REPLACEMENT OF 100TR VAPOUR COMPRESSION SYSTEM

WITH LNG BASED VAPOUR ABSORPTION SYSTEM

(KOCHI SEA FOOD CLUSTER)

Bureau of Energy Efficiency

Prepared By Reviewed By
 BEE, 2010
Detailed Project Report on Replacement of 100 TR Vapour Compression
System with LNG based Vapour Absorption System
Seafood SME Cluster, Kochi, Kerala (India)
New Delhi: Bureau of Energy Efficiency;
Detail Project Report No.:

For more information

Bureau of Energy Efficiency
Ministry of Power, Government of India Ph: +91 11 26179699
4th Floor, Sewa Bhawan, Sector – 1 Fax: 11 26178352
R. K. Puram, New Delhi -110066 Email: jsood@beenet.in /pktiwari@beenet.in
Websites: www.bee-india.nic.in
 ACKNOWLEDGEMENT

We sincerely appreciate the efforts of industry, energy auditors, equipment manufacturers,

technology providers, consultants and other experts in the area of energy conservation for joining
hands with Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India for
preparing the Detailed Project Report (DPR) under BEE SME Program in SMEs clusters. We
appreciate the support of suppliers/vendors for providing the adoptable energy efficient

Equipments/technical details to the SMEs. We express our sincere gratitude to all concerned
officials for their support and guidance during the conduct of this exercise.

Dr. Ajay Mathur, Director General, BEE

Smt. Abha Shukla, Secretary, BEE

Shri Jitendra Sood, Energy Economist, BEE

Shri Pawan Kumar Tiwari, Advisor (SME), BEE

Shri Rajeev Yadav, Project Economist, BEE

We have received very encouraging feedback for the BEE SME Program in various SME Clusters.
Therefore, it was decided to bring out the DPR for the benefits of SMEs. We sincerely thank the
officials of BEE and all service providers for all the support and cooperation extended for
preparation of the DPR. We gracefully acknowledge the diligent efforts and commitments of all
those who have contributed in preparation of the DPR.

Ernst & Young Private Ltd

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 Content
List of annexure ............................................................................................................................... i

List of tables ..................................................................................................................................... i

List of figures ................................................................................................................................... ii

List of abbreviations ....................................................................................................................... ii

Executive summary ........................................................................................................................ iii

About BEE SME programme .......................................................................................................... v

1. INTRODUCTION .................................................................................................................1

1.1 Brief Introduction about Cluster ............................................................................................1

1.2 Energy performance in existing situation..............................................................................4

1.2.1 Average Fuel/Energy Consumption .....................................................................................4

1.2.2 Average production ..............................................................................................................5

1.2.3 Specific Energy Consumption ..............................................................................................5

1.3 Existing technology/equipment ............................................................................................6

1.3.1 Description of technology/ equipment ..................................................................................6

1.4 Baseline establishment for existing Technology ...................................................................7

1.4.1 Operating Parameters..........................................................................................................7

1.4.2 Operating efficiency analysis ...............................................................................................7

1.4.3 Specific electricity Consumption ..........................................................................................8

1.5 Barriers in adoption of proposed technology/equipment .......................................................8

1.5.1 Technological Barrier ...........................................................................................................8

1.5.2 Financial issues ...................................................................................................................8

1.5.3 Energy availability ................................................................................................................9

2. PROPOSED EQUIPMENT FOR ENERGY EFFICIENCY IMPROVEMENT ....................... 10

2.1 Description of proposed equipment.................................................................................... 10

2.1.1 Detailed description of proposed equipment ...................................................................... 10

2.1.2 Equipment/Technology specification .................................................................................. 11

2.1.3 Integration with existing equipment .................................................................................... 12

2.1.4 Suitability over existing equipment ..................................................................................... 12

2.1.5 Availability of equipment .................................................................................................... 12

2.1.6 Service provider ................................................................................................................. 13

2.1.7 Terms and conditions in sales of equipment ...................................................................... 13

2.1.8 Process down time during implementation ......................................................................... 13

2.2 Life cycle assessment and risk analysis ............................................................................. 13

2.3 Suitable unit for implementation of proposed technology ................................................... 13

3. ECONOMIC BENEFITS FROM PROPOSED EQUIPMENT .............................................. 13

3.1 Technical benefit................................................................................................................ 13

3.1.1 Fuel saving ........................................................................................................................ 14

3.1.2 Electricity saving ................................................................................................................ 14

3.1.3 Improvement in product quality .......................................................................................... 14

3.1.4 Increase in production........................................................................................................ 14

3.1.5 Reduction in raw material .................................................................................................. 14

3.1.6 Reduction in other losses ................................................................................................... 14

3.2 Monetary benefits .............................................................................................................. 15

3.3 Social benefits ................................................................................................................... 15

3.3.1 Improvement in working environment in the plant .............................................................. 15

3.4 Environmental benefits ...................................................................................................... 15

3.4.1 Reduction in effluent generation ........................................................................................ 15

3.4.2 Reduction in GHG emission ............................................................................................... 15

3.4.3 Reduction on other emissions like SOx .............................................................................. 16

4. INSTALLATION OF PROPOSED EQUIPMENT ................................................................ 17

4.1 Cost of equipment implementation ..................................................................................... 17

4.1.1 Equipments cost ................................................................................................................ 17

4.1.2 Erection, commissioning and other misc. cost.................................................................... 17

4.2 Arrangements of funds....................................................................................................... 17

4.2.1 Entrepreneur’s contribution ................................................................................................ 17

4.2.2 Loan amount. ..................................................................................................................... 17

4.2.3 Terms & conditions of loan................................................................................................. 17

4.3 Financial indicators ............................................................................................................ 17

4.3.1 Cash flow analysis ............................................................................................................. 17

4.3.2 Simple payback period....................................................................................................... 18

4.3.3 Net Present Value (NPV) ................................................................................................... 18

4.3.4 Internal rate of return (IRR) ................................................................................................ 18

4.3.5 Return on investment (ROI) ............................................................................................... 18

4.4 Sensitivity analysis ............................................................................................................. 18

4.5 Procurement and implementation schedule ....................................................................... 19

List of Annexure

Annexure 1: Energy audit data used for baseline establishment.................................................... 20

Annexure 2: Process flow after process implementation................................................................ 21

Annexure 3: Detailed technology assessment report ..................................................................... 22

Annexure 4: Drawings for proposed system .................................................................................. 24

Annexure 5: Detailed financial analysis ......................................................................................... 25

Annexure 6: Procurement and implementation schedule ............................................................... 29

Annexure 7: Details of technology service providers ..................................................................... 30

Annexure 8: Techno-commercial bids for new technology/equipment ........................................... 31

List of tables

Table 1: Energy consumption wise breakup for Sea Food Cluster ................................................... 4

Table 2: Production capacity wise breakup for Sea Food Cluster ................................................... 5

Table 3: Specific Energy Consumption in Different Brass Units ....................................................... 6

Table 4 Operating Parameters of equipment ................................................................................. 11

Table 5 Technology suitability comparison .................................................................................... 12

Table 6 Energy and monetary benefit due to project implementation............................................. 15

Table 7 Details of proposed equipment installation cost ................................................................ 17

Table 8 Financial indicators of proposed technology/equipment .................................................... 18

Table 9 Sensitivity analysis in different scenario ............................................................................ 19

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List of figures

Figure 1: The location of the Cluster between Kochi and Aroor along NH 47A ................................ 1

Figure 2: Production process ........................................................................................................... 3

Figure 3: Classification based on electricity consumption ................................................................ 4

Figure 4: Annual production wise classification of seafood processing units.................................... 5

Figure 5: Representation of the HVAC system at the facility ............................................................ 6

Figure 6: Vapour Compression cycle ............................................................................................... 7

Figure 7 Vapour Absorption Sub Zero Freezer .............................................................................. 10

List of Abbreviations

BEE Bureau of Energy Efficiency

MSME Micro Small and Medium Enterprises

DPR Detailed Project Report

GHG Green House Gases

CDM Clean Development Mechanism

CO2 Carbon Di-Oxide

DSCR Debt Service Coverage Ratio

NPV Net Present Value

IRR Internal Rate of Return

ROI Return on Investment

SIDBI Small Industries Development Bank of India

AVAM Ammonia Vapour Absorption Mechanism

VCR Vapour Compression Refrigeration

MMTPA Million Metric Tonne per Annum

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 EXECUTIVE SUMMARY

Ernst & Young is executing BEE-SME program in Kochi Sea Food Cluster, supported by Bureau of
Energy Efficiency (BEE) with an overall objective of improving the energy efficiency in cluster units.

Kochi cluster is one of the larger Sea Food Processing clusters in India; accordingly this cluster
was chosen for energy efficiency improvements by implementing energy efficient measures/
technologies, so as to facilitate maximum replication in other Sea Food clusters in India. The main
energy forms used in the cluster units are grid electricity and diesel oil.

The major energy consumption unit within the cluster is the ammonia based sub zero freezer, it
accounts for more than 80% of the total connected load within the cluster. The freezers/
refrigeration units are compressor based and are highly dependent on the grid electricity or DG
power. When most of these units were installed there was no reliable ammonia based technology
other than the one installed. However, presently there are ammonia based vapour absorption
systems available with reputed manufacturers which can replace the electricity intensive ammonia
compression systems. With Kochi Petro net, LNG terminal almost nearing completion, continuous
availability of LNG for the ammonia based vapour absorption system will not be a barrier.

Installation of Vapour absorption base sub zero freezers to replace the existing compressor based
refrigeration system. Unlike electrical machines, VAM are powered by heat sources like steam, hot
water, waste heat, natural gas and other readily available low cost fuel. In such system LNG is
used as a fuel in Gas fired Boiler to generate steam which further used as a heat source in Vapour
Absorption Machine (VAM).

This DPR highlights the details of the study conducted for assessing the potential for replacement of
Vapour Compression type system with LNG based Vapour absorption system, possible energy
saving, and its monetary benefit, availability of the technologies/design, local service providers,
technical features & proposed equipment specifications, various barriers in implementation,
environmental aspects, estimated GHG reductions, capital cost, financial analysis, sensitivity analysis
for three different scenarios and schedule of Project Implementation

This bankable DPR also found eligible for subsidy scheme of MoMSME for “Technology and
Quality Upgradation Support to Micro, Small and Medium Enterprises” under “National
Manufacturing and Competitiveness Programme”. The key indicators of the DPR including the
Project cost, debt equity ratio, monetary benefit and other necessary parameters are given in table:

S.No Particular Unit Value

1 Project cost ` (in Lakh) 102.01

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 S.No Particular Unit Value

2 Electricity consumption in base case scenario kWh/annum 1,646,400

4 Electricity consumption in proposed scenario kWh/annum 117,600

3 Fuel (LNG) consumption in proposed scenario MMBTU/annum 26,453

4 Saving due to energy cost ` (in Lakh)/annum 25.99

4 Simple payback period Years 3.92

5 NPV ` (in Lakh) 12.22

6 IRR % age 13.02

7 ROI % age 19.48

8 DSCR Ratio 1.32

9 CO2 emission reduction Tonne/year 750

10 Process down time Days 21

The projected profitability and cash flow statements indicate that the project implementation will be
financially viable and technically feasible solution for Kochi Sea Food Cluster.

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 ABOUT BEE’S SME PROGRAM

Bureau of Energy Efficiency (BEE) is implementing a BEE-SME Programme to improve the energy
performance in 25 selected SMEs clusters. Kochi Sea Food Cluster is one of them. The BEE’s
SME Programme intends to enhance the energy efficiency awareness by funding/subsidizing need
based studies in SME clusters and giving energy conservation recommendations. For addressing
the specific problems of these SMEs and enhancing energy efficiency in the clusters, BEE will be
focusing on energy efficiency, energy conservation and technology up-gradation through studies
and pilot projects in these SMEs clusters.

Major activities in the BEE -SME program are furnished below:

Activity 1: Energy use and technology audit

The energy use technology studies would provide information on technology status, best operating
practices, gaps in skills and knowledge on energy conservation opportunities, energy saving
potential and new energy efficient technologies, etc for each of the sub sector in SMEs.

Activity 2: Capacity building of stake holders in cluster on energy efficiency

In most of the cases SME entrepreneurs are dependent on the locally available technologies,
service providers for various reasons. To address this issue BEE has also undertaken capacity
building of local service providers and entrepreneurs/ Managers of SMEs on energy efficiency
improvement in their units as well as clusters. The local service providers will be trained in order to
be able to provide the local services in setting up of energy efficiency projects in the clusters

Activity 3: Implementation of energy efficiency measures

To implement the technology up-gradation project in the clusters, BEE has proposed to prepare
the technology based detailed project reports (DPRs) for a minimum of five technologies in three
capacities for each technology.

Activity 4: Facilitation of innovative financing mechanisms for implementation of energy

efficiency projects

The objective of this activity is to facilitate the uptake of energy efficiency measures through
innovative financing mechanisms without creating market distortion.

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 Replacement of 100 TR Vapour Compression system with LNG based vapour absorption system

1. INTRODUCTION

1.1 Brief Introduction about Cluster

Overview of Kochi Seafood Processing Cluster

The Kochi Seafood Processing cluster has approximately 35 units spread between the coastal
Districts of Ernakulam and Alleppey in Kerala. Most of these units are located along the National
Highway 47A and 47, between Thopumpady in Ernakulam District and Aroor in Alleppey District.
The distance to these units from the commercial capital of Kochi City is approximately 5 km to 20
km.

Kochi pioneered seafood exports from India, taking advantage of good catch throughout the year,
availability of skilled labour, and access to a world class port (Kochi Port). The first ever shipment
of seafood exports from India was from Kochi. Today, the cluster exports a variety of frozen and
chilled fish to markets around the world, including Japan, U.S., EU, Middle East, China, and many
countries in SE Asia.

The peak season for production in Kochi is between August and November. The lean period is the
monsoon season when there is 45-day fishing ban between the months of June and July.

Figure 1: The location of the Cluster between Kochi and Aroor along NH 47A
(Source: Google maps)

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Cluster Background

Kerala has the largest number (about 80) of seafood processing units in the country. Of these,
nearly half are located in the Kochi cluster. The cluster has traditionally been known for handling
high value items like shrimp. In 2009-2010, Kochi Port has exported nearly 16% of the total
seafood exports, both in terms of quantity and value, from India.

The cluster in Kochi has about 35 units of which 30 were selected for the study under the BEE
SME Programme. All units studied are registered as small scale industries under the Government
of Karnataka and many of them have entrepreneurship memorandum number issued by
department of MSME. All of the units selected for the study are registered with the Seafood
Exporters Association of India.

Product manufactured

The first ever seafood export from India was from the Kochi Port in 1953. Initially the industry
focused on exporting canned shrimp and, later on, shifted to the export of frozen shrimp. In the
1960s, the export of other fish, squid, cuttlefish, octopus, crabs, clams, and mussels began. While
shrimp continues to be the major export item, accounting for nearly 45% of the total earnings,
export of other fish and cephalopods have steadily increased.

Energy usages pattern

The electricity consumption in the cluster varies from 11,731 units to 268,433 units per month. The
average electricity consumption for the cluster is 87,943 units per month with an increasing trend in
the consumption. The following figure shows the classification of percentage of the cluster units
based on consumption of electricity.

Classification of Units

Production capacity

Production capacity of the seafood processing units depends on the type of fish being produced in
unit. The high value items like shrimp and lobster generates larger revenues from smaller
capacities. Production capacity in the cluster ranges from 155 TPA to 36960 TPA. The following
figure shows the classification of the units in the cluster on production capacity.

Installed Production Capacity

The units in the cluster do not have name plate capacities. The daily operating capacities vary
based on the season, fish availability, and product demand.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Production process at Sea Food Processing Units

The typical process followed in the seafood processing industry is shown in the flowchart below.
For all of the units surveyed, the pre-processing of fish was done outside the units and the
operations in the units started with the cleaning of pre-processed/cleaned fish. While most of the
units follow the general process of cutting, cleaning, grading, weighing, freezing, packing, and
storing; the difference arise in the way fish is frozen and the freezers used for the purpose.

Freezing is an effective form of seafood preservation because the pathogens that cause food
spoilage are killed or do not grow very rapidly at reduced temperatures. Foods may be preserved
for several months by freezing. The role of a freezer is to extract heat from a stream of product,
lowering its temperature and converting most of its free moisture to ice. This needs to occur
sufficiently fast so that the product will experience a minimum degradation of quality, the rate of
freezing keeps pace with the production schedule, and upon exit, the average product temperature
will roughly match the subsequent temperature of storage.

Figure 2: Production process

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

From the flowchart, it can be inferred that the energy intensive steps in the process are the
freezing and the storage. Freezing alone accounts for nearly 75% of all the electricity consumed in
the cluster.

1.2 Energy performance in existing situation

1.2.1 Average Fuel/Energy Consumption

Electricity from the KSEB grid is the primary source of electrical energy for the cluster. The cluster
in general does not use any thermal energy except for diesel, which is used for generating the
power through D.G. sets as back-up power. Total energy cost constitutes 8 - 10% of the total
production cost. The average electrical energy cost for the cluster is ` 5.5/- per unit (kWh).

As per annual energy consumption the units were categorised as follows:

Table 1: Energy consumption wise breakup for Sea Food Cluster

S.No. Category Size (kWh) Percentage

1. Large > 100,000 kWh 36.67%

2. Medium 50,000-100,000 kWh 26.67%

3. Small < 50,000 kWh 36.67%

>1,00,000 units, <50,000 units,

36.67% 36.67%

50,000-
1,00,000 units,
26.67%

Figure 3: Classification based on electricity consumption

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

1.2.2 Average production

Production capacity of the seafood processing units depends on the type of fish being produced in
unit. The high value items like shrimp and lobster generates larger revenues from smaller
capacities. Production capacity in the cluster ranges from 155 TPA to 36960 TPA. The following
figure shows the classification of the units in the cluster on production capacity.

Capacity wise the units were categorized as large, medium and small. The break up is given as
below:

Table 2: Production capacity wise breakup for Sea Food Cluster

S.No. Category Size (TPA) Percentage

1. Large >10,000 TPA 46.67%

2. Medium 1000-10,000 TPA 40.00%

3. Small < 1,000 TPA 13.33%

<1000 TPA,
13.33%

>10,000TPA,
46.67%

1000-10,000TPA,
40.00%

Figure 4: Annual production wise classification of seafood processing units

1.2.3 Specific Energy Consumption

Specific energy consumption both electrical and thermal energy per kg of product for different
types of sea food processing units is given in Table below:

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Table 3: Specific Energy Consumption in Different Brass Units

Type of Seafood Unit Electricity (kWh/MT of Production)

Scale of Unit Min Max

A1 455.10 841.50

B 375.10 755.5

1.3 Existing technology/equipment

1.3.1 Description of technology/ equipment

In a fish processing unit, freezing of fish and cold storage of the frozen fish, accounts for a
significant portion the energy consumption. The facilities under consideration use a multi-stage
vapor compression cycle for freezing marine products, up to a temperature of -40◦oC. Ammonia (R
717) is the commonly used refrigerant in the refrigeration system of the plant. The figure below
provides a diagrammatic representation of the freezer at the facility:

Figure 5: Representation of the HVAC system at the facility

A = small & medium scale, B = large scale

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

1.3.2 Role in the Process

Sub zero freezers are used for processing and storage of sea food. This is the most energy
intensive area within the Sea Food processing plant area.

1.4 Baseline establishment for existing Technology

1.4.1 Operating Parameters

The facilities under consideration use a multi-stage vapor compression cycle for freezing marine
products, up to a temperature of -40◦oC. Ammonia (R 717) is the commonly used refrigerant in the
refrigeration system of the plant. Reciprocatory compressors are used in the chillers making them
energy inefficient. The figure below shows the vapour compression cycle for the freezers installed
in the facilities under consideration.

Figure 6: Vapour Compression cycle

1.4.2 Operating efficiency analysis

The Coefficient of performance of these identified systems which is supposed to replace by new
system is around 1.3 (Calculated from the primary information during the field Survey).

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

1.4.3 Specific electricity Consumption

The specific electricity consumption for the units under consideration is 2.45 kW/ TR (Averaged out
specific energy consumptions of ammonia vapour compression system of 100 TR capacity
installed in Kochi Sea food processing cluster).

1.5 Barriers in adoption of proposed technology/equipment

1.5.1 Technological Barrier

The freezers used in the seafood processing units are typically built on-site by local providers.
These freezers are operated without any automation or feedback control. Because of the fear of
rejection of products that do not meet core temperature specifications, most units deliberately over-
freeze the fish. Traditionally, energy consumption has not been a concern and not many initiatives
to reduce consumption have taken place.

Although these units have easy access to foreign exchange and can, relatively easily import
machinery and equipment, many have chosen not to do so. The major reason for preferring local
makes over imported more efficient equipments are the delays and the costs associated with
servicing the equipments.

Since most of the units have similar processes, there is a strong possibility of taking best practices
of one unit to the rest of the units.

Issues Related to Energy Usage and Conservation and Barrier in Technology up Gradation

Traditionally, small and medium scale industries in India lack the technical expertise to identify and
evaluate energy efficiency technologies and products. Typically, they also do not have internal
financial resources (although the seafood processing cluster is an exception to this) and need
external capital to fund EE projects. Further, they need assistance in identifying and managing
technical and financial risks. Major barriers in up-gradation of technology in the cluster are:

► Energy efficiency not on priority list

► Lack of awareness on energy efficiency

► Lack of local service providers who can support the initiatives

► Limited technical manpower

► Fear of production disruption and quality issues

1.5.2 Financial issues

The units in the cluster are generally not aware of financial incentives and schemes available for
energy efficiency. Because they are export oriented units, getting loans have never been a concern

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

at the cluster. While incentives and structured financing can go a long way in encouraging EE
projects in the cluster, the major roadblock in this process is the approval and clearance of
financing. It is strongly felt that rather than packaging the finances with incentives like lower
interest rates and subsidy etc., the delivery mechanism of loans needs to be facilitated by
proactive and transparent methodologies.

1.5.3 Energy availability

The power supply to the cluster is by KSEB, through LT and/or HT connections. Reliable and
quality power has been a concern in the cluster. Power cuts are imposed, mainly in peak season
such as the summer. Most of the units have back up power in the form of emergency DG Sets to
have incessant working. The main concern regarding the power situation in the cluster is the
quality of power delivered. Voltage drop has traditionally been a bane for this cluster.

The proposed technology is dependent of continuous availability of industrial LNG, Petro net India
has already commenced construction of LNG Receiving, Storage & Re-gasification Terminal at
Kochi. The terminal shall have a capacity of 2.5 MMTPA. The construction activities are
progressing as per schedule. The mechanical completion of the complete facility is expected in 1st
Quarter of 2012. The terminal at Kochi will help in meeting enormous demand of natural gas for
Power, Fertilizers, Petrochemicals and various other industries in the Southern States. The
terminal is expandable upto 5 MMTPA depending on LNG supplies and market conditions.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

2. PROPOSED EQUIPMENT FOR ENERGY EFFICIENCY IMPROVEMENT

2.1 Description of proposed equipment

2.1.1 Detailed description of proposed equipment

Here, we propose to install Vapour absorption base sub zero freezers to replace the existing
compressor based refrigeration system. Unlike electrical machines, VAM are powered by heat
sources like steam, hot water, waste heat, natural gas and other readily available low cost fuel. In
such system LNG is used as a fuel in Gas fired Boiler to generate steam which further used as a
heat source in Vapour Absorption Machine (VAM). The Ammonia VAM can produce refrigeration
up to -60 degree C which satisfies the need of the units under consideration. The lowest
temperature required is around -40 degree C, however, mean temperature requirement is around -
28 degree C.

The liquid ammonia evaporates in the evaporator and cools the product or brine. The ammonia
vapour is absorbed in the absorber by the weak ammonia solution which maintains the evaporator
pressure and hence the refrigeration temperature. The weak ammonia solution becomes a strong
ammonia solution after absorbing the ammonia vapour from the evaporator. This strong ammonia
solution from the absorber is pumped to the re-boiler. The heat is supplied to the re-boiler, which
boils the ammonia from the strong ammonia solution.

Figure 7 Vapour Absorption Sub Zero Freezer

The ammonia vapour generated is passed through the stripping and the rectification column. Since
the ammonia vapour also contains some water vapour, it is rectified in the rectification column to

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

remove the water vapour and to generate virtually pure ammonia vapour. This vapour condenses
in the condenser and the liquid ammonia is collected in a receiver.

The receiver supplies liquid ammonia to the evaporator through the sub cooler. The weak
ammonia solution generated in the re-boiler is sent on to the absorber to reabsorb ammonia
vapour, and hence complete the cycle. A solution heat exchanger is also provided to cool the weak
solution before it enters the absorber and to preheat the strong solution before it enters the re-
boiler.

2.1.2 Equipment/Technology specification

Equipment specification (Sub zero VAM chillers) and operating parameter after implementation of
project is also shown in Table 4 below:
Table 4 Operating Parameters of equipment
A. Capacity

1 Capacity (+/-3%) TR 100

B. Ammonia Circuit

1 Ammonia concentration % 99.9

2 Ammonia evaporation temp. °C (-) 40

C. Cooling Water Circuit

1 Cooling water flow m3/hr 190

2 Cooling Inlet temperatures °C 30

3 Cooling Outlet temperatures °C 36

D. Steam Circuit

1 Steam Pressure at the inlet of Steam control valve kg/cm2(g) 8-9

2 Steam Condition --- Dry saturated

3 Steam Consumption Kg/hr 1600

E. Electrical Circuit

1 Power Supply 3 Ph, --- 415 V +/- 10%, 50 Hz +/- 5%

2 Control Supply --- 230 V, 1 Ph a/c

3 Absorbent Pump (1W + 1SB) kW 12.15

4 Control panel kW 2.5

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 Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

5 Area classification --- Safe

2.1.3 Integration with existing equipment

Implementation of this technology for freezing and storage of marine product will require the design
of existing freezer unit based on the operating parameters and the arrangement for retrofitting of
new Ammonia VAM freezer at the existing ammonia pipelines. Presently, ammonia is supplied to
the evaporator through the pipelines at a minimum temperature of -40 degree C.

This technology has been selected for the following reasons:

• It reduces the electricity consumption refrigeration.

• Resulting in reduction in GHG emissions.

• Technology is easily available with reputed manufacturing companies.

2.1.4 Suitability over existing equipment

Implementation of this technology replacing the existing compressor based refrigeration system will
generate direct cost savings for the client due to lower cost of the alternative fuel (LNG) in place of
electricity. Again this will reduce the carbon foot print as the grid power has higher carbon intensity.
The benefits for replacing existing by VAM based system are tabulated as below:
Table 5 Technology suitability comparison
Ammonia Absorption Vapour Compression

Low running cost due to use of cheap fuels like LNG High running cost due to electricity being used as energy input

Uses about 10% of electrical energy Uses 10 times more electricity

Very low maintenance costs, due to no moving parts and Relatively higher maintenance costs
negligible wear & tear

High plant availability due to pumps being the only moving parts Needs standby compressor

No loss of efficiency at part loads Loss of efficiency at part loads, due to fixed mechanical losses
and electrical motor losses

No fouling of evaporator surfaces due to lubricating oil Possibility of fouling due to lube oil on evaporator surfaces

Small sized standby gen-set is sufficient Large DG set required as standby

Outdoor installation, hence low civil and structural costs Indoor installation is needed due to rotary components

Vapour absorption is a proven technology used in industrial and commercial facilities in India. The
vendor details for this technology along with quotations are given in Annexure 7.

2.1.5 Availability of equipment

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

The technology is proven and is available in India and available through one of the larger original
equipment manufacturer for sustainable energy & environment solutions.

2.1.6 Service provider

The contact detail of the service provider is shown in Annexure – 7.

2.1.7 Terms and conditions in sales of equipment

The VAM Chiller shall be guaranteed to give the desired thermal performance as indicated in
quotation. Also guarantee the VAM Chiller against defective material or faulty workmanship for a
period of twelve months from date of commissioning. However there is no guarantee for accident
related issues. The detailed Terms & Conditions are specified in the Annexure – 8.

2.1.8 Process down time during implementation

Since this will be a new system rather than retro fitment there will be minimal down time for the
process plant during the initial erection and commissioning of the VAM system. The process down
time will be during the integration of the VAM based chillers with the existing cooling system. The
Machine is skid mounted hence will take 10 days to install on foundation (foundation should be
constructed as per drawings provided by OEM) Machine will be commissioned within 10 days from
the date of installation. Total process down time will be 21 days.

2.2 Life cycle assessment and risk analysis

Life cycle of provided VAM system is about 20 years but it required to avail regular preventive
maintenance and right operating techniques to achieve the better performance.

The factors which effects the implementation of this technology are as follows

Lack of initiative of the unit owner/entrepreneur

Always have attitude that they implement only after seeing the same installation in other
unit i.e. they want demonstration.

Delay in implementation due to of breakdown of plant.

2.3 Suitable unit for implementation of proposed technology

The technology proposed in the DPR is suitable for units with freezer load of 100TR and multiple of
that.

3. ECONOMIC BENEFITS FROM PROPOSED EQUIPMENT

3.1 Technical benefit

Step less modulation possible down to 30%

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

High reliability and low maintenance - pump is the only moving component

Ammonia is user-friendly refrigerant and readily available

Least dependent on availability of electrical power

Outdoor installation possible

Stringent quality norms

Robust design

Variations like two level refrigeration temperatures

Reliable PLC based control mechanism for automatic operations

3.1.1 Fuel saving

The technology involves fuel switch from carbon intensive GRID power to LNG, though the input of
thermal energy will be higher it will have a positive impact on the overall energy consumption trend
by using the available LNG from Petro net LNG terminal at Kochi.

3.1.2 Electricity saving

The specific energy consumption for sub zero freezers have been conservatively taken 2.45
kW/TR for the cluster. The existing reciprocatory compressor assumed to be operating at 80%
loading and at this loading it requires about 1,646,400 unit of electricity. In proposed technology,
about 117,600 unit of electricity will be required for absorbent pump and control. Hence, total
1,528,800 kWh of grid electricity saving would be possible per year.

3.1.3 Improvement in product quality

Product quality achieved would be same as the present quality. It does not have any impact in
improving the quality of the product.

3.1.4 Increase in production

The proposed technology does not contribute to any improvement in production.

3.1.5 Reduction in raw material

Raw material consumption is same even after the implementation of proposed technology.

3.1.6 Reduction in other losses

The units are having low power factor, again large sized reciprocating compressors need power
factor compensation near the load which is missing in the present scenario. Low power factor

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

causes high current demand and as a result higher I2R losses across the electrical circuit.
Implementation of Ammonia VAM system will reduce the electrical load on the circuits by almost
85% and hence the I2R losses will be minimized.

3.2 Monetary benefits

Annual monetary savings due to implementation of VAM based freezer is ` 25.99 lakh per year.
Energy & monetary benefit analysis of VAM based freezer are shown in Table 6 below.
Table 6 Energy and monetary benefit due to project implementation

S.No. Parameters Existing System Proposed System

1 Capacity of system 100TR 100 TR

2 Average loading of system 80% 80%

3 Specific energy consumption 2.45 kW/TR 1600kg/hr (Steam)

4 Annual Electricity consumption 1,646,400 kWh 117,600 kWh

5 Annual LNG consumption --- 26,453 MMBTU

6 Annual Energy cost ` 90.55 lakh ` 64.56 lakh

7 Total monetary benefit ` 25.99 lakh

Further details of energy and monetary saving calculation are furnished in Annexure 3.

3.3 Social benefits

3.3.1 Improvement in working environment in the plant

Proposed equipment reduces the load on GHG intensive Southern Grid and also reduces the noise
pollution level.

3.3.2 Improvement in workers skill

This recommendation will improve the skill sets of the workers, the utility technicians will learn to
operate and maintain vapour absorption based system.

3.4 Environmental benefits

3.4.1 Reduction in effluent generation

There is no significant impact in effluent generation due to implementation of the project.

3.4.2 Reduction in GHG emission

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 Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

After the implementation of the LNG driven VAM system, the annual GHG emission reduction is
estimated to be around 502 TCO2.

Parameters Unit Value

Initial CO2 Emission from use of electricity TCO2e/Year 1333
Project emission (Due to use of LNG and Electricity) TCO2e/Year 583
CO2 emission reduction TCO2e/Year 750

3.4.3 Reduction on other emissions like SOx

Sulphur is not present in Natural Gas; hence there is no impact on SOX emissions.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

4. INSTALLATION OF PROPOSED EQUIPMENT

4.1 Cost of equipment implementation

4.1.1 Equipments cost

Ex works price for the supply of the Ammonia Vapour Absorption Machine will be ` 80 Lakh Only.
Ex works price for the supply of the natural gas fired boiler is ` 17.70 Lakh Only.

4.1.2 Erection, commissioning and other misc. cost

Supervision of Installation & Commissioning will be ` 1.0 Lakh only.

Table 7 Details of proposed equipment installation cost

S.No Particular Unit Value

1 Equipment cost ` (in Lakh) 97.70

2 Erection & Commissioning cost ` (in Lakh) 1.00

3 Other misc. cost like transportation, insurance ` (in Lakh) 3.31

4 Total cost ` (in Lakh) 102.01

4.2 Arrangements of funds

4.2.1 Entrepreneur’s contribution

Entrepreneur will contribute 25 % of the total project cost which is ` 25.50 lakh.

4.2.2 Loan amount.

Remaining 75 % cost of the proposed project will be taken from the bank which is ` 76.51 lakh.

4.2.3 Terms & conditions of loan

The interest rate is considered at 10% which is SIDBI’s rate of interest for energy efficient projects.
The loan tenure is 7 years excluding initial moratorium period is 6 months from the date of first
disbursement of loan.

4.3 Financial indicators

4.3.1 Cash flow analysis

Profitability and cash flow statements have been worked out for a period of 10 years. The
financials have been worked out on the basis of certain reasonable assumptions, which are
outlined below. The cost of equipment considered is inclusive of hot water storage tanks also.

The project is expected to achieve monetary savings of ` 25.99 lakh per annum.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

The Operation and Maintenance cost is estimated at 2 % of cost of total project with 5%
increase in every year as escalations.

Interest on term loan is estimated at 10 %.

Depreciation is provided as per the rates provided in the companies act.

Based on the above assumptions, profitability and cash flow statements have been prepared and
calculated in Annexure.

4.3.2 Simple payback period

The total project cost of the proposed technology is ` 102.01 lakh and monetary savings is ` 25.99
lakh hence, the simple payback period works out to be 3.92 years.

4.3.3 Net Present Value (NPV)

The Net present value of the investment at 10 % discount factor works out to be ` 12.22 lakh.

4.3.4 Internal rate of return (IRR)

The after tax Internal Rate of Return of the project works out to be 13.02%.

4.3.5 Return on investment (ROI)

The average return on investment of the project activity works out at 19.48%
Table 8 Financial indicators of proposed technology/equipment

S.No. Particular Unit Value

1 Simple payback period Year 3.92

2 NPV ( ` in lakh) 12.22

3 IRR % 13.02

4 ROI % 19.48

4.4 Sensitivity analysis

A sensitivity analysis has been carried out to ascertain how the project financials would behave in
different situations like when there is an increase in fuel savings or decrease in fuel savings. For
the purpose of sensitive analysis, two following scenarios has been considered

Optimistic scenario (Increase in fuel savings by 5%)

Pessimistic scenario (Decrease in fuel savings by 5%)

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

In each scenario, other inputs are assumed as a constant. The financial indicators in each of the
above situation are indicated along with standard indicators
Table 9 Sensitivity analysis in different scenario

IRR NPV ROI

Scenario DSCR
(%) (` in lakh) (%)

Pessimistic 17.34 30.57 20.53 1.53

Realistic 13.02 12.22 19.48 1.32

Optimistic 8.42 -6.13 17.83 1.11

4.5 Procurement and implementation schedule

Total procurement and implementation schedules required for implementation of proposed

technology would be 34 weeks and its detailed breakups are given at annexure 6.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

ANNEXURE
Annexure 1: Energy audit data used for baseline establishment

Baseline for implementation of the proposed project can be considered as the specific fuel
consumption and cost per unit of production in the sub zero freezers.

S.No. Particulars Unit Value

1 Quantity of refreeze ration TR 100

2 Freezer temperature oC (-) 45

3 Ambient temperature oC 35

4 Days of operation per year Days 350

5 Hours of operation per day Hours 24

6 Average loading % age 90

7 Specific fuel consumption in vapour compression system kWh/TR 2.45

8 Annual electricity consumption kWh 1,646,400

9 Cost of Electricity `/kWh 5.5

11 Annual cost of electricity ` 9,055,200.00

12 Specific Fuel consumption cost in vapour compression system `/TR 13.48

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Annexure 2: Process flow after process implementation

There will be no change in the process by introduction of ammonia based vapour absorption
system, only the energy input at freezing will change from electricity to primarily LNG fuel.

Ammonia VAM

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Annexure 3: Detailed technology assessment report

Equipment specification (Sub zero VAM chillers) and operating parameter after implementation of
project are also shown in Table below.

Parameter Units Value Basis

Days of Operation/Year Days 350 Field Study
Hrs of Operation per Day Hrs 24 Field Study
Existing System
Size of the Existing Freezer System TR 100 Field Study
Average Loading %age 80 Field Study
Specific Energy Consumption kW/TR 2.45 Average for cluster
Annual Electricity Consumption kWh/year 1,646,400

Cost of Electricity under KSEB `/kWh 5.50 KSEB Electricity Bills

Annual Energy Cost `/Year (In lakh) 90.55
Proposed System
Size of VAM Freezer TR 100 Field Study

Average Loading %age 80% Field Study

Steam requirement for VAM chiller kg/hr 1600 Vendor Quotation

Steam requirement for VAM chiller kg/hr/TR 16 Vendor Quotation

Steam requirement for VAM chiller @ 80%
loading kg/hr 1,280
Pressure of steam required (8 - 9 kg/cm2) kg/cm2 8 Vendor Quotation

Enthalpy of sat. steam at 9 kg/cm2 kCal/kg 658 Steam Table

Energy Savings by recycling hot water to Boiler kCal/kg 100 jacket water

Effective Energy Input to steam kCal/kg 558

Efficiency of Gas Fired Boiler %age 90% Source: Thermax India

Enthalpy of sat. steam used for AVAM @ 80% kCal/hr 793,600

Annual Thermal Energy requirement kCal/Year 6,666,240,000

Source GAIL: 252,000 Kcal

Annual Consumption of LNG MMBTU 26,453 = 1 MMBTU

Connected Electrical Load kW 17.5 Absorbent pump & control

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Parameter Units Value Basis

kWh/Year 117,600
Annual Electricity Consumption @ 80 % loading
Cost of Electricity under KSEB `./kWh 5.5

Annual Electricity Cost `./Year 6.47

Source: Ministry of
Unit Cost of LNG `./MT 219.60 Petroleum & Natural Gas

Annual Cost of LNG `/Year (lakh) 58.09

Annual Energy Cost for AVAM Chiller `/Year (lakh) 64.56

Energy saving Cost `/Year (lakh) 25.99

Cost of AVAM Chiller + Boiler with accessories `/ (lakh) 97.70

Installation & Transportation Cost `/ (lakh) 4.31

Cost of implementation `/ (lakh) 102.01

Simple Payback Years 3.92

Implementation of this technology for freezing and storage of marine product will require the design
of existing freezer unit based on the operating parameters and the arrangement for retrofitting of
new Ammonia VAM freezer at the existing ammonia pipelines. Presently, ammonia is supplied to
the evaporator through the pipelines at a minimum temperature of -40 degree C.

This technology has been selected for the following reasons:

• It reduces the electricity consumption in refrigeration.

• Resulting in reduction in GHG emissions.

• Technology is easily available with reputed manufacturing companies.

Implementation of this technology replacing the existing compressor based refrigeration system
which will generate direct cost savings for the client due to lower cost of the LNG in place of
electricity. Again this will reduce the carbon foot print for sea food processing as the grid power has
higher carbon intensity.

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Annexure 4: Drawings for proposed system

LNG fuel

Gas fired Steam Ammonia

Boiler VAM

Existing Ammonia Line

Process Area

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 Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Annexure 5: Detailed financial analysis

Assumption
Name of the Technology LNG based Ammonia VAM
Rated Capacity 100 TR
Details Unit Value Basis
Installed Capacity TR 100 Feasibility Study
No of working days Days 350 Feasibility Study
No of operating hours Hrs 24 Feasibility Study
Proposed Investment
Plant & Machinery ` (in lakh) 97.70 Feasibility Study
Erection & Commissioning ` (in lakh) 1.00 Feasibility Study
Investment without IDC ` (in lakh) 98.70 Feasibility Study
Other Cost (Transport) ` (in lakh) 3.31 Feasibility Study
Total Investment ` (in lakh) 102.01 Feasibility Study
Financing pattern
Own Funds (Equity) ` (in lakh) 25.50 Feasibility Study
Loan Funds (Term Loan) ` (in lakh) 76.51 Feasibility Study
Loan Tenure years 7 Assumed
Moratorium Period Months 6 Assumed
Repayment Period Months 90 Assumed
Interest Rate % 10.00% SIDBI Lending rate
Estimation of Costs
O & M Costs % on Plant & Equip 2.00% Feasibility Study
Annual Escalation % 5.00% Feasibility Study
Estimation of Revenue
Electricity savings kWh 1,528,800
LNG Consumption MMBTU/Year 26453
Cost of Electricity `/kWh 5.5
Cost of LNG `/MMBTU 219.60
St. line Depn. % 5.28% Indian Companies Act
IT Depreciation % 80.00% Income Tax Rules
Income Tax % 33.99% Income Tax

Estimation of term loan ` (in lakh)

Years Opening Balance Repayment Closing Balance Interest
1 76.51 2.80 73.71 6.97
2 73.71 6.00 67.71 7.10
3 67.71 7.80 59.91 6.46
4 59.91 9.80 50.11 5.55
5 50.11 12.00 38.11 4.47
6 38.11 14.00 24.11 3.21
7 24.11 15.00 9.11 1.73
8 9.11 9.11 0.00 0.27
76.51

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

WDV Depreciation ` (in lakh)

Particulars / years 1 2
Plant and Machinery
Cost 102.01 20.40
Depreciation 81.61 16.32
WDV 20.40 4.08

Projected Profitability
` (in lakh)
Particulars / Years 1 2 3 4 5 6 7 8 9 10 Total
Revenue through Savings
Fuel savings 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 259.92
Total Revenue (A) 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 259.92
EXPENSES
O & M Expenses 2.04 2.14 2.25 2.36 2.48 2.60 2.73 2.87 3.01 3.17 25.66
Total Expenses (B) 2.04 2.14 2.25 2.36 2.48 2.60 2.73 2.87 3.01 3.17 25.66
PBDIT (A)-(B) 23.95 23.85 23.74 23.63 23.51 23.39 23.26 23.12 22.98 22.83 234.26
Interest 6.97 7.10 6.46 5.55 4.47 3.21 1.73 0.27 0.00 0.00 35.75
PBDT 16.99 16.75 17.28 18.08 19.04 20.18 21.53 22.85 22.98 22.83 198.51
Depreciation 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 53.86
PBT 11.60 11.37 11.90 12.69 13.65 14.80 16.14 17.47 17.59 17.44 144.65
Income tax 0.00 0.15 5.87 6.14 6.47 6.86 7.32 7.77 7.81 7.76 56.15
Profit after tax (PAT) 11.60 11.22 6.02 6.55 7.18 7.94 8.83 9.70 9.78 9.68 88.50

Computation of Tax
` (in lakh)
Particulars / Years 1 2 3 4 5 6 7 8 9 10
Profit before tax 11.60 11.37 11.90 12.69 13.65 14.80 16.14 17.47 17.59 17.44
Add: Book depreciation 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39
Less: WDV depreciation 81.61 16.32 - - - - - - - -
Taxable profit (64.62) 0.43 17.28 18.08 19.04 20.18 21.53 22.85 22.98 22.83
Income Tax - 0.15 5.87 6.14 6.47 6.86 7.32 7.77 7.81 7.76

Projected Balance Sheet

Particulars / Years 1 2 3 4 5 6 7 8 9 10
LIABILITIES
Share Capital (D) 25.50 25.50 25.50 25.50 25.50 25.50 25.50 25.50 25.50 25.50
Reserves & Surplus (E) 11.60 22.82 28.84 35.39 42.57 50.51 59.33 69.03 78.81 88.50
Term Loans (F) 73.71 67.71 59.91 50.11 38.11 24.11 9.11 0.00 0.00 0.00
TOTAL LIABILITIES
(D)+(E)+(F) 110.81 116.03 114.25 111.00 106.18 100.12 93.94 94.53 104.31 114.00

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Assets
Particulars / Years 1 2 3 4 5 6 7 8 9 10
Gross Fixed Assets 102.01 102.01 102.01 102.01 102.01 102.01 102.01 102.01 102.01 102.01
Less: Accm. depreciation 5.39 10.77 16.16 21.54 26.93 32.32 37.70 43.09 48.48 53.86
Net Fixed Assets 96.62 91.24 85.85 80.47 75.08 69.69 64.31 58.92 53.53 48.15
Cash & Bank Balance 14.19 24.79 28.40 30.53 31.10 30.42 29.64 35.61 50.78 65.85
TOTAL ASSETS 110.81 116.03 114.25 111.00 106.18 100.12 93.94 94.53 104.31 114.00
Net Worth (D+E) 37.10 48.32 54.35 60.89 68.07 76.01 84.84 94.53 104.32 114.00
Debt Equity Ratio 2.89 2.65 2.35 1.96 1.49 0.95 0.36 0.00 0.00 0.00

Projected Cash Flow

` (in lakh)
Particulars / Years 0 1 2 3 4 5 6 7 8 9 10
Sources
Share Capital 25.50 - - - - - - - - - -
Term Loan 76.51
Profit After tax 11.60 11.22 6.02 6.55 7.18 7.94 8.83 9.70 9.78 9.68
Depreciation 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39
Total Sources 102.01 16.99 16.61 11.41 11.93 12.57 13.32 14.21 15.08 15.17 15.07
Application
Capital Expenditure 102.01
Repayment Of Loan - 2.80 6.00 7.80 9.80 12.00 14.00 15.00 9.11 0.00 0.00
Total Application 102.01 2.80 6.00 7.80 9.80 12.00 14.00 15.00 9.11 0.00 0.00
Net Surplus - 14.19 10.61 3.61 2.13 0.57 -0.68 -0.79 5.97 15.17 15.07
Add: Opening Balance - - 14.19 24.79 28.40 30.53 31.10 30.42 29.64 35.61 50.78
Closing Balance - 14.19 24.79 28.40 30.53 31.10 30.42 29.64 35.61 50.78 65.85
IRR
` (in lakh)
Particulars / months 0 1 2 3 4 5 6 7 8 9 10
Profit after Tax 11.60 11.22 6.02 6.55 7.18 7.94 8.83 9.70 9.78 9.68
Depreciation 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39
Interest on Term Loan 6.97 7.10 6.46 5.55 4.47 3.21 1.73 0.27 - -
Cash outflow (102.01) - - - - - - - - - -
Net Cash flow (102.01) 23.95 23.70 17.87 17.49 17.04 16.53 15.94 15.35 15.17 15.07
IRR 13.02%

NPV 12.22

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 Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Break Even Point

Particulars / Years 1 2 3 4 5 6 7 8 9 10
Variable Expenses (G)
Oper. & Maintenance Exp
(75%) 1.53 1.61 1.69 1.77 1.86 1.95 2.05 2.15 2.26 2.37
Sub Total 1.53 1.61 1.69 1.77 1.86 1.95 2.05 2.15 2.26 2.37

Fixed Expenses (H)

Oper. & Maintenance Exp
(25%) 0.51 0.54 0.56 0.59 0.62 0.65 0.68 0.72 0.75 0.79
Interest on Term Loan 6.97 7.10 6.46 5.55 4.47 3.21 1.73 0.27 0.00 0.00
Depreciation (I) 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39
Sub Total 12.86 13.02 12.41 11.53 10.48 9.24 7.80 6.37 6.14 6.18
Sales (J) 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99 25.99
Contribution (K) 24.46 24.39 24.31 24.22 24.13 24.04 23.94 23.84 23.73 23.62
Break Even Point (L= B/D) 52.58% 53.39% 51.05% 47.60% 43.43% 38.45% 32.57% 26.73% 25.87% 26.15%
Cash Break Even(H)-(I)/(K) 30.56% 31.30% 28.89% 25.36% 21.11% 16.05% 10.07% 4.14% 3.18% 3.35%
BREAK EVEN SALES
(J)*(L) 13.67 13.88 13.27 12.37 11.29 9.99 8.46 6.95 6.72 6.80

Return on Investment ` (in lakh)

Particulars / Years 1 2 3 4 5 6 7 8 9 10 Total
Net Profit Before Taxes 11.60 11.37 11.90 12.69 13.65 14.80 16.14 17.47 17.59 17.44 144.65
Net Worth 37.10 48.32 54.35 60.89 68.07 76.01 84.84 94.53 104.32 114.00 742.43
19.48%

Debt Service Coverage Ratio ` (in lakh)

Particulars / Years 1 2 3 4 5 6 7 8 9 10 Total
CASH INFLOW
Profit after Tax 11.60 11.22 6.02 6.55 7.18 7.94 8.83 9.70 9.78 9.68 69.03
Depreciation 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 5.39 43.09
Interest on Term Loan 6.97 7.10 6.46 5.55 4.47 3.21 1.73 0.27 0.00 0.00 35.75
TOTAL(M) 23.95 23.70 17.87 17.49 17.04 16.53 15.94 15.35 15.17 15.07 147.88

Debt ` (in lakh)

Particulars / Years 1 2 3 4 5 6 7 8 9 10 Total
Interest on Term Loan 6.97 7.10 6.46 5.55 4.47 3.21 1.73 0.27 0.00 0.00 35.75
Repayment of Term Loan 2.80 6.00 7.80 9.80 12.00 14.00 15.00 9.11 0.00 0.00 76.51
TOTAL(N) 9.77 13.10 14.26 15.35 16.47 17.21 16.73 9.38 0.00 0.00 112.26
Average DSCR 1.32

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Annexure 6: Procurement and implementation schedule

S. Weeks
Activities
No. 1 2 3 4 5 ….. 25 26 27 28 29 30 31 32 33 34
Finalization of
1
Layout
GA & Foundation
2
Drawing
Fabrication as per
3
design.
Transportation &
4
Handling
5 Civil works
Installation of
6
auxiliaries
7 Commissioning
8 Process down time

Process Down-Time Break up

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Replacement of 100 TR Vapour Compression System with LNG based Vapour Absorption System

Annexure 7: Details of technology service providers

Sr. No. Name of Service Provider and Address Contact person’s mobile number and email

Thermax Limited Raghavendra Kale

1 C&H - Cooling Sales
RNG Pallazzo, No. 1, 1st Floor, South End Street, raghavendra.kale@thermaxindia.com
Kumarapark East,
Bangalore 560 001 Cell: +91 8095245980
Tel: 080-22371721Fax: 080-22371726
FLOWLINE ENGINEERS
2 (Supplier Thermax Limited Boilers) Tahir Ali
147 18th MAIN 7th CROSS
BTM 2nd STAGE BANGALORE 560 076 flowlineblr@airtelmail.in
PH: 080 41237149 / 50 EMAIL :
flowlineblr@airtelmail.in Cell: +91- 98456 06930

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Annexure 8: Techno-commercial bids for new technology/equipment

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42
 Bureau of Energy Efficiency (BEE)
(Ministry of Power, Government of India)
4th Floor, Sewa Bhawan, R. K. Puram, New Delhi – 110066
Ph.: +91 – 11 – 26179699 (5 Lines), Fax: +91 – 11 – 26178352
Websites: www.bee-india.nic.in, www.energymanagertraining.com

Ernst & Young Private Ltd India SME Technology Services Ltd
13th Floor, "UB City" Canberra DFC Building, Plot No.37-38,
Block, Vittal Mallya Road, D-Block, Pankha Road,
Bengaluru - 560 001 Institutional Area, Janakpuri, New Delhi-110058
India Office: +91 80 4027 5000 Tel: +91-11-28525534, Fax: +91-11-28525535
Website: www.ey.com Website: www.techsmall.com