Cement-makers are accelerating their initiatives/ projects to increase the share of green power in their total power mix. The shift to green power, which is primarily executed by waste heat recovery system (WHRS) capacities now, is expected to aid cement companies in reducing power costs, which have been denting their margins.
Along with steel and power segments, the cement industry is also one of the largest consumers of fuel (in the form of coal). So, greenhouse gases emitted by the cement industry significantly impact the environment.
“The cement sector is one of the most progressive sectors in the Indian Industrial sectors, and it can reduce its overall emission intensity by 13.4 per cent and 30.3 per cent in business as usual and deep decarbonisation scenarios, according to a report by Danfoss-CII.
For the cement industry, the path towards decarbonisation is expected to help address emission as well as cost-related challenges.
Cement-makers are undertaking initiatives such as increasing the share of blended cement, which uses less clinker and consequently less fuel, and increasing the share of green power consumption through a mix of solar, wind, and WHRS capacities.
They have been implementing Waste Heat Recovery Systems (WHRS), a process of capturing waste heat losses during the production process. The captured waste heat losses can be utilised for the generation of power and other productive uses.
In the last 9-10 years, power and fuel cost per tonne has almost doubled for the cement makers. For eg, Ramco Cement’s power and fuel cost per tonne has increased from Rs.968 in FY14 to Rs.1796 in FY23. Now, power and fuel expenditures account for almost one-third of the total cost for cement producers.
WHRS carries the potential to solve two major purposes of the cement makers – to reduce power costs and cut greenhouse gas emissions.
According to rating agency Icra, green power is expected to account for 40-42% of the total power mix by FY2025 for cement companies, when compared with about 35% as of March 2023. The overall outlay for green power investments is estimated at about Rs.5,500 crore in the next two years.
Ramco Cements Ltd, a leading cement maker in South India, has built 43 MW of WHRS capacity to reduce energy consumption and optimising logistics to reduce lead distance and emissions. WHRS units have been helping the company reduce its power costs. The company’s wind power capacity, including its subsidiary’s capacity of 40 MW, stands at 166 MW.
“We are moving ahead in increasing the green energy share from 22 per cent in FY23 to more than 30 per cent in FY24,” says AV Dharmakrishnan, CEO of Ramco Cements Ltd.
Ambuja Cements says it is optimising the power mix by enhancing the use of renewable power including WHRS, solar, and wind. It has installed WHRS units across locations − a total of 53 MW capacity at Marwar, Darlaghat, and Bhatapara plants at a total investment of over Rs.550 crore have been installed. Also, 27.5 MW capacity at the Ambujanagar and Maratha plants at a total investment of more than Rs.475 crore are in the advanced stage of installation.
This year, green power (renewable and WHRS) is expected to account for about 43 per cent of the total power consumption of Ambuja Cements. This share will grow to 50 per cent with the proposed investment in solar capacity.
Ultratech Cement aims to source 100% of electricity from renewable sources by 2050. By 2024, it seeks to draw 34 per cent of its power requirement from green sources such as waste heat recovery systems (WHRS), solar, and wind energy. It has so far established 345 MW solar and wind power capacity and 210 MW WHRS capacity.
Dalmia Bharat vows to reach 100% use of renewables in its primary energy mix by 2035. It is targeting a 29 per cent share of non-fossil power consumption of the total power consumption in FY24. The company is expanding the capacities of renewable energy and WHRS. Its current green power capacity includes 100 MW of solar and 66 MW of WHRS.
Most of the cement manufacturers have been working on minimising power costs and enhancing the use of green power including WHRS units.