoided capital costs and reduced delivered energy cost of 0.purchased from a polluting and inefficient central generator. and reducing the frequency of brownouts. Environment Onsite power generation. Several European countries. delivered energy cost can be realized via a shift in investment from traditional central plants to smaller distributed plants to meet incremental demand growth for electricity. Work that WADE was recently commissioned to conduct in the UK. such as Finland.13 In other words. demonstrates that a shift in investment towards DE results in about £UK 1.1 Indeed there is strong evidence that having DE embedded in the grid reduces the risk of power 11 outage. This is the case whether it is a cement plant displacing central fuel combustion or some other factory or building. has the potential to consistently deliver significant cost savings at a system level. ∗ Refractories are special temperature-resistant materials used to line kilns/ furnaces etc in order to increase their lives. Cost Savings Research by WADE has shown that investment in onsite power. more importantly.38 pence/kWh. reducing transmission constraints. Both cost savings in the form of reduced capital cost expenditure and.14 Other WADE work suggests that similar savings are achievable in other countries around the world. where waste heat is put to use. Denmark and the Netherlands.∗ Other Other plant level benefits of installing cogeneration include:10 • reduced downtime and interruption of kiln operation • improved fuel efficiency • lower consumption of refractories∗ • enhanced clinker quality • higher kiln utilization System Level Grid Benefits Having onsite power plants embedded into the grid. 12 . even with DE saturation of up to 50%. can improve the quality of service offered by the grid by functioning as a stabilizing mechanism. defers grid investment. have proven that grid performance is not impeded even when onsite power accounts for more than 50% of total generation. for example. especially where load pockets exist. ∗ Centralized power plants average about 33% efficiency because the majority of the energy in the fuel burned is wasted as thermal energy up the stack.12 and offers quantifiable benefits to companies in the form of insurance from blackouts. alleviates grid congestion. special controls for power distribution are not required.

but often overlooked. Manufacturing cement is responsible for about 5% of total global GHG emissions. but the table does provide some interesting figures for a wide range of environmental performance metrics including energy and electricity use per unit output. The benefits are a result of several factors and driven by the technology chosen (see section below on technologies). but as of yet there is little research to verify this. pollution and social and economic 13 .∗ Of particular interest is the wide range of energy use per unit output for even a small selection of European cement manufacturers. mercury and particulates. Fuel Savings and Independence From a system level. This is especially relevant in any heavily fuel import-dependent economy where significant fuel imports has a strong negative impact on the balance of payments and overall economy. The main environmental benefit of onsite power is reduced emissions of GHG. Table 5 shows the results from the Science and Technology Policy Research Institute’s Sustainable Cement Initiative study on benchmark figures for participating European cement producers. resource use and waste. such as SO2. NOx.The environmental benefits of onsite plants are realized via the displacement of power generation that would otherwise come from (fossil-fired) centralized utility plants. Future studies could consider including power from waste heat/unit output or electricity generated onsite/unit output. Onsite power production is not tracked. Onsite plants may also benefit from increased water use efficiency. Environmental Impacts of Cement Production The cement industry is among the world’s industries with the largest environmental footprint because of the exceptional amount of energy and raw materials used. Just as important. ∗ In total 27 separate indicators were tracked from such diverse categories as: energy. the reduced fuel use associated with onsite power also means that less fuel needs to be produced or imported in order for the economy to run. Because of its impact the industry is under tremendous pressure to improve its environmental performance. are the other air pollutants arising from fossil fuel combustion that are also reduced.

massive potential exists to capture and use low.7 1.2 In China. Because heat is the main energy requirement for process. Japan is currently the country that sets the standard for energy efficiency in the cement manufacturing sector.3 0.6 0. N Megawatt hours / t cement Megawatt hours / t cement Megawatt hours / t cement Megawatt hours / t cement Percent Percent 0. The Japanese currently use 25% less energy per unit cement than Western Europe and 33% less than China.3 0. Nevertheless.15.0 0.0 60 56 59 37 5 0.3 0. electrical energy is also an important.1% in 2003.0 0.9 0. The laws of thermodynamics prevent all the heat from being recovered.0 0.6 5.18 14 . large quantities of fuel are burned to generate heat but much heat is used once or twice and discarded.2 25. the second biggest energy consuming nation after the United States.5 1. the figure was 7.1 1.9 0.1 0.2 30 SOURCE:21 Energy Use in the Cement Sector In major cement producing countries the cement sector’s demand for energy typically registers between 1% and 6% of total commercial energy.16.1 0.0 0.2 2.9 0.0 0. such as a complete shift from wet to dry process. Figure 3.0 6.1 0.2 0. There are various reasons for the success of the Japanese. Figures 4 shows the energy intensity of some of the main cement producing nations over time.4 0. and expensive. shows the main sources of waste heat in the manufacturing process.1 8.3 0. upwards of 30-50%.0 10 56 33 10 28 10 tonnes / t cement Kilograms / t cement Kilograms / t cement Kilograms / t cement Kilograms / t cement Kilograms / t cement 0.0 0.5 0. Dev.5 0.8 5.3 1. above.6 2.6.6 Energy costs account for a very large proportion of total cement manufacturing costs. medium and even high grade heat for power generation.17 While the majority of energy used in the cement manufacture process is fuel energy for heat. but ample room for improvement remains.0 1.3 0. In most areas there has been a gradual decrease in the energy required to make a unit of clinker. process drying and space heating/cooling.TABLE 5 SELECTED GLOBAL CEMENT SUSTAINABILITY INDICATORS FOR PARTICIPATING CEMENT COMPANIES Indicator Energy Indicators Total conventional energy use Electricity use Fossil fuel use Use of alternative energy Renewable/alternative fuel use Renewable electricity use Pollution indicators CO2 emissions SO2 emissions NOx emissions CO emissions Dust emissions Particulate emissions (PM 10) Unit Average Lowest Highest Std.2 1.0 0.0 0. secondary requirement. Another factor that certainly plays an important role is that Japanese cement manufacturers are required by law to hire an energy manager to examine onsite power potential and proceed with the investment if it is viable.1 0.1 0.6 0.0 1.0 0.0 7.0 0.4 0.

ENERGY INTENSITY OF CEMENT PRODUCING REGIONS OVER TIME (MJ/KG CLINKER) 6.FIGURE 4.00 3.00 4. shows the typical energy intensity of various cement manufacturing processes.00 5.00 2.00 SOURCE. Note that the most efficient method (which recovers waste heat from the kiln to preheat materials as they enter the kiln) uses 30-40% less energy than some of the older methods which suggests in general that there is considerable room for improvement. 3.00 Middle East Africa Latin America Other Eastern Europe Former Soviet Union India South Korea South East Asia China Japan Canada 2000 Australia/ New Zealand 1990 Western Europe USA 0. PAGE 5 Figure 5. FIGURE 5 ENERGY INTENSITY OF VARIOUS CEMENT/ CLINKER PRODUCTION TECHNOLOGIES 7 GJ/t clinker 6 5 4 3 2 1 0 Shaft kiln Wet kiln Dry kiln (four stage preheater) Precalciner dry kiln (six stage preheater) SOURCE: 22 15 . below.00 1.

23.24 Unlike other industries. Under extremely high temperatures limestone (calcium carbonate) is calcinised into lime (calcium oxide) and carbon dioxide: CCaO3 +heat = CaO + CO2 The calcium oxide then reacts with the silicates to form dicalcium and tricalcium silicates (cement). The arrival of the European Emission Trading scheme. The actual portion of CO2 resultant in the cement industry can roughly be divided into 50% chemical reaction. for example. despite plant efficiency. The industry is responsible for about 5 % of total man-made CO2 emissions in the world. fuel-use is not the most important source of GHG in cement manufacture. Table 6 shows the GHG emissions attributable to the cement industry for a select number of countries. About half of the sector’s emissions are derived from the chemical process of clinker production. CO2 is one of the chemical by-products of the process. are of growing importance to cement manufacturers and the public in general. especially CO2. below. the clinker based cement industry will always be an important source of CO2 emissions. 16 . Fuel burned for heat and electricity account for the other half of emissions from the sector. 40% fuel consumption for heat and 10% fuel consumption for electricity and transport of raw materials (see figure 6).Greenhouse Gas Emissions in the Cement Sector Greenhouse gas emissions. shows the world cement industry’s contribution to total global CO2 emissions. TABLE 6 GREENHOUSE GAS EMISSIONS FROM THE CEMENT INDUSTRY Country Mtons CO2 year Brazil USA Canada Japan Australia & NZ China Korea India Former Soviet Union 22 90 8 60 6 449 40 64 71 1996 2000 2000 2000 2000 2000 2000 2000 2000 SOURCE: WADE COMPILATION Figure 6. has made CO2 emissions an economic liability for manufacturers in Europe. This means that.

Because it accounts for such a high percentage of the industry’s overall emissions. and in many cases the payback period can be negligible. BY INDUSTRY (30GT CO2) Manufacturing Excluding cement 17% Other sectors 14% Calcination 50% Road transport 18% Cement manufacturing 5% Non-road transport 6% Energy industry 5% Fuel 40% Heat and power 34% Electricity/transport 10% SOURCE: 5. 25 CO2 Abatement Approaches Various CO2 abatement approaches are possible in the cement industry. volatile fuel prices and regulatory frameworks that increasingly include the cost of carbon in their accounts. Table 7 summarizes some of the main approaches for emission abatement in the industry. the potential is nevertheless considerable. the possibility deserves reexamination in light of changing electricity markets.FIGURE 6 GLOBAL ANNUAL CO2 PRODUCTION. displacing clinker with other cementous materials that do not require calcination has been the GHG abatement approach that has so far garnered the most attention. some of which have greater potential to reduce emissions than can be realized from onsite power alone. including electricity generation. 17 . The various means of power generation discussed in the following section are realistic solutions that deserve closer scrutiny. the main solution of interest here. Although fewer GHG emissions abatements are achievable via power generation. At the very least.

Source: 29 18 . Examples include ash. Increase plant efficiency via insulation. Replace transport fuels with biofuels. Buy grid-power from green sources. etc.27 & 28 ∗ Using a heat exchange system to preheat raw material is usually more energy efficient than the cogeneration of electricity because cogeneration systems convert thermal energy to electrical energy at about a 30% efficiency (typically about 9. improvement of grinding systems. slag and natural pozzolans.412 Btu)).935 Btu are required to produce 1 kWh (3. Capture waste heat to preheat raw material prior to entering kiln∗.TABLE 7 GREENHOUSE GAS ABATEMENT STRATEGIES FOR THE CEMENT INDUSTRY Approach Bottom Cycle Cogeneration Top Cycle Cogeneration Blending cement Fuel switching Transport Plant efficiency Preheater/precalciner Production of Reactive Belite Clinker Off-site Green Power Process Use waste heat to generate electricity. eliminating leaks. Allows lower clinkering temperature and therefore reduced emissions because less fuel is required. Replace coal with gas or gas with biomass. Generate power onsite and use waste heat from power system to dry fuels for kiln or cement raw materials. Replace a portion of the clinker in the cement with pozzolanic materials (the production of which produces less CO2). SOURCE: WADE BASED ON 26. advanced pyro-processing techniques. switch to dry from wet process.

Onsite Power and Cement Heat inputs are an important part of the cement manufacturing process (see figure 3). Figure 7. As a result. TABLE 8 POWER REQUIREMENTS IN INDIAN CEMENT PLANTS Plant capacity Tons/day 1. A Brazilian study estimates that cogeneration represents between 11. though the trend of wet kilns slowly being phased out should be seen as an encouraging sign in the context of heat recovery. and financing options can be combined. Table 8 below shows the typical electricity required of Indian cement plants of various cement production capacities.1% of total energy efficiency improvement potential realistically realizable in the cement sector between 1995 and 2015. such as switching to dry process.20 however.200 3. supply is nevertheless a prerequisite to the operation of any cement plant. illustrates the breakdown of a typical power bill faced by a cement manufacturer in Brazil. although electricity is a secondary energy requirement in cement plants compared to heat. Such major upgrades often present good opportunities for onsite power investment because many of the incremental costs.30 The same study found that 14% of the sector’s power demands could be met via cogeneration. Even where there is potential for onsite power generation in a cement manufacturing plant the economics of an upgrade that includes onsite power capacity may not always be favourable. are in a good position to simultaneously examine opportunities for investing in onsite power. such as engineering studies. As mentioned above. opportunities for making use of waste heat are abundant. Prospects for onsite power generation and cogeneration exist for all cement manufacturing facilities including both wet and dry kilns.000 4500 Typical electricity requirements (MW) 10 24 29 SOURCE: 28 19 . thus reducing significantly the costs that would be required if onsite power were to be considered on its own. dry kilns tend to require more electricity per ton output. below. Larger plants require more power in absolute terms irregardless of process (see table below). Plants considering major upgrades.8% and 12. it is plant size that is the main factor that determines electricity use.9 All else being equal. This is because exhaust gases from even the best maintained wet kilns tend to be of insufficient temperature and have a moisture content that is too high for optimal heat recovery via steam generators. land acquisition studies.

waste heat produced in existing industrial processes can be captured and put to use generating power or power can be generated using an onsite engine or turbine and its waste heat can be captured and used for some industrial process such as drying. 20 .FIGURE 7 TYPICAL ELECTRICITY CONSUMPTION BY USE IN BRAZILIAN CEMENT PLANTS 41% 2% 1% 3% Preparation of raw material Preparation and grinding untreated material Blending clinkering kiln and cooling Finish grinding General auxillary jobs Lighting 32% 21% SOURCE: 30 Technologies CHP in the cement industry can be either bottom or top cycle. and cooling. In other words. With this in mind. preheating. there are three options for onsite power in cement plants: • Bottom Cycle Cogeneration (waste heat recovery or energy recycling) • Top Cycle Cogeneration • Onsite Standby/Baseload Power Generation Annex One shows a list of selected companies involved in developing onsite power projects in the cement sector.

can make use of lower temperature waste heat. Table 10 summarizes three parameters of the various approaches: heat resource requirements.7 1. TABLE 9 TYPICAL HEAT RECOVERABLE FROM A 1000 TON/DAY OF CLINKER CAPACITY PLANT Source of heat within process Recoverable Energy (MJ/ton of clinker) ? 388-457 120-241 345-457 raw material drying cyclone preheater exhaust gas by-pass gas clinker cooler exhaust gas Reference from Figure 3 1 2 3 4 SOURCE: BASED ON 10 Various approaches can be used for this bottom cycle approach including. a Steam Rankine Cycle. TABLE 5 The Steam Rankine approach is the most common approach and the one used in existing onsite power plants in US cement plants (examples include the Florida Crushed Stone. though more expensive.9 Examples of the successful application of Kalina cycles also exist in industrial settings. TABLE 10 COMPARISON OF VARIOUS TECHNICAL APPROACHES OF WASTE HEAT RECOVERY FOR POWER GENERATION Parameter Waste heat temperature needed (°C) Approximate capital cost ($US/kW generating capacity) Electric Generation (Steam Rankine=1) Approach Steam Rankine Organic Rankine Kalina >250 >200 >200 1100-1400 1500-3500 1100-1500 1 1.6 SOURCE: BASED ON 9. An example of a successful ORC installation is the Heidelberger Zement in Germany.3-1.9 The Organic Rankine Cycle (ORC) (also known as ORMAT energy converter (OEC)).3-1. for example in the Sumitomo Corporation Kashima Steel works in Japan. Table 9 summarizes the various sources of heat from a cement plant and the related estimations of theoretically recoverable energy. an Organic Rankine Cycle or the Kalina Cycle. but there are not yet any commercial applications in cement plants. All waste heat that is successfully recovered directly displaces energy costs that would have otherwise been borne by the cement producer. cost and possible output.31 21 .Waste Heat Recovery This process is the most promising onsite power generation opportunity in the sector because of the abundant waste heat of both high and low grade. Brooksville Florida and CalMat in Colton California which has been in operation since 1985).Bottom Cycle Cogeneration .

Power thus generated would displace power from the local grid so the environmental benefits realized depend on the local fuel mix. Additional environmental benefits are achievable via the fuel switching effect. can be realized. Because a central plant is only 30% efficient. the raw material (slag.9 Top Cycle Cogeneration Opportunities for standard top cycle cogeneration are also abundant in the cement industry. generation would likely displace the need for power from central coal plants. if gas fired CHP replaces a combination of coal fired boilers and/or coal fired central plant. Indeed. for example. textile plants. food processing plants. Even the most efficient central CCGT plants max out at about 50-60% efficiency if they are not used in cogeneration applications. Examples include greenhouses∗. both of which are desirable because they can increase the efficiency of the plant. and subsequently use the heat exhaust from the generator to meet process needs.Bottom cycle plants offer the most environmental benefits because they use waste heat to generate electricity. so the power generated comes at no fuel premium. Top cycle applications use waste heat or burn fuel to generate power onsite. For both buildings and industry. In blended cement plants. In the case of China. the overall efficiency can reach upwards of 90%. the Netherlands. Where fuel in cement plants is burned to generate power and the waste heat is put to use for fuel drying or raw material preheating applications.) can also be dried using cogeneration applications. each kWh displaced by generating power with top or bottom cycle cogeneration in a cement plant actually results in three units of fuel being saved. cooling is also possible through the use of absorption chillers. but may require higher transaction costs if a neighbouring factory or community is used as a host for the waste heat. In the case of top cycle plants the environmental benefits arise from increased efficiency. As a result. for example. for example. This efficiency saving directly translates into environmental benefits in terms of reduced emissions (40% less fuel consumption means 40% lower emissions). and buildings via district heating networks. a very promising approach is to gather industries together in industrial networking parks so that efficiency increasing measures. uses gas turbines to generate power while the exhaust is used to dry slag. or drying coal prior to its introduction into the system. a plant in Rozenburg. Aalborg Portland plant in Denmark. Examples of onsite applications on the cement plant premises could include drying of raw meal (limestone/silicate mix). For example.32 An almost inexhaustible array of opportunities exists for cement plants to use cogeneration to supply heat needs to neighbouring plants or communities. aquaculture. fly ash etc. For both heat and cooling distance is the main limiting factor as it is both expensive and inefficient to move waste heat long distances. such as top cycle cogeneration. there is actually an unintuitive multiplier affect of such fuel displacement. feeds heat into a district heating network supplying approximately 15% of the municipal heat demand of the city of Aalborg. 22 . ∗ In the Netherlands it is common to use CO2 from cogeneration applications to improve the growing environment for greenhouse plants.

Periodic power shortages and power quality issues have led some cement plant operators to invest in this technology because of its relative cheap upfront capital costs and its separation from the core processes (i. Although. In some cases. 23 . power supply can be independent of operating the kiln). the cement company could expect power outages up to five times a day. Baseline Although onsite power technologies offer many benefits. without the onsite power.e. elsewhere the potential has hardly begun to be tapped. an amount equal to average transmission and distribution losses. Reduced line losses are of course applicable to top and bottom cycle CHP as well. the Twiga Cement plant in Tanzania ensures continual operation thanks to a 3MW onsite power supply.Onsite Standby/Baseload Generators Power-only plants to supply cement plants electricity can be used for standby/emergency use or for baseload. The results show that there is an imperfect correlation between the amount of cement produced and use of onsite power generation. From a system perspective there may be some overall environmental benefits even with power only applications as the elimination of transmission and distribution losses may allow central thermal plants to reduce output by 5-10% of the cement plant’s load. For example. Such an approach has proven especially popular in areas where grid power has been found insufficiently reliable to meet plant needs (such as in India). An example of this approach is seen at Grasim Cement in Chhatisgarh India. however. Table 11 illustrates the extent to which onsite power is currently being used around the world based on an extensive survey by WADE. there may still be environmental benefits if inefficient and dirty central generation (such as from coal) is displaced by cleaner onsite gas or biomass. there can be a strong economic case to invest in such technologies. In some countries the benefits from onsite power are already being widely realized. The important distinction is that no heat is recovered. the local environment may suffer as emissions shift from a remote central power plant to the onsite generator or where the central grid is largely hydro based. Even though no heat is recovered. from an environmental (and long term economic efficiency) perspective this approach is suboptimal compared to the above two options. The local electricity supply in Dar es Salaam is so unreliable that. an onsite power plant combined with some use of waste heat is optimal but even power only can be a move in the right direction. Clearly. they have been employed only sporadically around the world.

494 7.5 5. below.5 KWH OF GENERATION/TON CLINKER (SEE TABLE 3) SOURCE: WADE COMPILATION.1 5.7 38.5 3.0 2.3 1. The Kawasaki plants are bottom-cycle cogeneration whereas the Thermax and Siemens plants are a mixture of the top cycle.4 2.0 0.307 1.344 0 572 0 0 0 1.127 1.628 1.6 10.541 Potential Onsite Power (TWh/year)** 27. bottom cycle and power only plants. ** CALCULATED BASED ON AVERAGE POTENTIAL OF 32.939 4.4 1. 24 .8 0.1 1.1 1.1 3.300 3.264 57.9 10.4 2.WHERE CELLS ARE BLANK DATA IS PUBLICLY UNAVAILABLE Table 12.0 purchased (GWh) * INCLUDES TOP AND BOTTOM CYCLE COGENERATION AS WELL AS POWER ONLY APPLICATIONS.3 1.609 150 281 19 0 0 0 1 0 2 1 0 250 0 49 12 2 1 1 174 2.759 1.981 486 9 37 93 12 30 11 29 50 38 1.TABLE 11 EXISTING ONSITE POWER CAPACITY* AND GENERATION IN CEMENT PLANTS BY TOP CEMENT PRODUCING NATION Country China India USA Japan Korea Russia Spain Brazil Italy Egypt Mexico Thailand Turkey Indonesia Iran Germany Saudi Arabia France TOTAL # plants with Capacity onsite power MW* # plants 570 365 109 Gen (GWh)* 63 65 4 33 2 569 1. shows the installed onsite power capacity by country for three of the main manufacturers in Asia.144 4.6 1.

TABLE 12 ONSITE POWER PLANT CAPACITY IN CEMENT FACTORIES BY SELECTED COMPANY AND COUNTRY Country China Colombia India India India Japan Korea Saudi Arabia Sri Lanka Taiwan Vietnam TOTAL Capacity(MW) 202 17 8 114 224 81 20 158 10 59 3 896 Company Kawasaki Siemens Kawasaki Siemens Thermax Kawasaki Kawasaki Siemens Siemens Kawasaki Kawasaki SOURCE: WADE COMPILATION Potential By most accounts the potential of onsite power for improved economic performance and reduced environmental impact is significant. creating improved opportunity for waste heat recovery.10 Therefore. thus. It is very difficult to generalize as to the appropriateness of onsite power generation at a plant level because each facility will have to examine in detail the specific circumstances before a decision can be made. Potential can be gauged at both a system level (for example the cement industry of a country as a whole) or a specific project level. If it is possible to generalize on the appropriateness of onsite power at a project scale it is to say that timing is important. Onsite power investments are most likely to cost effective when they can be combined with the undertaking of other major upgrades. In other cases onsite has been shelved indefinitely as a promising option.9 There is some evidence that economies of scale can be achieved with the potential CHP opportunities greater in larger facilities (investment remains viable in smaller facilities). plants considering a shift from wet to 25 . For example. In some cases there is strong support for investment in onsite power but lack of capital or redirection of capital to other investments prevents projects from proceeding. A 2002 report in the USA called on the cement industry to re-examine the potential CHP opportunities in the cement industry. Project Level From a project specific perspective cement owners must continuously consider energy efficiency investments of all types in order to remain competitive. shifting from a wet process to a dry process results in much higher kiln exhaust gas temperatures.

Kiln upgrades or other major infrastructure changes may provide similar opportunities. since 105.6 It is safe to say that in any country with cement manufacturing capacity there is some untapped opportunity for power generation. a study estimated that large scale onsite power uptake could save 4. and 32.3 TWh) has been achieved.dry process may also consider investing in onsite power production. In a large cement plant. although a recent report examining energy efficiency opportunities in China’s cement industry focused considerably on the opportunities for power generation.∗ Including top cycle cogeneration and power only applications increases the potential considerably.9 (Source 10 uses 50-100 kWh/ton of clinker .661 TWh in 2003. onsite power generation in the US cement industry could meet 25% of the industry’s demand.3Mt CO2 or 0.5 kWh/ton clinker is achievable. Also.00019 tons of clinker were produced in the US in 2004.2Mtce**of coal every year and displace 11.8 million tons of ∗ Source: 6. Based on annual global clinker production and an assumption of the technical potential of heat recovery per ton of clinker. ** 26 . For example.41% of total world generation.23% of total global emissions could be displaced every year. if power generation potential were realized the cement industry could supply about 0. A similar calculation can be made at a national level. Coal is the main source of fuel for power generation in many of the world’s top cement making countries including China. Since 2. Source 30 uses 21.5 kWh of electricity can be generated per ton clinker it would be possible to annually generate 68.28 In China. System Level Little research seems to have been done on the scope for power generation technology in the cement industry from a system perspective. Clearly if all this power displaced from central fossil fuel major CO2 benefits could be realized.20 Therefore.1 TWh therefore this is equivalent to about 29.33 Therefore. Another study found that a similar proportion of the industry’s power demand could also be achieved in India.7 TWh in 2004. Emissions could be further reduced using top cycle cogeneration. a theoretical maximum electricity generation from the global cement industry can be estimated.000.1kWh/ton clinker) One Megaton coal equivalent equals 7. Less than one percent of total global power generation may not seem like much. The significant potential for top cycle cogeneration is additional. the above calculation provides an estimation of bottom cycle cogeneration potential only. Total global demand for generation was 16. it is technically feasible to generate 30-35 kWh via bottom cycle cogeneration per of ton clinker produced. The total demand for the electricity in the US cement sector was 13. but it is in fact a phenomenal amount of generation realizable from the cement sector with zero incremental pollution.4 TWh could be generated annually. If it is assumed that all power displaces coal (and coal has an emission factor of 1kgCO2/kWh generated) then about 68.3 TWh of electricity if waste recovery opportunities in the cement industry were maximized. about 3. This means that only a very small proportion of this theoretical maximum generation (68. Globally the current onsite generation capacity totals 2.9 GW (including bottom and top cogeneration and power only plants in the world’s cement plants).82 TWh of energy.1 billion metric tons of clinker were produced in 200519 and about 32. India and the United States.

shows an approximate potential for onsite power production in various cement producing nations based on 2005 clinker production figures. This is true whether or not the power sector has been deregulated. all barriers to developing onsite power projects in the cement sector are economic. In cases such as this.30 Barriers and Driving Forces Economics Arguably. where before these risks were limited by fixed power rates and long term contracts.6 Table 11. Indeed. As fuel costs are expected to rise. power managers must reexamine the economics of onsite power. this proportion of the overall cost of cement manufacture can also be expected to rise. especially in countries heavily reliant on fossil fuels to generate power. where power accounts for a high proportion of overall costs. Onsite power can be considered a form of buffer from power price volatility.9. although power generation will not be the approach to maximize CO2 reductions.28.9 Now that power markets around the world are increasingly subject to competition. above. FIGURE 8 TYPICAL DISTRIBUTION OF CEMENT PRODUCTION COSTS OF PLANTS IN CHINA Others 23% Raw materials 23% Electricity 26% Coal 28% SOURCE: 6 27 . it is one of the investment options with the quickest payback. whereas fuel was a variable cost. where power accounts for a considerably smaller proportion of total costs. various studies suggest that about 20-30% of total power demand for the cement sector could be met by onsite generation. Figure 8 illustrates the typical costs faced by a cement manufacturer in China. Although electricity accounts for a small proportion of the energy used in a cement production facility it can account for a much higher proportion of production costs. especially in areas where deregulation shifted the risk of energy price volatility to purchasers. Figure 9 shows similar cost data for a plant in Egypt.CO2. In most cement producing areas of the world power was traditionally seen as a fixed cost.

6 Of course the quality of the technology is the main cost driver. for example. if so. for example. A major factor that should also not be overlooked is whether non-energy related plant upgrades will be required in the near future and. Because onsite power equipment in cement factories tends to have extremely high capacity factors (even compared to the power sector plants) they wear out faster than other units that run less continuously.250 and 2. estimates suggest that while energy (including the landed cost of coal which is about 26%) and freight (15%) are the major cost components. Depreciation policy is another factor of CHP economics over which policy makers have considerable influence. In India. Every cement plant has unique operating costs so only a detailed evaluation of the individual plant circumstances can suggest the appropriateness of investing in onsite power. what the marginal cost of including onsite power in such upgrades would be.35 Depreciation rates for tax purposes do not always allow for this distinction. Import duties and other taxes create a disincentive for plant owners to make the investment. local availability and cost of financing and available technologies.FIGURE 9 TYPICAL DISTRIBUTION OF CEMENT PRODUCTION COSTS OF PLANTS IN EGYPT Miscellaneous Raw Materials 6% 6% Heavy Oil 7% Gas 8% Packing 13% Labour 9% Financing 22% Depreciation 11% Parts and M&O 9% Electricity 9% SOURCE: 34 Of course the above estimates are only illustrative. Tax and Other Incentives Tax considerations can play an important role in the economics of onsite power projects. one estimate suggests a capital cost of between $US 1. temperature and temporal availability of heat streams. one of the main factors preventing local plant operators from investing in foreign waste heat recovery generators is cost. Among the factors that need to be considered are the quantity. but import duties and taxes are also an important factor. 28 . For example. Economics for onsite power investments are most attractive when the investment can be combined with other plant upgrades or included in the original plant design. In China.750 per kW nameplate generating capacity depending mostly on the origin of technology.

This in an effort to allow ESCOs to prove themselves to the lending institutions which before were hesitant to lend to ESCOs. 29 . in China.interest and depreciation can account for 25-30% of total costs36. Joint Implementation (JI). even plant owners in the US and other countries with reliable grid power may want to reconsider investing in onsite power. the United States. upgrades in cement plants to generate power are often unappealing. For example. has comparatively very little onsite generation in the sector.6 As a result it is expected that the number of larger scale plants with waste heat recovery potential will increase. India has the most installed onsite capacity in the sector followed closely by China. To the extent that the benefits of increasing the reliability of a cement plant can be combined with the other cost saving and environmental benefits. A typical strength of the ESCO model is therefore rendered moot (typically one of the reasons an end user turns to an ESCO is because it has access to the necessary capital to undertake a project where the user may not).6 On the other hand. funds are pooled as a form of guarantee against ESCO borrowing. less efficient technology. Employing Energy Service Companies (ESCOs).6 First. but several main challenges remain. This is likely because the grid supply is relatively stable and projects must go ahead on payback alone. Financing Because banks have little experience in financing energy conservation schemes. and the Clean Development Mechanism (CDM) (see box below) are three possible routes to successful financing of onsite power in the cement industry. One study cited the importance of technology transfer as a possible driver for improving investor confidence in major cement plants investments in the developing world. Such projects can involve many transactions with comparatively little investment and progress can be difficult to measure. Another idea being considered in China is the establishment of a specialist ESCO that works only with onsite power projects. Reliability It seems that the single most important factor driving cement industry investment in onsite power is reliability. there is a shortage of specialized knowledge of the cement sector among ESCOs. rather than granting funds from the Global Environment Facility to ESCOs directly. ESCOs are a promising model. A policy adopted in China May 2004 prohibited lending that permitted installation of smaller. who tend to concentrate on equipment common in many industries. existing ESCOs do not have access to the large amounts of capital required for onsite power projects in the cement sector and are forced to borrow.6 The Kyoto protocol’s Clean Development Mechanism (CDM) was cited as one promising means of modernizing the cement sector. Second. Laws can also provide an important means of realizing financing for onsite power projects. the third most important cement producing nation in the world. There are strategies for overcoming this barrier. In both cases one of the most important factors in deciding the investment was that reliable grid power was not available.

One approach to overcome this challenge is to gather cement industry professionals together to discuss possible solutions. Thus technological change and upgrade cycle are important drivers for onsite power investment. As these issues continue to gain momentum and rise in importance in the eyes of the world’s governments the cement sector will be increasing pressure to reduce its environmental footprint.6 Policy General policy can play an important role in making power projects in the cement sector viable.Technology Technological change in industry is often slow because once a technology has been installed at a factory businesses will try to maximize its payback by operating existing equipment for the duration of its useful lifetime. new technologies may only have a short window of opportunity to compete every 20 years or so (when existing equipment such as kilns and preheaters needs to be replaced). when the gases first leave the kiln. The exhaust gases must be cleaned prior to feeding them into a power generation application. 30 . Does the government or regulatory commission allow industrial facilities with onsite power facilities to connect to the grid? To feed power into the grid? Are bilateral power contracts permissible? If the cement plant ever fed power to the grid would a fair tariff be guaranteed? Other more prescriptive rules are also possible to envisage. The plan actively promotes the use of low temperature heat for power generation in cement plants. Unfortunately these gases also contain dust and contaminants that can foul turbine blades. For example: Does the government require all plants to look at the possibility of CHP in cement plants (as is the case in Japan)? What kind of environmental regulations does the industry have to adhere to and how do these directly or indirectly encourage onsite power production? Must a cement plant optimise waste heat recovery in order to be granted approval for new build or renovation? Are there policies to ensure that renovations that improve energy efficiency obtain favourable access to finance? Are there any arrangements in place to permit a cement plant owner to take advantage of carbon savings such as carbon trading? A recent example of how policy can directly effect onsite power in the cement sector can be found in the “China Medium and Long Term Energy Conservation Plan” introduced in 2004.6 Environment Environmental issues such as air quality and climate change are increasingly rising on the political agenda around the world. One persistent technical challenge to waste heat recovery in the cement sector then is how to maximize recovery of useful heat from gases leaving the kiln. As a result. Broader regulatory decisions affecting the power sector is perhaps the best example of this. In the cement making process the waste gases are hottest. and therefore potential for heat recovery for power generation is greatest. By the time the gases are sufficiently clean they have lost much of their energy content. For example in 2004 the China cement Association organized a training course for ESCOs in the cement sector.

The environment issue will manifest itself in tougher anti-pollution laws as well as frameworks that will facilitate cleaner production. Examples include the CDM (see annex 3). the EU emission trading scheme or the Asia-Pacific Partnership on Clean Development & Climate which has specific Task Forces for both the cement sector and distributed generation. 31 .

Indeed.41% of total world’s demand for electricity generation could be met. At a plant level. tax structures. Cogeneration can often reduce production costs without negatively affecting the core plant operations or the quality of the end product. While generating electricity on cement manufacturing sites is a common practice in many areas of the world. If the full potential of onsite power in the cement sector were realized about 0. operations can be improved due to increased reliability and plant run time and end users can expect a more reliable and higher quality product. Only a detailed evaluation of heat streams (quantity. power demand patterns and energy prices can determine its appropriateness. Major cost savings can also be expected as investments in onsite power in major industries such as cement can displace the need for expensive local distribution and transmission infrastructure and redundant remote generating plant. If bottom cycle cogeneration were used to its maximum in the order of 0. In some cases major plant upgrades. Onsite power is one option which deserves renewed consideration. available incentives. for example a shift to dry process or major rotary kiln upgrades. could include power generation equipment or make use of waste heat in cogeneration 32 . provides significant untapped potential to reduce the environmental footprint of the cement sector as well as having significant scope for displacing a portion of the environmental footprint of the power sector. From a system perspective it is clear that onsite power. The environmental benefits of onsite power in cement plants depend not only on the efficiency increases that result but also on the fuel mix of the local grid power which is displaced. allows higher kiln utilization and increases quality of the finished product. saves energy costs. Other factors critical to deciding if onsite power is suitable include local rules related to grid connection and feeding power into the grid. significant untapped potential for onsite power remains. onsite power guarantees against production interruptions from utility failures. There are many options at the sector’s disposal for reducing its environmental footprint all of which merit attention.23% of total global emissions could be avoided annually. Other system level benefits include improved grid reliability and decreased vulnerability to fuel price volatility. financing mechanisms and management risk strategy. If even a small percentage of displaced power was from central fossil fuel plants major CO2 benefits could be realized. especially waste heat recovery technology and top cycle cogeneration.Conclusions The cement sector is one of the world’s most energy intensive industries and is responsible for large proportions of the world’s CO2 emissions as well as other pollutants. Nevertheless it is difficulty to generalize whether an investment in onsite power makes sense for a particular plant. temperature and temporal).

33 . efficient and cost effective onsite power generation. the competitiveness of their business and the perception with which an increasingly demanding public sees them. Leaders in the cement industry have much to gain by reconsidering the role that top and bottom cycle cogeneration can have in improving the efficiency of their plants.applications with little additional cost. Certainly costs can be reduced if power production capacity is included at the time of upgrade. Policy makers and the general public also have much to gain from the wider system level benefits provided by clean.

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. Huaxiao Resource Co. Ltd VA Tech Elin EBG Gmbh Virginia Transformer Corp Wartsila* Wedag Zhongxin Heavy Machine Company * DENOTES WADE MEMBER COMPANY SOURCE: WADE COMPILATION 36 .Annex 1. Kawasaki Kerpen Industrial KHD Humboldt Ormat Technologies Polysius Power Developments International Rockwell Automation Sadeven SA Siemens AG* Thermax Ltd* Tianjin Nengda Technology Development Co. Selected Companies Involved in Onsite Power in Cement Plants TABLE 14 SELECTED COMPANIES THAT ARE INVOLVED IN POWER GENERATION PROJECTS IN THE CEMENT INDUSTRY ABB Group AEES Alstom Power Arab Swiss engineering Company Autec Power Systems CBMEC Doosan Heavy Industries & Construction FLSmidth Hangzhou Boiler Group Co.

Only by starting to track this kind of information will we know when the market for generating powering in the cement industry has been saturated in a particular region. public statistics on the use of onsite power generation in the cement industry are poorly documented.Annex 2. SOURCE: STATISTICS IN FOCUS. Although Eurostat does not track data of CHP use in the cement sector specifically. during the process of electricity sector reform. The process is further complicated because cement companies in some countries. topping and power only plants) have all been included together in the same column in table 11. CERAMIC PRODUCTS. GLASS AND GLASS PRODUCTS. AND CEMENT AND PLASTER. Because of this lack of data. 3/2006 37 . Table 15 below illustrates the problem with poor data relating to onsite power by sector. Statistics and the Cement Industry In general. EUROSTAT. all forms of onsite power (bottoming. have outsourced electricity production assets. It is not clear how much of the capacity is attributable to cement versus glass and ceramics. The table shows CHP capacity for the EU-25 including that capacity installed in the cement sector. it is likely that cement accounts for very little of the 483MW capacity cited1 (10% may be a realistic estimate). TABLE 15 CHP IN THE EU-25 BY ECONOMICAL ACTIVITY IN 2002 Non-metallic mineral products* TOTAL (all sectors) Maximum CHP Capacity CHP Production Fuel Input Electrical MW Heat MW Electricity GWh Heat TJ TJ (NVC) 483 1045 2599 20453 43429 91634 236136 299164 2844166 6487558 *INCLUDES. thereby complicating the statistical work.

Annex 3: The CDM and Cement The Kyoto Protocol’s Clean Development Mechanism (CDM) is opening up new opportunities for financing efficiency projects that did not exist even five years ago. • Electricity generated under the project activity displaces either grid electricity or 38 . For a detailed background and explanation of the CDM see WADE’s report: “Clean Development through Cogeneration”. Emissions reduction through partial substitution of fossil fuels with alternative fuels in cement manufacture Substitution of CO2 from fossil or mineral origin by CO2 from renewable sources in the production of inorganic compounds Natural gas-based package cogeneration Consolidated methodology for waste gas and/or heat for power generation SOURCE: 37 The Taishan Huafeng Cement Works was the inspiration for the main methodology that has been established so far that is of interest to the cement plant owners considering onsite power applications.the baseline scenario). It is assumed that there is no electricity export to the grid in the baseline scenario to which the proposed CDM project must be compared (in order to qualify for CDM credits carbon savings from a project must be additional to those that would be realized if the project were to go ahead without CDM. Various CDM methodologies have been developed which are directly or indirectly applicable to onsite power projects in the cement sector: TABLE 13 CLEAN DEVELOPMENT MECHANISM METHODOLOGIES RELATED TO THE CEMENT SECTOR Methodology AM0024 ACM0005 ACM0003 AM0027 AM0014 ACM0004 Description Methodology for greenhouse gas reductions through waste heat recovery and utilization for power generation at cement plants Consolidated Methodology for Increasing the Blend in Cement Production. AM0024 deals with bottom-cycle cogeneration projects where: • The electricity produced is used within the cement works where the proposed project activity is located and excess electricity is supplied to the grid.

Some other methodologies may not yet have been applied in the context of a cement plant but there is no reason why they should not be in the future. the recycling of waste heat is possible only within the boundary of the clinker making process (e. Identified specific generation source could be either an existing captive power generation source or new generation source. This methodology is NOT applicable to project activities.power from an identified specific generation source. In the baseline scenario. • The grid or identified specific generation source option is clearly identifiable. clinker production lines in baseline scenario could include some heat recovery systems to capture a portion of the waste heat from the cooler end of the clinker kiln and use this to heat up the incoming raw materials and fuel ). 39 . • That affect process emissions from cement plants.g. • Waste heat is only to be used in the project activity. • Where the current use of waste heat or the identified alternative business as usual use of waste heat is located outside of the clinker making process. It is possible to envisage for example AM0014 being applied for a gas turbine at a cement plant where waste heat is used for drying raw material or fuel prior to use.