Whitepaper December 2015 www.beroeinc.

com

Real-time Energy
Optimization in the
Cement Industry |
Opportunities Vs Saving
Potential

Vikram M Avina
Author
Senior Research Analyst, Energy and Sustainability

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 Whitepaper Real-times Energy optimization for Cement Industry

Introduction
India Stands second in terms of cement production worldwide, with nearly 390
million tonnes (MT) of cement production capacity accounting for 6.7% of the worlds
cement output. It is estimated to reach 550 MT by FY 2020. The industry has been
growing strong lately (since 2013), before which it came to a halt in 2013. This
standstill in 2013-14 was in response to the sharp downturn of the economy and
rising production costs (especially energy cost; which makes up to 46% of the total
production cost), cement sales volume growth halved from the levels seen over the
past decade, while the prices nearly stagnated.

Domestic Cement Consumption (MT)

400
398
SLUMP 359
300
324

200 238.05 248.7

223.67

100

0
FY12 FY13 FY14 FY15 FY16 E FY17 E

Fig-1: Domestic Cement Consumption (in Million Metric Tonnes)

This paper attempts to understand and evaluate energy as a major cost contributor
to the total cost of cement production and suggest measures to optimize energy cost
coupled with an Impact assessment of annual potential savings. It takes a look at the
cost saving as well as the load curve optimization techniques to deal with the rising
production cost. It also borrows some lessons from the global cement industry that
the Indian cement producers can adopt to further improve their operating practices.

Break-up Of Cement Manufacturing Cost | The Energy Angle

Traditionally cement manufacturing has been an energy intensive process, where

electricity cost alone accounts for up to 25% of the total energy cost. With an ever
increasing electricity cost globally, the cement producers globally have started
looking for alternate means to remain competitive.

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 Whitepaper Real-time Energy optimization for Cement Industry

Fig-2: Break up of manufacturing cost of Cement and Energy Consumption

Sources: India Environmental Portal, PCA ([Portland Cement Association), Cement Review, Holtec Consulting, Beroe Analysis

Energy Flow | Cement Manufacturing | Electricity an Important Component --

Observations

Energy flow for cement manufacturing clearly indicates the energy intensiveness of
the process. Motors for crushers and grinding consume the maximum electrical
energy while Kilns consume the thermal energy.
Energy Flow | Cement
Manufacturing
Diesel for Loaders,
dozers and Limestone Mining
compressors

Diesel for trucks/ Transport

Electrical Energy for
ropeway
Electrical Energy for Crushing
crushers
Electrical Energy for Bauxite, Ferrite
Mill drive and fans Raw Milling
Heat Energy from Kiln Electrical energy for
off gases mill drive and fans
Heat Energy from fuel Pre calcination
input
Electrical Energy from
Coal Milling
Kiln drive, fans and Pyro processing
ESP
Heat Energy from fuel
input Heat Energy from fuel
Electrical Energy for input/waste heat from clinker
fans, drive and clinker Clinker cooling cooler
breaker

Electrical Energy for Gypsum

Mill drives and fans Cement Grinding

Packing & Dispatch

Fig-3: Step by step energy flow through Cement processing

Sources: Research Journals, Cement Review, Beroe Analysis

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 Whitepaper Real-time Energy optimization for Cement Industry

Mills accounts for more than 60% of the total electrical power consumed during the
manufacturing process of cement closely followed by kilns and crushers. So to apply
cost reduction approach these are to be chosen as the first point of action.

The Road Ahead | Time of Use Tariff | Way Forward for Load Shifting

Time of Use Tariff (TOU) structure is based on the load profile/ consumption pattern
of the consumers. The tariff varies (low/high) in tandem with demand. Industrial
consumers are increasing moving towards load shifting to encompass TOU tariff
structure, in order to enjoy its monetary benefits. Load profile of different segments
of consumers (urban/Rural/Industrial) has varying demand at different point of time
in a day. Load shifting implies of shifting heavy (adjustable) loads from peak to
standard/off peak periods to attain savings in terms of electricity bills.

Case Example of Time of Use (TOU) Tariff

With increasing energy costs for manufacturing of cement, various manufactures are
moving steadily to optimize their load curves; bringing down their overall demand
through increased efficiency. Another way of optimizing the load curve would be to
shift heavy (adjustable) loads from peak to standard/off peak periods (usage of TOU
Tariffs) to attain savings in their electricity bills.

Winters Summers
Midnight Midnight
11 1 11 1
10 2 10 2
3 3
9 9
4 4
8 8
7 5 7 5

P.M 6 6 A.M. P.M. 6 6 A.M.

7 7
5 5
4 8 4 8

3 9 3 9
2 10 2 10
1 11 1 11
Noon Noon
Peak Standard Off Peak

Fig-4: Electricity consumption in various seasons by Cement plant in South Africa

Sources: ESKOM, Research Journals, Beroe Analysis | Note: The above TOU tariff is from South Africa (A case Example)

The period (10 A.M 4 P.M) when the demand is comparatively lower than the rest
of the day, the tariff is at standard indicating the relation between the two.

Areas for Load Shifting in Cement Industry | Saving Potential

In the energy intensive industry such as cement manufacturing, major portion of the
electrical demand is taken up by motor/machine driven processes. When Demand
side management (DSM) / load optimization is to be considered motors in these
processes will be undoubtedly chosen considering the fact that majority of demand

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 Whitepaper Real-time Energy optimization for Cement Industry

comes from these. On implementation this would yield a great savings to the total
electrical consumption of the manufacturing unit.

In similarity to various non-metallic materials processing, the kiln is the slowest

process in the cement manufacturing process too. Hence highlighting the possibility
of load shift (for electric motors) before and after the kiln into off peak periods when
the tariffs are relatively lower. This would result in considerable amount of savings as
peak time energy purchase will be reduced.

There are multiple factors that influence the operation of plants (motors) and are
used to calculate the number of hours available for load shifting. These include plant
layout, flow rates, silo capacity, planned maintenance, motor operating capacity,
percentage use of fly ash, equipment reliability (incident hours), regulations of DSM
load-shifting, and weekend operating hours. The flow rate and reliability are variable
factors and can change over time
Other Best Practices | A Tilt towards Energy Efficiency
Today, although, India is the second largest and also one of the most cost efficient
cement producer in the world, there is still scope for improvement in its operating
practices particularly from the energy stand point. The following table summarizes
the best practices currently employed widely by the Global cement industry and the
corresponding level on implementation of these in the Indian cement industry. It
highlights the areas where there is scope for improvement for the Indian cement
industry
Implementation Level by Cement
Companies in India
Cost Remaining
Global Industry best practices Top 3 Ranked 4-7
Factor (Constitutes
(Constitutes 35% (Constitutes 25%
40% of Total
of Total Capacity) of Total Capacity)
Capacity)

Deployment of Waste Heat Recovery Systems

Installation of Solar panels and Wind farms to augment captive

electricity production

Use of Alternative fuels

Energy
(Thermal Substitution Rate TSR is currently 2-3% in India as

compared to 80% abroad)

Automation and New Technologies

Energy Efficiency - Use of Preheater/Pre Calciner

High Medium Low

Fig-5: Best practices used by Cement Industries Globally

Source: Beroe Analysis, Internal Records

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 Whitepaper Real-time Energy optimization for Cement Industry

In order to stay competitive, cement producers in India need to focus on the

following energy measures
1. Increase deployment and use of renewable energy sources like Solar and
Wind Power as captive power plants. This will help reduce transmission losses.
2. Increase in the use of preheaters/pre-calciners will help improve energy
efficiency
3. Upgradation and modernization of Old plants Automated process control
systems will help improve productivity, optimize kiln capacity, improve energy
efficiency and limit emissions of particulate pollutants, thereby helping the
producers meet environmental controls

Conclusion

1. Time of Use Tariff Optimization

Cement manufacturing is an energy intensive process, where electricity
cost alone accounts for up to 25% of the total energy cost.
In cement manufacturing, major portion of the electrical demand is taken
up by motor/machine driven processes. When Demand side management
(DSM) / load optimization is to be considered motors in these process are
chosen considering the fact that the majority of demand comes from
these motors. The processes identified for load shift/optimization
includes-
Raw Mill & Cement Mill
On implementation this would yield a great savings (monetary) to the total
electrical consumption of the manufacturing unit.
Load shift of raw mills from peak period to off-peak period has substantial
saving potential: 3-5% annually.
Cement Mill consumes around 30% of the total electrical energy
consumed in the manufacturing process. A load shift to off peak periods
would yield a significant savings. Based on certain assumptions the
estimated saving potential is around 3-5% annually.

2. Energy Efficiency

The Indian cement industry is poised for recovery and growth, going by the
infrastructure plan outlined by the 12th Five year plan. However, it may be few
more quarters before the uptrend arrives. Until then, the cement producers
should take this slowdown period as an opportunity to streamline operating
practices, modernize their production to enhance their energy efficiency
measures so as to cut down their overall cost.

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 Whitepaper Real-time Energy optimization for Cement Industry

Metadata
Industry to be impacted
Food, Beverage & Metal, Mining &
Pharmaceutical Chemicals
Tobacco Minerals

Bank & Financial

Oil & Gas Personal Products Hi-tech
Services

Domain to be impacted
Energy and
Oil & Gas
Sustainability

Category to be impacted
Natural Gas Liquid Fuels Electricity Solid Fuels

Focus Area
Sourcing Opportunity Supplier Intelligence Technology Substitute Opportunity

Supply chain Risk Input Cost Price Outlook Sustainability

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 Whitepaper Real-time Energy optimization for Cement Industry

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About the Author

Vikram is a Senior Research Analyst with Beroe Inc. in the

Energy and Sustainability division with an expertise and key
focus on Fuels Sector (Liquid fuels, Natural Gas and Crude Oil)
Constantly endeavor to build category expertise in Liquid fuels
through continuous support to the fortune-500 clients.
Vikram M Avina Completed close to 10 projects on advising Energy Purchase
Senior Research Managers to procure fuel cost effectively across the globe.
Analyst
MBA from Great Lakes Institute of Management, Gurgaon and
B.E. from R. V. College of Engineering, Bangalore in
Instrumentation Technology. Diverse work experience of nearly
4 years working in Gujarat Gas Company Limited (previously a
BG group business), Surat.

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