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CHP Potential in Indian Industrial Sectors

There are significant opportunities in various industrial sectors in India for producing electrical and
thermal energy simultaneously in the co-generation mode. There is a potential of generating electricity
to the extent of about 15,000 MW through cogeneration in core industries such as sugar, breweries/
distilleries, Chlor-alkali, aluminium, fertilizer, paper & pulp, textile, petrochemicals & refineries, rice
mills etc. The fuel used for cogeneration can be conventional like coal, lignite, oil, gas or renewable
sources like bagasse, rice husk, biogas and biomass based fuels. A review of cogeneration / CHP
opportunities in some of energy intensive sectors is presented below.
1. Aluminium
Production of Aluminium from bauxite ore involves purification steps to
produce pure Alumina (Al2O3) and then electrolysis of Alumina. The whole
process is energy intensive. Energy accounts for about 40% of cost of
There are four major aluminium producers in India viz. BALCO, NALCO,
HINDALCO and INDAL. Bayer-Hall-Heroult technology used by all producers
During purification of Alumina from bauxite ore digestion of ore at a
temperature of about 2500 C at a pressure of about 35 bar. Further the heat
is required in calcinations of the alumina at about 1000 to 12000C. Finally the electrolysis process of
producing aluminum requires electricity to the tune of 13000 kWh per MT.
There is a huge scope for CHP in this sector by recovering the waste heat from the exhaust gases
from calcinations section to produce the steam at high pressure and utilize it to generate electricity
and also provide the required steam for digestion.
All aluminium producing plants in India have their own captive power plants to provide reliable source
of electricity. All the plants are targeting to reduce energy consumption by 1 to 2% every year for next
5 to 8 years. The demand of aluminium is expected to grow by about 9 percent per annum from
present consumption levels. This sector is going through a consolidation phase and existing
producers are in the process of enhancing their production capacity so that a demand supply gap
expected in future is bridged. So CHP has a good scope in achieving reduction in specific energy
consumption of aluminium. The estimated potential for CHP in this sector is about 60 MW.

2. Distilleries
There are about 330 distilleries in India, out of which about 250 units are in
operation. The total installed capacity is about 3500 million litres of alchohol.
Distilleries generate a large amount of waste water (spent wash) having high
COD and BOD values. The waste water cannot be discharged directly without
reducing COD/ BOD values below State Pollution Control norms. However, the
waste water can generate biogas through biomethanation and biogas can be
further utilized for the production of electricity and thermal energy through a
technology integration comprising a boiler/ steam turbine or 100% biogas engine.
The distilleries can generate steam at desired pressure and temperature to meet
their process requirements and produce electricity for captive use or for export.
Estimated potential for CHP is about 2000 MW. It is only next to bagasse cogeneration. Some
distilleries have successfully implemented CHP projects based on biogas generation from spent wash
liquors through anaerobic digestion. Biogas utilized for power and heat generation through gas
engines or steam turbines is now established technology. Some of the biogas based CHP plants in
Distillery sector are:
a) 2 MW biogas based power generation through gas engines by Kanoria Chemicals at
Ankaleshwar, Gujarat.
a) 1.0 MW biogas based power generation by Brihan Sugar Syndicate, Sreepur,
a) 2.0 MW power generation based on biogas at Saraya Distillery, UP.

CHP projects based on biogas from spent wash not only benefits the industry by gainful utilization of
otherwise waste product but also helps in eliminating pollution.

3. Cement Industry
India is the second largest producer of cement in the world. The Indian
cement industry is a unique combination of very large to very small capacity
and very modern to very old technology plants. The share of installed
capacity of energy inefficient wet process plants had slowly decreased from
94% in 1960 to 61% till 1980 and thereafter as a result of quantum jump in
production capacities through modern dry process plants as well as
conversion of some of the wet process plants, the share of old wet process
has been reduced to just 5% today. The Indian cement industry comprises of
124 large/medium size cement plants including grinding units and about 300
mini cement plants. The annual installed capacity of the industry is about 146 million tonnes and
production was about 106 million tonnes during 2001-02. The current trend is to install large size
single stream cement plants of 1.2-2.5 million TPA capacity.
Cement plays a vital role in infrastructure development, especially in a developing country like India.
The industry also provides direct and indirect employment to people. Economic liberalisation and
favourable industrial policies, including decontrol of cement, has resulted in enormous growth in
cement production capacities in India. The growth of cement industry in India is likely to be sustained
at the rate of 8% and the cement demand is likely to reach about 164 million tonnes by 2006-07.
Therefore the industry is look out for cheaper and environ friendly source of energy. Average use of
thermal energy is about 725 kcal/kg of clinker and use of electricity is about 82 kWh per MT of cement
production. Cement industry being a continuous process industry requires highly reliable power
supply. Therefore, most of the plants have captive power plants.

Cogeneration of power utilizing waste heat is an attractive proposition for cement plants for energy
conservation and minimizing dependence on the grid. Further, cogeneration of power will also help
reduce environmental pollution as well as strain on the economy because of reduction in consumption
of diesel oil. The present scenario therefore, warrants adoption of cogeneration systems in the Indian
cement industry to make them more economical and to ensure cleaner environment.
However, in Indian cement industry, this technology has not been implemented so far owing to the
following reasons:
• Non-availability of proven technology indigenously
• Non-availability of installation or their operating experience in India resulting in lack of
• Design of waste heat boiler suiting to high dust load.
• Large capital requirement and financial constraints owing to depressed cement marketing
Nevertheless, the cement industry is quite keen to adopt the cogeneration system provided its
apprehension with regard to technology and economic risks are alleviated through installation of
demonstration projects, and same financial assistance.

NCB studies indicate that in the dry process cement plants, nearly 40 percent of the total heat input is
rejected as waste heat from exit gases of pre-heater and grate cooler. The quantity of heat lost from
PH exit gases ranges from 180-250 kcal/kg clinker at temperature range of 300-400 o C. In addition,
80-130 kcal/kg clinker heat is lost at a temperature range of 200-300 o C from grate cooler. This waste
heat can be utilized for electric power generation. There can be many combinations to work out the
best scheme suited to a given situation. In existing plants, cogeneration technologies based on
bottoming cycles have potential to generate up to 25-30 percent of the power requirement of a plant.
The analysis of the data of 20 cement plants by NCB has indicated cogeneration potential ranging
from 3.0 to 5.5 MW in different plants depending upon the temperature and quantity of waste
gases from PH and cooler exhaust, number of PH stages, use of gases for drying of raw
materials and coal etc. There is a total cogeneration potential of about 200 MW in 45 plants of
1 MTPA and more capacity.

4. Chlor-Alkali Industry
The chlor-alkali industry consists of the production of three inorganic
chemicals: caustic soda (NaOH), chlorine (Cl2) and soda ash (Na2CO3).
Caustic soda and chlorine are produced simultaneously while soda ash is
produced during a different process. Hence, the chlor-alkali industry with
respect to CHP is covered in two parts:

a) Caustic Soda
The caustic soda industry in India is approximately 65 years old. There are
40 major caustic soda plants with an average plant size of 150 tons per day
(TPD), which is relatively small compared to sizes found in developed countries (500 TPD). Five
largescale caustic soda units have been commissioned since 1997. During the last 8 years, caustic
soda has increased at an average annual growth of 4%. Production of Caustic Soda during the year
2003-2004 was 1,741 thousands of MT.
The raw material necessary in the production of caustic soda consisting of salt and water is abundant
and inexpensive. Conversely, the electrical energy required to process salt into caustic soda and
chlorine is expensive and occasionally unreliable. Energy costs represent 50 to 65% of the total cost
of production.
The electrolysis phase is the most energy intensive. The thermal energy requirement is null in the
mercury process as the caustic soda solution formed is highly concentrated (50%). The diaphragm
process results in a caustic soda solution with a much lower concentration of around 10%, and
thermal energy is needed to evaporate and concentrate the solution to 50%. The membrane cells
produce a solution of about 30-35%, requiring less thermal energy. Following Table 4-1 gives
electrical and thermal energy required to produce Caustic soda lye of 48.5 % concentration.

Table 4-1. Specific Energy Consumption for Manufacturing Caustic Soda Lye*
Diaphragm (1994) Mercury Membran
(1999) e (1999)
Power Consumption (kWh/t of NaOH)
DC Power 2561 2833 2342
AC/DC losses 107 160 104
Auxiliary 457 307 254
Thermal energy for evaporation 942 0 148

Total 4067 3300 2848

total in GJ/t of NaOH 14.64 11.88 10.25

During the last 10 years, production has shifted to membrane cell technology. This shift, combined
with technology improvements in mercury and membrane cell processes and energy conservation
programs intended to reduce auxiliary and rectifiers’ energy consumption, has resulted in an
estimated overall energy savings of more than 10%.
As energy in the form of electricity and heat is required for caustic soda process, CHP is the right
choice to achieve better efficiency. Hydrogen gas is produced as a by-product of caustic soda; it can
be captured and used as a fuel in on-site power co-generation. The heat can be used for the
evaporation of caustic soda and for the preparation of the brine. Moreover hydrogen is clean fuel. The
use of by-product hydrogen gas can substitute up to 35% of the total fuel requirement in a caustic
fusion plant.
b) Soda Ash
The energy needs for the production of soda ash take on different forms: electrical, thermal and
mechanical energy and feedstocks. Coke is used as a source of carbon dioxide in the soda ash
production during the limestone calcination.
Two types of soda ash are produced: “light soda ash” with a specific weight of about 500 kg/m and
“dense soda ash” of about 1000 kg/m. Light soda is directly used in the detergent sector and certain
chemical intermediates. The remainder is transformed by crystallization after drying to produce dense
soda mainly used in the glass industry. This extra step requires further energy. Table 4-2 shows the
energy requirements at different stages in the production of soda ash for the standard Solvay process

and the dual process. Unfortunately, this level of detail is not available for the dry lime process.
However, the basic advantage of the use of dry lime instead of milk lime is a better steam balance
and the reduction in the raw material inputs, resulting in energy savings. The consumption of steam
and lime is much lower as compared to other processes.

Table 4-2. Specific Final Energy Consumption in Different Sections in a Soda Ash Plant (1994)

(GJ/t) Solvay Process Dual Process

Manufacturing The Ele Tot Ther Electrical Total
rma ctric al mal
l al
Limestone 4.2 0.1 4.3 - - -
Salt purification 0.4 0 0.5 0.4 0 0.5
Calcination of 4.2 0.1 4.3 4.2 0.1 4.3
sodium bicarbonate
Crystallization, 4.2 0.1 4.3 4.2 0.1 4.3
drying and
Ammonia recovery 2.5 0 2.5 - - -
Manufacture of - - - - 0.7 -
ammonia chloride
Utilities and general 0.4 0.7 1.1 0.4 1.2 1.6
Total 15. 1.1 17.0 9.2 2.2 11.4

Table 4-3 shows the detail of the soda ash industry plants in India. 34% of the total production
capacity consists of the state of the art dry lime process, 4% the dual process and 62% the
standard Solvay process.

Table 4-3. India Soda Ash Plants Characteristics

Company Location Year Process Capacity

‘000 %
Tata Chemicals Gujarat 1948 Standard 875 33%
Saurashtra Chemicals Gujarat 1960 Standard 650 25%
Ltd. Solvay
GHCL Gujarat 1988 Dry lime 525 20%
Nirma Ltd Gujarat 1998 Dry lime 365 14%
Tuticorin Alkalis Tamil 1982 Dual/ 115 4%
Nadu Modified
Dcw Limited Gujarat 1939 Standard 96 4%

Cogeneration: The Solvay process requires a large amount of steam, a big part of which is used as
low pressure steam, injected directly into the process for the recovery of ammonia (steam stripping).
Energy savings can be realized by reducing steam pressure in a set of turbo-generators while
generating electricity. This electricity is produced with a "cogeneration" of steam, with an excellent
efficiency (about 90%) because all the steam leaving the turbines is used in the process. In
comparison, the same quantity of energy will be generated, in a classical power station, with a much
lower efficiency (about 30%) because of the lost released steam. Comparison of the primary energy
needs of a co-generation unit (based on gas) - for a soda ash plant - with that required for the
separate production of steam and electricity (by a classical power station for electricity and boilers for
steam), shows that it is possible to achieve 30% savings with co-generation.
Total estimated potential for CHP in this sector is about 400 MW.

5. Dairy
Dairy industry operation involves milk processing consisting of following steps:
1. Homogenization
2. Pasteurization involving rapid heating and cooling of milk
3. Packaging and
4. Storage
A block flow diagram is shown below:

Further conversion of milk into value added products like yoghurt, cheese, ice cream, milk powder,
condensed milk requires electricity along with heating and cooling at various stages. Therefore,
instead of depending on unreliable state grid electricity (as case may be in the most of the States) to
run plant, CHP can be good and economical option to produce power, heat and refrigeration with
higher overall efficiency. For dairy industry, biogas or other renewable agriculture source of energy
can be easily available at low cost. This can be used to generate power and steam as per
requirement. Steam can be used for Absorption refrigeration.
Total estimated potential in this sector is about 500 MW.

5. Fertilizers
Profile of the Fertilizer industry:
Fertilizer sector is very crucial for Indian economy because it provides a
very important input to agriculture. Moreover the fertilizer industry, specially
the ammonia urea plants, are highly energy intensive in their operation.
There are vide variation in the vintage of fertilizer plants in the country. In
terms of feedstock, major feedstocks presently being used in the fertilizer
plant are natural gas, naphtha and fuel oil / LSHS. Over the years, the
majority of industry has improved its performance significantly in terms of

specific energy consumption and capacity utilization. There are several state-of-the-art fertilizer plants
operating in India. There are around 27 fertilizer plants in the country engaged in the manufacture of

2. Salient features of Indian fertilizer industry

Fertilizer sector is very crucial to Indian economy, provides important input to agriculture sector. It is
regulated by government policies administering the price of fertilizer and the production.
• Urea production is energy intensive process.
• Natural gas, naphtha, LSLS/fuel oil are used as feedstock for producing urea
• Cost of energy varies from 65% to 87% of production costs.
• Specific energy consumption of plants varies between 5.53 Gcal/MT of urea and 10.2
• Majority of industry is energy conscious and focuses on energy management. Over the years,
the industry has improved its energy performance by bringing down the specific energy
consumption and improving capacity utilisation. The fertilizer industry is among the most
energy intensive industry particularly all fertilizers involving production of intermediate
ammonia. Feedstock for ammonia production is natural gas, naphtha, fuel oil (LSHS) or coal-
all sources of primary energy. From ammonia you can produce urea, ammonium sulphate,
ammonium nitrate (requires nitric acid again from ammonia as raw material), MAP, DAP, ANP
etc. Almost 70 to 80% variable cost of ammonia is through primary energy sources.
Ammonia and urea production in a complex is a good example of CHP. In ammonia process based on
NG as feedstock, some reactions like primary reformation are endothermic while reactions like
secondary reformation, shift conversion, ammonia synthesis are highly exothermic. All the exothermic
heat of reaction is utilized to produce high pressure steam. In the Primary Reformer furnace, the
waste heat from the flue gas is recovered to pre-heat process streams like natural gas, process air,
combustion air and also to generate or superheat steam. The high pressure steam is then used for
running steam turbines of various compressors like syngas compressor, process air compressor,
ammonia refrigeration compressor and pumps like BFW pumps, CO 2 removal solution circulation
pumps and also process requirement. A modern ammonia plant is more or less self sufficient with
respect to steam.
In India, almost all ammonia/ urea plants are provided with captive power generation. In earlier plants,
HP boilers were provided to generate power as well as provide required steam to Urea plant to drive
CO2 compressor turbine and provide process steam through extraction of steam turbine.

In some modern ammonia/ urea plants, captive power is generated through running of Gas Turbine
and steam is generated through HRSG. The steam generated in HRSG is used in urea plant for
steam turbine.
In nitric acid production, the reaction of oxidation of ammonia to produce nitric acid is exothermic. The
heat of reaction is used to generate medium pressure steam, which is partially used for drive process
air compressor and rest is exported to other process plants.
Through use of CHP along with integrated steam net work, the energy consumption in Indian recent
ammonia plants is near to 7 Gcal/ MT which is comparable to any modern International ammonia
Estimated CHP potential in this sector is about 1200 MW.

6. Iron and Steel Industry

Profile of the Steel Industry
The Indian integrated steel industry consists of nine major plants located
mostly in the eastern areas rich in both iron ore deposits and coal. The
location of the plants was conceived with the intention of having them close
to raw material sources. In the days of supply driven market which was also
hedged from external competition, the emphasis was mostly on production
and not on cost cutting or energy efficiency. With the change in the business
environment where market driven forces became stronger and in view of the
integration of global environment concerns with the national concerns a
marked shift towards incorporating energy efficiency and environment
protection in the business activities has taken place. Initially focus was on
production technology and it was only recently in this process that energy efficiency concerns were
seeded into the thinking of the respective managements. The plants have a wide range of facilities
and this reflects in the energy consumption of the individual plants as well.
Salient features of Indian Steel Industry

• Installed capacity 34 MT of finished steel

• 42% of finished steel production in integrated steel sector
• 58% of installed production in secondary steel sector
• SEC ranges from 29.5 GJ/tcs to 41.8 GJ/tcs
• Average SEC of Indian industry (33 GJ/tcs) is slowly approaching that of US industry (26
• Most efficient steel making countries are Japan (18 GJ/tcs) and South Korea (19 GJ/tcs)
• Over the years, a number of energy conservation measures taken by each plant.

Energy from waste

The utilisation factors are inversely correlated to the Specific Energy Consumptions (SECs). However
an important off-lier in the analysis carried out is the JSPL plant which is mostly dependent on the
Scrap / DRI-EAF route for steel making. Even though the utilisation factor for the plant is only 66% the
SEC is only 26 GJ/tcs implying that the use of new routes of steel making with optimal capacities
could be used to harness energy for better purposes. The plant uses the DRI off-gases for electricity
In the steel industry, the type of cogeneration based on recycled energy is used.
Recycled energy, typically a form of bottom cycle CHP, is a unique – although not novel – way to
recover energy that has been ‘bought and paid for’. This recycled energy still has residual value after
it has been used for its initial purpose in an industrial process. Recycled energy can intricately couple
with energy-recovery generation equipment in an industrial process.
Some recycled energy projects have been a part of the standard production process for many
decades. For example, the steel industry has been burning its by-product streams (including blast
furnace gas, coke gas and off gas) in boilers for plant steam or electric generation or both, through a
condensing, condensing–extraction or back-pressure steam turbine. Historically though, only 75% of
the energy in waste gases has been utilized while the rest was flared. While the cost for these
innovative projects can be substantial compared with other non-core business investments, they
employ proven technology and can be practical investment strategies.
In the steel industry specifically, three major processes lend themselves to recycling: the coking
process, the blast furnace process, and the reheating process. The coke-making process can produce
latent and sensible energy in a non-recovery coke process, or chemical energy in the form of coke
oven gas (COG) from a recovery coke process. The terms ‘recovery’ and ‘non-recovery’ refer to
whether the COG constituents (such as tar or naphthalene) are recovered or whether they are
destroyed by combustion within the coke batteries. When recycling energy from a non-recovery coke
process, heat is routed through heat-recovery steam boilers to make high-pressure steam which is
then sent to a steam turbine. When installed on a recovery operation, a recycled energy project
cleans the COG and collects the constituents either for disposal or sale. The resulting gas has a
heating value of approximately 500 BTU/scfh (5.2 kWh/m3/hour), which is half that of natural gas. The
gas is then burned in an alternative fuel boiler to make high-pressure steam and sent to a steam
Blast furnaces, exhaust a combustible gas fittingly termed blast furnace gas (BFG). BFG has a
heating value of 100 BTU/scfh (1.0 kWh/m3/hour), about one tenth that of natural gas. This exhaust
by-product can be burned in a boiler to produce high-pressure steam, and the steam can be passed
through a steam turbine, directly to a process, or both. Both recovered COG and BFG can also be
burned in an industrial gas turbine (a top-cycle approach) in combination with a heat-recovery steam
generator to make high-pressure steam, which can be routed through a steam turbine and back to the
plant for process uses.
Reheat furnaces are used to heat up slabs of steel produced by the blast furnace process or an
electric arc process. The slabs are heated up to glowing orange, and are then sent through a cleaning
and reducing mill where they are flattened and coiled for delivery. The furnaces typically have high
volumes of exhaust at temperatures above 800ºF (430ºC). The exhaust can be routed through heat-
recovery steam generators and make high-pressure steam, and the steam can be routed through a
steam turbine and back to the process.

Recycled energy a good idea even with all the engineering costs, capital costs and operational risks.
These projects have a long list of benefits that must be evaluated for their environmental and or
financial values. These benefits include:
• reduced energy purchases – oil, gas and electricity
• decreased exposure to fuel price volatility n displaced investment in other non-cogeneration
energy facilities
• improved competitive position and reduced costs
• reduced environmental impact
• production of clean power with no incremental fuel emissions or greenhouse gases
• generation of emission credits.
Many companies need to reduce their impact on the environment if they want to increase production

Potential for Recycled Energy and CHP

There are still prospects for cogeneration in the steel industry. The reason that the steel industry has
such a small amount of cogeneration is the internal competition for capital facing many companies.
Companies must justify energy projects while dealing with issues such as volatile local gas and
electricity rates, as well as the high costs of interconnection and back-up power that regulated utilities
have been able to charge. Unfortunately, the electrical utility industry does not generally support these
cogeneration projects and perceives them as threats to their customer base.
The potential of cogeneration in the steel-making processes is vast, but technological hurdles and
complex utility contractual relationships sometimes steer less determined companies away from the
long-term environmental and financial benefits. However, nearly every analysis that attempts to
address efficiency issues within the steel industry itemizes heat recovery and cogeneration as one of
the many improvements available to existing mills. For example, in the electric arc process, nearly
20% of the energy input is lost in the off-gas, but as the process is a batch process and is
discontinuous, it can increase the economic and technological hurdles due to operating time, cycling
stresses or increased capital costs.
The steel industry is a highly capital-intensive industry. Most companies want to concentrate on their
core business: the production of a high-quality finished steel product that meets their customer’s
requirements. Therefore, a large portion of available capital is used to accomplish these goals. There
has been a trend in the industry to consider using third-party participation to support non-core
investments. Cogeneration is certainly an area that would apply to this concept, whereas plants have
an opportunity to reduce energy costs while conserving capital investment. Obviously steel companies
want to choose a reputable partner that has expertise in this area to ensure reliable and efficient
operation of these facilities.
Should you develop, construct, own, operate and maintain a cogeneration facility? Should you enter
into a cogeneration partnership? To answer these questions, you must answer the following:
• What is your strategic outlook on on-site power and thermal plants, and does your core
business include recycled energy and CHP?
• If you do plan to put in more power and thermal plants, does your company prefer to do it
themselves or with a third party, and how rigorously has this been examined and
communicated to executive management?
• What is your forward view on energy commodity pricing in future years, and how does that
affect your competitive position in five years?
The most important technical and economic concept that must be considered is the thermal and
electrical balance within the plant and the thermo-mechanical efficiency that results from it. CHP
project capacities must coincide with the electrical and thermal needs of the plant, or the developer
must market a part of its output on the market. This second scenario will force the developer into
entering either the thermal supply market or the power market or both. Both have their complications,
but only one of them is highly regulated, maybe even unfairly regulated, in every industrialized nation
in the world. Having a cogeneration partner that can mitigate some of these developments and
ongoing market-driven risks will allow the host to substantially profit from reduced utility purchases but
still adjust quickly to market changes.
(Ref: An article in Earthscan Feb. 2006 by Brennan Downes)

In many Indian Iron & Steel plants CHP through waste heat recovery have been implemented.
Incidentally, a number of projects of power generation through waste heat recovery are registered as
CDM projects. There is an estimated potential of 1000 MW power generation through CHP in
the Steel industry.

7. Sugar Industry (Bagasse Cogeneration)

Sugar industry has the maximum potential of CHP in India. There are over
575 sugar mills spread over 9 states of India. All sugar mills produce
bagasse during sugar production and use it for power and steam generation
for internal use. Conventional use of bagasse for this purpose is inefficient.
Indian sugar mills both in private and cooperative/ joint sectors have started
acknowledging the importance of high efficiency grid connected
cogeneration power plants for generating exportable surplus after meeting
their own demand of power and heat. By improving efficiency by steam
production at higher pressure above 67 kg/cm2 and temperature near about
5000C more power can be generated and steam required for the process also can be met.
Projections for India’s potential for bagasse cogeneration range from 3500 MW to 5000 MW. This
potential is expected to be tapped by 2012 resulting in annual savings of more than Rs. 4000 crore
(US$ 900 million) annually. It will also contribute annual CO 2 emission reduction by 39 million MT.
However, by the end of Sept. 2006, cumulative achievement was only 572 MW. The following Table
indicates the state-wise potential for existing conventional and energy efficient sugar mills in India:

Sr. State Potential for exportable surplus, MW

Conventional Energy efficient
sugar mills sugar mills
1. Maharashtra 1000 1250
2. UP 1000 1250
3. Tamil Nadu 350 500
4. Karnataka 300 400
5. AP 200 300
6. Bihar 200 250
7. Gujarat 200 400
8. Punjab 150 250
9. Haryana & others 100 400

Source: Estimates by MITCON and MNES Annual Report

8. Refineries & Petrochemicals

Refining capacity, as measured by primary distillation capacity, has
expanded rapidly in recent years. At the end of the 1998/99 fiscal year,
refining capacity stood at 67.5 million tonnes (mmt), compared to 119 mmt at
the beginning of the 2003/04 fiscal year, a rise of over 75% in five years.
Many existing refineries were expanded over this period, but more than half
the increase was accounted for by the commissioning of the 27 mmt
Reliance grassroots refinery at Jamnagar in 1999 (see Table 3-2). India now
has 19 refineries, owned among five major corporate groups. Since 2001, a
number of smaller refining companies have been consolidated into the
Indian Oil Group and Bharat Petroleum Corporation. In 2003, the Oil and Natural Gas Corporation,
India’s major upstream oil and gas producer, entered the downstream market though the acquisition
of the majority shares of the 9.7 mmt Mangalore refinery.

India’s refineries are relatively simple. Comparing the ratio of primary upgrading capacity to crude
distillation (“cracking to distillation ratio”), most large Indian refineries have a cracking-to-distillation
ratio of less than 40%; only the new large Reliance refinery meets the average of the U.S. refining
industry (56%).
The main fuels used in the refinery are refinery gas, natural gas, and coke. The refinery gas and coke
are by-products of the different processes. The coke is mainly produced in the crackers, while the
refinery gas is the lightest fraction from the distillation and cracking processes. Natural gas and
electricity represents the largest purchased fuels in the refineries. Natural gas is used for the
production of hydrogen, fuel for co-generation of heat and power (CHP), and as supplementary fuel in
Most refineries have some form of onsite power generation. In fact, refineries offer an excellent
opportunity for energy efficient power generation in the form of combined heat and power production
(CHP). CHP provides the opportunity to use internally generated fuels for power production, allowing
greater independence of grip operation and even export to the grid. This increases reliability of supply
as well as the cost-effectiveness. The cost benefits of power export to the grid will depend on the
regulation in the state where the refinery is located. Not all states allow wheeling of power (i.e , sales
of power directly to another customer using the grid for transport) while the regulation may also differ
with respect to the tariff structure for power sales to the grid operator.
Estimated potential in this sector is about 232 MW.

9. Paper & Pulp Industry

The pulp and paper industry is one of India's core sector industries and is
about 100 years old. India with an installed capacity of around 7 million
tonnes and production of 5.4 million tonnes ranks as the within the fifteen
largest producers of paper in the world.
The paper industry can be classified into three major segments- newsprint,
printing and writing paper (PWP) and industrial paper. Based on the raw
material used, paper producers can be classified as wood based, agro based
and waste paper/recycled paper companies. Most of the paper producers
have captive plantations or have long term supply contracts with plantations.
At present, there are more than 500 pulp & paper mills in the organised and unorganised sectors
The Indian paper industry is highly fragmented with players having as small a capacity of 20 TPD to
those having 700 TPD and utilise different kinds of fibrous raw materials. The relatively larger mills,
around 25 in number, utilise hardwood and bamboo, while the smaller ones use agro residue fibres
such as bagasse, wheat & rice straw, jute, grasses and recycled fibres. The pulp and paper industry
converts fibrous raw materials into pulp, paper and paperboard. In a first step raw materials are
processed into pulp and in a second step paper and paper products are produced out of this pulp.
Different plant categories exist depending on whether they only produce pulp (pulp mills) for further
processing or only paper out of purchased pulp and/or recycled waste paper (paper mills).
The third category, the integrated pulp and paper mills, combines the two processes and is most
common in the paper industry. The five principal steps in pulp and paper production are wood
preparation, pulping, bleaching, chemical recovery, and papermaking.
Size, type and quality of the paper-producing units are very diverse. More than 50% of paper and
paperboard products were produced in only about 10% of the mills. The average size of a paper mill
in India was 10,400 tonnes per year (TPA), compared with 85,000 TPA in Asia and about 300,000
TPA in Europe and North America. About 65% of India’s paper mills are small mills, i.e., having a
capacity of less than 18,000 TPA.
Most small and medium size pulp and paper mills cannot economically provide chemical recovery and
pollution control systems. Therefore, they are highly polluting industries contributing substantially to
the overall level of emissions and environmental problems.

CHP Potential
• Estimated CHP potential of about 850 MW
• Potential may increase, with grid connected cogeneration plants
• Electricity bill 2003 and conducive provisions thereof
• Gasification, Biomass and Fossil fuel combinations possible
• Inadequate awareness and poor energy efficiency, particularly in small mills
• Frequent use of DG sets, fluctuations in grid supply & quality
• Pulp & paper industry sector, using 75-85 % energy process heat & 15-25% as electrical
power, qualifies for cogeneration
• Captive / cogeneration plants set up by very few & large paper mills
• High pressure, high efficiency Rankin cycle technology for captive generation of steam and
power yet to be adopted
• Serious attempts for year round captive / cogen power not made across
• Inadequate awareness on technology to be adopted
• Lack of adequate finance for implementing these projects
• Poor capacity for conceiving, designing, implementing & operating energy efficiency
improvement, captive cogen and biogas projects
• Lack of availability of total solution providers
(Ref: Proceedings of National Awareness Workshop, Sept.2006 organized by Cogenindia)

10. Textile Industry

Textile Industry Characteristics
The Indian textile industry contributes about 14% to the national industrial
output and about 25% to the total national export earnings. The textile
industry in India is a key sector in terms of employment as it is the second
largest employment provider after agriculture with direct employment of
about 30m.
Cotton is the predominant fabric used in the Indian textile industry – nearly
60% of overall consumption in textiles and more than 75% in spinning mills
is cotton. India is among the world's largest producers of cotton with over 9
million hectares under cultivation, and an annual crop of around 3 million
Processes and technologies differ considerably across factories. Composite mills cover complete sets
of processes, from raw material to final products, however most manufacturing units tend only to deal
with a part of the process. India’s textile industry is generally divided into the organized and the
unorganized sector. The organized sector includes spinning mills and composite units. The
unorganized sector comprises power looms, handlooms and garment sectors.
Processing of fabric or yarn is a multi stage process and involves heat and power consumption in
most of such steps. The main operations can be classified as scouring, dyeing, washing and drying.
While boiling is done at around 90o C in Soft flow/ Jet dyeing/ Jigger the dyeing operation may be
carried out at any temperature between 60o to 130oC depending upon the type of fabric to be dyed
and the machine to be used.
Depending upon the need, a few other operations are also carried out, which require hot water and
the final product is dried by hot air in a stenter or in drying range. Heat is usually supplied through
heat exchangers by steam or heating oil known as thermic fluid oil.
Dyeing requires steam to heat the liquor to the requisite temperature and maintain the temperature for
a specific period of time.
Various operations in a textile mill are power driven. Also heat in the form of steam and thermic fluid is
utilized in various textile processors. Heat generated through the combustion of fuel is utilized to
generate steam from water in a boiler and to heat thermic fluid in a thermic fluid heater. Ever
escalating fuel cost has increased the cost of heat energy to a considerable extent, which is one of
the important factors contributing to the higher processing cost, and hence the production cost of

textile. Higher production cost thin profit margins; tough global competition collectively have posed a
serious problem for survival of Textile Industry. CHP can be effectively used in the textile industry.
Estimated potential of CHP in this sector is 800 MW.

11. BCHP (Building CHP)

BCHP describes any technology that simultaneously generates both useful electrical and thermal
(heat and /or cooling) energy in commercial or residential buildings. There is a wide variety of
technologies that can be used in BCHP applications ranging from 1kW micro-CHP to multi-MW
reciprocating engine and gas turbine installations. Similarly fuels used in BCHP applications can also
range widely from fossil-fuel based renewable sources.
BCHP can operate at efficiencies of 70% to 90%, displacing on-site boilers and grid-based electricity.
In India the growth of BCHP has a good potential as the Indian economy is growing at fast pace. More
and more commercial buildings like shopping malls, office buildings, airports, hospitals, IT parks are
being constructed. It is causing lot of strain on power supply. Under such circumstance CHP has a
good potential. About 30 MW of BCHP is currently installed. More capacities can definitely be added.

As per report by WADE, the CHP potential of about 650 MW is estimated with low growth
scenario. With high growth scenario, the potential will be much more.