Energy Efficiency & New Technology Deployment in Indian Iron & Steel Sector

1. 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

2. 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)

3. 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.

4. 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.

5. Indian Steel Industry Crude Steel Production 2004-05 Major steel plants & Energy Cons. level Source: Joint Plant Committee, Govt. of India

6. 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

7. 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

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

9. Top 5 countries in Crude Steel Production India has emerged 3rd largest steel producer in the world in 9M ’09 Source: WSA

10. 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 High Low Forecasted Growth rate 2005-15

11. 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

12. 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

13. 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

14. Future Demand of Steel in India Different projections for proposed capacity: (In million tons)

15. Projected per Capita consumption of Finished Steel in India (kg) India’s current population is - 1160 million It is assumed that till 2051, population would be about : 1.4 bn.

16. GROWTH SCENARIOS Estimated Steel Production by 2020 = +200 MT * - Also projected by National Steel Policy

17. 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

18. 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

19. 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

20. 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.

21. Energy-efficient Technologies for Iron and Steel Making

22. To Conclude.. • 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

23. 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

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