SOLAR THERMAL INDUSTRIAL PROCESS HEATING FOR CO 2 ABATEMENT: A CASE STUDY Amit Kumar and Mahesh Vipradas Tata Energy Research Institute, Darbari Seth Block, Habitat Place, Lodhi Road, New Delhi Fax: +91-11- 4621770/4632609, E-mail: akumar@teri.res.in ABSTRACT Major portion of thermal energy requirements in the Indian industrial sector lies in the temperature range of 100 o C to 250 o C that corresponds to the medium temperature range of solar thermal systems. Solar energy is best suited for such medium grade thermal applications. This case study deals with a number of issues, including the cost of CO 2 abatement in the perspective of CDM (Clean Development Mechanism) within the Kyoto Protocol. Aim of the case study project is two-fold, namely, (1) to reduce fossil fuel consumption in industrial process heating by way of part replacement of conventional heating through solar thermal energy, and (2) to reduce harmful GHG emissions. The high industrial growth rate coupled with increasing fuel prices and stringent emission control laws makes it rational to utilize solar process heating. The baseline case comprises process heating based on conventionally fired boilers. Two fuels, namely, coal and oil, have been considered while working out the savings and abatement costs. KEYWORDS Industrial process heating, solar parabolic concentrators, CO 2 abatement, CDM INTRODUCTION Major portion of thermal energy requirements in the Indian industrial sector lies in the temperature range of 100 o C to 250 o C that corresponds to the medium temperature range of solar thermal systems. This is supplied either as high temperature pressurized water or as low pressure steam. These medium temperature requirements are presently met primarily by combustion of fossil fuels like coal, lignite, and fuel oil etc. fuel. Solar energy is best suited for such medium grade thermal applications. There are 22 major industries where boilers supply process heat either in the form of steam or hot air up to a temperature of 150 o C, belonging to dairy, food processing, textiles, hotel, edible oil, chemical, marine chemicals, bulk drug, breweries, and distilleries. Solar thermal energy has a number of attractive features that make it a very desirable energy source. The perennial source of solar energy provides un-interrupted energy supply. The sunshine varies from 3200 to 2300 hours per year and the annual global radiation is 4-5 kwh/ m 2 -day, fairly spread over 80% of the country. The solar thermal technologies offer three ranges of application-temperatures, such as: 1
Low grade Up to 80 o C Flat plate collector For water heating, space heating and air drying Medium grade 80-120 o C Evacuated tube collector, CPC For process steam, hot water, desalination and cooking etc. 100-350 o C Parabolic trough concentrator For process heat, power generation etc. Above 500 o C Parabolic dish concentrator For steam and power generation High grade Above 1000 o C Central receiver For power generation and material processing This case study deals with a number of issues, including the cost of CO 2 abatement, in the perspective of CDM (Clean Development Mechanism) within the Kyoto Protocol. Aim of the case study project is two-fold, namely, (1) to reduce fossil fuel consumption in industrial process heating by way of part replacement of conventional heating through solar thermal energy, and (2) to reduce harmful GHG emissions. The target GHG in this case is CO 2. It is assumed that the said solar thermal system is installed in the marine chemicals sector. As far as medium temperature solar thermal technology is concerned, it is still in infancy in India. However, parabolic trough concentrators are available commercially overseas, in countries like Israel, USA, and Germany etc. The high industrial growth rate coupled with increasing fuel prices and stringent emission control laws makes it rational to utilize solar process heating. Moreover, investment in the proposed project is attractive considering the fact that solar thermal system not only affects substantial savings in the fossil fuel consumption but also offers reduction in CO 2, it being a zero emission system. However, considering the high initial cost of the system, a CDM mechanism gives the project an extra leverage. THE CLEAN DEVELOPMENT MECHANISM The Kyoto Protocol within the UNFCCC set limits on the developed country emissions in the 2008-2012 period. In order to attain this goal, it formulated some mechanisms. The Clean Development 2
Mechanism (CDM) is one of these mechanisms, conceived as an international instrument to promote sustainable development in developing countries along with cost-effective climate change mitigation. It brings together the need for developed countries to initiate investments in carbon-emissions reductions, with the availability of low-cost carbon-emissions reduction opportunities in developing countries. Through the process, enterprises in developed countries can, in partnership with enterprises in developing countries, invest in the establishment of state-of-the-art technologies in host developing countries. The lower technological baseline in the developing countries would imply that such an investment would result in greater potential reductions in carbon emissions than would a similar investment in the developed country. In return for this investment, the developed country enterprise would seek returns in the form of the carbon emissions reductions (as compared to host country baseline) that occurs over the life of the investment. CDM is seen as cost-effective measure to mitigate climate change and to promote the transfer of cutting-edge climate-friendly technologies. The CDM process aims at ensuring that the projects promote sustainable development in developing countries, while ensuring additionality of global carbon-emissions reductions. CDM projects could also promote technologies that are not yet available in host countries. However, the Kyoto Protocol specifies that such new technologies should have been identified as sustainabledevelopment priorities in the host country. The introduction of these technologies that are already being promoted commercially, albeit with incentives, in some developed countries, would encourage the more rapid adoption of these technologies in the Indian market. In these applications, the entire energy replacement due to their introduction can be counted towards the additional carbon savings due to the project. PROJECT DETAILS Baseline The baseline case comprises process heating based on conventionally fired boilers. Two fuels, namely, coal and oil, have been considered while working out the savings and abatement costs. This particular baseline scenario has been chosen based on the fact that in India, for industrial process heating, mostly coal or oil fired boilers are used. Maximum efficiency of currently available boilers in the country has been taken. Internationally, more efficient boilers may be available. Project scenario The case study process heating system is based on parabolic trough concentrators. The solar radiation incident on the parabolic trough reflector is reflected in concentrated form on to the receiver tube that is placed along the focal axis of the parabolic trough. Consequently, the fluid flowing through this tube attains very high temperature. Depending upon the requirement, a number of such concentrators can be coupled together to deliver the desired steam output. A tracking system ensures that the concentrator is facing sun continuously. 3
The capacity of the solar thermal system is 10 MT of steam per day. It may be noted that this system is an add-on to the existing boiler and not a replacement. Thus, during 300 sunny days, for about 8 hours a day, the solar thermal process heating would replace conventional heating to the extent of its capacity. Additionalities Additionality of technological intervention In India, this technology is not being used anywhere and as such implementing such a project satisfies this criteria. Offset additionality The project would result in CO 2 abatement to the tune of 1015 MT/year or 30450 MT over its life of 30 years, for the baseline of coal-fired boiler. Financial additionality The project satisfies this criterion too, as it does not take into account, any subsidy/incentive currently in force. The NPV of the incremental costs, for discount rate of 21%, are as follows: (-) Rs. 44,26,000 (for the baseline of oil-fired boiler) (-) Rs. 87,54,000 (for the baseline of coal-fired boiler) With a view to examine the commercial viability of the project, the analyses have been carried out for the commercial discount rates of 18%, 21% and 24%, instead of governmental discount rate of 12%. The costs of CO 2 abatement thus work out to be as follows: Fuel Discount rate (%) CO 2 abatement cost ($/MT) Coal 18 21 24 20.58 32.16 44.39 Oil 18 21 24 Assumptions 6.70 23.47 41.72 For carrying out this analysis, the following assumptions have been made: Cost of parabolic trough concentrator Rs. 8,200/m 2 (Rs. 2,108/kg of steam) 4
O&M cost of the solar system 2.5% of capital cost Boiler efficiency Coal-fired 80% Oil-fired 85% Cost of fuel Coal Rs. 2,500/MT Oil Rs. 9,300/MT Discount rate 18%, 21% and 24% Inflation 6% System life 30 years Emissions Coal 1.76 kg of CO 2 /kg of coal Oil 3.11 kg of CO 2 /kg of oil Benefits On account of substantial savings in burning of fossil fuels (like coal and oil), the project offers attractive environmental benefits in the form of CO 2 abatement, throughout its lifetime. These GHG reductions can be effectively estimated by monitoring the reduction in the consumption of fossil fuel in the boiler. In case of baseline case of coal/lignite fired boiler, there would also be an added benefit in terms of reduction in ash generation, leading to reduced cost of ash disposal. National priorities Reduction in industrial consumption of fossil fuels and utilization of more efficient and cleaner technologies is one of the foremost priorities of the Government of India. Indeed, utilization of solar thermal energy for the industrial process heating is one of the thrust areas of the Ministry of Nonconventional Energy Sources. Thus, the project is compatible with the national priorities. Since the proposed project results in reduction in environmental pollution levels, it also helps in achieving the objective of cleaner and healthier atmosphere for the populace at large. CONCLUSIONS The technical feasibility of the project is well established in other countries and in India also, the industry (both, user as well as manufacturing) is capable of absorbing this technology. In fact, except for a few critical components, Indian industry can manufacture all the components and balance of system. Moreover, by taking up this project, an opportunity could be created, firstly for the technology transfer, and secondly, for fine-tuning the overall system and its integration with the conventional system. Further, this would contribute towards framing out the issues, involved in adapting the technology to Indian conditions, monitoring and quantifying the GHG abatement, and host-investor networking, etc. Thus, there exists a tremendous scope of learning through the implementation of such a project under CDM mechanism. 5