User Guide for India s 2047 Energy Calculator. Industry

Transcription

1 User Guide for India s 2047 Energy Calculator Industry

2 Table of Contents 1 Industry Sector overview Industry sector trajectories - approach Industry Sector Assumptions Industry sector trajectory Fuel wise Aluminium Industry Organization Energy consumption Scenario Results Coal Consumption Cement Industry Organization Production and capacity Utilization Energy consumption Scenario Results Coal Consumption Technology Options Chlor-Alkali Industry Organization Production and capacity utilisation Technology present and future technology penetration levels Scenario Results Coal Consumption Fertilizer Industry Organization Production and capacity Utilization Demand Energy consumption Scenario Results Coal Consumption Iron and Steel Industry Organization Production and capacity Utilization Demand Energy consumption Scenario Results... 24

3 7.6 Coal Consumption Technology Options Pulp and paper Industry Organization Production and capacity Utilization Demand Scenario Results Coal Consumption Textiles Industry Organization Production and capacity Utilization Demand Scenario Results Coal Consumption Others Scenario Results Coal Consumption Non Energy Use for the Industry Sector Cost Estimates Appendix Appendix

4 1 Industry Sector overview The industry sector in India doubled in value during 2000/01 to 2010/11 and grew at an annual growth rate of 7%. Despite the increase in energy consumption by the sector, the percentage consumption of energy by the sector has not increased dramatically and has stayed between 40-45% of the total commercial energy consumed. In 2010/11 the industry sector consumed ~1656 Twh (138 MTOE) of energy, which is 45% of the total commercial energy consumed (TEDDY, 2012) Within the Industry sector aluminium, cement, chlor-alkali, fertilizer, iron and steel, pulp and paper, and textiles are the largest energy consumers, accounting for around 55% (TERI calculations) of total energy use in the industry sub-sector. Most industry sub-sectors in India have a mix of varying plant sizes, different processes, raw materials/feed stocks being used, and large variations in the specific energy consumption of plants. This exercise, however does not consider plant level details and average sub-sector level data and understanding till the year 2011 time period is used to best represent the trends in each major sub-sector and the industry sector as a whole. 2006/07 has been considered as the base year for the calculations, and 2011/12 is the last year for which actual data was available and has been used. 1.1 Industry sector trajectories - approach TERI had undertaken the industry sector analysis for the Planning Commission to feed in to the 2047 Calculator exercise. The aim is to develop 4 trajectories for industry, ranging from the worst possible efficiency level to the best till 2046/47. Accordingly, TERI had compiled 4 trajectories as described later in this document. CSTEP continued the effort and has added on to several aspects of the estimates of technology and costs in the various sub sectors. In addition, CSTEP has added a feature to choose specific Tech Options in the cement and iron and steel sectors in order to view the likely impact of these more disruptive changes in these sectors. These Tech Options provide valuable insights for driving policy mechanisms with the aim of energy security and competitiveness of industrial sectors. Section 3 of this document provides a snapshot of the 4 trajectories for industry and the corresponding energy trajectories for the overall industry sector. Subsequently, Section 4 provides the broad assumptions considered in each sector across the 4 trajectories. The growth in production in each sub-sector, the assumptions on specific energy consumption taken in each of the 4 trajectories, the consequent energy consumption by sub-sector and the average costs (capex) assumed for each sub-sector are also included. Seven major energy consuming industry sub-sectors have been analysed in detail to estimate the energy use in each sub-sector to understand the potential for savings from industry under different trajectories. These sub-sectors include: 1. Aluminium 2. Cement 3. Chlor-Alkali 4. Fertilizer 5. Iron and steel 6. Pulp and paper 7. Textiles

5 The energy not accounted by these sub-sectors is then categorised as Others. This category includes sub sectors like bricks, glass etc. that are energy intensive industries. Energy consumption by industries in the others category is assumed to vary across the 4 trajectories as a ratio of the energy consumption of the seven sub-sectors, in the absence of greater detail of the composition of industries and the energy use across them. The proportion of energy used by others is about 40% of the total industrial energy consumption in Over the years, the energy intensity of the industry sector has been reducing as several of the units across sectors have moved to more efficient processes and adopted state-of-the art technologies. There is an autonomous improvement in the Energy Efficiency (EE) of industry that has been occurring over the past many decades. This improvement is driven by several factors including the high cost of input energy in industrial processes, a high share of the manufacturing cost, increased competitiveness among industry and the introduction of newer and efficient technologies. The autonomous improvement in EE has been considered as a major driver for reduction in the Specific Energy Consumption (SEC) of industry. However, for the period existing energy efficiency based policy mechanisms have also been factored into the analysis. For the case of the cement and iron and steel sectors, they account for a major share of the industrial energy consumption and are also expected to have major increases in production over the coming decades. Keeping this in view, this exercise has considered several major technology options (Tech Options) which can further drive improvement in the EE of these two sub sectors. The Government has put in place the Perform Achieve and Trade (PAT) scheme to incentivise energy efficiency improvement in industry. With the aim to incentivise energy efficiency for energy intensive large industries through a market mechanism, the PAT framework assigns targets to certain units covered under this scheme called Designated Consumers (DCs). The legal framework for PAT was set up under the Energy Conservation Act, Section 14 e of the Act, empowers the Central government to notify energy intensive industries, as listed in the Schedule to the Act, as Designated Consumers. If the Designated Consumers over achieve the target, they can trade the surplus as energy certificates, while a DC that has not been able to meet its target could purchase these Energy certificates. The first cycle of PAT has been completed in ; however the assessments are in progress. 2 Industry Sector Four trajectories have been developed for the industry sector representing varying assumptions on efficiency improvements across industry sub-sectors 1. Level 1 represents the worst trajectory in terms of energy consumption and efficiency while Level 4 represents the trajectory with the best possible efficiencies. Efficiency changes in the trajectories are possible either due to a shift towards more efficient technologies/processes or due to improvement in specific energy consumption due to specific EE measures. 2.1 Assumptions Level:1 This trajectory assumes no new major government policies for EE, other than the one PAT cycle 1 Due to differences in the second/third places of decimals for the production numbers and the specific energy consumption numbers, of the document and of the model, the final energy consumption numbers generated by the calculator might vary by a factor of +-5% from those of the document.

6 ( ). The autonomous EE penetration levels are also low. The norms are applicable to only the subset of the units in the seven industry sub-sectors. However, the efficiency of the units undergoes a marginal reduction/revision by the end of the terminal year (2047). The remaining units in the sub-sector do not opt for EE. The efficiency of these units improves at 5-15% of the efficiency improvement for the units that opt for EE. The Others undergo reduction in energy intensity by a CAGR of ~4%. Level:2 This level includes a gradual enhancement of penetration of EE in Industry (Table 1). Industrial units opting for EE would achieve the best efficiency possible in every sub sector. The units not opting for EE also improve their efficiency, but by a much lesser degree. The Others undergo a reduction in intensity of about 4-5% CAGR Level:3 Building on Level 2, this trajectory further increases the EE penetration under the seven subsectors. The units not opting for EE increase their efficiency across processes at a rate of 20-30% of the efficiency improvement by units that opt for EE. The Others undergo an efficiency improvement of about 4-5% CAGR. Level:4 Level 4 indicates the maximum possible improvement that can be achieved in the industry sector. This level further increases EE penetration. In addition, this level assumes that the units not taking up EE undergo an efficiency increase of between 20-50% of the units that opt for EE. The Others improve their intensity by about 5-6% CAGR. Figure 1 provides the energy consumption by the industry sector as a whole under the trajectories and assumptions as described in Section 3. The fuel-wise dis-aggregation into coal, oil, gas and electricity is also provided as tables in Appendix 1. Figure 1 Industrial Energy Consumption in Twh Table 1 EE Penetration across Levels EE penetration (%) in Level 1 Level 2 Level 3 Level 4

7 Cement Fertilizer Aluminum Iron and Steel Pulp and Paper Textile Chlor Alkali Note: In cases where the penetration of EE industries appears to decrease from the base year, the units in the specific sub-sectors do not take up EE measures in a consistent and long term approach. 2.2 Industry sector trajectory Four trajectories have been constructed for the industry sector each representing a different scenario. These scenarios are in descending order of the total energy consumed in the industry. Therefore, Level 1 represents the worst trajectory in terms of energy consumption and efficiency and Level 4 is the best trajectory. These have been constructed by changing efficiencies either in terms of technology/process penetration or in terms of specific energy consumption. In addition, major technology switch options have been now been provided to enable the user to observe potential savings that could accrue based on such Tech Options. Apart from the seven sectors covered here, the balance energy is covered under others. These are assumed to grow at a fixed proportion (fixed at 2011 levels and is roughly 60% major industries and 40% others with some variations). 2.3 Fuel wise The fuel wise analysis is also provided. The energy consumption is assumed to derive from either of the following fuels and the proportion of energy consumption is assumed to remain constant throughout the timeline when Tech Options are not operational. 1. Coal 2. Oil 3. Gas 4. Grid Electricity (also, electricity imported) The fuel wise distribution for the overall sector is available in appendix 1. 3 Aluminium

8 3.1 Industry Organization The primary aluminium industry comprises three main producers National Aluminium Company Ltd (NALCO), HINDALCO Industries Ltd, and Vedanta group consisting of Bharat Aluminium Company Ltd, Madras Aluminium Company Ltd (MALCO), and Vedanta Aluminium Ltd (VAL). VAL bought over BALCO and NALCO in 2006 and started its operations in April 2008 and MALCO closed its operations in December Out of all the aluminium producers, NALCO is in the public sector. Demand The demand for aluminium is assumed to increase based on GDP growth in India, this is reflected in the figure below. 3.2 Energy consumption The main steps in production of aluminium are: a) Refining of bauxite to make alumina

9 b) Smelting of alumina to make aluminium Of these two, smelting is the more energy intensive process and consumes electrical energy accounting for about 85-90% of the electric energy consumption 2. Accordingly, smelting accounts for more than 80% of total energy consumption in Aluminium sector and in this exercise, energy consumption in smelting operation is considered. 3.3 Scenario Results Four scenarios have been envisaged. These scenarios are in descending order of the total energy consumed in the industry. Therefore, the Level 1 represents the pessimistic trajectory in terms of energy consumption and efficiency and Level 4 is the most efficient trajectory. 2 Source PAT booklet, BEE, Ministry of Power, pg6

10 ALUMINIUM SECTOR Units Level 1 Production of Aluminium MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Aluminium TWh/ MT Level 2 Production of Aluminium MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Aluminium TWh/ MT Level 3 Production of Aluminium MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Aluminium TWh/ MT Level 4 Production of Aluminium MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Aluminium TWh/ MT Coal Consumption The coal consumption for the different trajectories in the aluminium sector are shown below.

11 4 Cement 4.1 Industry Organization The cement industry is one of the core industries that play a vital role in the growth and expansion of a nation. The industry occupies an important place in the Indian economy because of its strong linkages to other sectors such as construction, transportation, coal, and power. India accounts for

12 6% of the world s cement production. The per capita consumption of cement is 136Kg in India, which is much lower than the world average of 396 Kg and the average of other developing countries like Brazil (191 Kg) and Thailand (366 Kg). The production of cement entails the following two steps: a) Production of clinker b) Grinding and addition of ingredients to clinker to make the cement (ingredients depends upon the type of cement to be manufactured) 4.2 Production and capacity Utilization There are about 183 large cement plants in the country with an installed capacity of 312 MTPA and more than 360 mini-cement plants with an estimated capacity of 11.1 MTPA, making the total installed capacity 323 MTPA in 2010/11. The production of cement increased from MT in 2000/01 to MT in 2010/11 (Planning Commission 2011a). Demand The demand for cement is projected based on GDP. 4.3 Energy consumption The cement industry is highly energy intensive, with energy costs varying between 35% and 45% of the total manufacturing costs. The cement industry uses the coal and electricity as their major fuels. The actual consumption of coal in the Indian cement industry was 30 MT in 2010/11 3. The Indian cement industry is highly energy efficient compared to other cement-manufacturing countries. 3 Source TEDDY

13 4.4 Scenario Results The various parameters of the sector under the four trajectories are shown in the table below.

14 CEMENT SECTOR Units Level 1Production of Cement MT ,042.0 Large Ind Output MT Other Ind Output MT Energy Demand TWh ,048.6 Avg SEC Cement TWh /MT Level 2Production of Cement MT ,042.0 Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Cement TWh /MT Level 3Production of Cement MT ,042.0 Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Cement TWh /MT Level 4Production of Cement MT ,042.0 Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Cement TWh /MT Coal Consumption

15 The coal consumption for the different trajectories in the cement sector are shown below. 4.6 Technology Options Various Tech Options have been provided in the cement sector model. The Tech Options are as follows: 1. Default This option does not invoke specific tech options and the trajectories are based on the levels which have been chosen and the SEC reductions are based on these chosen levels. 2. Increased Waste Heat Recovery (WHR) This option characterizes the impact of a concerted drive to increase the penetration of WHR technologies in cement plants. Such technologies are available globally and in India, however the current penetration is low. Under this tech option a large penetration of such technologies is assumed with a corresponding reduction in thermal and electrical energy used in the process. 3. Increased Electricity from the Grid This tech option models a major switch in the sourcing of electric power in the cement sector. Current trends show that plants are preferring to produce most of their electric power through the use of Captive Power Plants which are largely powered by domestic and imported coal. This tech option provides insights into the impact of a switch to procuring most of the electric power from the grid. This assumes that the grid power would be available and would be reliable as well. Such a switch provides an improvement in the energy efficiency of the specific plant since the inefficient CPP s energy consumption is now outside the plant boundary. 4. Increased Alternate Fuels and Raw Materials (AFRM) This tech option is a major driver for reduction of thermal energy consumption in cement plants. European and Japanese plants are reportedly running with more that 30-50% coal being substituted by alternate fuels such as domestic, industrial and agricultural waste and used rubber tyres. The penetration of AFRM in India is probably less than 1% and

16 thus a large potential seems to exist if the enabling infrastructure and incentives can be provided along with policy based support. 5 Chlor-Alkali 5.1 Industry Organization The chlor-alkali industry in India contributes about 4% to the total global market. Caustic soda, soda ash, chlorine along with hydrogen and hydrochloric acid comprise the chlor-alkali industry. These chemicals find their applications in a number of industries such as textiles, chemicals, paper, polyvinyl chloride, water treatment, alumina, soaps and detergents, glass, and chlorinated paraffin wax, among others. To maintain parity with PAT definitions, only Caustic Soda is being analysed separately here as the chlor alkali sector and the soda ash, chlorine, hydrogen and HCL are considered in the others category. 5.2 Production and capacity utilisation Caustic soda The capacity utilisation of the caustic soda plants, on average is very low due to imports at very low prices. According to the Alkali Manufacturers Association of India, the production of caustic soda in 2011/12 was 2.6 MTPA against an installed capacity of 3.1 MTPA. Demand The demand for caustic soda is projected using the production as a proxy for demand and based on past trends. 5.3 Technology present and future technology penetration levels Caustic soda industry traditionally used the electrolysis process with a mercury cathode for producing chlorine and caustic soda from brine. Today with a rapid change in technology during the last decade as reflected in Table 21, India is next only to Japan in adopting state-of-the-art membrane cell technology for caustic soda production.

17 Only 5% of India s chlor-alkali capacity is based on mercury cell, which will be phased out by 2012 according to Corporate Responsibility for Environment Protection (CREP) Voluntary Commitment. The industry is in the process of continuous adoption of third/fourth/fifth generation electrolysers and membranes. 5.4 Scenario Results The various parameters of the sector under the four trajectories are shown in the table below.

18 CHLOR-ALKALI SECTOR Units Level 1 Production of Chlor Alkali MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Chlor Alkali TWh /MT Level 2 Production of Chlor Alkali MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Chlor Alkali TWh /MT Level 3 Production of Chlor Alkali MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Chlor Alkali TWh /MT Level 4 Production of Chlor Alkali MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Chlor Alkali TWh /MT Coal Consumption The coal consumption for the different trajectories in the chlor alkali sector are shown below.

19 6 Fertilizer 6.1 Industry Organization The fertiliser industry in India has both Public and private players. The most widely used fertilizers include nitrogenous (N), phosphate based (P), and potassic based (K) fertilizers. There are about 139 fertilizer plants operating in India. Out of these 29 units produce urea, 19 units

20 produce Di-ammonium phosphate (DAP) and NP/NPK complex fertilizers, 80 units produce single super phosphate (SSP), 10 units produce ammonium sulphate, and one unit produces calcium ammonium nitrate. In , about 38% of the total fertilizer consumption was imported 4. In terms of energy use, nitrogenous based fertilisers account for 94% of energy used by the fertiliser industry Production and capacity Utilization The installed capacity of nitrogenous fertilizers during 2010/11 is MT and that of phosphatic fertilizers was 5.6 MT. Potassic fertilizers are not manufactured in India and are imported. The production of nitrogenous fertilizers increased from MT during 2009/10 to MT in 2010/11, and the production of phosphatic fertilizers increased from 4.3 MT during 2009/10 to 4.5 MT in 2010/11 (MoCF 2011). Among the major fertilizers, the production of urea was MT, of DAP was MT, of NP/NPK complex was MT, and of SSP was MT during 2010/11. The installed capacity for urea (nitrogenous compound) for the year 2011 varies widely across India ranging between 0.37 MT per year to 1.72 MT per year. (TEDDY, 2012). 6.3 Demand The fertilizer sector growth is represented through the demand for nitrogen. 4 Source - TEDDY Source PAT Booklet BEE, MoP

21 6.4 Energy consumption The Indian fertilizer industry is benchmarked as one of the best in the world in terms of operational efficiency, energy consumption, maintenance of safety, and environmental standards. The cost of energy constitutes 60 70% of the total cost of production. (MoCF 2012) The specific energy consumed to produce one tonne of urea is the major indicator of the operating efficiency of the plant. 6.5 Scenario Results The scenario results are shown in the table below.

22 FERTILIZER SECTOR Units Level 1Production of Fertilizer MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Fertilizer TWh/ MT Level 2Production of Fertilizer MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Fertilizer TWh/ MT Level 3Production of Fertilizer MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Fertilizer TWh/ MT Level 4Production of Fertilizer MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Fertilizer TWh/ MT Coal Consumption The coal consumption for the different trajectories in the fertilizer sector are shown below.

23 7 Iron and Steel 7.1 Industry Organization India is the fourth largest producer of crude steel in the world and is expected to become the second largest by The iron and steel industry contributes around 2% of the GDP of the country 6. The Indian steel industry is characterized by fragmentation, particularly in the downstream segment, with a large number of unorganized players. Integrated steel plants engage in the entire spectrum of steel-making operations, commencing from extracting iron ore and coal until the stage of steel manufacture. Secondary steel units undertake only a portion of the operations. To analyse together the entire steel industry, the processes are considered as the technology and the SEC of the process is used to analyse change in efficiency. The three different processes are Basic Oxygen furnace, electric arc furnace and induction furnace. The share of electric arc furnace route witnessed an increasing trend. 7.2 Production and capacity Utilization The crude steel production capacity during 2010/11was 78 million tonnes per annum (MTPA), and the crude steel production grew at 8% annually from 2005/06 and stood at MT in 2010/11. The steel industry can be classified by the type of plants, namely, integrated steel plants and secondary steel plants. 7.3 Demand The demand for finished steel has been considered as a function of GDP. 6 Source TEDDY 2012

24 7.4 Energy consumption The industry has three major technologies, The Basic Oxygen Furnace, the Electric Arc furnace and the induction furnace. Projected energy consumption is shown below. 7.5 Scenario Results The trajectories of various parameters for the iron and steel sector are shown below.

25 IRON AND STEEL SECTOR Units Level 1 Production of Iron and Steel MT Large Ind output MT Other Ind Output MT Energy Demand TWh , , , , , ,777.6 Avg SEC Iron and Steel TWh /MT Level 2 Production of Iron and Steel MT Large Ind output MT Other Ind Output MT Energy Demand TWh , , , , , ,192.0 Avg SEC Iron and Steel TWh /MT Level 3 Production of Iron and Steel MT Large Ind output MT Other Ind Output MT Energy Demand TWh , , , , , ,715.8 Avg SEC Iron and Steel TWh /MT Level 4 Production of Iron and Steel MT Large Ind output MT Other Ind Output MT Energy Demand TWh , , , , , ,001.1 Avg SEC Iron and Steel TWh /MT Coal Consumption The coal consumption for the different trajectories in the iron and steel sector are shown below.

26 7.7 Technology Options Various Tech Options have been provided in the iron and steel sector model. The Tech Options are as follows: 1. Default This option does not invoke specific tech options and the trajectories are based on the levels which have been chosen and the SEC reductions are based on these chosen levels. 2. Switch to Electric Furnace This tech option studies the impact of a major shift to electric furnace processes instead of the oxygen furnaces which are expected to be dominant in the autonomous/default scenario. Under this tech option a major reduction of the SEC can be expected based on the increased efficiency of the electric processes. A major transfer of efficient electric technologies is estimated giving rise to major improvements in the state of the art of electric processes in the next three decades. 3. Increased Gas based Direct Reduced Iron (DRI) This option characterizes the impact of a concerted drive to increase the penetration of Gas based technologies in the manufacture of DRI. Plants using gas based DRI are under operation in developed countries and such plants have reported very low SECs and high efficiencies. In addition, the emissions from these plants is also much lower than coal based DRI plants. There are very few gas based DRI plants in India primarily due to the low availability of natural gas in the country and the priority mechanisms which are in place to allot the available gas to fertilizer and power plants. In fact, existing gas based power plants have been facing severe shortages of gas supplies with the hampering of operations. This tech option seeks to provide insights into the scenario in which large supplies of gas could be imported or domestically sourced enabled by strong government policy support and such supplies could be made available to steel plants for increased efficiency of use.

27 4. Increased Electricity from the Grid This tech option models a major switch in the sourcing of electric power in the iron and steel sector. Current trends show that plants are preferring to produce most of their electric power through the use of Captive Power Plants which are largely powered by domestic and imported coal. This tech option provides insights into the impact of a switch to procuring most of the electric power from the grid. This assumes that the grid power would be available and would be reliable as well. Such a switch provides a major improvement in the energy efficiency of the specific plant since the inefficient CPP s energy consumption is now outside the plant boundary. The final energy use could be reduced significantly under this tech option. 5. Increased Scrap This tech option is a major driver for reduction of thermal energy consumption in iron and steel plants. European and Japanese plants are reportedly running with more that 30-50% iron being substituted by steel scrap. The utilization of scrap in steel plants in India is probably less than 3-5% and thus a large potential seems to exist over the long term, if the enabling infrastructure and incentives can be provided along with policy based support. Increased scrap utilization has the potential to significantly reduce the thermal energy consumption in steel plants since the typically 60% of the total energy is used for producing iron and this can be saved through the increased use of scrap in the downstream steel making process. 8 Pulp and paper 8.1 Industry Organization The Indian paper industry produces MT of paper per annum accounting for about 2.6% of the total world production of paper, paperboard, and newsprint in 2010/11. The paper industry is broadly classified into three segments printing and writing (P&W), newsprint and paperboard, and industrial packaging (paperboard). Paperboard is the largest segment, accounting for 45% of total domestic paper demand, followed by P&W (35%) and newsprint (20%). The industry is further categorized on the basis of raw materials used for manufacturing paper into forest-based or wood based (31%), agro-based (22%), and recycled fibre-based paper (47%) Production and capacity Utilization The capacity of paper mills varies from 500 tonnes per annum to 0.2 MTPA. In 2010/11, there were 759 pulp and paper mills with an installed capacity of 12.7 MT, producing around MTPA of paper/paperboard and newsprint out of an annual consumption of around MT. There are 30 large integrated paper mills based on wood/ bamboo as major raw materials. These mills contribute about 31% of the total production, which works out to about 3.1 MTPA 8. There are 150 paper mills based on agro-residues in the country using bagasse and straws as major raw materials in proportion of 50% bagasse and 50% wheat/rice straw and other annual grasses and contribute to about 22% of the total production, which is 2.2 MTPA agro-based. Of the total 653 paper mills in operation, more than two-thirds of the mills use recycled fibre/waste paper as the primary fibre source, contributing about 4.72 MTPA or 47% of the country s total production of paper/ paperboard and newsprint. 7 Source - TEDDY Source TEDDY 2011

28 8.3 Demand The demand for paper is taken from the working group report on pulp and paper till 2030 and has been extrapolated thereafter. 8.4 Scenario Results The trajectories of various parameters for the pulp and paper sector are shown below.

29 PULP AND PAPER SECTOR Units Level 1Production of Pulp and Paper MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Pulp and Paper TWh /MT Level 2Production of Pulp and Paper MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Pulp and Paper TWh /MT Level 3Production of Pulp and Paper MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Pulp and Paper TWh /MT Level 4Production of Pulp and Paper MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Pulp and Paper TWh /MT Coal Consumption The coal consumption for the different trajectories in the pulp and paper sector are shown below.

30 9 Textiles 9.1 Industry Organization The Indian textile industry contributes about 14% to the industrial production, 4% to the GDP, and 17 % to the country s export earnings. The textiles sector is the second largest provider of employment after agriculture. The Indian textiles industry is extremely varied, with the handspun and hand-woven sector at one end of the spectrum, and the capital-intensive, sophisticated mill sector at the other. The decentralized power looms/ hosiery and knitting sectors form the largest section of the textiles sector. 9.2 Production and capacity Utilization Over the years, production of cloth in the mill sector has shown a steady growth since 2003/04 and was 2016 million m2 in 2009/10.The total production of cloth by all sectors mill, power loom, handloom, hosiery and khadi, wool, and silk has shown an upward trend in recent years. The cloth production in 2010/11 is million m2 (provisional). The cloth production during April October (2011/12) showed a fall by 6.5% (provisional). The production of cloth in different sectors of textiles is given in Table Demand The demand for cotton yarns is projected using regression estimates based on GDP.

31 Energy consumption In textiles only cotton yarn has been considered, this is because for any synthetic textiles, some amount of cotton is used. In term of energy consumption, this could lead to double counting of cotton. 9.4 Scenario Results The trajectories of various parameters for the textiles sector are shown below.

32 TEXTILES SECTOR Units Level 1Production of Textile MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Textile TWh /MT Level 2Production of Textile MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Textile TWh /MT Level 3Production of Textile MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Textile TWh /MT Level 4Production of Textile MT Large Ind output MT Other Ind Output MT Energy Demand TWh Avg SEC Textile TWh /MT Coal Consumption The coal consumption for the different trajectories in the textiles sector is shown below.

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34 10 Others The category of Others is a heterogeneous category and this category has been analysed by using value addition in monetary terms. For efficiency, the energy consumed per unit of value addition is utilized. The energy consumption of the Others sector is estimated as follows.

35 10.1 Scenario Results The trajectories of various parameters for the Others sector are shown below. OTHERS SECTOR Units Level 1 Production Demand from other sector $bn Energy Demand TWh , , , , ,809.6 Demand Adjustment as per baseline n TWh Net Energy Demand TWh , , , , , , ,690.5 Avg SEC OTHERS TWh /$bn 9, , , , , , , , Level 2 Production Demand from other sector $bn Energy Demand TWh , , , , ,583.0 Demand Adjustment as per baseline n TWh Net Energy Demand TWh , , , , , , ,392.9 Avg SEC OTHERS TWh /$bn 9, , , , , , , , Level 3 Production Demand from other sector $bn Energy Demand TWh , , , , ,158.6 Demand Adjustment as per baseline n TWh Net Energy Demand TWh , , , , , ,835.4 Avg SEC OTHERS TWh /$bn 9, , , , , , , , Level 4 Production Demand from other sector $bn Energy Demand TWh , , , , ,033.1 Demand Adjustment as per baseline n TWh Net Energy Demand TWh , , , , , ,670.6 Avg SEC OTHERS TWh /$bn 9, , , , , , , ,375.37

36 10.2 Coal Consumption The coal consumption for the different trajectories in the Others sector is shown below.

37 11 Non Energy Use for the Industry Sector In addition to using Coal, Oil and Gas as fuels for energy, fossil fuels are also being used as feedstock by the Industry. The majority of it being Gas for the fertilizer Industry and Naphtha for the Petrochemicals Industry. Gas consumption as a feedstock in steel and petrochemicals has also been accounted for in this exercise. The consumption levels have been linked to the future projection of output in that particular sector of Industry. The consumption number for Gas in the fertilizer industry has been taken to be around Twh in the year from the PNGRB Vision 2030 document, which assumes that the fertilizer production in the country will tend to saturate around the year 2030 due to saturation of agricultural crop yields. The consumption levels of Gas for the Fertilizer Industry increase very marginally every year to level of 409 Twh in the year Similarly the consumption levels of Naphtha as a feedstock has been linked to production levels of Petrochemicals (Chlor- Alkali for the purpose of this tool), increasing from the levels of Twh in the year to a level of Twh in the year On similar lines, gas consumption for petrochemicals and steel industry increases from the levels of 29 Twh in the year to a level of Twh in the year The baselines numbers have been taken from the PNGRB Vision 2030 document. Statistical adjustments as per the baseline numbers BP Energy Outlook 2035 has been taken as a reference document for referencing energy consumption and fuel wise consumption numbers for the Industry. An adjustment of 221 Twh has been carried out in which has been projected till the year 2047 as per the original energy consumption numbers of the Industry.

38 12 Cost Estimates This exercise has included estimates of energy savings that are achieved under the various specific trajectories. The costs are based on assumptions and estimates that are drawn from global and Indian literature that has been available and also based on further analysis by CSTEP. These estimates provide an indication of the scale of capital costs that could be required for various EE improvements both autonomous and disruptive process switch type of events. High and Low cost estimates for the various sub sectors are shown below for the case of Level 2 trajectory.

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40 CEMENT SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Appendix 1 Fuel wise energy consumption in various trajectories are shown in detail for the different sub sectors in the tables that follow.

41 FERTILIZER SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh

42 ALUMINIUM SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh

43 IRON AND STEEL SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh , , , , , ,917.6 Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh , , , , , ,437.5 Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh , , , , , ,047.0 Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh , , , , , ,460.9 Liquid hydrocarbons TWh Gaseous hydrocarbons TWh

44 PULP AND PAPER SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh

45 TEXTILES SECTOR Units Level 1Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 2Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 3Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh Level 4Electricity (delivered to end user) TWh Solid hydrocarbons TWh Liquid hydrocarbons TWh Gaseous hydrocarbons TWh