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Reports of CDM/JI Feasibility Studies: FY2005

Title of the researchThe Survey for CDM Project of Heat Recovery System at the Sponge Iron Kilns in Orissa, India.
FYFY 2005
Main research orgnisationJP Steel Plantech Co.
Research partner(s)BPNSI, OSIMA, Japan Consulting Institute
Location of the projectIndia (Orissa)
Summary of the research report (PDF)200521.pdf
Description of the projectThe most rotary kiln plants for sponge iron production in India don’t have
heat recovery system of hot waste gas. By installing the heat recovery system in these plants, the gas is recovered to produce steam then is utilized for power generation. The generated power is used in each plants, and the excess amount of power will be sold to grids. This may contribute to reduce the fossil fuel (coal) combustion in grids, and hence eliminate CO2 emission.
Sector of the projectOthers (Waste Heat Recovery)
Duration of the project activity/ crediting period2007-2025
Baseline methodology/additionalityAt present the participants (sponge iron manufacturers) don’t have their own captive power plant, and they purchase electric power from Grid. The reason of this condition is the evidence of the Baseline. Generally, the fuels of captive plant are natural gas, coal, diesel, hydro, wind etc. Out of these, natural gas has the difficulty for obtaining, and is not practical. Diesel power plant is emergency purpose. Coal based plant is the most practical one, but the captive power plant size in the manufacturers are small compared to the Grid, hence they are not competitive and are unfavorable. In considering this background, the present situation, that is, purchasing of electricity from Grid is the Baseline.
We proved additionally by analyzing the following steps:

(1) There were no any applicable laws and regulation that enforced this project. (2) Investment analysis shows that Net gain would be minus for all 7 years. With the CDM credit (assumed t-CO2 = US$15), Net gain will be plus for all 7 years. This shows this project is financially not visible without considering the benefit of CDM.
(3) There are technological barriers that skilled and/or properly trained labor is not available, and it takes some time to provide the qualified persons. This is a barrier, which the project proponents have accepted considering the benefits afforded by CDM.
Estimation of GHG emissions17enterprises have the annual production capacity of 750,000 tons of spong iron in total. By installing the Waste Heat Recovery Boilers with Steam Turbine Generators (WHRB-STG), a new generation capacity with 50MW will arise. This generates the electric power of 360,000 MWh annually. This leads CO2 reduction about 300,000 t-CO2/year, therefore in 10 years 3 million t-CO2.e
Monitoring methodologyMonitoring will be carried out for the following items:
(1)Generated power in the manufacturers / Power consumption in the manufacturers / Power sold to grids
(2)Generated power in the grids
(3)Sort of fuel and generation pattern in the grids
(4)Amount of raw material and fuel used for sponge iron production, as well as sponge iron production amount.
Environmental impactThe influence of this project were surveyed in the following fields / stages.
(1)fields: Soil, air noise,natural resouces,health care of the employeers
(2)stages: Construction stage, operation stage, maintenance, etc
As a conclusion, the rotary kiln process will not be influenced by this project, and this project may eliminate more dust than the present condition.
Issues and tasks for project implementationAt present we have no concrete project idea. We need to investigate further for actual project implementation such points as follows:
(1) Reduction of initial investment (present price: US$ 48 million)
(2) Sales price up of generated power to grids (present price: RS 1.1/kWh)
(3) CER market price, etc.

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