|Title of Feasibility Study (FS)||New Mechanism Feasibility Study for Energy Efficiency Improvement by Introducing High-Performance Industrial Furnaces to Aluminium Industry in India|
|Main Implementing Entity||Japan Industrial Furnace Manufacturers Association|
|FS Partners||Mizuho Corporate Bank, Ltd.|
Evalueserve UK Ltd.
|Location of Project Activity||India|
|Category of Project Activity||Energy Efficiency|
|Summary of FS Report||PDF (472KB)|
|Description of Project/ Activity||The feasibility of the new mechanism for introduction of high-performance industrial furnaces in the Indian aluminum industry is studied. High-performance industrial furnaces are industrial furnaces which are equipped with regenerative combustion devices and regenerative burners. By adopting a combustion technology using high temperature combustion air, in which the heat of the exhaust gas is recovered and used to preheat the combustion air, this technology makes it possible to realize large energy savings in combination with low NOx operation and uniform heating.|
The possibility of introducing this high-performance industrial furnace technology in the aluminum industry in the host country (India) is studied, the amount of GHG reductions in the host country is estimated, and the potential for dissemination of this technology is examined.
|Reference Scenario and Project/ Activity Boundary||At the present time, it cannot be thought that substantial incentives exist for introduction of high-performance industrial furnaces in either PAT object plants or non-PAT object plants |
However, as the Indian Government has suggested the possibility that the PAT system may be expanded in the future, the level of future GHG reduction regulations (benchmark) can be considered a reference scenario.
Accordingly, an emission reduction of 5.6% is set here as a reference scenario. In this case, the portion of emissions reduced by introduction of high-performance industrial furnaces exceeding 5.6% is recognized as credits.
Based on a basic study of the Indian aluminum industry and the results of local surveys, boundaries were set as follows. Virgin metal ingots: Melting & holding furnace, soaking pit; Secondary (remelt) ingots: Melting furnace; Wire & bar, sheets, and foils: Annealing furnace; Extrusions: Melting furnace, reheating furnace; Castings: Melting furnace; Forgings: Reheating furnace.
|Monitoring Methods and Plan||Items specified in ISO/WD13579-3 (FDIS) are used.|
All these items are set assuming use in detailed calculations on a level exceeding that of ordinary business transactions. Therefore, in this study, the essential items for MRV were set so as to enable construction of an implementation system and secure transparency and traceability. The essential items are 5.1.1 Volume, 5.3.1 Combustion air volume, 5.5.1 Combustion exhaust gas temperature, 5.5.2 Combustion exhaust gas volume, 5.6.1 Fixture/Mass.
|GHG Emissions and Reductions||Present: 18.72 x104 ton-CO2 (credit after deduction of 5.6%)|
2020: 105.4 x 104 ton-CO2 (credit after deduction of 5.6%)
|MRV System for GHG Reductions||An international standard for energy efficiency of industrial furnaces is now under examination in ISO/TC244 (Industrial furnaces and associated processing equipment), as proposed by Japan (Japan Industrial Furnace Manufacturers Association). An MRV system of a level which can be adopted as an international MRV guideline should follow the thinking in this international standard.|
Due to the timing of the present study, it is not possible to include a finalized international standard as an ISO standard for the energy efficiency of industrial furnaces. However, an MRV system is presented using the Working Draft, which is in the FDIS stage.
Measurement is performed in accordance with ISO/WD 13579-3, Chapter 5: Measurement method. In case it is not possible to measure all items, the essential items are measured. These are monitoring items which are measured by Japanese industrial furnace makers during site observation for establishing the specifications of high-performance industrial furnaces, and the results of energy saving, etc. calculated using those results are used in judgments for business transactions. Accordingly, MRV based on these simplified essential items is the basis for project/activity implementation. Measurements of these essential items can also be made by local industrial furnace users.
Reporting is performed in accordance with ISO/WD 13579-3, Chapter 6: Calculation.
As the concept of reporting based on the essential items in the above-mentioned measurement, the energy saving rate when a furnace is converted to a high-performance industrial furnace is calculated based on measurements of the combustion exhaust gas, and the reduction of fuel consumption is obtained by multiplying the energy saving rate by fuel consumption (fuel volume). The GHG emissions reduction is obtained in a similar manner.
Verification is performed in accordance with the table in ISO/WD 13579-3, Chapter 7: Energy supplied for machineries and electrical equipment.
Verification can be performed by an organization with actual results of energy saving diagnosis, etc., if such an organization exists. For example, in India, verification by PCRA, etc. is assumed.
|Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)|| No other social, cultural, and economic impacts, including environmental impacts, associated with the energy savings achieved by introduction of industrial furnaces or equipment (regenerative burners, etc.) were foreseen from the beginning of the study, and no such effects are considered likely at the present stage, when 3 local surveys have been completed.|
|Financial Planning||The following cases are assumed in this study: Soaking pit (virgin metal): 48 t/ch-unit = payback 5.0 years; Melting furnace (secondary metal): 5 t/ch-unit = payback 4.5 years; Annealing furnace (wire & bar, sheets, foil): 28 t/ch-unit = Payback 5.0 years.|
The specific investment and financial plan are still undecided. However, a combination of self-financing and bank loans is possible as a financing method. For loans, borrowing from Japanese banks is assumed, depending on the case.
|Introduction of Japanese Technology||As efforts to improve the recognition of Japanese-made technologies, PR on high-performance industrial furnaces at exhibitions, etc., approaches to academic societies, etc. will be used.|
Early implementation of model projects is desirable, and support from the government, etc. is required. This is carried out in combination with demonstrations.
Efforts will be made to reduce costs/shorten the delivery period by standardization. This will also improve the competitiveness of all Japanese industrial furnace makers in the host country market.
PR will also be carried out in Japan to accelerate decision-making by industrial furnace users.
(i.e. Improvement of Local Environmental Problems)
|As co-benefits in case of dissemination of high-performance industrial furnaces in the Indian aluminum industry, the cost of environmental externalities can be evaluated by reduction of CO2 and NOx.|
Quantification of NOx emission reductions by introduction of high-performance industrial furnaces is difficult; however, emission reductions of 30% or more have been confirmed in a cases where high-performance industrial furnaces were introduced in Japan.
|Contribution to Sustainable Development in Host Country||Dissemination of high-performance industrial furnaces will contribute to sustainable development in India by substantially reducing consumption of natural gas, LPG, and heavy oil in the Indian aluminum industry. Because this technology is also applicable to iron and steel and other sectors, introduction with backing by policies of some type will have a large ripple effect in India industry in the future. |