Carbon Trading Potential in Indian Sponge Iron Sector - A ...

(i) waste gases from a 200 TPD kiln can produce 4MW power
(ii) 1 MW power, on an average, can attract 3000 CERs annually
By the year 2011-12, with the anticipated doubling of production of sponge iron through
coal based kilns, power generation and corresponding CERs would also be doubled to
realize a credit of about 3 million CERs annually.
Taking a case of some realistic recent transactions of CERs at 13.75 Euro per unit, there
is business volume of 41 million Euros annually or about 2250 million rupees per year.
Improving viability of WHRS
In view of such promise of business, there is a strong case to enhance viability of related
projects for better realization compounded with harnessing its full potential. Some of the
suggested measures could be :-
(i) earmarking and allocating non-coking coal blocks having coal of high ash fusion
temperature and high reactivity exclusively for sponge iron sector. Such coals are better
suited to manufacturing of sponge iron.
ii) allocating iron ore mines to sponge iron manufacturers to ensure availability of
consistent quality of high grade iron ore feed to kilns. This will lead to higher degree of
metallisation and reduced accretion in the kilns with less downtime and hence higher
plant availability.
(iii) permitting open access and inter-state wheeling of power from sponge iron sector at
a reasonable tariff with no hindrance.
While on the subject of wheeling power, it is estimated that a waste heat recovery
system based on 350 TPD kiln can generate about 7 MW, out of which 1.5 MW can be
used for captive consumption in sponge iron making in stand-alone sponge iron plants
and a surplus of 5.5 MW can be exported to the grid for trading. The sponge iron units
graduating to mini steel plants through forward integration by employing induction
furnaces, electric arc furnaces or similar adjuncts would require more power for captive
consumption. Such integrated plants can use the surplus power cost effectively with self
reliance.
(iv) networking of carbon trading business through carbon exchanges spread over
strategic locations.
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