Waste Heat Recovery for the Cement Sector-Market and Supplier Analysis
“Waste Heat Recovery (WHR) is a proven technology, but until now WHR uptake has been limited except in China. As early as the 1980s, Japanese companies spearheaded the introduction of WHR power systems in the cement industry. Currently, there are a range of commercially proven and mature WHR power systems ranging from classic Rankine-cycle steam-based installations to Organic Rankine Cycle (ORC) and Kalina cycle WHR power systems. There are over 850 WHR power installations in the world. China leads in the number of WHR installations—739, followed by India (26 WHR installations) and Japan (24 installations)”.
“Regulatory measures and lower capital costs have been key factors behind China’s success in mainstreaming WHR technology. Initially, WHR development in China was driven by incentives such as tax breaks and Clean Development Mechanism (CDM) revenues for emissions reductions from clean energy projects. In 2011, a national energy efficiency regulation mandated WHR on all new clinker lines constructed after January 2011. These drivers were reinforced when multiple Chinese WHR suppliers entered the market, lowering WHR capital and installation costs by adopting domestic components and design capability, which developed the technology for the Chinese market. The figure below shows average installation costs for Chinese-manufactured WHR installations in China, Asia and Europe/Middle East and North Africa”.
“Waste Heat Recovery (WHR) can reduce the operating costs and improve EBITDA margins of cement factories by about 10 to 15 percent. On average, electric power expenses account for up to 25 percent of total operating costs of a cement factory. WHR technology utilizes residual heat in the exhaust gases generated in the cement manufacturing process and can provide low-temperature heating or generate up to 30 percent of overall plant electricity needs. WHR-based electric power generation offers several advantages:
- Reduces purchased power consumption (or reduces reliance on fossil-fuel-based captive power plants)
- Mitigates the impact of future electric price increases Enhances plant power reliability
- Improves plant competitive position in the market Business opportunity revealed by the study: investment of ~US$5 billion to introduce ~2GWe of WHR power capacity in eleven countries. Rising grid-based electric power prices and fuel costs for captive power plants, as well as concerns over power supply reliability from the grid provide solid incentives for WHR deployment. The remaining technical potential for WHR power systems is estimated between 1,615 and 2,930 MWe”