New Technology Deployment in Indian Iron & Steel Sector Energy Efficiency & New Technology Deployment in Indian Iron & Steel Sector S. K. Jain General Manager STEEL AUTHORITY OF INDIA LIMITED INTERNATIONAL WORKSHOP ON INDUSTRIAL ENERGY EFFICIENCY – NEW DELHI

SAIL Today A listed company, 86% owned by GoI; one of the “Navratna” PSUs Authorized Capital: Rs. 5000 Crore, Paid up capital: Rs 4130 Crore. Largest Steel producer in India and 21st largest in the world (2008) Highest ever turnover of Rs. 48,681 Crore in 2008-09 (equivalent to over $10 billion), 7% higher on YOY. (Rs. 20,481 Cr. in April-Sept. 09-10) SAIL’s PBT was Rs 9,404 Crore and PAT of Rs.6,175 Crore in 2008-09 inspite of the economic downturn and higher input costs. (PBT Rs. 4529 Cr. & PAT Rs. 2994 Cr. in April- Sept. 09-10) Highest PAT among all steel companies of the world in 1st half of January –June’09 (Rs. 2627 Crore)

Energy Scenario in Indian Iron and Steel Industry Is the largest consumer of energy among all industrial sectors. Consumes about 10% of total electricity and 27% of coal used by Indian industry. Energy cost contributes nearly 30 – 35% of this sector’s production cost. Coking coal accounts for 65 – 85% of primary source of energy.

Energy Scenario in Indian Iron and Steel Industry Iron making through BF route accounts nearly 70% of the total energy consumed by the industry. Energy is essential for economic growth and to achieve the target growth in GDP.

Indian Steel Industry Crude Steel Production 2004-05 Major steel plants & Energy Cons. level Crude Steel Company 08-09 (Gcal/tcs) BSP 6.50 DSP RSP 7.09 BSL 6.73 ISP 8.27 SAIL 6.74 Tata Steel 6.59 RINL 6.77 ESSAR 5.81 ISPAT 5.21 JSW 6.70 Total 6.50-7.00 Source: Joint Plant Committee, Govt. of India

Energy Consumption in Indian Steel Industry ...Contd. Specific energy consumption declined by >15% in last 10 years. However, it is still more than World level of 4.5 Gcal/tcs

High Energy Consumption in India – Why ? Out dated technology in older plants set up in 60s and 70s Inferior raw material quality High alumina and high alumina & silica ratio in iron ore High ash content in coking coal even after blending Low rate of recycling

Domestic installed capacity of crude steel (62.6 MT)- 2009 Other Integrated Main Producers: 36.6% SAIL is the largest domestic steel player

Top 5 countries in Crude Steel Production 2008 2009 Jan-Sep’2009 Rank Country   MT 1 China 502 MT 420.4 2 Japan 119 MT 60.9 3 US 91 MT India 41.74 4 Russia 68.5 MT 41.68 5 55 MT United States 40.23 India has emerged 3rd largest steel producer in the world in 9M ’09 Source: WSA

Forecasted Growth rate 2005-15 Production sites will move to regions with both RM source and demand. Excess CIS Latin America Raw Material basin Growth basin India Avail-ability of Iron Ore USA / Canada Eastern Europe EU China Other emerging Asian countries Deficit Mature basin Japan Low High Forecasted Growth rate 2005-15

Indian Potential for Steel Huge Potential for Demand High GDP growth rate of 8% 1 billion population Low per capita steel consumption of 34kg (World av. 170 kg) Growth factors for India Abundant Iron Ore Skilled Human Resources Reserves 23 billion tonnes Government Policy Encouraging trade relations with ASEAN and other countries Infrastructure building Exploring new Energy resources Stable currency Easing of regulations Strong Banking & judicial system

Future Direction : National Steel Policy - 2005 Enhance indigenous production of steel to 110 MT by 2020 from a level of 38 MT in 2005 with a CAGR of 7.3 % Exports 26 MT by 2020, from level of 4 MT in 2004-05 with a CAGR of 13.3 % Iron ore requirement to increase to 190 MTPA by 2020 from about 54 MTPA in 2004. Technology/ productivity in line with global standards Demand Side Strengthening of delivery chain linking the producers to the users, especially rural areas Interface between producers, designers of steel intensive products, fabricators and ultimate user Creating awareness about steel as a cost-effective and technically efficient end-use material

Future Direction : National Steel Policy - 2005 Supply side Enhanced and easy access to critical inputs – iron ore & coking coal Expansion and improvement in quality of infrastructure – Energy, railways, ports and other means of transport Well developed financial market with efficient financial instruments Increased focus on R&D, training of manpower and integrated information services

Future Demand of Steel in India Different projections for proposed capacity: (In million tons) Agency 2019-20 National Steel Policy 2005 110 Latest projection by Ministry of Steel (MoS) + 200 Based on MOUs signed by the private producers with various State Governments 293

Projected per Capita consumption of Finished Steel in India (kg) Year Per Capita Steel Consumption 2011-12 48 2019-20 80 2024-25 110 2029-30 135 2034-35 175 India’s current population is - 1160 million It is assumed that till 2051, population would be about : 1.4 bn.

GROWTH SCENARIOS Optimistic Case Medium Growth Conservative 2005-2020 Fin. Steel Cons. Rate Consum-ption (mTpa) Fin. Steel Cons. Growth Rate Consum- ption Fin. Steel Cons. Growth 2005-2020 7.6% 100 6.9% 90 * 5.5% 76 2020-2030 6.5% 188 147 4.5% 118 2030-2040 5.0% 305 4.0% 217 3% 158 2040-2050 498 322 212 Estimated Steel Production by 2020 = +200 MT * - Also projected by National Steel Policy

Energy Saving Potential in India Specific Energy Consumption for Steel Industry : India: 6.9 GCal / tcs (07-08) World: 4.5 GCal / tcs (2008) 2.4 Energy saving potential : 200x(6.9-4.5) = + 484 million GCal / yr

Energy Saving Potential in India To achieve this potential, Asia-Pacific partnership for clean development and climate has suggested adoption of Energy efficient “Best Available Technologies (BAT)” in Coke Making Sintering Iron Making BOF/EAF Steel Making Finishing

Barriers in implementing Energy Efficiency Technologies Focus on reducing capital cost rather than being concerned about energy input Difficulty in acquisition of energy-efficient technologies Space constraints/retrofit ability problem in adoption of clean technologies in existing set up

Barriers in implementing Energy Efficiency Technologies Focus on reducing capital cost rather than being concerned about energy input Difficulty in acquisition of energy-efficient technologies Space constraints/retrofit ability problem in adoption of clean technologies in existing set up Low rate of recycling.

Energy-efficient Technologies for Iron and Steel Making Process Energy-efficient Technologies Coke making Coke Dry Quenching (CDQ) Automatic Combustion Control Automatic Ignition for Coke Oven Flare Tall batteries and stamp charged batteries Sinter making Sinter Cooler Waste Heat Recovery Multi-slit Burners Iron making Top Pressure Recovery Turbine (TRT) Hot Stove Waste Heat Recovery Coal Dust Injection (CDI) Bled BF Gas Recovery Steel making Bled BOF Gas Recovery BOF gas Sensible Heat Recovery Casting Continuous Casting replacing Ingot Casting Thin Slab Casting / Near-net-strip Casting Rolling Walking Beam Furnace Reheating Furnace Waste Heat Recovery

To Conclude.. OPPORTUNITIES POLICY Indian steel industry has a bright future RESOURCES Abundant Iron Ore reserves Strong Managerial skills in Iron and Steel making Large pool of skilled Man-power Established steel players with strong skills in steel making OPPORTUNITIES High economic growth driven increasingly by industry Faster Urbanisation Increased Fixed Asset Building Automobiles and component industry growth POLICY Pro-active stance of Govt. Encouragement for overseas investments

To Conclude… At this juncture, when demand for steel in India is fast growing to meet domestic and global demand, energy efficiency is the only option to counteract the associated maladies. However lack of financing capabilities as well as lack of incentives impede the implementation of such measures. Sectoral policies to be developed to promote such incentives Policy strategy would consists of mix of regulatory and price based incentives

Thank You There’s a little bit of SAIL in everybody’s life 24