training manual for energy professionals in the foundry sector

Training Manual for Energy

Professionals in the Foundry Sector

Prepared for

Bureau of Energy Efficiency

Certificate of originality

Original work of TERI done under the BEE-GEF-WB/KMS/CS-

9A/Foundry/2011 project "Financing Energy Efficiency at MSMEs".

This document may be reproduced in whole or in part and in any

form for educational and non-profit purposes without special

permission, provided acknowledgement of the source is made. BEE and TERI would appreciate receiving a copy of any publication that

uses this document as a source.

Disclaimer

This document is an output of an exercise undertaken by TERI

through a project funded by the Bureau of Energy Efficiency (BEE) for

benefit to foundry units. This document is an initiative of Bureau of

Energy Efficiency (BEE) for the benefit of MSME units. While every effort has been made to avoid any mistakes or omissions, BEE would

not be in any way liable to any person by reason of any mistake/

omission in the publication.

Printed at

TERI Press

The Energy and Resources Institute Darbari Seth Block

IHC Complex, Lodhi Road

New Delhi-110 003, India

For more information

Bureau of Energy Efficiency

GEF-WB Project Tel: +91-11-2617 9699 Extn.: 276 "Financing Energy Efficiency at MSMEs" Fax: +91-11-2617 8352

4th Floor, Sewa Bhawan, R.K. Puram Email: [email protected]

New Delhi-110066 Website: www.beeindia.in

PPrreeffaaccee

Energy management is a streamlined and structured concept, devised by management

strategists for the efficient use of energy without compromising upon production levels, product quality, safety, and environmental standards.

The entire concept, therefore, requires both technical and financial evaluations, along with other considerations such as the human resources, the environmental implications and of

course, the ever-present attitude of “no-change” which very often needs a push to “change”.

Energy audits—both electrical and fuel—are an essential part of manufacturing process, and

expenditure on these inputs often accounts for a significant share of the manufacturing cost.

This is compounded by the fact that the cost of energy is constantly escalating and will continue to rise.

The efficient use of energy and its conservation is a better option to reduce the energy demand in the manufacturing plant. Any saving in energy costs directly adds to the

operating profits of the company. It probably requires less effort to improve profits through

energy savings than by reducing labour cost, increasing sales, increasing prices, reducing distribution costs, etc. Experience shows that energy audits could result in as much as 10–15

per cent of energy savings with small investments.

Foundry is one of the most energy intensive SMEs sectors in India. There are about 5,000

foundries in the country with a total installed capacity of 7.5 million tonnes. Typically, the

energy cost in this sector is around 20–25 per cent of the manufacturing cost. Past initiatives

focusing on promoting energy efficiency in metal casting industries have generally noticed

that the energy professionals lack clear understanding related to performance evaluation of

plant utilities.

With this background, this training manual has been prepared to assist the energy

professionals of foundry industries to enhance their understanding and capacity on energy audit methodology, energy efficiency opportunities in terms of technologies and practices

pertaining to metal casting industries in India. The manual also provides brief information

on aspects related to financing of energy efficiency projects, and relevant programmes and policies that influence Indian metal casting sector. Since energy conservation is essentially a

continuous exercise, it is inevitable that the plant personnel are able to regularly monitor

trends in energy consumption and initiate remedial measures to improve energy efficiency.

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PREFACE ...................................................................................................................................................1

LIST OF TABLES ......................................................................................................................................... I

LIST OF FIGURES ........................................................................................................................................ I

LIST OF ABBREVIATIONS ............................................................................................................................ I

CHAPTER 1 INTRODUCTION .....................................................................................................................1

1.1 Background .....................................................................................................................................1

1.2 Project objectives .............................................................................................................................1

1.3 Major components of the project ..................................................................................................1

1.4 About the training manual ............................................................................................................2

CHAPTER 2 ENERGY AUDIT AND METHODOLOGY .....................................................................................3

2.1 Energy auditing techniques and methodology ...........................................................................3

2.1.1 Preliminary energy audit ....................................................................................................3

2.1.2 Detailed energy audit...........................................................................................................4

2.2 Energy auditing instruments .........................................................................................................4

2.3 Methodology for energy saving calculations ...............................................................................4

2.3.1 Methodology followed for energy audit of a facility.......................................................5

2.4 Monitoring and measurement requirements..............................................................................6

2.5 Monitoring and verification protocol ..........................................................................................8

CHAPTER 3 ENERGY EFFICIENCY IN FOUNDRY ........................................................................................ 11

3.1 Background of foundry industry in India ................................................................................. 11

3.2 Process description ....................................................................................................................... 12

3.2.1 Preparation of sand ............................................................................................................ 12

3.2.2 Preparation of moulds ....................................................................................................... 13

3.2.3 Melting of charge material ................................................................................................ 13

3.3 Energy and material balance in a foundry unit ........................................................................ 14

3.3.1 Energy use in a foundry unit ............................................................................................ 14

3.3.2 Distribution of energy in foundry .................................................................................... 14

3.3.3 Metal flow in foundry ........................................................................................................ 15

3.4 Energy losses and waste analysis ............................................................................................... 15

3.4.1 Energy losses in induction furnace .................................................................................. 15

3.4.2 Energy losses in cupola furnace ....................................................................................... 17

3.5 Specific energy consumption and trends .................................................................................. 18

3.5.1 SEC of induction furnace ................................................................................................... 18

3.5.2 SEC of cupola furnace ........................................................................................................ 19

3.5.3 Other factors influencing energy consumption .............................................................. 20

3.6 Energy saving potential in foundry ........................................................................................... 20

3.7 Performance assessment in foundry .......................................................................................... 20

3.7.1 Performance assessment of induction furnace ............................................................... 21

3.7.2 Performance assessment of cupola furnaces................................................................... 21

3.7.3 Performance assessment of motors .................................................................................. 22

3.7.4 Performance assessment of pump .................................................................................... 24

3.7.5 Performance assessment of compressed air system ...................................................... 25

3.7.6 Performance assessment of cooling tower ...................................................................... 28

3.7.7 Performance assessment of lighting ................................................................................ 30

3.7.8 Performance assessment of generator set ....................................................................... 30

CHAPTER 4 ENERGY EFFICIENT TECHNOLOGIES AND PRACTICES ............................................................ 33

4.1 Energy efficient technologies for melting ................................................................................... 33

4.1.1 Induction furnace ............................................................................................................... 33

4.1.2 Cupola furnace .................................................................................................................... 35

4.1.3 Classification of cupola ...................................................................................................... 36

4.1.4 Important control parameters ........................................................................................... 37

4.1.5 Energy and environmental performance ........................................................................ 38

4.1.6 New developments ............................................................................................................ 39

4.1.7 Moulding process ............................................................................................................... 40

4.1.8 Core preparation ................................................................................................................. 45

4.1.9 Compressor ......................................................................................................................... 48

4.1.10 Other areas ........................................................................................................................ 50

4.2 Best operating practices in foundry ............................................................................................ 52

4.2.1 Best operating practices in induction furnace ................................................................ 52

4.2.2 Best operating practices in cupola furnace ..................................................................... 55

4.2.3 Best operating practices in compressed air system ........................................................ 59

4.2.4 Best operating practices in electric motor ....................................................................... 60

4.2.5 Best operating practices in cooling tower ....................................................................... 60

4.2.6 Best operating practices in pumping system .................................................................. 60

4.2.7 Best operating practices in generator set ......................................................................... 61

4.2.8 Best operating practices in lighting system .................................................................... 61

4.3 Success stories/case studies ........................................................................................................ 62

4.3.1 Success story on demonstration of energy efficient DBCs in Foundry Cluster, Howrah, West Bengal ........................................................................................................... 62

4.3.2 Case study on EE induction furnace at Kolhapur foundry cluster .............................. 63

4.3.3 Case study on EE pump at Kolhapur foundry cluster .................................................. 64

4.3.4 Case study on EE compressor with VFD at Kolhapur foundry cluster ...................... 64

4.3.6 Published papers on energy efficient projects ................................................................ 66

4.4 Gaps hindering the adoption of EE technologies in SME foundry cluster ........................... 67

4.5 Vendors/suppliers ....................................................................................................................... 68

CHAPTER 5 FINANCING OF ENERGY EFFICIENCY PROJECTS ..................................................................... 71

5.1 Financial evaluation of EE project .............................................................................................. 71

5.1.1 Average rate of return (ARR) ............................................................................................ 71

5.1.2 Return on investment (ROI) .............................................................................................. 71

5.1.3 Simple payback period (SPP) ............................................................................................ 72

5.1.4 Net Present Value (NPV) ................................................................................................... 73

5.1.5 Internal rate of return (IRR) .............................................................................................. 74

5.2 Guidelines for preparing Investment Grade Detailed Project Report (IGDPR) .................... 74

5.3 Step by step approach for loan application ................................................................................ 76

CHAPTER 6 RELEVANT PROGRAMMES AND POLICIES IN INDIA ............................................................... 79

6.1 On-going programmes for energy efficiency in SME ............................................................... 79

6.1.1 WB-GEF project for energy efficiency in SME ................................................................ 79

6.1.2 UNDP-GEF project on upscaling energy efficient production in small scale steel industry in India .................................................................................................................... 79

6.1.3 UNIDO-GEF project on “Promoting Energy Efficiency and Renewable Energy in Selected Micro, Small and Medium Enterprises (MSME) Clusters in India” ............... 80

6.2 Policies and schemes of the Government of India ................................................................... 81

6.2.1 Energy Conservation Act, 2001......................................................................................... 81

6.2.2 Integrated Energy Policy ................................................................................................... 83

6.2.3 National Action Plan on Climate Change (NAPCC) ..................................................... 83

6.2.4 National Steel Policy (NSP) ............................................................................................... 86

6.2.5 National Manufacturing Policy ........................................................................................ 86

6.2.6 Financial Schemes for Indian MSMEs ............................................................................. 86

6.3 Various credit lines and bank schemes for financing of EE ..................................................... 88

6.3.1 JICA–SIDBI Financing Scheme ......................................................................................... 88

6.3.2 KfW–SIDBI Financing Scheme ......................................................................................... 88

6.3.3 AfD–SIDBI Financing Scheme .......................................................................................... 89

6.3.4 Sustainable Finance Scheme (SFS).................................................................................... 89

6.3.5 Common Facilities Centre (CFC) scheme for sand reclamation in foundry cluster .. 90

6.3.6 Modified Industrial Infrastructure Upgradation Scheme (IIUS) ................................ 90

6.4 Gaps or other issues hindering the financing of EE projects in MSMEs ................................ 91

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Table 1.1: Details of target clusters ................................................................................................................... 1

Table 2.4: Details of online measurements and portable instruments ......................................................... 7

Table 2.5a: Baseline parameters for M&V ....................................................................................................... 8

Table 2.5b: Proposed parameters for M&V ...................................................................................................... 9

Table 3.3.1: Details of major energy consuming centres ............................................................................... 14

Table 3.7.1: List of data for SEC calculation of induction furnace............................................................... 21

Table 3.7.2: List of data for performance analysis of cupola furnace .......................................................... 22

Table 3.7.3: IEEE standard stray losses ........................................................................................................... 23

Table 3.7.4: Operating parameters of pump................................................................................................... 25

Table 3.7.5a: Power consumption of compressors at different pressures .................................................. 27

Table 3.7.5b: Power wastage from leakage of compressed air .................................................................... 28

Table 3.7.6: List of operating parameters of cooling tower system ............................................................. 30

Table 3.7.8: Recommended SEGR values of diesel generator ...................................................................... 30

Table 4.1.4.3: Recommended number of tuyeres ........................................................................................... 38

Table 4.3.2: Techno-economics of replacing inefficient induction furnace with EE induction furnace . 63

Table 4.3.3: Techno-economics of replacing inefficient pump with EE pump .......................................... 64

Table 4.3.4a: Design details of existing compressors .................................................................................... 65

Table 4.3.4b: Techno-economics of replacing inefficient air compressor with EE invertor air

compressor ................................................................................................................................................ 65

Table 4.5: List of supplier for EE technologies for foundry ........................................................................ 68

Table 5.2: Typical contents page of IGDPR ................................................................................................... 75

Table 6.1.1: Details of target clusters .............................................................................................................. 79

Table 6.1.3: Primary details of the project ...................................................................................................... 80

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Figure 2.3.1: Broad steps of energy audit ........................................................................................................ 6

Figure 3.1: Share of different metal cast in India ........................................................................................... 11

Figure 3.2: Manufacturing process of a typical foundry unit ...................................................................... 12

Figure 3.3.2: Typical energy use in a foundry ................................................................................................ 14

Figure 3.3.3: Metal flow diagram in foundry ................................................................................................. 15

Figure 3.4.1a: Typical arrangement of coreless induction furnace .............................................................. 16

Figure 3.4.1b: Energy losses in coreless induction furnace .......................................................................... 16

Figure 3.4.2a: Schematic view of typical DBC................................................................................................ 17

Figure 3.4.2b: Energy losses in cupola furnace ............................................................................................. 18

Figure 3.5.1: Variation of SEC of induction furnaces in Kolhapur cluster ................................................. 19

Figure 3.5.2: SEC of cupola furnaces operating in Kolhapur cluster .......................................................... 19

Figure 3.74.: Operating curve of a pump ........................................................................................................ 24

Figure 3.7.6a: Schematic view of cooling tower ............................................................................................. 28

Figure 3.7.6b: Representation of cooling tower performance indicators ................................................... 29

Figure 3.7.8: Relationship of engine loading vs. fuel consumption ............................................................ 31

Figure 4.1.2: Schematic view cupola cross section ....................................................................................... 35

Figure 4.1.4.2: View of blast air penetration in cupola ................................................................................ 37

Figure 4.2.1: Operational steps of induction furnace .................................................................................... 53

Figure 4.2.2a: Schematic view of slide gauge ................................................................................................. 56

Figure 4.2.2b: Schematic view of wooden bat ................................................................................................ 56

Figure 4.2.2c: Photo view of bulk density estimation ................................................................................... 57

Figure 4.2.2d: Schematic view of coke heights in DBC ................................................................................. 58

Figure 4.3.1: View of demonstrated TERI design DBC at Howrah ............................................................. 63

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Abbreviation Expanded form

AfD French Development Agency

APFC Automatic power factor controller

ARR Average rate of return

AusAid Australian Agency for International Development

BAT Best available technology

BCIRA British Cast Iron Research Association

BEE Bureau of Energy Efficiency

BOP Best operating practices

BPCL Bharat Petroleum Corporation Limited

CCA Carbon Credit Aggregation

CEA Central Electricity Authority

CER Certified emission reductions

CERC Central Electricity Regulatory Commission

CESC Electricity Supply Corporation Limited

CETP Central Effluent Treatment Plants

CFC Common facilities centre

CFL Compact fluorescent lamp

CFM Cubic feet per minute

CFR Coke feed ratio

CGMSE Credit Guarantee Fund Scheme for Micro and Small Enterprises

CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises

CI Cast iron

CLCSS Credit Linked Capital Subsidy Scheme

CO Carbon monoxide

CO2 Carbon dioxide

COC Cycles of concentration

CPP Captive Power Plant

CPSUs Central Public Sector Undertakings

CRI Colour rendering index

CRISIL Credit Rating Information Services of India Limited

DBC Divided blast cupola

DC Designated consumers

DEA Detailed Energy Audit

DESL Development Environergy Services Limited

DG Diesel generator

DGVCL Dakshin Gujarat Vij Company Limited

DIC District Industries Centre

DPR Detailed project report

DSCR Debt-Service Coverage Ratio

DSM Demand Side Management

DSR Diagnostic study report

EC Energy conservation

ECBC Energy Conservation Building Code

ECM Energy Conservation Measure


EE Energy Efficient

EEPI Energy Efficiency Performance Index

EESL Energy Efficiency Services Limited

ESCerts Energy Savings Certificates

ESCO Energy service company

FAD Free air delivery

FI Financial Institute

FiTs Feed-in tariffs

FRP Fibre-reinforced plastic

FTL Fluorescent tube light/Fluorescent tube lamp

FY Financial year

GCV Gross calorific value

GDP Gross domestic product

GEF Global Environmental Facility

GHG Greenhouse gas

GIDC Gujarat Industrial Development Corporation

GLS Tungsten filament lamps

HESCOM Hubli Electricity Supply Company Limited

HID High-intensity discharge

HP Horsepower

HPCL Hindustan Petroleum Corporation Limited

HPMV High-pressure mercury vapour lamps

HPSV High-pressure sodium vapour lamps

HSD High speed diesel

HVAC Heating, ventilation, and air conditioning

ICRA Indian Credit Rating Agency Limited

ICT Information and Communication Technology

IEEE Institute of Electrical and Electronics Engineers

IFA Indian Foundry Association

IGDPR Investment Grade Detailed Project Report

IIF Institute of Indian Foundrymen

IIT Indian Institute of Technology

IIUS Industrial Infrastructure Upgradation Scheme

INR Indian rupee

IOCL Indian Oil Corporation Limited

IPR Intellectual Property Rights

IRR Internal rate of return

IS Indian standard

JICA Japan International Cooperation Agency

KEA Kolhapur Engineering Association

KfW Kreditanstalt für Wiederaufbau

KSPCB Karnataka State Pollution Control Board

kW Kilowatt

kWh Kilowatt hour

LDO Light diesel oil

LPG Liquefied petroleum gas

LSHS Low-sulphur heavy stock

LSP Local service provider


Ltr Litre

M&V Monitoring & Verification

MAI Market Access Initiatives

MFA Miscellaneous fixed asset

MJ Mega joule

MLL Mercury light lamps

MNRE Ministry of Non-conventional and Renewable Energy

MoMSME Ministry of Micro, Small and Medium Enterprises

MOP Ministry of Power

MPCB Maharashtra Pollution Control Board

MSMEs Micro, small and medium enterprises

MT Metric tonne

MTOE Metric tonnes of oil equivalent

MVL Mercury vapour lamp

MWh Megawatt hour

NAPCC National Action Plan on Climate Change

NG Natural gas

NIMZ National Investment and Manufacturing Zones

NMCP National Manufacturing Competitiveness Programme Scheme

NPV Net present value

NSIC National Small Industries Corporation Limited

NSP National Steel Policy

NTP National Tariff Policy

NTPC National Thermal Power Corporation

O&M Operation and Maintenance

PAT Perform, Achieve, and Trade

PCS Pollution control system

PFC Power factor controller

PMU Project management unit

PPP Public private partnership

PRGF Partial Risk Guarantee Fund

PVC Polyvinyl chloride

QMS Quality Management Standards

QTT Quality Technology Tools

REC Renewable Energy Certificate

ROI Return on investment

RPM Revolution per minute

RPO Renewable Purchase Obligation

SCM Standard cubic metre

SDC Swiss Agency for Development and Cooperation

SEC Specific energy consumption

SEGR Specific electricity generation ratio

SERCs State Electricity Regulatory Commissions

SFS Sustainable Finance Scheme

SG Steel Grade

SIDBI Small Industries Development Bank of India

SLM Straight line method

SMEs Small and medium enterprises


SPM Suspended particulate matter

SPP Simple Payback Period

SS Stainless steel

SSI Small-scale industries

SV Sodium vapour

TADF Technology Acquisition and Development Fund

TEQUP Technology and Quality Upgradation Support

TERI The Energy and Resources Institute

ToE Tonne of oil equivalent

tpd Tonnes per day

tpy Tonnes per year

tph

TR

Tonnes per hour

Tonnage of refrigeration

UNDP United Nations Development Programme

UNIDO United Nations Industrial Development Organization

UPL Unit per litre of diesel

VCFEE Venture Capital Fund for Energy Efficiency

VFD Variable Frequency Drive

WB The World Bank

WC Working capital

WDV Written down value

WG Water gauge

1

CChhaapptteerr 11 IInnttrroodduuccttiioonn

1.1 Background The World Bank (WB) with the support from Global Environmental Facility (GEF) has

designed the MSME–EE project as a part of the GEF Programmatic Framework project for

Energy Efficiency in India. The objective of this project is “to increase demand for energy efficiency investments in target micro, small, and medium enterprise (MSME) clusters and

to build their capacity to access commercial finance.” The five targeted MSME clusters

covered under the project and the indicative information are given in Table 1.1.

Table 1.1: Details of target clusters

S. No. Cluster Main fuel

1. Kolhapur (foundry) Electricity, coke

2. Pune (forging) Furnace oil

3. Tirunelveli (limekiln) Charcoal

4. Ankleshwar (chemical) Natural gas, electricity

5. Faridabad (mixed) Electricity, oil

This project is being co-implemented by the Small Industries Development Bank of India

(SIDBI) and Bureau of Energy Efficiency (BEE).

1.2 Project objectives The objectives of the WB–GEF–SIDBI project are as follows: 1. To create increased demand for EE investments by adopting a cluster approach to

facilitate the development of customized EE products and financing solutions in five

targeted industry clusters, and to build the capacity of identified apex organizations to assist MSME units in identifying additional EE projects in the future, thereby aiding in

widespread replication.

2. To raise the quality of EE investment proposals from a technical and commercial perspective, and thus to increase the capacity of both project developers and bank loan

officers/branch managers to help shrink the gap between project identification and

successful delivery of commercial finance. 3. To expand the uses of existing guarantee mechanisms for better risk management by

banks to catalyse additional commercial finance for energy efficiency.

4. To establish a monitoring and evaluation system for the targeted clusters.

1.3 Major components of the project The project comprises of the following major components: 1. Activities to build capacity and awareness

Marketing and outreach effort to clusters and capacity building of industry

associations Training of energy auditors and energy professionals

Training manual for energy professionals in the foundry sector

2

Specialized support to financial intermediaries

Unit-level support to MSMEs in accessing finance Vendor outreach, enlistment and support, and engagement of a Regional Energy

Efficiency Centre of Excellence for specialized technical capacity building

activities in the area of furnace optimization.

2. Activities to increase investment in energy efficiency

Energy Efficiency project development support Performance linked grants for demonstration of efficient technologies.

3. Programme on knowledge management and sharing.

1.4 About the training manual Past initiatives focusing on promoting energy efficiency in metal casting industries have generally noticed that the energy professionals lack clear understanding related to

performance evaluation of plant utilities. Consequently, a few training programmes were

planned under the project to enhance the capacity of the professionals engaged in energy management activities in the metal casting industries in the foundry clusters and industry

associations. Additionally, it was decided to develop a training manual which would be like

a ready reference document for energy professionals engaged in the foundry sector. The manual would have details about energy auditing methodologies, achieving energy

efficiency in the foundry sector, financing of energy efficiency projects and preparation of

investment grade DPR, and available government schemes for adopting energy efficient technologies.

In this context, the background study material for the training programmes was prepared in the form of this training manual. This manual provides a clear understanding on energy

efficiency aspects in the metal casting industries in India.

3

CChhaapptteerr 22 EEnneerrggyy aauuddiitt aanndd mmeetthhooddoollooggyy

2.1 Energy auditing techniques and methodology The definition of energy audit as defined under the Energy Conservation Act of 2001

(Bureau of Energy Efficiency, BEE 2008) is as follows:

The verification, monitoring and analysis of the use of energy and submission of technical report containing recommendations for improving energy efficiency with cost–benefit analysis and an action plan to reduce energy consumption.

The primary activities carried out during an energy audit include the following:

Obtain adequate information on existing and actual energy consumption profile of the plant

Assess how effectively different forms of energy are being used in the process and

quantify energy use according to discrete functions

Identify factors effecting energy consumption and potential for improvements

Prepare a detailed report covering various energy conservation measures including

cost–benefit analysis.

The type of energy audits performed is dependent on: (1) function and type of end-user, (2)

depth to which final energy audit is needed, and (3) magnitude of cost reduction desired.

The energy audit may be classified into: (1) preliminary energy audit and (2) detailed energy

audit, which are discussed below.

2.1.1 Preliminary energy audit

A preliminary energy audit or walk-through audits typically requires relatively short time

(1–2 days) of plant visit. It focuses on readily available macro data provided by the unit or data/information collected during the walk-through audit. The objectives of preliminary

energy audit are as follows:

Familiarization of process/plant activities

First hand observation and assessment of current level operation and practices

Identify potential areas (equipment/system) for energy saving

Identify immediate energy conservation measures that require marginal or no investment

Shortlist potential areas for more detailed assessment.


4

2.1.2 Detailed energy audit

A detailed energy audit goes much beyond the quantitative estimates of cost and savings. Depending on the nature and complexity of the site, a detailed energy audit can take from

several weeks to few months. It involves comprehensive energy assessment of the facility

and its energy footprint. The types of data collection and measurements during a detailed energy audit include the following:

Collection of details of technologies, processes and equipment, and preparation of

process flow chart

Collation of design, operating data, and schedule of operation of different equipment

Estimation of details of production, yield, rejections, and waste generation

Details of different types of energy source, consumption, and tariff.

The detailed energy audit involves elaborate monitoring and logging of operational data of

all equipment and analysing to estimate existing performance including areas of energy losses either directly or indirectly method, as feasible for the system under study. The

system efficiencies are evaluated and energy conservation measures are identified for

improving the end-use energy efficiency. The study proposes on specific projects/feasibility studies for major retrofitting/replacement proposals, providing cost–benefit analysis of the

recommended measures. The typical outputs from a detailed audit include: (1) specific

projects/feasibility studies for major retrofitting/replacement proposals and (2) cost–benefit analysis of the recommended measures and prioritization.

2.2 Energy auditing instruments The performance assessment of utilities is fully dependent on the availability of reliable and

accurate data from individual equipment. The control panels installed in the industries

generally provide valuable data related to production, energy consumption, and key operating parameters. Additional data that would be required for the purpose of

performance assessment is collected using portable instruments of the energy auditing

company. Some of the portable instruments commonly used in energy audits are: power analyser, ultrasonic flow meter, flue gas analyser, hygrometer, digital temperature indicator,

thermal imager, thermography, lux meter, infrared thermometer, anemometer, temperature

data logger, and stroboscope.

2.3 Methodology for energy saving calculations The performance assessment of different equipment can be computed using two methods, viz., (1) direct method and (2) indirect method, which are discussed below.

(i) Direct method

Direct method or input–output method is a simple method for evaluating efficiency. The

efficiency is calculated using the following formula:


5

Both output and input parameters are measured/converted into same unit for calculating efficiency. The advantage with this method is that it directly evaluates the performance.

However, it does not provide insight regarding the reasons for lower efficiency level and the

areas of energy losses.

(ii) Indirect method Various energy losses are calculated in the indirect method and the total percentage losses are subtracted from “100” to arrive at the efficiency of the system. Indirect method is more

accurate. This method is also known as “energy loss” method. The generic formula used is

as follows:

The performance of different equipment is also calculated in terms of “specific energy

consumption” (SEC) for a number of equipment. The SEC of equipment is calculated as

follows:

The deviations of efficiency or SEC levels from design values indicate the energy saving potential.

2.3.1 Methodology followed for energy audit of a facility

Energy audit of a facility involves measurement of detailed data and collection of related

information of different energy consuming centres. The energy auditor must use his

knowledge and judgement to collect and interpret data suitably through measurements and interactions with various plant personnel. It is equally important to discuss about the

findings of the analysis with the plant personnel at different levels (low, middle, and top

management) to assess the feasibility of the recommendation in terms of suitability, user friendliness and techno-economic feasibility so that all barriers are addressed. The financial

analysis includes—simple payback period (generally applicable for measures having

marginal or low investments), net present value (NPV), internal rate of return (IRR), and

return on investment (ROI). The broad steps followed in an energy audit of a facility are

shown in Figure 2.3.1.


6

Figure 2.3.1: Broad steps of energy audit

2.4 Monitoring and measurement requirements The performance analysis of various energy-consuming centres/equipment/system would require close monitoring of various key operating parameters. These data are measured or

collected based on their availability. The required data can be categorized to the following

four groups depending upon its source:

Interactions with plant management and shop floor personnel

Walk-through survey of the facility (to understand processes and technology assessment)

Monitoring of various energy-consuming equipment/system

Observations on operating practices Measurements/data collection on energy consumption and operating

parameters

Collection of design data of monitored equipment

Data analysis to identify potential areas for improvements

Formulate energy conservation measures with cost– benefit analysis (short/medium/long term)

Presentation to plant personnel (To share results and findings, and for their

acceptability and implementation)


7

Real time operational parameters using portable instruments and/or from control panels

Historical data collected from plant log or record books Analytical reports of samples Standard values from relevant hand books.

The list of important operating parameters, monitoring points, and instruments required are given in Table 2.4.

Table 2.4.: Details of online measurements and portable instruments

S. No. Parameter Monitoring point Requirement

1. Flue gas analysis—O2, CO,

and CO2

Flue duct Flue gas analyser

2. Flue gas temperature Flue duct/chimney base, Before

and after waste heat recovery

system

Conduct type digital

thermometer

3. Combustion air temperature Inlet to blower, Before and after

waste heat recovery system

Hot wire anemometer

4. Temperature of melt In-place instrument Log book records

5. Surface temperature External surface Non-conduct infrared

thermometer

6. Ambient conditions—Wet

bulb temperature, dry bulb

temperature, relative

humidity

Workplace Hygrometer

7. Water flow rates Water pipelines used in the process

cooling and chillers

Ultrasonic flow meter

8. Wind/air velocity Workplace, air compressor, air

handling unit

Hot wire anemometer

9. Lighting level Workplace Lux meter

10. Speed of motors Motors Stroboscope

11. Raw material consumption In-place instrument Log book records

12. Fuel consumption In-place flow meter Log book records

13. Fuel analysis—Ultimate

analysis, gross calorific value

and ash content (for solid

fuels)

Laboratory analysis Lab reports

14. Air pressure Wind belt Pressure gauge

In addition, the following support will be required from individual plants while

undertaking energy audits: Electrical panel must be accessible for electrical measurements

De-coupling of motors to facilitate no load test

Weighing system/scale for measurements of solid fuel consumption Porthole in chimney to facilitate monitoring of flue gas parameters

Design details of equipment/system

Energy source, cost and tariff details Process and material flow diagrams

Installed capacity of various products, production details, wastage/yield.


8

2.5 Monitoring and verification protocol Monitoring and Verification (M&V) protocol is the term given to the process for quantifying energy savings delivered by a recommended energy conservation measure (ECM) upon

implementation. A key part of the M&V process is the development of an “M&V Plan”,

which defines how the savings analysis will be conducted before each ECM is implemented. M&V protocol is prepared for both (1) existing or baseline case and (2) proposed case. The

“baseline protocol” provides suggested protocol for monitoring of existing equipment for

which performance evaluation was carried out for identifying ECM. The proposed protocol refers to the performance monitoring of the equipment upon implementing the

recommendation, i.e., any modifications or retrofits, or replacement in place of existing

system. Verification methods include surveys, inspections, spot measurements, and short-term metering. Both baseline and expected performance for each ECM are essential to

prepare M&V sheet for regular monitoring and verification covering operating parameters,

energy consumption, production, etc. The benefits of M&V include the following: Accurate assessment of energy savings from the implemented ECM

Routine monitoring of equipment performance

Improvement in operation and maintenance (O&M) records Verification of energy and cost savings as estimated from energy audit.

Table 2.5a provides the baseline parameters estimated for monitoring and verification for a set of different energy conservation measures.

Table 2.5a: Baseline parameters for M&V

S. No. Energy conservation measure Baseline parameters Baseline conditions

1. Replacement of existing induction

furnace by new induction furnace with cooling tower

Specific power

consumption—850 kWh per tonne

Batch period—45 minutes

Charging capacity—100 kg per batch

2. Replacement of existing raw water

pump by efficient pump

Efficiency of pump—27% Power consumption—6.0 kW

Flow rate—14.1 m3/hr Head—42 m

3. Modification in crucible and

furnace to improve energy efficiency

Specific energy

consumption—635 kWh/MT

Charging—500 kg

4. Replacement of existing air

compressor with fixed speed compressor for base load and new

VFD air compressor for variable

load

Specific power

consumption—0.414 kW per CFM

Generation pressure—6.6

kg/cm2

Power consumption—87

kW (load) and 37 kW

(unload)

5. Replacement of existing lighting

system by efficient lighting system

Existing lamps installed:

o FTL (T – 12)

o MVL – (250 W) o Others

Nil

6. Use of ladle cover to reduce rate

of temperature drop

Specific energy

consumption—635 kWh/MT

Tapping temperature—

1489°C

7. Replacement of pneumatic

moulding machine with hydraulic moulding machine

Compressed air

consumption—158 CFM

Generation pressure—6.6

bar


9

Similarly, Table 2.5b provides the proposed M&V protocol for the post implementation of the same set of energy conservation measures as mentioned in Table 2.5a.

Table 2.5b: Proposed parameters for M&V

S. No.

Energy conservation measure

Parameters to be measured after implementation

Adjustment/variable factors

1. Replacement of

existing induction furnace by new

induction furnace

with cooling tower

Estimation of specific

power consumption

3 batches Furnace loading

2. Replacement of

existing raw water

pump by efficient pump

Calculation of

efficiency by

measurement of flow rate, head, and input

power

3 samples –

3. Modification in crucible and furnace

to improve energy

efficiency

Estimation of specific energy

consumption

3 samples

Charging

4. Replacement of

existing air

compressor with fixed speed

compressor for base

load and new VFD air compressor for

variable load

Estimation of

specific power

consumption by measurement of

FAD and input

power

Examine the

operation of VFD

3 samples

1 sample

Generation pressure

5. Replacement of existing

lighting system by

efficient lighting system

Physical inspection One time –

6. Use of ladle cover to

reduce rate of

temperature drop

Estimation of specific

energy consumption

3 samples

Charging

7. Replacement of

pneumatic moulding

machine with hydraulic

moulding machine

Estimation of energy

consumption of

moulding machine

3 samples

–

11

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3.1 Background of foundry industry in India India is the second largest producer of castings, next to China, and accounts for about 8–9

per cent of total castings production in the world. Total castings production in India is about

9.05 million tonnes (Source: Indian Foundry Journal, July 2012). The foundries manufacture various types of castings which can be divided into the following categories: (1) non-ferrous,

(2) gray iron, (3) ductile iron, and (4) steel. Castings are used in automobiles, railways,

pumps and valves, air compressors, diesel engines, electric motors, pipes and fittings, and many other specialized applications. Estimates show that about 32 per cent global output of

foundry industry goes to automobile industry and the balance to other sectors. Production

of gray iron castings account for the major share of about 70 per cent of total castings produced. The share of different metal cast in India is shown in Figure 3.1.

Indian foundry industry is capable of producing various grades of value-added castings as

per various international standards. Most of the 4,500 or so foundry units in India are in the

MSME sector. Only about 20 per cent of these foundry units have ISO quality accreditation. The foundry industry in India is geographically clustered. There are several foundry

clusters in India. Some of the major clusters include Howrah, Coimbatore, Rajkot, Kolhapur,

Ahmedabad, Batala, Jalandhar, Ludhiana, Belgaum, Shimoga, Agra, Hyderabad, Bangalore, and Vijayawada.

Foundry industry is energy intensive and energy cost accounts for about 15–20 per cent of total production cost. The primary process steps in metal casting method are preparation,

melting, pouring, and finishing. Of these, melting is the most energy-intensive operation

and accounts for about 70–80 per cent of the total energy consumption of the unit while the

Figure 3.1: Share of different metal cast in India

(Source: 47th Census of World Casting Production, Modern Casting, December 2013)

pp 23. (http://www.afsinc.org/files/Dec13%20Census.pdf))

68% 12%

11% 9%

Gray iron

Steel

Ductile iron

Non-ferrous metals


12

balance is used in auxiliary operations. Induction furnace and cupola are the two main

melting furnaces used by foundries. Energy consumed in heat treatment is significant for foundry units having that operation.

3.2 Process description The manufacturing process followed in a typical foundry unit is shown in Figure 3.2. The

melting of raw material is either done using electricity in an induction furnace or coke in a

cupola (conventional or divided blast type). The size (connected load) of induction furnace in a foundry varies from 75 kg (50 kW) to 8 tonne (3 MW). However, the most common

specification of induction furnace used in foundry industry is 500 kg (550 kW). The capacity

of cupola is generally indicated by the internal diameter of the shaft. Majority of the cupolas fall in the size range of 18 inch (1.5 tph) to 40 inch (6 tph). A brief description of the major

manufacturing processes is given in the following sections.

Figure 3.2: Manufacturing process of a typical foundry unit

3.2.1 Preparation of sand

Fresh sand is thoroughly mixed with suitable binders, like bentonite, coal dust, water, and other additives in intensive mixers to prepare green sand, which is the most commonly used

material to prepare moulds for the castings. Sand mixing is undertaken in intensive sand

Sand blasting, grinding, removal of

gates and feeders

Charge materials (pig-iron, scrap, foundry

return, and ferro alloys)

Charge preparation

Melting (Induction furnace,

cupola)

Raw materials (sand, bentonite, coal-dust, chemical binding

systems)

Green sand mulling, core sand mixing

Core setting and mould closing

Pouring

Green sand moulding

Shake out

Core making

Finishing operation

Inspection and Delivery


13

mixers, having typical batch size of 200–1,000 kg. The connected load is in the range of 10–

100 kW.

3.2.2 Preparation of moulds

Preparation of the mould is an important process in casting industry. The mould is divided into two halves—(1) the cope (upper half) and (2) the drag (bottom half), which meet along a

parting line. Both mould halves are contained inside a box, called a flask, which itself is

divided along this parting line. The mould cavity is formed by packing sand around the pattern (which is a replica of the external shape of the casting) in each half of the flask. The

sand can be packed manually, but moulding machines that use pressure or impact to pack

the sand are commonly used. Cores are placed inside the moulds to create void spaces. Four common types of sand moulds are as follows:

Greensand mould: Greensand moulds use a mixture of sand, water, and a clay or

binder. Greensand moulds are the least expensive and most widely used. Skin-dried mould: A skin-dried mould begins like a greensand mould, but additional

bonding materials are added and the cavity surface is dried by a torch or heating lamp

to increase mould strength. Doing so also improves the dimensional accuracy and surface finish and lowers collapsibility. Dry skin moulds are more expensive and

require more time, thus, lowering the production rate.

Dry sand mould: In a dry sand mould, sometimes called a cold box mould, the sand is mixed only with an organic binder. The mould is strengthened by baking it in an oven.

The resulting mould has high dimensional accuracy, but is expensive and results in a

lower production rate. No-bake mould: The sand in a no-bake mould is mixed with a liquid resin and hardens

at room temperature.

Further details of the different moulding processes are given in section 4.1.7.

3.2.3 Melting of charge material

Pig iron, metal scrap, foundry return, and other alloys are charged into the furnace for

melting. The ratio of different charge materials depends on properties required for the final

castings. The charged material is melted either in a cupola furnace or induction furnace. The molten metal temperature requirement for cast iron is about 1,400°C, for steel about 1,650°C,

and for aluminium about 750°C. Once the melting is completed, the molten metal is poured

into sand moulds either manually or using semi/automatic pouring system.

3.2.4 Shot blasting and finishing

The melt poured inside the mould takes the shape of the mould. The casting is removed, shot blasted, and cleaned. Although pneumatic shot blasting machines can be used, turbine

wheel type short blasting machines are more common and also energy efficient. There are

different models of shot-blasting machines available. The most common shot-blasting machine is double door, two shooters type. It has four drives, two for shooters, one for

bucket rotating, and one for dust collection. A typical 1 tonne per batch shot-blast machine

has total connected load of around 25 kW.


14

After shot blasting, machining of the castings is done as per requirement. The final product

is tested using spectrometer and packed for dispatch. The sand recovered from the moulds is either disposed off or treated in a sand reclamation unit. Units using sand reclamation

unit are generally able to reuse about 80 per cent of the sand.

3.3 Energy and material balance in a foundry unit Melting accounts for the major share of energy consumption in any foundry unit. Details of

energy use in a foundry unit are described in the following sections.

3.3.1 Energy use in a foundry unit

Coke is the major energy source in a cupola based foundry unit whereas electricity is the

predominant type of energy source in an induction furnace based unit. The major energy

consuming centres in a foundry unit are shown in Table 3.3.1.

Table 3.3.1: Details of major energy consuming centres

Equipment Process step Type of energy

Cupola Melting Thermal (coke)

Induction furnace Melting Electrical

Motors Moulding, sand blasting, cooling

tower, air compressors, pumps

Electrical

Others Lighting Electrical

3.3.2 Distribution of energy in a foundry unit

Melting accounts for a major share of about 70–80 per cent in a foundry unit. The other

important energy consuming areas include moulding, core preparation, and sand preparation. The share of energy usage in a typical small and medium foundry is given in

Figure 3.3.2.

Figure 3.3.2: Typical energy use in a foundry

Melting, 70%

Moulding and core preparation,

10%

Sand preparation, 6%

Lighting, 5% Compressor, 5% Miscellaneous, 4%


15

3.3.3 Metal flow in a foundry unit

The rejections in different stages in a foundry can be minimized to enhance the yield.1 Figure 3.3.3 shows the metal flow in a foundry unit.

Figure 3.3.3: Metal flow diagram in a foundry unit

Source: Achieving high yields in iron foundries. Good Practice Guide 17. Oxfordshire and

Birmingham: The Department of the Environment, Transport and the Regions. March 1999

3.4 Energy losses and waste analysis The major energy losses occur in melting. Apart from melting, other areas of energy losses included compressed air system and various motive loads. The energy losses occurring in

melting operation are given below.

3.4.1 Energy losses in induction furnace

Induction furnace uses eddy currents generated at high frequency for melting. The inductors

are made of copper to minimize electrical losses and are generally water cooled. A typical arrangement of a coreless induction furnace is shown in Figure 3.4.1a.

1 Yield = (Total weight of good castings/Total weight of metal melted) x 100

Total metal

melted

Metal poured

into moulds

Metal in gross

castings

Metal in

good castings

Raw materials

Melting losses Split

metal Grinding losses

Good castings dispatched to customers

Scrap castings Runners

Pigged metal

Metallic returns

Metal returned to melting furnace


16

Figure 3.4.1a: Typical arrangement of a coreless induction furnace

Source: Efficient melting in coreless induction furnaces. Good Practice Guide 50. Birmingham: The

Department of the Environment, Transport and the Regions. February 2000

The theoretical electrical energy required for melting one tonne of iron and heating up to

1500°C is 396 kWh. In an induction furnace, a number of energy losses take place which

increases the specific energy consumption to about 600–950 kWh per tonne of iron. Different losses occurring in an induction furnace include the following: (1) radiation losses, (2) coil

losses, (3) transmission losses, and (4) lining-conducted heat losses. Of these, coil and lining-

conducted losses are mostly absorbed by cooling water. Different energy losses occurring in a typical induction furnace is shown in the Sankey diagram (Figure 3.4.1b).

Figure 3.4.1b: Energy losses in a coreless induction furnace

Source: Efficient melting in coreless induction furnaces. Good Practice Guide 50. Birmingham: The

Department of the Environment, Transport and the Regions. February 2000


17

In an induction furnace, the various energy losses typically vary between 100 to 130 kWh

per tonne of metal. The furnace efficiency is around 65–75 per cent. With new developments, IGBT controls, energy efficient coils, new refractory material, reduction of converter losses

and reduction in transformer losses, the energy losses have been reduced to about 60–90

kWh per tonne of metal. These new furnaces have an efficiency level of 81–87 per cent. However, the actual energy losses vary from one unit to another and are influenced by a

number of factors like the following:

Quality standard of the manufacturer Capacity of the furnace (batch size)

Quality and size of batch material

Operating practices.

3.4.2 Energy losses in cupola furnace

A cupola furnace uses coke as the main fuel for melting of iron. In a cupola, the charge materials and the fuel are fed in the required proportions for melting of metal. A foundry

unit uses either a conventional cupola or a divided blast cupola (DBC). Of these, the DBC is

more energy efficient. A typical DBC schematic is shown in Figure 3.4.2a.

Figure 3.4.2a: Schematic view of a typical DBC

Source: Pal P. 2006. Towards Cleaner Technologies: a process story in small-scale foundries, edited by

G Sethi, P Jaboyedoff, and V Joshi. New Delhi: TERI. 102 pp

Different energy losses occurring in a cupola include the following:

Heat losses due to formation and combustion of carbon monoxide (CO) Sensible heat losses in flue gas

Structural and unaccounted losses


18

Losses due to calcination of limestone

Heat in molten slag.

Heat losses due to CO formation, flue gas losses and structural losses account for major

energy losses in a cupola. Figure 3.4.2b shows a typical Sankey diagram of a cupola furnace.

Figure 3.4.2b: Energy losses in a cupola furnace



3.5 Specific energy consumption and trends The specific energy consumption (SEC) or the energy consumed per unit mass is an indicator of the performance of an equipment. Lower the SEC, the better is its energy

performance. Typical SECs of induction and cupola furnaces are given in the following

sections.

3.5.1 SEC of induction furnace

The SEC of an induction furnace is denoted as the ratio of kWh consumption per tonne of charged metal. SECs of typical induction furnaces vary in the range of 600–700 kWh per

tonne of charge metal. Energy audits undertaken by TERI under GEF–World Bank project in

Kolhapur foundry cluster show a large variation in SEC levels of the induction furnaces operating in the cluster. The highest SEC was found to be 55 per cent more than the lowest

SEC and the average SEC of the cluster as a whole was 14 per cent greater than the lowest


19

SEC level (Figure 3.5.1). The analysis clearly showed that there is a great potential to save

energy by improving the SEC levels of the induction furnaces operating in the cluster.

Figure 3.5.1: Variation of SEC of induction furnaces in Kolhapur cluster

3.5.2 SEC of cupola furnace

The SEC of a cupola furnace is measured in terms of the amount of charged coke (including

booster coke) per tonne of charged metal. SEC of a cupola varies widely and is a function of the design of the cupola and its operating practices, quality of coke, and molten metal

temperature. The range of SEC of cupolas operating in Kolhapur cluster is shown in Figure

3.5.2.

Figure 3.5.2: SEC of cupola furnaces operating in Kolhapur cluster

There exists a large potential to improve the energy efficiency of operating cupolas through

adoption of improved designs like the DBC and best operating practices (BOP).

547 624

850

Best Average Worst

SEC of Induction Furnaces (kWh/MT)

87

121

171

Best Average Worst

SEC of Cupola Furnaces (kg coke/MT)


20

3.5.3 Other factors influencing energy consumption

Other factors that influence the overall energy consumption and SEC at the unit level include the following:

Plant capacity and utilization

Equipment specification and the manufacturing process Overall yield of operation

Degree of mechanization

Type and quality of coke used Raw material quality

Product type and mix

Operating practices Housekeeping and maintenance practices.

3.6 Energy saving potential in foundry Metal casting industries are steadily switching over from coke-based cupolas to electricity-

operated induction furnaces for melting operation. There are also options for conventional

cupolas to adopt DBC system for enhancing their performance level. While this is a positive trend from an energy efficiency perspective, significant technology upgradation and

improving energy efficiency still remains within induction furnaces. Large savings through

temperature and frequency controls, harmonic loss reduction, etc., are possible in induction furnaces. There is also considerable scope for improving other process technologies in the

plant such as sand mixing, pneumatic grinding, machining, sand reclamation, etc. Most of

the units are still using conventional machines for these processes, and penetration of energy efficient designs can be promoted. In addition to process technologies, industries also use

numerous cross-cutting technologies such as compressors, motors, pumps, etc. It is observed

that these types of technologies are generally outmoded and inefficient, especially in the smaller units. Overall, there are only a small fraction of the plants that are mechanized and

automated, while the rest are employing manual processes and, hence, there is good scope

for technology enhancement. A few potential energy-saving opportunities are listed below. Improvement in metal melting

Efficiency improvements in compressed air system, e.g., use of screw compressor

and VFDs, pressure setting, and minimizing compressed air leakage Replacement of old and inefficient pumps and motor

Use of energy-efficient sand mixture

Adoption of sand reclamation systems Transformer tap setting

Improvement in lighting system.

It is required to undertake performance monitoring of existing equipment/system to assess

the energy saving potential and options. The performance assessment of various equipment

used in foundries are described in the following section.

3.7 Performance assessment in foundry The performance assessment of different electrical and thermal systems used in a foundry unit is provided here.


21

3.7.1 Performance assessment of induction furnace

Molten metal in a foundry is produced using one or more furnaces depending upon, the choice of which is determined by the quality, quantity, and throughput required. Foundries

use induction furnace (electricity based) or cupola (coke based) for melting process. The

salient features of an induction furnace are as follows: High heat efficiency—as the material is directly heated by electromagnetic

induction

No carbon dioxide is produced, and little smoke and soot are emitted Little loss of metal due to oxidation, thereby, low contamination of metal

Temperature control is simple and uniform composition of metal product can be

attained by agitation effect Suitable for high-temperature melting because of its energy concentration

Requires less space as compared to other types of melting furnace.

The operating efficiency of the induction furnace can be established in direct method by

comparing the operating SEC with rated or design values as provided by the manufacturer.

The list of data required for calculating SEC of an induction furnace is given in Table 3.7.1. Power consumption in melting could be noted from dedicated energy meter installed in

induction furnace and charged metal could be weighed using an electronic balance and by

maintaining a log sheet to record the weight of metal during actual operation of the induction furnace.

Table 3.7.1: List of data for SEC calculation of induction furnace

S.

No.

Parameter

1. Weight of total metallic charged per batch (tonne)

2. Number of batch melted

3. Power consumption in melting (kWh)

3.7.2 Performance assessment of cupola furnaces

A large number of foundry units use cupola route for melting of iron. These units are thermal energy intensive, which use coke as the main source of fuel. The performance

assessments of cupola furnaces are given below. The performance of a cupola can be directly

estimated with the help of coke consumption in percentage of total metallics melted and melting rate in routine melting campaign of the cupola. Coke consumption can be measured

by either „metal to charged coke ratio‟ or „total coke consumption‟ basis using the following

relation:

1. Metal to charged coke ratio: It is calculated by the ratio of total charged coke

including booster coke into the cupola under study to the total metal charged to it

for melting. Better operating range is 6.75–8 per cent of metallics. 2. Total coke percentage: It is calculated by the ratio of entire coke (total charged coke

+ bed coke—equivalent return coke) to the total metal charged. Better operating range is 8–10 per cent of metallics.

3. Melting rate in tonne per hour is the ratio of total metallics charged in tonne to

duration of melting campaign (blast on to blast off) in hour. Melting rate around

the design value indicates good condition of refractory lining and better operating practices being followed during melting.


22

The amount of airflow to the melting chamber and its pressure has great influence on the

performance of a cupola. The capacity of the blower must be able to supply air at the correct volume for combustion and pressure so that the air penetrates the coke bed and high core

temperatures are developed. As per BCIRA, the optimal blowing rate for a cupola is

115 m3/min-m2 of melting zone cross sectional area (375 ft3/min/ft2). Variation of blast rates of ±20 per cent of this figure would result in unsatisfactory cupola operation. Blowing

pressure will depend on the size of cupola. Table 3.7.2 provides the list of data that are

required for calculating the efficiency of a cupola by direct method.

Table 3.7.2: List of data for performance analysis of a cupola furnace

S. No. Parameter

1. Weight of total metallic charged (tonne)

2. Duration of melting run (hour)

3. Weight of total charged coke (tonne)

4. Weight of bed coke charged (tonne)

5. Weight of return coke (tonne)

3.7.3 Performance assessment of motors

Motors are used in foundries for various motive loads like blower, air compressor, sand preparation, sand blasting, etc., to operate connected utilities in the process. The important

parameters for assessing the performance of the motors include: (1) loading and (2)

efficiency of motors.

Motor loading

The loading patterns of the motors are estimated by comparing operating load to the rated load provided by the motor supplier.

Efficiency of motors

Efficiency of motor is the ratio of delivered shaft power to the power consumption by the motor. The calculated efficiency is compared with rated efficiency provided by the supplier

to estimate the deviations and savings.

In order to calculate the efficiency of the motor, the no load performance needs to be

observed. This needs the motor to be decoupled from the load. Hence, this causes a stoppage in the process. This procedure can be done only if the plant can spare the motor to be out of

service for duration of half an hour.


23

No load test

Under „no load‟ conditions, the motor is run at rated voltage and frequency without any

shaft load. Input power, current, frequency, and voltage are noted. From the input power,

stator I2R losses under no load are subtracted to give the sum of Friction and Windage

(F&W) and core losses.

Stator and rotor I2R losses

The stator winding resistance is directly measured by „Volt Amp‟ method. The resistance must be corrected to the operating temperature as per the formula given below:

where,

Rotor I2R losses are measured from measurement of rotor slip.

The speed of the rotor can be measured using stroboscope or non-contact type tachometer.

Stray load losses

These losses can be calculated using standard methodology described in IEEE Standard 112.

Normally, IE and IEC standard considers a fixed value as 0.5 per cent and IEEE-112 specifies the range of 0.9–1.8 per cent of output depending upon the motor rating. Table 3.7.3

provides the stray losses corresponding to the motor rating as per the IEEE standard. The

stray losses are to be estimated using the reference mentioned in Table 3.7.3.

Table 3.7.3: IEEE standard stray losses

Motor rating (HP) Standard stray losses (%)

1–125 1.8

125–500 1.5

501–2,499 1.2

2,500 and above 0.9

Efficiency of a motor can be calculated by the formula:


24

3.7.4 Performance assessment of pump

In metal casting industries, the pumps are mainly used to transfer water from reserve source point to user end as employed in the process and connected with the utilities to circulate the

cooling water. The condition of an operating pump can be understood by calculating

operating efficiency of the individual pump and comparing with design value. Efficiency of a pump can be estimated by the following relation:

where,

Best performance from a pump can be

observed when a pump is operated at a point where its operating curve intersects with

system curve without any throttling at either

stream of flow as shown in Figure 3.7.4.

The pump performance will vary depending

upon the operating parameters like RPM (N), input power (kW), head (H) and flow rate (Q).

These operating parameters are linked with

the following relationship.

Flow: Flow is proportional to speed;

Where, Q1 is flow corresponding to speed N1 and Q2 is the flow corresponding to speed N2

Head: Head is proportional to the square of speed;

Power (kW): Power is proportional to the cube of speed;

As can be seen from the above laws, doubling the speed of the centrifugal pump will

increase the power consumption by eight times. Conversely, a small reduction in speed will

result in significant reduction in power consumption. This forms the basis for energy conservation in centrifugal pumps with varying flow requirements. Table 3.7.4 provides the

list of data that are required for calculating above mentioned performance indicators of a

cooling tower.

Figure 3.74.: Operating curve of a pump


25

Table 3.7.4: Operating parameters of pump

S.

No. Parameter Unit

1. Power consumption kW

2. Suction head metre (m)

3. Delivery head metre (m)

4. Pump flow rate kg/sec

5. Fluid temperature oC

3.7.5 Performance assessment of compressed air system

Air compressor is used to compress and pressurize air as per the set operating condition. The pressurized air is stored in a receiver tank and distributed to the point of use through

piping network. In metal casting industries, the air compressors are mainly used to deliver

service air to various connected utilities used in the process.

Compressors are designed to deliver a fixed quantity of air at certain pressure. However,

due to factors such as ageing, wear and tear or poor maintenance, the compressor may not be able to deliver the same volume of air as specified by the manufacturer in the nameplate.

By performing the free air delivery (FAD) test, the actual output of a compressor with

reference to the inlet conditions can be assessed. The test determines the pumping capacity of the compressors in terms of FAD, i.e., air pumped at atmospheric conditions. The

following tests are generally carried out for evaluating the operating capacity of

compressors: Pump-up test

Suction velocity method.

The pump-up test of a compressor would require isolation of the air receiver and

compressor from rest of the plant, whereas the suction velocity method could be undertaken

without isolating the compressor. Depending upon the operating conditions prevailing in the plant, one of these methods is used to study the performance of the compressors. Apart

from FAD, it is also advisable to check power consumption, the optimum pressure setting

and carry out the air leak test in the air distribution network in the plant to evaluate the condition of the air distribution system. The methods of carrying these tests are explained

below.

(i) Measurement of FAD

Pump-up test method:

Pump-up test determines the pumping capacity of the compressors (reciprocating and screw) in terms of air pumped at atmospheric conditions. It requires the isolation of the air

receiver from the system, and only the compressor, whose pumping capacity has to be

determined, must be connected to it. The receiver must be drained before switching on the compressor. The time taken by the compressor to maintain the working pressure in the air

receiver (compressor on time or on load time) must be observed. A minimum of three

measurements are required to calculate the average value of time. The volume of the pipeline between the compressor and the receiver must then be calculated. The capacity of

the compressor can be calculated using the formula:


26

where,

FAD = actual pumping capacity of the compressor (m3/minute), V = total volume (m3) = Vr´ + Vp

Vr = volume of the receiver (m3),

Vp = volume of the pipeline connected from air compressor to air receiver (m3), P1 = atmospheric pressure (1.013 bar absolute),

P2 = final pressure of the receiver (bar absolute),

t1, t2, t3 = time taken to fill the receiver at working pressure of the system,

T1 = inlet air temperature (ºK),

T2 = compressed air exit temperature (ºK).

Suction velocity method:

Suction velocity method is only used wherever compressor cannot be isolated from the system. In this method, velocity of inlet air to the compressor is measured at the entire suction filter‟s area with multiple readings using handheld portable instrument. Actual free air delivery for the compressors is calculated after averaging out the multiple measurements of suction velocity and multiplying it with the net open area of the filter‟s suction area.

After calculating FAD either by pump-up test or suction velocity method, compare the value

with the design value of FAD. If the difference is more than 20 per cent, it is important to

check the piston rings, cylinder bores, and so on.

(ii) Specific power consumption

It is always better to evaluate the compressors on the basis of the specific power

consumption index. This is the actual shaft power to generate 1 Nm3/minute (normal m3

per minute, i.e., 1 m3 per minute at 1 bar, 0 ºC and 0 per cent RH) at 7 kg/cm2 (g) or at any common pressure, when the compressor is running at full load. This ratio can be calculated

when the actual electrical power input (not the rated power of motor) and the FAD in

Nm3/min are known.

(iii) Pressure setting

The discharge pressure should be kept at the minimum as required for the process or the operation of pneumatic equipment for a number of reasons, including minimizing the

power consumption. The compressor capacity also varies inversely with discharge pressure

and the power consumption increases (Table 3.7.5a). Another disadvantage of higher discharge pressure is the increased loading on the compressor piston rods and their

subsequent failure. Maintaining a higher air pressure (generated for buffer storage) than


27

operating pressure is a waste of energy and cost. Also, at higher pressure, air leakages from

the same size of orifice increase. An increase in operating pressure by 1 kg/cm2 can increase energy consumption by about 4 per cent. On the other hand, lower air pressure than

required reduces the productivity of pneumatic tools drastically. Most of the air tools are

designed to operate at 90 psig. The performance of these tools reduces by 1–4 per cent for every one psig drop in pressure.

Table 3.7.5a: Power consumption of compressors at different pressures

Pressure

(kg/cm2)

Free air delivery

(Nm3/min) Shaft power (kW)

Specific power

(kW/Nm3/min)

3 19.60 87.0 4.44

4 18.30 92.6 5.06

7 19.30 123.0 6.37

8 19.22 128.0 6.66

10 19.87 150.0 7.55

iv) Leakage test

The leakage in the compressed air system can be quantified by running the compressor with

all the air-using equipment shut off. The time taken for the system to attain the desired pressure or for the compressor to unload can be noted. This pressure will fall because of

leakages in the system and the compressor will come on load again. The time taken for this

to happen is to be noted as well. The period for which the compressor is on-load or off-load should be recorded at least thrice to calculate an average value. The leakages can be

estimated as follows:

where,

L = leakages (m3/minute)

FAD = actual free air delivery of the compressor (m3/minute)

t1 = average on-load time of compressor (second) t2 = average off-load time of compressor (second)

A certain amount of wastage through leakage in any compressed system is inevitable, but

air leakages above 5 per cent, certainly needs in-depth study of the system. It is difficult to

detect air leakages as they cannot be seen and smelt. While large leakages are easily detected by their hissing sound or by ultrasonic generated, it is difficult to detect small leakages,

which can only be identified by applying soap solution on pipelines, joints, and so on. It is

recommended that the entire distribution system be tested with soap solution once in six months. The compressed air lost due to leakages can be quite significant depending on the

air pressure. Table 3.7.5b gives the leakages through various orifice sizes and the resulting

energy wastage at 7 kg/cm2 air pressure.


28

Table 3.7.5b: Power wastage from leakage of compressed air

Orifice diameter (inch) Air leakage (Nm3/h) Power wasted (kW)

1/64 0.72 0.08

1/32 2.88 0.31

1/16 11.53 1.26

1/8 46.20 5.04

1/4 184.78 20.19

3.7.6 Performance assessment of cooling tower

Cooling towers are mainly used in foundries to circulate cooling water to user end in the

process to meet the desired requirement in the plant. It could be either natural draught or forced draught operation. Figure 3.7.6a shows the simple schematic view of water and air

flow to a cooling tower.

Figure 3.7.6a: Schematic view of a cooling tower

The performance of a cooling tower can be compared with the rated output with the actual output like range, approach, effectiveness, heat rejection capacity in TR, evaporation loss,

and make-up water flow rate, etc. Cooling duty water flow rate and its temperature helps to

estimate different performance indicators of a cooling tower. Some of the important performance indicators of a cooling tower are represented in Figure 3.7.6b. The relation to

estimate range, approach, and effectiveness for a given cooling tower are mentioned below:


29

Figure 3.7.6b: Representation of cooling tower performance indicators

Heat rejected or cooling capacity; TR

Make-up water quantity

The make-up water or the quantity of water is to be added in the cooling tower to

compensate for the losses due to drift, evaporation, and blow-down.

Drift loss is the loss of water droplets that are carried out from the cooling tower as

entrained in the current of leaving air stream. The drift losses is typically reduced by

employing baffle-like devices, called drift eliminators, through which the air must travel after leaving the fill and spray zones of the cooling tower. Drift loss varies between 0.1 and

0.2 per cent of circulation flow. It can be as low as 0.01 per cent of circulation flow, if the

cooling tower has drift eliminators in place.

Evaporation loss is the water quantity evaporated for cooling duty; as a thumb of rule—for

every 1 million of kcal heat rejected, the evaporation quantity could be worked out at 1.8 m3.

Blow-down loss depends upon COC (cycles of concentration), where COC is the ratio of

dissolved solids in circulating water to the dissolved solids in make-up water. The total make-up water quantity is dependent on the loss of circulating water in drift, evaporation,

and blow-down.

The data required to be collected from a cooling tower system for evaluating its performance

are given below.


30

Table 3.7.6: List of operating parameters of a cooling tower system

S.

No.

Parameter

1. Ambient dry bulb temperature oC

2. Ambient wet bulb temperature oC

3. Average cooling water inlet temperature oC

4. Average cooling water outlet temperature oC

5. Average cooling duty water flow rate m3/hour

3.7.7 Performance assessment of lighting

The power consumption by the industrial lighting varies between 2 to 10 per cent of the total power depending on the type of industry. Lighting is an area, which provides a major scope

to achieve energy efficiency at the design stage, by incorporation of modern energy efficient

lamps, luminaires, and lighting gears. Considering the lighting requirement at different sections of the plant, existing and suitable lighting load can be estimated from the lighting

inventory details of the plant. Options such as de-lamping, reduction of number of

lightings/fittings, maximization/optimization of day lighting arrangement, energy efficient lighting systems and use of better/electronic control system will emerge based on the

existing situation and plant‟s requirements.

3.7.8 Performance assessment of generator set

A generator set is used as a backup power system to meet a part or the full load requirement

of the plant to avoid any interruption in the process in case of power failures. A generator

set consists of a prime mover and an alternator. Depending on its design, it is operated using

either HSD (high speed diesel), LDO (light diesel oil), LSHS (low-sulphur heavy stock), NG

(natural gas) or other heavier petroleum fractions.

The overall performance of a generator is defined as „specific electricity generation ratio‟

(SEGR) which is defined as the quantity of electricity generated (kWh) per litre of fuel consumption. The calculated SEGR value is to be compared with the normative figure

supplied by the DG set manufacturer. The recommended level of SEGR values for different

sizes of DG sets is shown in Table 3.7.8.

Table 3.7.8: Recommended SEGR values of diesel generator

Rating (kVA) Recommended SEGR (kWh/litre)

1450

1100

625

608

550

500

400

310

250

180

175

166

3.84

3.88

3.73

3.50

3.50

3.84

3.69

3.30

3.20

3.07

3.00

3.00


31

Rating (kVA) Recommended SEGR (kWh/litre)

160

120

3.00

3.00

kVA—kilovolt-ampere; kWh—kilowatt-hour

Source: PCRA (undated) The low SEGR in a generator set may be attributed to problems such as improper fuel

injection (clogged/damaged injectors, fault in the fuel injection pump, etc.), excessive wear

and tear in ring/liner assembly. At part-load operation, the efficiency of the generator set drops with a consequent decrease in SEGR. The drop in efficiency becomes fairly

pronounced at loads below 60 per cent and is a function of: (1) the ratio of actual output to

rated capacity; and (2) design and capacity rating of the DG set. Figure 3.7.8 illustrates a typical relationship between the extent of loading and the efficiency level, showing the

inefficient and the preferred ranges of operation.

Figure 3.7.8: Relationship of engine loading vs. fuel consumption

Source: www.pcra.org/english/latest/book/02-Chapter%20-%202.pdf, last accessed on 17

December 2014

Regular maintenance would help in maintaining the performance of generator set. Options

such as waste heat recovery from generator set can be explored in case of large capacity DG

sets operated on a continuous basis. Data required for calculating the efficiency are power generation and fuel consumption, which can be monitored online during real time routine

operation for a day.

0

100

200

300

400

500

600

700

0 10 20 30 40 50 60 70 80 90 100

Fuel

co

nsu

mp

tio

n (

ml/

kWh

)

Rated load (%)

Inefficient range Efficient range

http://www.pcra.org/english/latest/book/02-Chapter%20-%202.pdf

33

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pprraaccttiicceess

4.1 Energy efficient technologies for melting Melting is the major energy consuming centre in foundry units. Moulding and core making are important process steps that help in improving the quality and yield of good castings,

and minimizing wastage. Foundry industry uses mainly two types of furnaces for melting,

namely, (1) induction furnaces which use electricity and (2) cupola furnaces using coke as the fuel.

4.1.1 Induction furnace

In India, electric furnaces are usually used to manufacture higher value graded gray iron,

ductile iron castings, and steel castings. Duplexing of cupola and electric furnace is also

common among foundries. In the United States and Europe, electric induction furnaces have replaced many smaller cupolas. Induction furnaces are operated in batches. In electric

melting, unlike cupola melting, there are few changes in the chemistry of the metal. Steel

scrap, instead of pig iron, is the major charge metal for induction furnaces. The most common induction furnace designs are: (1) channel furnace and (2) coreless furnace. The

channel type induction furnaces are usually used for holding liquid metal, whereas the

majority of electric melting plants are based on coreless induction furnaces. With the advent of modern medium-frequency coreless induction furnaces, use of holding furnaces has

virtually ceased. Arc furnaces are used by large steel foundries and, hence, are not described

here.

4.1.1.1 Advantages of induction furnaces

Some of the advantages of induction furnaces include the following: Less oxidation losses

Faster start-up

Low manpower requirement Less refractory consumption

Low level of emissions per tonne of metal melted.

4.1.1.2 Principle of operation—coreless induction furnaces

Coreless melting furnaces use a refractory envelope to contain the metal, and surround that

by the coil. Operating on the same basis as a transformer, the charge acts as a single secondary turn, thereby producing heat through eddy current flow when power is applied

to the multi-turn primary coil. When the metal melts, the electromagnetic forces produce a

stirring action. Mixing and melting rates can be controlled through careful selection of frequency and power. Electric furnaces are sized for a melt/tap cycle of approximately one

hour.


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4.1.1.3 Principle of operation—channel type induction furnaces

An inductor, comprising water-cooled coil, is the energy source. A channel is formed in the refractory through the coil, which forms a continuous loop with the metal in the main part of

the furnace. The hot metal in the channel circulates into the main body of the metal in the

furnace envelope and is replaced by colder metal. Unlike the coreless induction furnace, a source of primary molten metal is required for the start-up of a channel furnace. These

furnaces do have a lower surface turbulence within the main metal bath.

4.1.1.4 Furnace sub-components

The pit electric furnace typically consists of a base fixed to the foundation and a crucible set.

The crucible set includes the following main elements: casing, magnetic shunts, heating inductor, and compacted ceramic or graphite crucible. Hydraulically or manually operated

lid can be used to cover the crucible. The crucible set is tilted for pouring of metal. The

furnace is equipped with transformer, frequency converter, compensating capacitor bank, control cabinet, control panel, cooling water system, and hydraulic actuation system. The

control systems are housed in a panel provided in the control cabinet.

4.1.1.5 Specifications

(a) Frequency of operation

While all channel furnaces are mains frequency, coreless medium frequency furnaces in India typically have frequency ranging between 500 Hz to 2,000 Hz, with frequency range of

800–1,000 Hz being the most common. Mains frequency furnaces are slower to start from a

cold charge resulting in growing preference for medium and high frequency units.

Developments in frequency converters and lower costs have resulted in increased adoption

of this technology.

(b) Power density

The achievable melting rate in any induction furnace is determined by power density,

measured in terms of kW per crucible capacity. The power density of medium frequency typical induction furnace is about 750 kW per tonne. However, lower power densities are

also used by some foundries, which reduces the melting rate. A power density of 750 kW

per tonne will enable iron to be melted and superheated to about 1500 oC in approximately 45 minutes.

(c) Power consumption in induction furnaces

The specific electricity consumption in an induction furnace varies considerably with the

make and specifications of the furnace. The specific energy consumption (SEC) is claimed to

be in the range of 580–620 kWh per tonne by different induction furnace manufacturers in India.


35

4.1.2 Cupola furnace

Cupola is the most common type of melting furnace used in Indian foundry industry. The cupola is a vertical shaft cylindrical furnace with raw materials and fuel charged from the

top. Heat, released from combustion of coke, melts the metallic charge materials. A

schematic cross-section of the cupola, depicting the important zones, is shown in Figure 4.1.2. Some advantages of the cupola are as follows:

Lower capital cost

Ease and flexibility of operation Lower melting losses

Lower energy cost

Better metallurgical properties promoting machinability.

Figure 4.1.2: Schematic view—cupola cross section




36

4.1.3 Classification of cupola

4.1.3.1 Cold blast operated cupola

Cold blast cupolas operate with ambient blast air. Cold blast is common in Indian foundries

since it is easier to design and operate and entail lower capital investments compared to hot

blast systems.

4.1.3.2 Hot blast operated cupola

Hot blast systems are designed to preheat the combustion air by heat exchange with the hot stack gases. Some advantages of hot blast operation are energy savings, lower sulphur pick-

up, and higher carbon pick-up. However, the benefits are substantially reduced if the blast

air temperature is below 400oC. Second-hand imported hot blast cupolas are notorious for

being difficult to rebuild and operate.

4.1.3.3 Continuous tapped cupola

In continuously tapped cupola, very little metal is held in the well. The slag and metal comes

out from the same tap hole, and are separated in the siphon box provided at the launder.

Since the metal is tapped immediately after melting, it is more an energy efficient operation compared to intermittent tapping of the cupola.

4.1.3.4 Intermittently tapped cupola

Also called bott and tap cupola, an intermittently tapped cupola stores the molten metal in

the well before it is tapped in batches. Separate tap-holes are provided for iron and slag in

this type of operation. Although, an intermittently tapped cupola provides a more uniform composition of the molten metal, some energy is lost in the cupola well.

4.1.3.5 Conventional cupola

Conventional cupolas are designed to inject the blast air through a single row of tuyeres.

Modified conventional cupola designs, injecting the blast air through two rows of tuyeres,

connected to the same wind belt, are also common.

4.1.3.6 Divided blast cupola

The efficiency of a cupola can be improved by splitting the blast air, in correct proportion, between two rows of tuyeres. The blast air is first divided between two wind-belts, before it

is injected into the cupola through the tuyeres. Divided blast operation helps to reduce coke

consumption and increase the melting rate for a given cupola diameter.


37

4.1.4 Important control parameters

The important control parameters in cupola operation are summarized below.

4.1.4.1 Blast rate

The blast rate of air is one of the most important control parameters in cupola operation. Apart from higher coke consumption, a higher blast rate creates an oxidizing atmosphere,

resulting in excess oxidation of iron and elements, like silicon and manganese. Too little

blast air does not generate enough heat for efficient combustion and leads to lower metal temperature, slower melting, and higher coke consumption.

Although calculating blast rate from first principles, a rule of thumb for estimating the optimum blast rate based on the cupola cross sectional area at the tuyeres is often used. The

optimum blast rate has been found to be 375 ft3/min per square foot or 115 m3/min per

square metre. The blower should be capable of delivering about 15–20 per cent more than the required blast rate to account for air losses in blast system.

4.1.4.2 Blast pressure

Proper blast pressure is required to penetrate coke bed. Incorrect air penetration adversely

affects the temperature, carbon pick-up, and the melting rate of the cupola. Figure 4.1.4.2

provides view of both desirable and undesirable blast air penetration.

The blast pressure is a function of the cupola diameter. An empirical correlation to derive

the blast pressure from cupola diameter is suggested below:

where,

P = Blast pressure, inch H2O D = Internal diameter at the melting zone, inches

Figure 4.1.4.2: View of blast air penetration in cupola




38

4.1.4.3 Tuyere size

The tuyere size determines the velocity of the blast air in the bed. The specifications of tuyere differ between cold blast- and hot blast system. For a cold blast system, the total area

of the tuyeres is about 20 per cent of the melting zone area. The size of each tuyere can be

calculated by dividing the total tuyere area by the total number of tuyeres. The shape of the tuyere can be either round (preferable) or rectangular. The recommended number of tuyeres

per row for cupolas of various diameters is provided in Table 4.1.4.3.

Table 4.1.4.3: Recommended number of tuyeres

Cupola internal diameter (inch) Number of tuyeres per row (-)

less than 30 4

30–42 6

42–60 8

60–84 12

4.1.4.4 Stack height

In the cupola, hot gases rising from the melting zone exchange heat with the descending

charge materials. If the stack height is too short, inadequate charge pre-heating takes place

and excess heat escapes in the top gases. A stack height in the range of 16–22 ft is recommended for a cold blast cupola depending upon its diameter.

4.1.4.5 Well depth

The well depth influences the carbon pick-up and the metal tapping temperature. Research

at BCIRA (Source: BCIRA Journal, January 1978, Report no. 1289) has shown that increasing

the well depth leads to higher carbon-up. On the flip side, increasing the well depth reduces the tapping temperature of the molten metal. As a rule of thumb, there is a drop of about

1oC in molten metal temperature for every additional inch increase in the well depth.

4.1.5 Energy and environmental performance

The energy performance of a cupola is measured by the charged coke consumed (including

boosters) per tonne of metallic charged material. Bed coke consumption is usually excluded while comparing the energy performance of cupolas. Apart from the design, energy

performance of a cupola is affected by the operating practices, quality of coke, tapped melt

temperature, composition of the metallic charged material, etc. Hence, the charged coke consumption in cupolas varies widely, typically ranging between 8 per cent (coke: metal

ratio of 1:12.5) and 13 per cent (coke: metal ratio of 1:7.5) in most Indian foundry units.

Suspended particulate matter (SPM) is the major air pollutant from cupola stack. The

quantity and composition of particulate emissions vary among cupolas, and even during

different periods of operation in the same cupola. It is necessary to clean the cupola stack gases in a pollution control system in order to comply with the local air emission standards.

The emission standards for cupola melting furnaces in India are given under environment

regulations. The maximum allowable SPM levels are 450 mg/Nm3 (milligrams per normal cubic metre) for cupolas with capacities lower than 3 tph, and 150 mg/Nm3 for cupolas with

capacities equal to or more than 3 tph.


39

4.1.6 New developments

The technological developments that have taken place in cupola melting technology is provided below.

4.1.6.1 Cokeless cupola

Cupolas using natural gas or oil as fuel in place of coke were developed in the 1950s in the

United Kingdom, mainly driven by environmental pressures. Particulate emissions from a

cokeless cupola are much lower compared to coke fired cupolas. In a cokeless cupola, a water-cooled grate supports the charge material instead of a coke bed. High intensity gas or

oil fired burners are used to generate the heat in the furnace. A carburizer is injected in the

cupola to make up the loss of carbon. However, high capital and operating costs, and sophisticated control requirements have limited the adoption of cokeless cupolas to only a

handful of larger foundry units in Europe. Even there, the cokeless cupolas are operated in

duplexing mode with electric furnaces.

4.1.6.2 Oxygen enrichment

Oxygen helps to raise the melt temperature and increase the melting rate. It is usually introduced at the tuyere level after suitably modifying the tuyeres. The amount of oxygen in

the blast air usually varies between 1 per cent to 4 per cent. Oxygen enrichment is common

in the United States and Europe, especially in large cupolas.

4.1.6.3 Cupola as a smelter and melter

Very large foundries have used cupola for conversion of iron oxide to iron, a sort of mini-blast furnace for smelting and melting together. A much larger cupola is needed in such

cases because any carbon reduction of iron oxide takes time and additional coke, which

inevitably slows down the melting rate.

4.1.6.4 Producing gray and ductile iron from the same cupola

It is possible to produce both gray and ductile iron from the same cupola by proper planning and control. A few changes such as reduced manganese and chromium in charge metallics

and additional coke boosters are needed while switching from gray iron to ductile iron

production. The melt chemistry needs to be closely monitored to detect a rapid drop in manganese and chromium, signalling a change to ductile iron. Increase in carbon content of

the melt is achieved by lowering the air blast.

4.1.6.5 Long campaign cupola

Most recent cupola installations in Europe are of long campaign hot blast type. The

operating period of the cupola could range from a few weeks to several months. The shell and tuyeres of long campaign cupolas are usually water-cooled and high quality refractories

(alumina type) are used in the cupola well. Some advantages of a long campaign cupola are

as follows: One cupola is sufficient to meet the melting requirements

Savings in coke and limestone


40

Slag extraction is simpler and easier

Less refractory consumption Saving in space.

4.1.7 Moulding process

Moulding processes can be classified either by the type of mould or pattern, or by the

pressure or force used to fill the mould with molten metal. The different moulding

techniques can be classified into four categories on the basis of the type of mould or pattern used. These four categories are as follows:

Conventional sand moulding process

Chemically bonded sand moulding process Permanent moulding process

Special and innovative moulding process.

In terms of the pressure or force used to fill the mould with molten metal, moulding process

may be classified as follows:

Hand moulding Floor and pit moulding

Machine moulding—Jolt-squeeze moulding machines

Machine moulding—Automatic or high density moulding Disamatic moulding machines.

4.1.7.1 Conventional sand processes moulding

Clay bonded sand mixtures have been used to make moulds for molten metal for centuries.

Castings dating back to the bronze age have been found by archaeologists. Sand moulds are

still commonplace today but we have modern tools and techniques that help to make the job more efficient and accurate. Conventional sand moulding processes are most widely used in

the foundry industry today. Some of the common conventional moulding processes include

green sand moulding and dry sand moulding.

a) Green sand moulding process

Green sand moulding is the most common moulding process used in the foundry industry. The term „green‟ denotes the presence of moisture in the moulding sand. Typical green sand

for moulding contains about 80–85 per cent silica sand, 8–10 per cent clay, 3.5–6 per cent coal

dust, and 3–4 per cent water. The water helps to develop the bonding characteristics of the clay and bind the sand grains together. The mixture is weak enough to flow and be packed

tightly around a pattern but rigid enough to retain its shape during withdrawal of the

pattern and pouring of the metal. The advantages of green sand moulding process include the following:

Low material costs

Reusability of the material Environment friendly—problem-free disposal of waste material

Ease of mould production

Possibility of a nearly closed sand circulation system.


41

The disadvantages of the process include: (1) practical limits to the complexity of design and

dimensional accuracy; and (2) machining usually required to achieve the finished product.

b) Dry sand moulding process

Most of the moisture is removed by drying the moulds at a temperature just above 100°C. Dry sand moulds are much more rigid as compared to green sand moulds and, hence, they

can withstand much greater pressures also. Hence, this process is commonly adopted to

manufacture large and heavy castings such as ingot moulds, rolls, engine cylinders, large gears, and housings. Some foundries use the process to cast intricate parts as well. The

advantages of dry sand moulding include: (1) better dimensional accuracy and surface finish

compared to green sand; and (2) moulds can withstand additional handling. The disadvantages include: (1) more expensive than green sand moulding; and (2) not suitable

for high production rates.

4.1.7.2 Chemically bonded sand moulding processes

Chemically bonded sand moulding processes use some chemical binder. A chemical reaction

takes place during mixing of the sand and binder or by introduction of a gas or application of heat. Some of the common chemical bonded sand moulding processes like sodium

silicate/carbon dioxide, no bake air set processes, and shell moulding are briefed below.

a) Sodium silicate/carbon dioxide (CO2) process

The sodium silicate/carbon dioxide (CO2) process is one of the oldest of no bake binder

systems. It is also one of the most environment-friendly moulding processes. The sand is

mixed with sodium silicate, and CO2 is introduced, after the mould has been compacted.

The CO2 reacts with the sodium silicate and hardens the binder.

Advantages:

The process can be automated

Good dimensional tolerances and surface finish possible Wide range of mould sizes is possible.

Disadvantages: The moulds cannot be stored for a long time since the binder is hygroscopic

Shakeout and collapsibility of the mould is slower.

b) No bake, air set sand moulding processes

In these processes, the refractory sand is mixed with a binder, typically furan or urethane in

a mixer. A liquid catalyst is then added, which hardens the binder. The setting time can be controlled by the amount of catalyst added.

Advantages: Good dimensional accuracy

Uniform hardness of the mould

Intricate designs are possible.


42

Disadvantages: The sand mixtures can only be stored for a limited time Patterns require more maintenance.

c) Shell sand moulding

Shell moulding is one of the earliest, heat cured automated moulding techniques. The

process uses fine-grained, high purity sand that contributes towards improving the surface

finish of the mould. The mould is literally a shell, about 10 mm (0.4 inches) thick. The sand is coated with a thermosetting resin which provides the relatively high strength enabling a

thin section, or shell, mould to be produced. The mould is formed when the resin-bonded

sand is placed in contact with a heated pattern plate. Ejector pins help separate the mould from the pattern. Further improvement in casting accuracy can be obtained if zircon sand is

used instead of silica sand. Some of the products that are made by shell moulding include

camshaft, valve tappets, rocker arm, etc.

Advantages: Lower capital plant costs, when compared with mechanized green sand moulding Capital outlay on sand preparation plant is not essential

Lightweight moulds are produced which are readily handled and have good storage

characteristics Shells have excellent breakdown at the knockout stage

Lower cleaning and fettling costs

Castings have a superior surface finish and dimensional accuracy, when compared with green sand moulded castings.

Disadvantages: Best suited for high volume production because of higher pattern cost

Raw materials are relatively expensive

Size and weight range of castings is limited The process generates noxious fumes which must be effectively extracted.

4.1.7.3 Permanent moulding process

In permanent moulding processes, the mould is used repeatedly unlike sand moulds, which

are destroyed after every pouring. For cast iron, this process is used to produce small ferritic

gray and ductile iron castings. If sand cores are used, the process is called „semi-permanent moulding‟. The molten metal is usually poured into the mould by gravity, with the mould in

vertical position. The mould halves are preheated and the internal surfaces are coated with

refractory.

Advantages: Superior mechanical properties of the cast iron due to the chilling effect of the metal

mould

Useful for high-production runs

Good surface finish and dimensional tolerances.


43

Disadvantages: High cost of tooling Limited for small castings for ferrous alloys.

4.1.7.4 Special and innovative moulding processes

Some of the recently developed moulding processes use innovative methods to produce

castings. Although some of these processes are now proven, new developments are still

taking place in these moulding processes. In this section, some of the special and innovative moulding processes for production of iron castings are described.

(i) Lost foam process

There has been a rapid increase in the use of lost foam process to produce large volumes of

complex automotive components. In the lost foam process, pre-forms of the parts to be cast

are first moulded in expanded polystyrene using aluminium dies. These pre-forms are then glued together to form complex shapes which are then assembled around a gating and

runner system. The foam pre-forms are then coated with ceramic coating, which helps to

prevent inclusions as a result of sand erosion during filling. Dry sand is then compacted around the pre-form. The molten metal vaporizes the pre-form and replaces it to form the

casting. A new pattern must be made for each casting and, hence, the process is known as

the lost foam casting process. The process is suitable for production of iron (gray, ductile and malleable) castings up to about 50 kg and is also used for production of aluminium and

copper based alloy castings.

Advantages:

Complex shapes can be cast

Machining can be eliminated as good dimensional accuracy is achieved No cores are needed

Minimum finishing (shot blast and grinding) needed

Capital cost is lower than high volume automatic green sand moulding for high production rates.

Disadvantages: Expensive pre-form tooling restricts the process to long run castings

Specialized casting equipment is needed

Tight process controls required Longer development times for new castings.

(ii) Vacuum “V” process

The V process is a proprietary process, more suitable for jobbing applications. The V process

uses a film heated to its deformation point and then draped by application of vacuum on

pattern. Dry unbonded sand is used to fill the moulding box that is compacted using vacuum. The pattern is stripped from the mould and the two halves assembled and cast

with the vacuum on.


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Advantages: Excellent surface finish Thin wall castings can be made

Long pattern life

Good reproduction of details.

Disadvantages: Plated pattern equipment required Synchronization of mould and metal is required.

4.1.7.5 Process of filling the mould

(a) Hand moulding

In hand moulding, the moulder physically compacts the sand around the pattern or uses

pneumatic hand tools. Wood patterns are commonly used in this technique. In some cases, the pattern is attached to a board or plate. The process has greater flexibility to produce a

wide variety of products and requires low capital investments. However, there are

disadvantages such as higher moulding defect percentage, limitation in producing larger volumes, and is highly labour intensive. Hand moulding technique is still quite common

among small-scale foundry units in India.

(b) Floor and pit moulding

Floor and pit moulding techniques are usually used for large castings. The pit is dug in the

foundry floor. When the pit mould is finished, it is covered with a cope flask. Floor and pit moulding is also common among small-scale foundry units in India.

(c) Machine moulding

The increasing demand for castings of better dimensional accuracy and surface finish has led

to the development of moulding machines, which produce the high-density moulds

necessary to meet the customers‟ demands. Moulding machines may be either: Individual machines such as the traditional jolt-squeeze machine; or

Automatic machines, which will often be part of fully automated lines, incorporating

stations from sand box delivery through to knock-out.

Jolt-squeeze machines: In the case of jolt-squeeze or jolt-simultaneous jolt-squeeze

machines, the jolting mechanism ensures the moulding sand contains no voids and is equally distributed in the moulding box prior to final consolidation by hydraulic or

pneumatic pressings.

Machine moulding—automatic or high-density moulding: Automatic moulding machines,

two large turntables and one small one. The employee uses the moulding equipment and

black sand to create sand blocks which have a pattern pressed into the sand. The bottom of the mould is made first, if a hollow spot is needed, a core is placed into the mould. A sand

“top” is placed on the mould to make a sand block with a pouring hole. The sand block is

then transported by belt to the pouring station, where an employee pours iron into the mould, creating the desired casting. High pressure moulding machines can use moulding


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sand having lower moisture contents and, hence, higher mould densities can be achieved.

The castings have better dimensional accuracy and better surface finish.

(d) Disamatic moulding machines

One recent innovation in green sand moulding has been introduction of flaskless moulding. This totally mechanized mould producing system is common among modern foundries in

industrialized countries. Disamatic is a flaskless moulding technique for producing high

volume production moulds. Disamatics offer a highly efficient means of rapidly and automatically creating a string of flaskless moulds. The moulds can be built for a vertical or

horizontal moulding environment.

4.1.8 Core preparation

Core making is a craft that combines the latest technology with more traditional practical

processes. Cores are forms that are placed into the mould to create the interior contours of the casting. They are typically made of clay-free silica sand mixture. The sand is thoroughly

mixed with suitable binders, water, and other ingredients in Muller-type mixers. A range of

binders from vegetable oils to synthetic resins like phenol formaldehyde is used.

4.1.8.1 Types of cores

The core should be strong yet collapsible, so they can be easily removed from the finished casting. Since cores are made in moulds, they require a pattern and mould, called a core box.

The core pattern is made in the same fashion as the casting pattern, but the core box is

created from a durable material like metal or wood. Automatic or semi-automatic is now

used for rapid production of small-medium sized cores in modern foundries. The core

production is faster and the cores can be directly conveyed to continuous core drying ovens

for baking. Cores are classified by the type of binder used. Some commonly used types of cores are given below.

i) Green sand core

The use of green sand cores, where feasible, may yield considerable cost savings. The cost of

the binders and baking are eliminated. The chief consideration with green-sand cores is how

to handle them and set them into the moulds. A green-sand core can sometimes be rammed up on top of a dry-sand core base. Another method is to ram the green-sand core around an

arbor with which it can be lifted.

ii) Oil sand cores

The oil sand method is a very old and time-honoured method. The core binder principally

consists of vegetable oil, like linseed oil or a mixture of vegetable oil and mineral based oil. Oil sand cores can be made very accurately. However, each core has to be handmade and

requires heating in a core oven. Oil sand cores are being phased-out in modern foundries in

industrialized countries, are used only for short-runs or prototype production.


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iii) Air-set cores

Air-set cores are no-bake cores made from air setting binders. These cores are ideal for short runs and can be made in simple core making machines.

iv) Shell cores

Shell cores are easily identifiable because they are yellowish in colour. Hollow cores are

made on special machines using resin coated sand and use natural gas flame in the process.

Shell core production is relatively fast and efficiently mechanized. The sand–resin mixture is poured, or blown under low pressures, into the interior of a heated metal core box. After

sufficient period of time, the loose mix is poured out, leaving a shell adhering to the heated

core-box surfaces. After heating for the additional curing, the shell core is removed from the core box. Shell cores are widely used in modern foundries. Hollow cores offer the

advantages of reduced sand consumption, easy breakdown during the shakeout process,

and excellent casting finish. However, even shell cores are being phased out slowly in state-of-the-art foundries in the Western countries.

v) Iso-cure cores

Unlike oil sand and shell cores, which use heat to harden the cores, iso-cure cores use

chemical catalysts to quickly bond the sand together. The name „iso-cure‟ is a trade name

given to isocyanate based binder system developed for use in the cold box process of core construction. Because of the efficiency and quality of the resulting core, state-of-the art

foundries are in the process of converting the majority of their cores to iso-cure.

4.1.8.2 Core-making processes

Cores can be made manually or in core making machines. There is a wide range of core

making machines—suited for semi-mechanized operation to fully-mechanized operations. The core making machines can be classified into four broad categories as per the core-

making process used by them. These include: (1) cold or gas cured process, (2) hot process,

(3) air-set process, and (4) shell core machines.

i) Cold or gas cured process

The cold box or gas cured process is a rapid core making process that does not require application of heat to cure the cores. Hardening of the cores is accomplished by chemical

reaction rather than by conventional baking. A phenolic resin is added to the sand used to

make the core. This resin reacts chemically when exposed to an accelerator (typically an

active organic gas) and hardens very quickly, forming an organic bond in the core sand. This

reaction occurs at room temperature and does not require special core boxes or equipment.

Additionally, since the bond is organic, the sand collapses readily during shakeout and can be recovered easily from the casting.

Maximum core size: Cold box processes can typically produce cores up to 150 lbs (68 kg).


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Machine specifications: The machines are designed for use with either horizontally or

vertically parted core boxes. They feature fast, automatic operation, including sand blowing, gassing and purging cycles, and mechanized core removal by belt conveyor on selected

models.

Advantages: Cold processes permit the use of cores of good dimensional accuracy and

eliminate the need of baking. These processes involve the room temperature cure of two or

more chemicals after they have been mixed thoroughly.

ii) Hot process

The hot box process is a method of making chemically hardened cores within a heated core box. Special resin coated sands are used in this process. The resin materials used for hot box

process are a combination of urea, formaldehyde, phenol formaldehyde, and furfuryl

alcohol. The material becomes very hard and rigid upon contact with the hot core box. To form and cure the core, the core box is heated to about 250oC. The curing temperatures

depend on the type of resin, catalyst, and section thickness of the core. Complete curing

while the core is still in the box results from the residual heat in the core, eliminating the need for conventional dryers or ovens.

Maximum core size: Hot processes can typically produce solid shell cores up to 200 lbs (92 kg).

Machine specifications: The hot process core machines can operate with all popular hot box, warm box, and shell processes. Natural gas or bottled gas is used for heating. The machines

are dedicated for use with either horizontally or vertically parted core boxes. They feature

automatic operation of the core producing cycle, including blowing, heating/curing, ejection, and mechanized core removal on selected models. Shell cores can be produced

using separate blow and drain systems (including automatic sand return) for efficient

production of even the most intricate cores.

Advantages: The rigidity of the shell core helps in improving surface finish and dimensional

accuracy. The process is adaptable for mechanization

The shells can be stored for future use

Less sand is used compared to other core making processes.

iii) Air-set processes

Air-set machines are used to produce no bake core using air-setting binders.

Maximum core size: Air-set processes typically produce core up to 50 lbs (22.6 kg).

Machine specifications: These machines require little or no tooling modification, no special

seals, and minimal core box venting. Some machines are equipped with an integrated

continuous sand mixer.


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Advantages: Useful to blow shot runs of cores using any tooling (loose, wooden, vertically, or

horizontally parted)

Ease of operation of the machine.

iv) Shell core machines

Shell core machines feature manual or hydraulic rocking motion of the core box to ensure

that sand is invested into all cavities, and that after investment, all loose sand is drained away before cores are cured and removed.

Maximum core size: Shell core machines typically produce core up to 50 lbs (22.6 kg).

Machine specifications: Shell core production is relatively fast and efficiently mechanized.

Manual or hydraulically powered machines are available with a variety of manual, semi-automatic, and automatic control options.

Advantages: Hollow cores offer the advantages of reduced sand consumption, easy breakdown during the shake-out process, and excellent casting finish.

Suppliers of core making machines: There are a number of reputed suppliers of core making machines. Names of some of the large manufacturers include Foundry Automation (Italy),

Redford Caver (USA), and DISA (UK).

4.1.9 Compressor

Compressors can be broadly classified into dynamic and positive displacement types.

Dynamic compressors are centrifugal compressors, and are categorized as radial and axial flow types. Positive displacement compressors are mainly categorized as reciprocating and

rotary compressors, having further sub-classifications. While dynamic compressors increase

the velocity, which is then converted to increased pressure at the outlet, positive displacement compressors increase the pressure of the gas by reducing the volume. The

most commonly used compressors in the industries are the reciprocating, centrifugal, and

rotary types.

4.1.9.1 Centrifugal compressor

Centrifugal compressors are necessary wherever high quantity of compressed air is constantly required. The major limitation of a centrifugal compressor is that it operates at

peak efficiency at design points only, and any significant deviation from this point will be

detrimental to its performance. A small change in compression ratio produces a marked change in compressor output and efficiency. Centrifugal machines are less efficient than

reciprocating machines at smaller capacities, but are better suited for applications requiring

very high capacities. These compressors have low initial cost and are compact for large capacity requirements. The advantage of centrifugal compressors is smooth and pulsation-

free operation. They also require less maintenance than reciprocating compressors. The

output of centrifugal compressors can be controlled by using variable inlet-guide vanes and throttling of suction or discharge pressures (up to some extent only).


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4.1.9.2 Reciprocating compressor

Several types of reciprocating compressors are available, namely, single- or multi-stage, lubricating and non-lubricating, and single- and double-acting. Single-stage compressors are

normally used for a pressure ratio of up to four, while multi-stage compressors are

economical for situations above this ratio. Other associated advantages of multi-stage compressors are reduced air temperature and pressure differential, which reduces the load

and stress on valves and piston rings. Non-lubricating compressors are especially used for

providing air to the instruments and for processes that require oil-free air. Double-acting compressors are used for higher capacities, as the quantity of air delivered is twice the

normal at a given speed. Reciprocating compressors are generally best suited for medium

pressure and volume applications. They are comparatively cheap, rugged in design, and have fairly high efficiencies. The disadvantages with this type, however, are the pulsating

output and higher installation costs due to relatively high vibrations.

4.1.9.3 Rotary screw compressor

Rotary screw compressors have several advantages over reciprocating compressors. They

are inherently more reliable and require less maintenance as they have few moving parts. Further, the maximum temperature anywhere in the compressor does not exceed 100oC,

thus, obviating the need for cooling the casing. In screw compressors, the suction and

discharge valves are replaced by ports in the housing, and the piston is replaced by rotors. It consists of two helical rotors; an electric motor drives a rotor shaft, which in turn drives the

other rotor. These compressors have less wear and tear and vibrations, and require smaller

foundations. The advantages of a screw compressor are its smaller size, lighter weight, step-less capacity control, and less starting torque requirement. Also, the performance of screw

compressors, unlike reciprocating and centrifugal compressors, is not affected by the

presence of moisture in the suction air.

4.1.9.4 Compressor automatic control

Different compressor manufacturers are supplying in-built online/offline control with auto start and stop to minimize human intervention in efficient compressor operation. Online/

offline allows the compressor to operate at two points on the capacity curve. The first is 100

per cent full-flow. The second is no flow. The online/offline control is a power saving mode of operation. The unloaded operation provides for immediate, rapid compressor internal

system blow-down to minimize power requirements. The compressor will automatically

reload to 100 per cent capacity when the system falls to the online pressure setting. This allows the compressor to run unloaded for a predetermined time. All compressors are

factory set to a minimum of 10 minutes. This can be adjusted to a maximum interval of 32

minutes considering compressed air requirement in the plan. If there is no demand within that period the unit shuts down to standby and will automatically restart and reload, if the

system pressure falls to the online pressure setting.


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4.1.10 Other areas

4.1.10.1 Energy efficient motors and pumps

BEE has an on-going programme called “Standards and Labelling” (S&L) covering few

identified equipment that include motors and pumps to indicate energy efficiency grade

rating. The energy efficiency ratings are indicated using number of stars; depending upon the efficiency level and other relevant criteria of evaluation, rating could be 1–5 stars. Star

rating of the most energy efficient system is 5. Energy-efficient star rated motors may be

preferred on the following circumstances: New motor installations in the plant

Procurement of new equipment packages like compressors, HVAC systems, and

pumps Major expansion and modifications are made to facilities or processes in the plant

Rewinding older and standard efficiency equipment

Replacement of oversized and under loaded motors.

Although failed motors can usually be rewound, it is preferable to change a damaged motor

with a new energy-efficient model to save energy and improve reliability instead of rewinding under any of the following conditions:

Motor rating below 40 hp

Repair cost more than 65 per cent of procurement cost of new EE motor.

The economic viability of an EE motor in a specific situation can be evaluated by estimating

simple payback period for the investment through potential energy saving from the select equipment. The extra cost of an energy-efficient motor is often quickly repaid in energy

savings. The annual energy savings could be calculated using the following formula:

where,

hp = Motor rated horse power Lf = Load factor (percentage of full load/100)

T = Annual operating hours

R = Average energy rate (Rs/kWh) Estd = Efficiency of standard motor in per cent (%)

Eee = Efficiency of alternative energy-efficient motor in per cent (%)

0.746 = Conversion from horsepower to kW units

Simple payback period is the ratio of total cost in rupees of the motor to annual savings in

rupees per year. Total cost normally excludes installation costs for new installation when motor is purchased from different alternatives. However, it is advisable to consider

installation cost to estimate the total cost for replacing an existing and operating motor in the

plant.


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4.1.10.2 Energy efficient lighting

The function of interior illumination is to provide human beings with an environment which contributes to their mental and physical well-being and prevents accidents. In addition, it

should influence the mental state of the persons involved with the aim of achieving a higher

degree of performance, combating premature fatigue, and reducing errors. The choice of the right type of light sources and luminaires is, therefore, crucial for appropriate illumination

in any industrial site. BIS provides guidelines for the lighting designer on the luminance

levels required for various applications and visual tasks. It is essential to explore various alternative lighting options considering colour rendering and illumination required for

specific application in an industrial site. Some of the latest practices for industrial lighting

are provided below, which will improve energy efficiency in lighting.

i) Use luminaires with energy efficient T5 fluorescent lamp instead of conventional 40 W FTL

Apart from excellent colour rendering properties, these lamps have higher luminous

efficacy. Less number of luminaires will be required due to improved illumination, hence,

reducing the cost of installation. This also ensures lower energy consumption of the total installation for same illumination level.

ii) Installation of compact fluorescent lamps (CFLs) in place of incandescent lamps

Compact fluorescent lamps are generally considered best for replacement of lower wattage

incandescent lamps. These lamps have efficacy ranging from 55–65 lumens/Watt. The

average rated lamp life is approximately 10 times longer than normal incandescent lamps. CFLs are highly suitable for places such as conference rooms, offices, pathways, building

entrances, and corridors.

iii) Installation of metal halide lamps in place of mercury / sodium vapour lamps

Metal halide lamps provide high colour rendering index when compared with mercury and

sodium vapour lamps. These lamps offer efficient white light. Hence, metal halide lamp is the right choice for colour critical applications where, higher illumination levels are

required. These lamps are highly suitable for applications such as assembly line, inspection

areas, and painting shops.

iv) Installation of high pressure sodium vapour (HPSV) lamps for applications where colour rendering is not critical

High pressure sodium vapour (HPSV) lamps offer more efficacies. But the colour rendering

property of HPSV is very low. Hence, it is recommended to install HPSV lamps for

applications such as street lighting, yard lighting, assembly workshop, and storage area.

v) Use of T5 luminaires for low bay / medium bay applications

Traditionally, luminaires with HPMV lamps were used for low bay applications. In view of the energy efficiency offered by T5 luminaires, customers are selecting T5 luminaires for low

bay and medium bay applications. Use of high efficacy T5 lamps (24 W/54W T5) ensures

lower number of luminaires for same installation.


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vi) Use of electronic ballasts for fluorescent lamp luminaires and open type ballasts for high-intensity discharge (HID) luminaires

Electronic ballasts ensure flicker-free high quality illumination for fluorescent lamp

luminaires. They also provide substantial energy savings as watt loss in ballast is 2–3 W

only. Conventional potted ballasts have now given way to vacuum pressure impregnated—open construction ballasts in HID lamp fittings. This ensures lower heating and more

reliable operation.

vii) Use of e-lamps

There are innovative energy efficient e-lamps lighting options of different categories, like

self-ballasted constant-temperature energy-saving fluorescent T5 tube, sunlight induction e-lamp and fixtures, etc. These are available in the market at commercial price. These

products have the following advantages:

Extremely long life Highly efficient and energy saving

Instant starting, no cold-start

No flickering Perform well under extremely cold conditions

Bright, white light ( CRI>80)

Improved visibility and security No glare and light pollution.

viii) Use of induction lamps

It is an electrode less fluorescent. Without electrodes, the lamp relies on the fundamental

principles of electromagnetic induction and gas discharge to create light. The elimination of

filaments and electrodes results in a lamp of unmatched life, which is rated to be 100,000 hour. The list of features of induction fixtures outdoor and indoor is so impressive that

induction lighting is emerging as one of the best technologies in lighting. Induction lighting

is even more attractive and useful in applications where lamp replacement is very difficult and expensive, as in many outdoor applications, hard-to-reach installations such as

industrial plants with 80 ft ceilings, hazardous applications like refineries, tunnels, mines,

airports, and others.

4.2 Best operating practices in foundry

4.2.1 Best operating practices in induction furnace

Efficient operation of coreless induction furnace depends primarily on implementation of

best operating practices (BOP). The steps involved in operation of induction furnace are

shown in Figure 4.2.1. Best operating practices under each of the stages are elaborated in the following section.


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Figure 4.2.1: Operational steps of induction furnace

4.2.1.1 Charge preparation and charging

The best practices for charge preparation and charging are provided below.

The raw material must be weighed and arranged on melt floor near the furnace

before starting the melting, e.g., for 500 kg crucible weigh and keep 500 kg raw

material ready. Charge must be free from sand, dirt, and oil/grease. Rusty scrap not only takes more

time to melt, but also contains less metal per charging. Use of clean, dry, and dense

charge material will result in energy saving. The maximum size of a single piece of metal/scrap should not be more than one-

third. of diameter of furnace crucible. It avoids problem of bridging.

Furnace should not be charged beyond the coil level, i.e., charging the furnace to its capacity. It should be noted that as furnace lining wears out the charging may

slightly increase.

Proper charge sequence must be followed. Bigger size metal first followed by smaller

size and gaps must be filled by turnings and boring.

The foundry return, i.e., runner and risers must be tum blasted or shot blasted to

remove the sand adhering to it. Typically, runner and risers consists of 3–5 per cent sand by weight.

Process control through melt processor leads to less interruptions. Typically, reduce

interruptions by 2–4 minutes. Limit the use of baled steel scrap and loose borings.

Use charge driers and pre-heaters to remove moisture and pre-heat the charge.

4.2.1.2 Melting and making melt ready

The best practices for melting are as follows:

Follow the melt process and run the furnace with full power.

Use lid mechanism for furnace crucible, radiation heat loss accounts for 4–5 per cent

input energy, e.g., 500 kg crucible melting at 1,450°C with no lid cover leads to

radiation heat loss of up to 25 kWh per tonne. Avoid build-up of slag on furnace walls.

Proper tools must be used for de-slagging. Use tools with flat head instead of rod or

bar for de-slagging; it is more effective and takes very less time. Spectro-testing lab must be located near the melt shop to avoid waiting time for

chemical analysis.

Avoid unnecessary super-heating of metal. Super-heating by 50°C can increase furnace specific energy consumption by 25 kWh per tonne.

Charge preparation

Charging Melting Make the

melt ready

Emptying the

furnace


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4.2.1.3 Emptying the furnace

The best practices for emptying the furnace are as follows: Optimization of the ladle size to minimize the heat losses and empty the furnace in

the shortest time.

Optimization of the ladle transportation. Plan melting according to moulding. Metal should never wait for mould—rather

mould should be ready before metal.

Use of ladle pre-heater. Proper positioning of burner is important to get uniform heating.

Quantity of liquid metal returned to furnace must be as low as possible.

Glass-wool or ceramic-wool cover for pouring ladle. Minimize plant breakdown by implementing a planned maintenance schedule.

4.2.1.4 Furnace lining

The best practices for furnace lining are provided below.

Select the correct lining material. Use of better lining refractory material will lead to

larger number of melts per lining (in the range of 350–380 melts per lining). Silica based ramming mass is commonly used for acidic lining of induction furnaces. Some

reliable suppliers of this refractory material include Daka Monolithics and Allied

Mineral Products. Do not increase lining thickness at bottom or sidewalls. Increase in lining means

reducing capacity of furnace.

Do not allow furnace to cool very slow. Forced air cooling helps in developing cracks of lower depth, this helps in faster cold start cycle. Cold start cycle time should be

ideally not more than 120 per cent of normal cycle time.

Do not remove worn-out lining without witnessing. Measure left over thickness of lining, erosion up to 50 per cent is SAFE.

Coil cement should be smooth, in straight line, and having thickness of 3–5 mm.

While performing lining, ensure that each layer is not more than 50 mm. Compaction is better with smaller layer.

Consider use of pre-formed linings.

Monitor lining performance.

4.2.1.5 Energy monitoring and data analysis

The best practices for energy monitoring are provided below. Separate energy meter for furnace must be installed.

Monitor energy consumption on heat by heat basis. Analyse them in correlation with

production data to arrive at specific energy consumption of furnace on daily basis. Any peak or valley in data must be studied and investigated.

Energy monitoring the first step for achieving energy saving.

4.2.1.6 Others

Effective raw material storage is important for optimum performance of the furnace

equipment.


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Coil cooling and panel cooling water‟s temperature and flow rate must be monitored

regularly to assess the condition of the furnace refractory lining and the coil losses. The panel must be checked on weekly basis and cleaning must be done on monthly

basis.

Check the condition of fins in cooling tower, do cleaning of fins on monthly basis.

4.2.2 Best operating practices in cupola furnace

Efficient operation of cupola furnace depends primarily on implementation of best operating practices such as provided below.

4.2.2.1 Brick lining in cupola

Good operation of cupola is very much dependent on proper lining work with good

refractory bricks of IS-8 grade. Double row of refractory bricks is normally used up to

charging door height and single row above that height. A sand packing of 20–25 mm is provided between shell and refractory brick lining for expansion clearance. The refractory

bricks are kept in place with the help of retainer rings.

4.2.2.2 Selection of firebricks

Good quality with proper dimension, preferably of IS-8 specification should always be used

for the virgin lining. Firebricks used for lining must be intact and bone dry. A simple test like tapping a brick with a hammer is useful to check the brick quality. A good brick will

give a sonorous tone whereas a damaged or wet brick will give a dull sound. Edges and

corners of the brick must be intact. A chipped or damaged brick, if used, can fail due to the high temperature and metal pressure resulting in metal penetration to the cupola shell

creating hot spots on the shell.

4.2.2.3 Mortar mix for refractory lining

This mixture is to be prepared in a tub or tank. A clay batch mixture of 90 per cent fire clay

and 10 per cent china clay is used. This should be soaked in water for 48 hours and then mixed well to a smooth paste before use.

4.2.2.4 Post run repair of cupola lining

Erosion of cupola lining during melting operation is natural. The erosion increases the

internal diameter of the cupola. A standard sliding stick gauge can be prepared and used to

measure the burn-back or erosion of lining after each melt. Figure 4.2.2a shows the schematic construction of such a slide gauge.


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In case of erosion/burn-back less than 3 inch (75 mm), patching material can be used to

repair the erosion. The refractory bricks can be used if erosion is more 75 mm. The cupola should be left for at least 24 hours for better drying of the patching material after repair. Six

bags of the patching material can be prepared by mixing four bags of refractory (or 3 bags of

refractory + 1 bag of fireclay) with three bags of grogs (1 bag of small grogs about 1/4 inch size and 2 bags of bigger grogs about 1/2 inch size). Water is mixed with the patching batch

material so as to ensure proper consistency. Finally, 2 kg sodium silicate can be added and

mixed with the material. A wooden bat, with slightly convex surface on one side may be used for ramming the patching material during cupola repair. Figure 4.2.2b provides a

sketch of a wooden bat which can be used for ramming.

4.2.2.5 General guidelines for lining of a new cupola

Proper inside refractory lining of the cupola is very important. The following important guidelines can be observed while undertaking the cupola lining:

a) Lighting arrangement must be made inside the cupola.

b) Mortar applied for brick-setting is important. Layer of mortar should be just enough so that the brick sets firmly onto the other. Excess mortar should be wiped clean.

Thick mortar layer is a weak point through which metal can penetrate causing hot

spots on the cupola shell or leak. Fire clay should be used for joining the bricks. c) Brick lining goes up to the charging door. Beyond this, CI hollow bricks are set up to

above the charging door. After the CI bricks firebrick lining is done up to the top.

For continuous type cupolas, where metal and slag flow out together, a dam has to be made in the siphon box to separate the metal from the slag. The height of the dam

needs to be calculated from the wind box pressure.

d) A newly lined cupola needs to be pre-heated slowly (at least 3–4 times) about a week before commissioning. A slow fire should be maintained inside the cupola. For

preheating the cupola, put some dry sand on the bottom, followed by firewood and

Figure 4.2.2a: Schematic view of a slide gauge

Figure 4.2.2b: Schematic view of a wooden bat


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coke in 2–3 instalments to a height of 1 m above top tuyeres. Leave the ignited coke

bed overnight. Launder may get heated by burning firewood. It is inevitable that some cracks will appear and these should be patched before the first melt.

e) The first melt should be of short duration, say 2 hours. After the melt, a ganister

patch should be applied in the normal manner. Burn-back during the first melt in a newly bricked cupola is generally considerably heavier than during normal

operation. It is not, however, necessary to re-brick the cupola but conventional

patching should be applied and then dried out slowly. f) Keep the tuyere aperture as specified in the drawing. A little slant in the lining work

just above the tuyeres prevents dripping metal and slag droplets to enter the tuyere

which causes air blockage.

Brick setting for tap-hole and slag-hole should be done in such a way that these can be

removed and replaced without disturbing the lining work. Both tap-hole and slag-hole get

enlarged after a couple of heats.

Bulk density of coke and charge calculation

An important part of successful cupola operation is correct coke bed height. The coke bed

weight can be theoretically calculated from the bulk density of the coke. To estimate the bulk

density of coke, build a dummy well having internal diameter equal to the cupola and height 2 feet. Figure 4.2.2c provides a photo view of bulk density estimation in progress.

Weigh coke and fill the dummy well.

The bulk density of coke is calculated from the formula:

where, Pi (π) = 3.14

D = Diameter of dummy well (in metre)

H = Height of dummy well (in metre) (or 2 ft, i.e., 0.61 m)

Figure 4.2.2c: Photo view of bulk density estimation


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The bulk density of the coke is useful to theoretically estimate the weight of bed coke, bed

limestone, and details of split charges. For optimum combustion, it is recommended to keep the height of the bed coke about 900 mm or 3 ft above the top tuyeres centre line as shown in

Figure 4.2.2d. For best results, the split coke should occupy a height of 8 inches inside the

cupola as shown in Figure 4.2.2d.

Figure 4.2.2d: Schematic view of coke heights in DBC

The following relations are useful to calculate various charge details for smooth cupola operation:

Bulk density: To be estimated as explained above using dummy cylinder of same ID

of cupola Bed coke: Quantity to be estimated considering bulk density to maintain height of

900 mm above centre line from upper tuyere

Bed limestone: Normally, use 15–16 per cent of bed coke amount

Charge coke: Quantity to be estimated considering bulk density to maintain height of

200 mm

Charge limestone: Generally, one-third of charge coke Charge booster coke and limestone: Around 50 per cent of charge amount is used

Metallic: Follow optimum metal to coke ratio to estimate total metallic quantity per

charge without compromising desired melt quality. The quantity of pig iron should preferably be restricted to 40 per cent of total metallic quantity per charge.

Charge coke height 200 mm (8 inch)

Bed coke height 900 mm (3 ft) above upper tuyere


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4.2.3 Best operating practices in compressed air system

The best operating practices in compressed air system are provided below. Location of compressor:

o The compressor room must be clean, dust free, dry, and as cool as possible

o Avoid direct exposure to sunlight o Additional heat producing units or line systems should not be installed in the

same room or should be well isolated

o The floor must be capable of taking the load of the system weight o Locate the unit as level as possible

o Ensure adequate ventilation: room temperature = cooling air temperature (min:

+5°C and max: +45°C) o It is to be installed closer to point of use.

Selection of compressor is to be done considering the fluctuation of load in the plant as

screw and centrifugal compressors are suitable for base or full load applications but for part load applications, reciprocating compressors are most suitable.

Compressed air should be cooled to an ambient temperature before entering into the

system by using inter- and after coolers. Analyse whether air at lower pressure can be used in the process. Reduction in

discharge pressure by 10 per cent saves energy consumption up to 5 per cent. Restrict use of compressed air to the essential points and arrest leakage of compressed

air. A leakage from a ½ inch diameter hole from a compressed air line working at a pressure of 7 kg/cm2 can drain almost 3,000–3,500 per day.

The inter-coolers and after-coolers in a multistage compressor are essential to ensure

perfect cooling of air and reduce power consumption. Every 5ºC rise in intake air

temperature will increase the power consumption by 2 per cent. Proper filters should be provided to facilitate clean air intake for the compressors.

These filters should also be cleaned regularly.

Fouling of inter-coolers can lead to poor heat exchange efficiency, higher compressed air temperature, and finally poor compressor efficiency.

Fouling of after-coolers and dryers can lead to moisture in distribution pipelines,

leading to corrosion of pipelines and end-use equipment. Maintain optimum pressure setting, which may be 0.5 kg/cm2 more than maximum

requirement in the process. Increase by 1 kg/cm² in discharge pressure increases the

energy consumption by 4 per cent. Lowering of operating pressure by 1 psig will reduce the power consumption by 1.4 per cent (when operating pressure is 90 psig).

Use of variable speed drive decreases energy consumption.

Dedicated compressor for low- and high-pressure system is good where significant difference of pressure exists.

Proper piping also reduces energy consumption. The following points must be

considered while designing the distribution network: o The main line should have a minimum slope of 1 inch for every 10 ft in the

downstream to facilitate water drainage from the nearest drain point.

However, this slope is not needed if an effective air dryer is provided in the system.

o The distance between two drain points should not exceed 30 m.

o Branch tapings should be taken from the top of the main pipeline. o Adequate auto drain traps and strainers must be provided in the main and

branch lines.


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o Separators should be provided before the pneumatic equipment to get rid of

any moisture still left in the system. Separators are, however, not required if an effective air dryer is used.

o Valves may be used to isolate lines in the plants where air is not required

during certain shifts or days.

4.2.4 Best operating practices in electric motor

The best operating practices in electric motor are provided below. Motors should be operated at maximum load factor.

Old motors are to be replaced in a phased manner with energy efficient motors.

All phase of motors are to be supplied with balance voltage for optimum performance.

Belt tension should be proper to reduce power transmission losses.

Improve power factor by installing capacitors to reduce KVA demand charges and also line losses within the plant.

Improvement of power factor from 9.85 to 0.96 will give 11.5 per cent reduction of

peak KVA and 21.6 per cent reduction in peak losses. This corresponds to 14.5 per cent reduction in average losses for a load factor of 0.8.

Avoid repeated rewinding of motors. Observations show that rewound motors

practically have an efficiency loss of up to 5 per cent. This is mainly due to increase in no load losses. Hence, use such rewound motors on low duty cycle applications

only.

Use of variable frequency drives, slip power recovery systems, and fluid couplings for variable speed applications such as fans, pumps, etc., help in minimizing

consumption.

4.2.5 Best operating practices in cooling tower

The best operating practices in cooling tower are provided below.

Replacing the inefficient aluminium or fabricated steel fans by moulded FRP fans with aerofoil designs can lead to electricity savings in the range of 15–25 per cent.

In a typical 20 ft diameter fan, replacing wooden blade drift eliminators with newly

developed cellular PVC drift eliminators reduces the drift losses by 0.01–0.02 per cent with a fan power energy saving of 10 per cent.

Installation of automatic ON-OFF switching of cooling tower fans can save up to 25–

30 per cent on electricity costs. Use of PVC fills, in place of wooden bars, results in a saving in pumping power of up

to 20 per cent.

4.2.6 Best operating practices in pumping system

The best operating practices in pumping system are provided below.

Improper selection of pumps can result in huge wastage of energy. A pump with 85 per cent efficiency at rated flow may have only 65 per cent efficiency at half the flow.

Use of throttling valves instead of variable speed drives to change flow of fluids is

not a recommended practice. Throttling can cause wastage of power to the tune of 50–60 per cent.


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It is better to use a number of pumps in series and parallel to cope with variations in

operating conditions by switching on or off pumps rather than running one large pump with partial load.

Check transmission regularly. Loose belts can cause energy loss of 10–15 per cent.

Synthetic flat belts in place of conventional V-belts can save energy by 5–10 per cent. Efficiency of worn out pumps can drop by 10–15 per cent, if periodical maintenance

is not done.

4.2.7 Best operating practices in generator set

The best operating practices in a generator set are provided below.

Diesel generator (DG) set should be operated at more than 60 per cent loading of the engine to optimize SEGR (specific electricity generation ratio)

UPL (unit per litre of diesel) of the generator set to be between 3.8 to 4

Sensible heat loss through the exhaust gases is quite substantial and can be utilized in specific cases when it is available in large quantities and on a continuous basis

Replenishment of lubricating oil is to be undertaken as per the recommended schedule

to avoid wastage of oil and maintain quality of the lubricant Air supply to engine should be monitored and controlled. A 10 per cent drop in excess

air amounts to 1 per cent saving of fuel consumption in engine

Maintain diesel engines regularly A poorly maintained injection pump increases fuel consumption by 4 g/KWh

A faulty nozzle increases fuel consumption by 2 g/KWh

Blocked filters increase fuel consumption by 2 g/KWh.

4.2.8 Best operating practices in lighting system

The best operating practices in lighting system are provided below. Low efficiency incandescent and fluorescent lamps such as tungsten filament lamps

(GLS) can be replaced by fluorescent lamps or high-pressure mercury vapour lamps

(HPMV) or by high-pressure sodium vapour lamps (HPSV). Where it is difficult to change from incandescent lamps to more efficient lamps

(HPMV or HPSV), the blended light lamps (MLL) provide an interesting alternative

with no additional investment, as they are a plug-in replacement. A 1 m reduction in height of the ceiling can reduce 20–30 per cent energy consumption

by way of lower lighting requirement.

Painting walls and ceiling with light colours can reduce artificial light requirements. Unnecessary lamps can be removed or switched off, preferably by a timer switch.

Natural light can be effectively used by providing large fibreglass skylights and high

openings in the walls. Periodic cleaning of lamps and windowpanes will ensure full utilization of daylight

and artificial lights.

A slight reduction in operating voltage, in case of fluorescent tubes, would result in savings without affecting lighting levels appreciably. A separate voltage regulator,

which supplies about 380/390 volts to the lighting circuit, be used. In large/medium

scale industries, where the lighting consumption is high, it would be economically viable and technically feasible to have a separate 11 kV/240V – 3 phase transformer,

exclusively for lighting circuits.


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Scheduling controls help eliminate unnecessary use of lighting. Timed switching

controls ensure lighting systems are turned off, according to an established schedule. These devices range from simple timers to programmable sweep systems.

Use of electronic ballast in place of conventional choke saves energy up to 20 per cent.

Use of CFL lamp in place of conventional lamps can save energy up to 70 per cent. Illumination levels fall by 20–30 per cent due to collection of dust. Clean the lamps and

fixtures regularly.

Use of 36 W tube light instead of 40 W saves electricity by 10–12 per cent. Use of sodium vapour lamps for area lighting in place of mercury vapour lamps saves

electricity up to 35–40 per cent.

4.3 Success stories/case studies

4.3.1 Success story on demonstration of energy efficient DBCs in Foundry Cluster, Howrah, West Bengal

There are about 4,500 small-scale foundry units in India, with a collective annual output of

about 9 million tonnes of castings which are marketed both in India and abroad. The

foundry industry provides direct employment to an estimated 5,00,000 people.

The foundry sector is among the most energy intensive MSME sectors in India, consuming

around 6,00,000 tonnes of coke per year (equivalent to around 1,640,000 tonnes CO2). Melting is by far the most energy intensive stage of a foundry‟s operations. Recognizing the

potential to increase the energy efficiency of the conventional coke-based cupolas and

thereby reduce CO2 emissions, SDC partnered with TERI in a project to demonstrate and promote a more energy-efficient cupola for small-scale foundries in India. The Howrah

foundry cluster was chosen for demonstration of the energy efficient melting technology.

The Howrah foundry cluster is one of the oldest and largest foundry clusters in India. There

are about 300 foundries operating in the cluster that mainly produce low-value-added

castings such as manhole covers and pipes. Many of the foundry units still use poorly designed melting systems and sub-optimal operating practices.

The demonstration unit in Howrah, Bharat Engineering Works, was selected in consultation with the local industry association, i.e., Indian Foundry Association (IFA). In setting up the

DBC demonstration plant, the project adopted a “competence pooling” approach, i.e., it

brought together local and international experts in many disciplines like project management, foundry technology, energy management, cupola operations, and

environmental technology. Cast Metals Development Limited, UK, a BCIRA group

company, and consultants from M B Associates and Sorane SA provided crucial support and expertise in transferring technical know-how related to the DBC, and at every stage during

the design and commissioning the demonstration plant. The DBC was successfully

demonstrated in July 1998. The demonstrated DBC yielded energy savings of about 40 per cent compared to the conventional cupola. The DBC system paid back its capital investment

in less than two years. The following are the key performance indicators of TERI design

energy efficient DBC: Charge coke consumption is reduced (20–32 per cent)

Melting rate is increased (11–23 per cent)

Higher metal tapping temperature (45–50oC)


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Higher carbon pick-up (0.06)

Particulate emission at stack is 53 mg/Nm3, which is far below than permission level (The emission standard at stack is < 450 mg/Nm3 for production capacity more than 3 MT/hour but it is < 150 mg/Nm3 for production capacity less than 3 MT/hour).

A view of the DBC demonstrated at Howrah is shown in Figure 4.3.1.

4.3.2 Case study on EE induction furnace at Kolhapur foundry cluster

A typical foundry unit in Kolhapur foundry cluster manufactures around 430 MT per year

of castings. The energy consumption of the unit is around 75 ToE and the energy cost is

around 60 lakhs. The total CO2 emission is around 770 tonnes. A detailed performance study of the existing induction melting furnace and connected cooling tower was conducted.

The specific energy consumption of induction furnace was found to be 850 kWh/tonne,

which is much higher than the achievable SEC of 650 kWh/tonne.

On TERI‟s recommendation, the unit went for replacement of the induction furnace with an

improved EE induction furnace. Table 4.3.2 provides the detailed techno-economic analysis of the EE induction furnace replacement.

Table 4.3.2: Techno-economics of replacing inefficient induction furnace with EE induction

furnace

Parameters Unit Value

Capacity kW 175

Crucible kg 150

Specific energy consumption kWh per tonne 650

Cost benefit analysis

Existing SEC kWh per tonne 850

Proposed SEC kWh per tonne 650

Figure 4.3.1: View of demonstrated TERI design DBC at Howrah


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Parameters Unit Value

Baseline production tonne per year 432

Annual savings kWh per year 86,400

Electricity cost Rs per kWh 7.03

Monetary savings Rs lakh per year 6.07

Investment cost for induction

furnace and cooling tower

Rs lakh 12.72

Simple payback period Years 2.2

4.3.3 Case study on EE pump at Kolhapur foundry cluster

The cooling water pump in a foundry unit in Kolhapur foundry cluster was circulating the

raw water through the plate type heat exchanger for panel cooling. During the performance

analysis, the operating efficiency of the raw water pump was estimated to be 27 per cent, which is lower as compared to the design. The flow rate was less than the design flow rate,

which directly affected the performance of the induction furnace and cooling tower. The

power consumption of raw water pump was measured to be 6.0 kW. The water flow rate was measured to be 14.1 m3 per hour, which was less than the design flow rate (21.6 m3 per

hour).

Replacing the existing raw water pump with an energy efficient pump was recommended

by TERI. The implementation of this ECM has resulted in saving around 16,000 per year.

Table 4.3.3 provides the detailed techno-economic analysis of this measure.

Table 4.3.3: Techno-economics of replacing inefficient pump with EE pump

Parameters Unit Existing Proposed

Pump efficiency % 27 49

Flow rate m3 per hour 14.1 21.6

Input power kW 6.0 5.5

Annual operating hours hours per annum 4,800 4,800

Annual energy savings kWh per year - 2,277

Monetary benefits Rs per year - 16,006

Investment Rs - 26,381

Payback period years - 1.65

4.3.4 Case study on EE compressor with VFD at Kolhapur foundry cluster

A foundry unit in Kolhapur foundry cluster produces 6,000 MT of castings per year. The

corresponding annual energy consumption of the unit was estimated to be 490 ToE, and energy bill was about 368 lakhs. The total CO2 emission was about 5,100 tonnes. The plant

has two screw compressors for meeting the requirement of compressed air in the plant.

Compressed air is mainly used to operate moulding machines, pneumatic grinders, mould cleaning, and miscellaneous uses. The design specifications of existing compressors are

given in Table 4.3.4a.


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Table 4.3.4a: Design details of existing compressors

Particulars Unit Compressor 1 Compressor 2

Type Screw Screw

Operating mode Load and unload

Capacity Cfm 519.13 127.5

Pressure kg/cm2 7.6 7.6

Power kW 75 30

Compressor 2 is a stand-by system and compressor 1 is operated to meet plant requirement.

Performance monitoring of the operating compressor was undertaken in detail. Energy

audit of the compressor revealed the possibilities of reducing energy consumption. The operating air compressor‟s motor was found to have been re-wound thrice. The compressor

was tripping many times during the audit period. The on load power was 87 kW. The SEC

was measured as 0.414 kW/cfm. The compressor was generating 210 cfm against the design value of 520 cfm. The plant management admitted they are not able to meet full air

requirement. Plant was having one 127.5 cfm air compressor in fairly good condition in

other plant which was not under use. It was recommended to run this for base load and install a new air compressor with VFD to meet variable load. The VFD will minimize

compressor unload power consumption as per quantity of compressed air requirement by

optimizing speed of motor. The details of new VFD compressor were—capacity: 225 cfm, power 37 kW, and 7.1 bar. Table 4.3.4b provides the detailed techno-economic analysis of

the recommended EE project.

Table 4.3.4b: Techno-economics of replacing inefficient air compressor with EE invertor air

compressor

Actual Parameters Unit Air Compressor

Loading pressure kg/cm2 5.9

Unloading pressure kg/cm2 6.6

Loading power kW 87.0

Specific power consumption kW/cfm 0.414

Operational hours hours/year 7,200

Operation hours lost due to tripping and

rewinding

hours/year 850

Actual operation hours hours/year 6,350

Annual energy consumption kWh/year 5,52,450

Base load screw compressor

Capacity Cfm 127.5

Pressure kg/cm2 7.6

Power kW 30

Specific power consumption kW/cfm 0.190


Air compressor with VFD Unit Air Compressor

Capacity Cfm 225

Pressure kg/cm2 7.1

Power kW 37

SEC kW/cfm 0.180

VFD saving (maximum 35%) 25%

Unload mins per hour Min 15.00

Savings per hour kWh 3.13


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Actual Parameters Unit Air Compressor

Annual savings with VFD kWh/year 22,500


Total annual energy savings kWh/year 1,08,930

ToE/year 9.37

CO2 emission factor tCO2/MWh 0.89

CO2 avoided tCO2/year 96.95

Electricity cost INR/kWh 6.77

Monetary savings lakhs

INR/year

7.37

Investment cost lakhs INR 8.48

Simple payback period Year 1.15

4.3.6 Published papers on energy efficient projects

A number of different stakeholders—policy makers, multilateral/bilateral organizations,

financing agencies, industry associations, and academic and R&D institutions, have undertaken initiatives to promote energy efficiency in MSMEs. The foundry industry has

benefitted from these initiatives either directly or indirectly. Some of the relevant published

papers were collated by TERI. The papers are expected to be useful for the energy professionals of metal casting industries. The list of the relevant published papers, which

can be referred for further details are given below.

1. Pal P, Vasudevan N. 1997. Evaluation of energy performance in foundries. Indian Foundry Journal 21–26.

2. Nath A, Pal P. 2004. Enhancing energy and environment performance in foundries.

IE (I) Journal-MM 85: 49–52.

3. US Department of Energy. Energy Efficiency and Renewable Energy. 2004. Best

Practices Case Study. Techni-Cast: Foundry Saves Energy with Compressed Air

System Retrofit. DOE/GO-102004-1726. Details available at <http://accurateair.com/files/Technicast_Case_Study.pdf>, last accessed on 23

December 2014.

4. Patel M H, Pal P, and Nath A. 2005. Savings from Divided Blast Cupola: A Case Study of Successful Implementation at a Foundry Unit at Rajkot (Gujarat), pp. 191–

195. Proceedings of the 53rd Indian Foundry Congress, 21–23 January 2005, Kolkata.

5. Halim B, Mitra J, Lahiri D, Pal P. 2005. Techno-social Integration in Foundry Industry: Insights from Pilot Action Work among Small-scale Foundry Units in

Howrah, pp. 195–200. Proceedings of the 53rd Indian Foundry Congress, 21–23

January 2005, Kolkata. 6. Pal P, Sethi G. 2006. Economic and Social Risks Associated with Implementing CDM

Projects among SME—A Case Study of Foundry Industry in India. Paper presented

by TERI at WESCON 2006, organized by IIF, Kolhapur, 2–3 December 2006. 7. Petter Solding, Patrik Thollander. 2006. Increased Energy Efficiency in a Swedish

Iron Foundry through use of Discrete Event Simulation. In Proceedings of the 2006

Winter Simulation Conference, 1-4242-0501-7/S20.00© 2006, EEE, 1971-1976. 8. Nath B, Pal P, Panigrahy K C. 2007. Energy Conservation Options among Indian

Foundries: A Broad Overview. Indian Foundry Journal 53 (8): 27–30.

9. Pal P, Sethi G, Nath A, Swami S. 2008. Towards Cleaner Technologies in Small and Micro Enterprises: A Process-based Case Study of Foundry Industry in India. Journal of Cleaner Production 16 (2008): 1264–1274.

http://accurateair.com/files/Technicast_Case_Study.pdf


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10. Pal P. 2012. Energy and Cost Saving in Cupola Melting Furnace: TERI‟s Experience,

pp. 17–21. Energy Conservation Conclave–2012, 14–15 January 2012, Ranchi. 11. Singh K K, Sinha S N. 2012. Operational Challenges of Gas-Fired Cupola, pp. 22–26.

Energy Conservation Conclave–2012, 14–15 January 2012, Ranchi.

12. Bhagat-Patil H R, Londhekar M S. 2013. Performance Testing and Analysis of Cupola Furnace. International Journal of Engineering Science and Technology (IJEST) 5 (05S):

55–60.

13. Pal P, Sethi G, Kakkad K, Shah G. 2014. Energy-Efficient Small Cupola for Indian Foundry Units: Results of an Applied Research Project. Indian Foundry Journal 60

(1): 30–33.

14. Saravanan V S. 2014. An Overview of Energy Saving Opportunities in Foundries. Indian Foundry Journal 60 (1): 23–29.

15. Basu N. 2014. Waste Bits for Wealth of Energy Conservation in Foundry Sector.

Indian Foundry Journal 60 (1): 34–40.

16. Sharma S, Chandrawat S S. 2012. Increasing Efficiency of Cupola Furnace of a Small

Size Foundry: A Case Study. IOSR Journal of Engineering (IOSRJEN) 2 (9): 50–57, e-

ISSN: 2250-3021, p-ISSN: 2278-8719.

4.4 Gaps hindering the adoption of EE technologies in SME foundry cluster There exists significant potential to reduce energy consumption in foundry units. However,

there are several barriers that need to be addressed to realize the full potential of energy

savings in foundry industries.

Some of the primary barriers in promoting energy efficient technology in SME foundry are

listed below. Production capacity expansion gets top priority for investment than the potential

energy conservation projects within the management

Unpredictability of future business due to global economic downturn, which may adversely affect manufacturing activities in end user sectors of foundry products

Financial analysis of the potential EE technology is highly sensitive to the external

factors like fuel pricing and capacity utilization, which are directly linked with market scenario

Change in government regulation/policy related to pollution, and taxes and duties

can affect the viability of the unit. High capital cost of the EE technology and fear of underperformance as well as

disruption of routine manufacturing cycle due to troubleshooting

Low awareness on various schemes of the Government of India related energy conservation

Shortage of skilled staff and lack of knowledge/information on technological options

Force of habits resist any change in routine operating practices Lack of training and awareness on importance and necessity of energy conservation

It is a low priority segment for EE technology supplier services towards SME

foundry units than large industrial plant due to perceived notion about expected lower scale of business.


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4.5 Vendors/suppliers The performance of the energy efficient technology will depend on the reliability of the equipment and credential of the supplier in the market. Instead of word of mouth and

recommendation of marketing personnel, it is preferable to procure energy efficient

equipment from reputed and competent supplier as advised by energy experts in their recommendations and DPR. Failure to procure reliable equipment will have an adverse

impact on the performance of the system. A list of various energy efficient technologies and

potential suppliers for foundry units is provided in Table 4.5 below.

Table 4.5: List of suppliers for EE technologies for foundry

Equipment/utility Supplier

Induction Furnace ABP Induction Systems Pvt. Ltd

Alidia Powertronics

Doshi Technologies Pvt. Ltd

Electrotherm (India) Ltd

GH Induction India Pvt. Ltd

Indotherm Furnaces Pvt. Ltd

Inductotherm (India) Pvt. Ltd

Magnalenz Furnaces Pvt. Ltd

Megathermm

Oritech Solutions

Pioneer Furnaces

Cupola Furnace Kelsons Engineers and Fabricators

Kulkarni and Associates, Pune

Metafore Synthesis Nucleus Foundry Services

Process and Product Development Centre, Agra

Punjab State Council for Science & Technology (PSCST)

The Energy and Resources Institute (TERI)

Moulding Machine L. S. Engineering Co.

Unitherm Engineers Ltd

Wheelabrator Group India

World Equipment and Machine Sales Co.

Motor ABB India

Bombay Electricals

Crompton Greave

Kirloskar Brothers

Siemens Ltd

Pump Encon (India)

Grundfos Pumps India Pvt. Ltd

Kirloskar Brothers

KSB Pumps

Seemsan Pumps & Equipments Pvt. Ltd

Usha International Ltd

Compressor Atlas Copco India Ltd

ELGI

Hitachi Industrial Equipment Systems Co. Ltd

Ingersoll Rand

Kaeser Compressors India Pvt. Ltd

Pecma Air Systems Pvt. Ltd

Sirus Electronic India Pvt. Ltd

Vacon Drives and Controls Pvt. Ltd

Blower Air Conditioning Corporation Ltd


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Equipment/utility Supplier

Andrew Yule & Co. Ltd

Nadi Airtechnics Pvt. Ltd

Reitz India Ltd

TLT Engineering India Pvt. Ltd

Capacitor and Automatic Power

Factor Controller

ABB India

Sai Electricals

Schneider Electric India

Siemens Ltd

Variable Frequency Drive ABB India

Apex Industries

FUJI Electric


Siemens Ltd

Lighting Arihant Electricals, Surat

Bajaj Electricals Ltd

Billion Light India Pvt. Ltd

GE Consumer & Industrial India

Havells India Ltd

Phillips Electronics India Ltd

Shah Electronics, Ahmedabad

Sony Electrical & Hardware Mumbai

Surya Roshini Light

Microprocessor Based

Intelligent Control

ABB India

Crestron Electronics India Pvt. Ltd


Exclusive Transformer for

Lighting

ABB India

Osram India Pvt. Ltd


Electronic Ballast

Gayatri Electrotech Co. Pvt. Ltd

Intelux Electronics Pvt. Ltd

Shah Electronics

Cooling Tower Airtech Cooling Process (Pvt.) Ltd

DG Set for Power Generation Acoustic Power Gensets

Asian Diesel Co.

Caterpillar

Cummins India Ltd

Kirloskar Oil Engines Ltd

Insulation Lloyds Insulation

Megha Insulation Pvt. Ltd

Murugappa Morgan Thermal Ceramics Ltd

Rockwool (India) Ltd

S S Insulation

http://www.indiamart.com/sony-electrical-hardware/electrical-items.html

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5.1 Financial evaluation of EE project Implementation of potential energy conservation measures requires investments, either

marginal or substantial in order to realize energy savings. For effective decision making,

certain financial appraisal tools are followed. Usually, decisions are made regarding alternative solutions for utilization of capital. They can be influenced partially by the

management priorities or time required for implementation. However, the prime objective

does not deviate from profit maximization.

All these tools are quite reliable, depending on the accuracy of evaluation of the cash inflow

and outflow, estimation of the discount rate (cost of capital), and prediction of the possible rate of increase of the energy price. Within these limitations, the most precise method is the

„present value criterion‟, which compares the present value of all-future after-tax cash inflow

and outflow over specified period of time to the present value of the cost of investment. Different methodologies followed for making assessment of the investments are

summarized below.

5.1.1 Average rate of return (ARR)

The most basic and simple method is the average rate of return on investment. This indicates

the projected future annual cash savings. Though, it is not as precise as the present value criterion but can provide a preliminary guide to investment decisions with an assumption

that the projected cash savings will remain constant in future. The estimation of ARR is

described with the example given below.

Example: SME invested 850,000 to procure EE screw compressor with VFD. Over a period

of five years, the equipment will result in energy savings of 65,000 in the first year, 71,000 in the second year, 69,000 in the third year, 70,000 in the fourth year, and Rs 72,000

in the fifth year. This totals to cumulative energy savings of 347,000. Dividing this number

by the five years, we get 69,400 as an average annual energy saving. Divide 69,400 by the initial 850,000 investment to calculate the average rate of return of 8.16 per cent.

Guideline: Invest in a project with higher ARR

5.1.2 Return on investment (ROI)

ROI is a profitability measure that evaluates the performance of a business or efficiency of an investment. It is often used to compare the efficiency of a number of different investments considering the cost of capital for undertaking the investment. It is the equivalent annual return from the project as a percentage of capital cost, considering the energy savings over the project life and corresponding discount rate to estimate the


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average annual amount of energy savings over the life of the project. To calculate ROI, the benefit (energy savings) from an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

It is calculated as follows:

In the above formula, „gain from investment‟ refers to energy savings accrued as a result of implementing an EE technology. This should be estimated based upon the discounted value of the energy savings over the life time of the project. ROI is a very popular measure because of its versatility and simplicity. An investment with a positive ROI, is considered financially viable. Discounted value of energy savings: Discounted value is an analysis based on time value for money (considering money is a relative term—A Rupee is worth more today than it is worth in the future). So, the energy savings over the years have to be discounted to obtain their present value. Its estimation is explained in the NPV section (5.1.4). Guideline: Invest in a project with higher ROI

5.1.3 Simple payback period (SPP)

SPP is the time period required to recover the initial capital investment amount through

annual energy savings or cash flow return (annual benefits- annual expenses). It is

calculated as the investment cost divided by the annual energy savings.

Unlike the ROI method, the payback criterion has some limitations as it does not take into

consideration the discount rate, the change in energy prices, or the lifetime of the investment project. It has one advantage over ROI in respect of precise indication of the annual benefit,

namely the cash flow instead of profits. However, both suffer from the difficulty in

justifying the threshold value beyond which no project should be considered. In practice,

investment projects with a payback period of three years or less are considered viable as

they normally have a positive net present value. Thus, the payback period is often used as a

“filter”, calculating NPV when the payback period is over three years and accepting the project when it is less. The advantages of SPP are as follows:

It is a simple calculation and easy to use by semi-skilled shop floor personnel

It favours projects with substantial cash flow in initial years, but rejects projects that generate substantial cash flow in later years instead of earlier.


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The limitations of SPP tool are:

It fails to account for the time value of money It ignores potential cash flow beyond the payback period

It only indicates time period to recover capital investment but ignores profitability.

Guideline: Invest in a project with small SPP

5.1.4 Net Present Value (NPV)

The net present value (NPV) is the present value of the entire cash flow considering both

outflow and inflow (energy savings) from a project under analysis during complete project

life cycle, including any residual or salvage value of the equipment on disposal/completion life cycle. In simple terms, the difference between the present value of energy savings

(inflows) and the present value of cash outflows is NPV.

It is calculated using a given discount rate, also known as the hurdle rate and is usually

equal to the incremental cost of capital. NPV is very useful analysis that enables the plant

management to take an informed decision about whether to accept or reject a particular project. Project could be accepted if its NPV is more than zero, which indicates the

investment would add value to the firm. In case of zero NPV, project could still be accepted

if it has some strategic value for the firm. However, the project with negative NPV would subtract value from the firm and, hence, should be rejected. The future energy savings are

converted to present value using the formulae given below.

where,

FV = future value of energy savings

i = interest or discount rate or hurdle value n = number of years under analysis

The NPV is then calculated by subtracting the initial cost of investment from the total PV of future energy savings from entire life cycle.

NPV = Total PV- Initial cost of investment

NPV indicates the return that the management can expect from the project at various

discount rates. It can also be used to compare various EE projects with similar discount rates

and risks, as well as compare them against a benchmark rate. The advantages of NPP are

given below.

It considers the time value of money It considers entire cash flow stream during project life cycle including salvage value.

Guideline: NPV > 0: Should be accepted

NPV = 0: Should be accepted if the project has some strategic value

NPV < 0: Should not be accepted.


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5.1.5 Internal rate of return (IRR)

IRR also referred as „economic rate of return‟ is the highest discounted rate, which makes the present value of the energy savings/inflows (including residual or salvage value of the

equipment from its life cycle) equal to the initial capital cost of the investment or equipment.

In other terms, IRR is the discount rate that makes the net present value equal ZERO. It is also the rate, which makes benefits to cost ratio ONE. This is commonly used for analysing

investments in projects. A project is considered viable, if its IRR is greater than the returns

(interest rate) offered by the bank/financial institution on investments/deposits made with them.

The formula for IRR is:

where, P0, P1, . . . Pn equals the cash flows in periods 1, 2, . . . n, respectively; and IRR equals the project‟s internal rate of return.

As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various EE projects, the EE project with the

highest IRR would probably be considered the best and undertaken first.

Guideline: Invest in a project with high IRR

5.2 Guidelines for preparing Investment Grade Detailed Project Report (IGDPR) The guidelines to prepare bankable DPRs for implementing the recommended measures and

also to seek loans from banks for the capital expenditures are provided below.

Detailed financial analysis of the moderate to large investments is required as much for the

promoter, as it is for the banker. The promoter is interested to see if the true return on the investment over the project life is comparable to returns on other sources of investment,

such as a fixed deposit in a bank, while the banker needs to be convinced on the financial

viability of the investment made through the loan.

In general, each investment grade DPR should be structured to include the company profile,

energy baseline assessment, technology assessment, financial assessment, and sustainability assessment of each EE project recommended in the DEA. The company profile of the unit

will include assessment of its past financial reports (balance sheet, profit and loss account),

registration details, compliance with pollution control board norms, as well as, details of products, production capacities, customers, and marketing and selling arrangements. The

energy baseline assessment will include current energy bill, cost of energy as a percentage of

total manufacturing cost, and overall and section-wise specific energy consumption levels. Technology assessment will include the details of the design of equipment/technology

along with the calculation of energy savings. The design details of the technology for EE

project will include detailed engineering drawing for the most commonly prevalent operational scale, required civil and structural work, system modification, and included

instrumentation and various line diagrams. A list of vendors (technology providers/


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equipment suppliers) will be provided along with quotations for major bought-out

equipments. Examples of similar interventions as proposed in other industries within India or abroad with the benefits will also be provided. The estimated lead time for

implementation of the new technology, or enhancement of the existing technology will be

provided. The financial assessment will contain details of investment required for each EE measure and means of financing for the proposed measures. Financial projects such as cost–

benefit analysis for each of the proposed measure and for the unit as a whole including IRR

and cash flow will be provided. The sustainability assessment will include environmental and social sustainability assessments like greenhouse gas (GHG) reduction (over the

estimated lifetime in terms of certified emission reductions or CERs), reduction in

conventional pollutants; air (sulphur dioxide, particulates, etc.), water and solid waste, productivity enhancements, and social impacts on the workforce. A typical outline of an

IGDPR is provided in Table 5.2. It is understood that the IGDPRs will be structured keeping

in view their acceptability to financial institutions/banks.

Table 5.2: Typical contents page of IGDPR

Executive Summary

1.0 Introduction

1.1 Brief introduction about cluster/unit

1.2 Energy performance in existing situation

1.3 Proposed EE intervention

1.3.1 Description of existing technology/equipment

1.3.2 Energy audit methodology

1.3.3 Performance analysis of the existing technology

1.4 Barrier analysis in adoption of proposed EE intervention

2.0 Implementation methodology

2.1 Approach of modification

2.2 Description of modified system/equipment

2.3 Availability of equipment

2.4 Source of equipment

2.5 Terms and conditions in sales of equipment

2.6 Process down time during implementation

2.7 Life cycle assessment and risks analysis

2.8 Suitability of unit for implementation of proposed technology

3.0 Benefits from proposed EE intervention

3.1 Technical benefit

3.2 Monetary benefits

3.3 Social benefits

3.4 Environmental benefits

3.5 Examples of similar interventions

4.0 Project financial statements

4.1 Cost of project and means of finance

4.2 Financial projections of the unit

4.2.1 Projected financial summary of the unit

4.2.2 Projected operating statement of the unit

4.2.3 Projected balance sheet of the unit

4.2.4 Projected cash flow statement of the unit

4.2.5 Projected fund flow statement of the unit

4.2.6 Projections of current assets and current liabilities of the unit


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Executive Summary

4.2.7 Debt service coverage ratio

4.2.8 Debt equity ratio

4.2.9 Other major financial ratio calculations

4.2.10 Maximum permissible bank finance for working capital as per Nayak

Committee

4.2.11 Working capital requirements

4.2.12 Assumptions for financial calculations

4.2.13 Marketing and selling arrangement

4.2.14 Risk analysis and mitigation

4.2.15 Conclusion

Typical Appendices

Process flow diagram

Baseline energy performance

Schematic diagram of the modified system

Technical specification and information brochure of equipment

Details of fabricators/suppliers

Budgetary quotation for the proposed equipment

Cash flow and financial analysis

List of used abbreviations

5.3 Step by step approach for loan application Energy efficiency projects are normally supported by banks and financial institutions under

the broad umbrella of various government schemes and credit lines. These schemes and credit lines are formulated with specific eligibility criteria to promote special thematic issues

for improving overall business sustainability of the target sector.

Loan application for EE projects is to be developed using standard format of individual

scheme guidelines or credit line requirements. It is advisable for the concerned MSME unit

to obtain the standard template of loan application from the prospective banking institute, which is going to evaluate loan application before granting financial support. The following

activities are required to be undertaken for developing loan application to seek financial

support from bank towards implementation of EE projects by the unit: Establish baseline performance through detailed study

Identify implementable energy conservation measures (ECMs) including alternative

energy efficient (EE) technologies, wherever applicable

Prepare preliminary cost–benefit analysis

Identify suitable technology suppliers who can also provide regular maintenance

Obtain techno-commercial quotations Negotiate price and finalize suppliers

Estimate miscellaneous costs for implementation of ECMs

Estimate project cost and means of finance Undertake the financial projections of the unit

Identify eligible financing scheme and credit line for financial support

Discuss the EE project with the prospective financial institution (FI)


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Develop detailed project report as per the guidelines provided and format of the

scheme that includes baseline monitoring and verification (M&V) protocol Submit the DPR to the FI for review

Follow up with the FI and provide clarification, if any

Obtain loan approval and complete necessary contract with concerned FI Implement the project that includes commissioning, trial runs, and troubleshooting

required, if any

Undertake post implementation M&V protocol Submit status report to FI as per the agreement.

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6.1 On-going programmes for energy efficiency in SME Some of the major on-going programmes to promote energy efficiency in the SME sector are highlighted below.

6.1.1 WB-GEF project for energy efficiency in SME

The World Bank with the support from GEF has designed the MSME EE project as a part of

the GEF Programmatic Framework project for Energy Efficiency in India. The objective of

this project is “to increase demand for energy efficiency investments in target MSME clusters and to build their capacity to access commercial finance.” The five targeted MSME clusters

covered under the project and the indicative information are given in Table 6.1.1.

Table 6.1.1: Details of target clusters

S. No. Cluster Main fuel

1. Kolhapur (foundry) Coke

2. Pune (forging) Furnace oil

3. Tirunelveli (limekiln) Charcoal

4. Ankleshwar (chemical) Natural gas/electricity

5. Faridabad (mixed) Electricity/oil

This project is being co-implemented by SIDBI and BEE. Activities such as detailed energy

audit (DEA), preparation of investment grade detailed project reports (IGDPRs), and

implementation of recommended energy conservation measures (ECM) are being undertaken under the project. Kolhapur, Pune and Ankleshwar clusters are covered by The

Energy and Resources Institute (TERI), and Faridabad and Tirunelveli clusters have been

covered by Development Environergy Services Limited (DESL).

6.1.2 UNDP-GEF project on upscaling energy efficient production in small-scale steel industry in India

UNDP in partnership with the Ministry of Steel, Government of India has successfully

implemented pilot phase of energy efficiency project in steel rerolling mills in India. Inspired

by the success of its pilot EE initiatives, UNDP has decided to scale up energy efficiency interventions in the steel re-rolling mills as well as in other SME sub-sectors in India. The

project is being supported by the Ministry of Steel, UNDP, and the Australian Agency for

International Development (AusAid).

The objective of the partnership is to promote energy efficiency, mitigate GHG emissions,

and improve productivity in the selected SME sub-sectors.


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The following activities are being undertaken under this intervention:

Implementation of energy efficient technologies in 300 units from SRRM sector. These interventions are expected to save INR 1,000–1,250 million (USD 20–25

million) annually in energy costs.

Implementation of energy efficient technologies in five units in other sub-sectors of small-scale steel industry such as induction furnace units.

Development of knowledge products to promote widespread replication of the

technologies in the targeted sectors. Dissemination of information about energy efficiency interventions that can provide

huge savings in GHG emissions and improve productivity of the units in the selected

sectors.

6.1.3 UNIDO-GEF project on “Promoting Energy Efficiency and Renewable Energy in Selected Micro, Small, and Medium Enterprises (MSME) Clusters in India”

This is a cluster based programme implemented by the United Nations Industrial

Development Organization (UNIDO) in collaboration with local industries associations and government agencies. The BEE and the Ministries of MSME and New and Renewable

Energy are part of this initiative. The project that has a budget of $7.8 million is being

implemented in 12 selected SME clusters across five sub-sectors in India. The primary details of the project are provided in Table 6.1.3.

Table 6.1.3: Primary details of the project

Parameter Description

Project duration 4 years

Project partners BEE (National Executing Agency), MNRE, and MSME

Total project costs $33.4 million ($7.2 million GEF grant and 26.2 million co-financing)

Intervention areas 12 MSME clusters in the country across five industry sectors

Foundries—Belgaum, Coimbatore, and Indore

Dairy—Punjab and Gujarat

Brass—Jagadhri and Jamnagar

Hand tools—Jalandhar and Nagpur

Ceramic—Khurja, Morbi, and Thangadh

The aim of the project is to develop and promote a market environment for:

Introduction of energy efficient technologies

Enhance use of renewable energy (RE) technologies in process applications.

The project will have the following primary activities:

Establishing PMU at BEE, cluster leaders/units Deployment of BATs and development of new technologies

Audits/Technology Reviews

Development of 200 bankable DPRs Establish technology platforms/incubators with IITs and equipment suppliers

Technology demonstrations

Organization of exposure visits, interactions, and providing training (technical and banking) to industry beneficiaries and LSPs

Capacity Building of Industry stakeholders.


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UNIDO will work closely with the local institutions to establish showcasing business model

in 20–30 units in each cluster. The project has the following targets: Energy savings—276,600 MWh

GHG emission reductions (CO2eqivalent)—84,700 tonnes

Life time (15 years) cumulative GHG emissions reduction (CO2eqivalent)—1,270,500 tonnes from the EE measures introduced.

6.2 Policies and schemes of the Government of India The Government of India and respective State governments have announced various

policies and schemes from time to time to address emerging issues and develop the MSME

sector.

The Government of India has recognized the importance of lowering the country‟s GHG

emissions. As part of Copenhagen Accord, India has stated voluntary targets to reduce its GHG emissions per unit of economic output by 20–25 per cent by 2020 compared to 2005

levels. In its efforts towards climate change mitigation and adaptation, India is focusing on

improving energy efficiency and using renewable energy sources in different economic areas. Some of the major policy initiatives of the Indian government in this direction are

highlighted below.

6.2.1 Energy Conservation Act, 2001

In order to promote energy efficiency in the country, Energy Conservation Act (ECA) was

enacted in October 2001 that became effective from March 2002. The Act provides regulatory

impetus to energy efficiency related activities in the country. Under the provisions of the

Act, the Government of India set up BEE on 1st March 2002 with the primary objective of

reducing energy intensity of the Indian economy. The mission of BEE is to assist in formulating and implementing policies and strategies with a thrust on self-regulation and

market principles, within the overall framework of the ECA, 2001. The setting up of BEE

provides a legal framework for energy efficiency initiatives in the country. The Act empowers the Central Government and in some instances the State governments to:

Notify energy intensive industries, other establishments, and commercial buildings

as designated consumers. Establish and prescribe energy consumption norms and standards for designated

consumers.

Direct designated consumers to designate or appoint certified energy manager in charge of activities for efficient use of energy and its conservation.

Get an energy audit conducted by an accredited energy auditor in the specified

manner and intervals of time. Furnish information with regard to energy consumed and action taken on the

recommendation of the accredited energy auditor to the designated agency.

Comply with energy consumption norms and standards, and if not so, to prepare and implement schemes for efficient use of energy and its conservation.

Prescribe energy conservation building codes for efficient use of energy and its

conservation in commercial buildings. State governments to amend the energy conservation building codes to suit regional and local climatic conditions.


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Direct owners or occupiers of commercial buildings to comply with the provisions of

energy conservation building codes. Direct mandatory display of label on notified equipment and appliances.

Specify energy consumption standards for notified equipment and appliance.

Prohibit manufacture, sale, purchase and import of notified equipment and appliances not conforming to standards.

The EC Act was amended in 2010 and the main amendments of the Act are given below. The Energy Conservation (Amendment) Act, 2010—Main Amendments:

The Central Government may issue the energy savings certificate to such designated

consumer whose energy consumption is less than the prescribed norms and standards in accordance with the procedure as may be prescribed.

The designated consumer whose energy consumption is more than the prescribed

norms and standards shall be entitled to purchase the energy savings certificate to

comply with the prescribed norms and standards.

The Central Government may, in consultation with the Bureau, prescribe the value of

per metric tonne of oil equivalent of energy consumed. Commercial buildings which are having a connected load of 100 kW or contract

demand of 120 kVA and above come under the purview of ECBC under EC Act.

Different programmes of BEE that are relevant to industry and MSME sector are briefed

below.

(i) Standard and Labelling Programme

The standard and labelling scheme for energy efficiency of appliances, launched by BEE

during 2006, is intended to provide information on energy performance so that consumers are able to make informed decisions while purchasing appliances. It also aims to create an

appropriate legal and regulatory environment for energy efficient end use products. The

larger framework of the scheme is to create an impetus for Indian industry to compete in overseas markets that have mandatory standards, stimulate market transformation in favour

of energy efficient appliances, and targeted to reduce 3,000 MW of overall energy

consumption by 2012.

Under the energy efficiency standard for household appliances, labels are displayed directly

on the concerned appliance/equipment, providing detailed information about the energy efficiency of the equipment. Under this scheme, appliances including frost-free refrigerators,

tubular fluorescent bulbs, room air conditioners, and distribution transformers are required

to display an energy star rating label on a mandatory basis. Appliances such as direct cool

refrigerators, distribution transformers, induction motors, pump-sets, ceiling fans, LPG and

electric geysers, and colour televisions can display the label on a voluntary basis. The

labelling is due to be expanded to cover products and appliances including CFLs, passenger cars, heavy commercial vehicles, office equipment, washing machines, consumer electronics,

microwaves, UPS and inverter systems, battery chargers, industrial fans and blowers, and

compressors.


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(ii) BEE-SME programme

The „BEE-SME programme‟, initiated during the 11th five year plan focused on 29 energy intensive MSME clusters (such as brass, ceramic, foundry, brick, rice mills, etc.) and sought

to address barriers of lack of dependable data on energy consumption and energy saving

potential among MSMEs. The activities undertaken under the programme included conducting situation analysis and detailed energy audits as well as preparation of cluster

manuals and detailed project reports on EE technologies.

Under the 12th plan, BEE proposes to showcase a few selected EE technologies (identified

under 11th plan) through demonstrations in five energy intensive MSME sectors and

support other MSMEs to implement these EE technologies through technical assistance and capacity building. The programme with a budget of INR 40 crores aims to achieve energy

savings of over 99,000 ToE.

6.2.2 Integrated Energy Policy

The integrated energy policy was adopted in 2006. The broad vision behind the policy is to reliably meet the demand for energy services of all sectors including the lifeline energy

needs of vulnerable households in all parts of the country with safe, clean, and convenient

energy at the least-cost. Some of its key provisions are: Promotion of energy efficiency in all sectors

Promote energy efficiency by enforcing energy standards effectively

Promote technologies that maximize energy efficiency, demand side management, conservation and energy security and encourage domestic research into such

technologies and free access to suitable energy related technologies available abroad.

For economic efficiency and for promoting optimal investment in energy, energy markets to be made competitive wherever possible. Competitive markets would lead

to trade parity prices ensuring that energy use and inter-fuel choices would be

economically rational. Emphasis on mass transport Emphasis on renewables including biofuels plantations

Accelerated development of nuclear and hydropower for clean energy

Focused R&D on several clean energy related technologies.

6.2.3 National Action Plan on Climate Change (NAPCC)

NAPCC unveiled in 2008, addresses the urgent and critical concerns of the country. It identifies measures that promote country‟s development objectives simultaneously yielding

co-benefits for effectively addressing climate change. The National action plan hinges on the

development and use of new technologies and focuses on promoting understanding of climate change, adaptation and mitigation, energy efficiency, and natural resource

conservation. The following eight National Missions form the core of the National action

plan: 1. National Solar Mission

2. National Mission for Enhanced Energy Efficiency

3. National Mission on Sustainable Habitat 4. National Water Mission

5. National Mission for sustaining the Himalayan Ecosystem


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6. National Mission for Green India

7. National Mission for Sustainable Agriculture 8. National Mission on Strategic Knowledge on Climate Change.

A brief about these missions is provided below.

6.2.3.1 National Mission for Enhanced Energy Efficiency

The mission targeted savings of 10,000 MW during the 11th five year plan. To achieve this,

the following four new initiatives were put in place to enhance energy efficiency.

i) Perform Achieve and Trade (PAT)

This is a market based mechanism to enhance cost effectiveness of improvements in energy

efficiency in energy-intensive large industries and facilities, through certification of energy

savings that could be traded. The mechanism mandates the award of Specific Energy

Consumption (SEC) reduction targets to „Designated Consumers‟ (DCs) to achieve mandatory reductions in energy use in the range of 2–10 per cent during a period of 3 years

or the first PAT cycle. The Ministry of Power (MoP) has notified 478 industrial installations

across 9 sectors as DCs. These DCs have been short-listed based on their level of energy consumption expressed in terms of metric tonnes of oil equivalent (MTOE). The target

setting is based on „gate to gate‟ SEC of individual DCs. Each DC has to reduce SEC in target

year, i.e., 2012–15 as compared to the baseline year. The percentage reduction in SEC level is based on efficiency in baseline year. Lower targets have been set for efficient units as

compared to less efficient units in the same category. The SEC reduction targets have been

notified to DCs in March 2012. The total energy saving target identified in these DCs is 6.686 MTOE.

The implementation phase to achieve the targets started in April 2012. Individual DCs were provided with EE targets they have achieved in a timeframe of three years. This will be

followed by an assessment of over-achievement and under-achievement in order to reward

or penalize the DCs as the case may be. Under the PAT mechanism, industries that exceed their targets will be awarded „Energy Savings Certificates‟ (ESCerts) to the extent of targets

over-achieved, i.e., if a company achieves 5 per cent SEC reduction against a target of 4 per

cent, it will be awarded with „ESCerts‟ (Energy Saving Certificates) for the additional 1 per cent achievement. The certificates can be carried forward for one more PAT cycle. Industries

falling short of targets can purchase ESCerts from the market to minimize on the penalties

linked to underachieved targets.

At the end of implementation phase, the current SECs (2015) against their targets will be

assessed for each DC by third party energy auditors. The verification report prepared by the auditors will be presented to Energy Efficiency Service Limited (EESL), an entity created

under the aegis of MoP as a joint venture of PSUs of MoP. The allotment of ESCerts and

trading will take place during April 2015 to March 2016. Companies with underachieved targets can purchase the ESCerts to fill the gap between targets and achievements. Failure to

do so will attract market based penalties. The penalties would be based on the price of

ESCerts and the quantum underachieved targets.


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ii) Market Transformation for Energy Efficiency

This focuses on accelerating the shift to energy efficient appliances in designated sectors through innovative measures to make the products more affordable. Salient features are:

Leveraging international funds for promoting energy efficiency

o Project preparation to utilize bilateral/multilateral funds for energy efficiency Implementing a national energy-efficiency CDM roadmap

o Public sector leadership and involvement for aggregation of projects

o Programmes of Activity for Household lighting, Municipal DSM (Mu DSM), Agriculture DSM (Ag DSM), SME sector, Commercial Buildings sector and

Distribution Transformers.

o Preparation of new CDM methodologies.

iii) Energy Efficiency Financing Platform (EEFP)

This focused on creation of mechanisms that would help finance DSM programmes in all sectors by capturing future energy savings. Salient features are:

Ensuring availability of finance at reasonable rates for energy efficiency project

implementation—expansion of EEFP to include other FIs and public and private sector banks

Creating demand for energy efficiency products, goods and services—awareness,

public policy, facilitation/stimulation by preparation of bankable projects and markets

Promotion of ESCOs—accreditation by CRISIL/ICRA

Credible monitoring and verification protocols to capture energy savings Capacity building of banks and FIs.

In order to achieve the above mentioned objectives, a corporate entity, EESL was created by MoP as a joint venture company of four central power sector undertakings, viz., NTPC Ltd,

PFC, REC, and Power Grid during 2009. EESL was set up to create and sustain markets for

energy efficiency in the country. EESL is actively promoting EE pumps in agricultural sectors of Karnataka under ongoing “Agriculture Demand Side Management Projects (Ag-

DSM)” to reduce power demand in the sectors.

iv) Framework for Energy Efficient Economic Development

This focuses on developing fiscal instruments to promote energy efficiency in the

country. Two fiscal instruments—the Partial Risk Guarantee Fund (PRGF) and Venture Capital Fund for Energy Efficiency (VCFEE) have been developed under the framework

with an estimated 66.62 crore ($10.8 million) allocated for both funds, to provide

comfort to the lenders. Other incentives include: Incentives to Central Public Sector Undertakings (CPSUs) to take up energy efficiency

o Policy guidance to CPSUs to take up energy efficiency projects

o Promoting Energy Efficient Public Procurement. Support and assistance to Electricity Regulatory Commissions (ERCs) for stimulating

utility driven DSM

Tax/duty exemptions for promoting energy efficiency


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6.2.4 National Steel Policy (NSP)

Ministry of Steel has drafted the New National Steel Policy in place of existing National Steel Policy 2005. The draft National Steel Policy 2012 aims to transform Indian steel industry into

a global leader in terms of production, consumption, quality, and techno‐economic

efficiency while achieving economic, environmental, and social sustainability. The vision of NSP 2012 is to ensure availability of quality steel to accelerate growth of the domestic

economy. Currently, India‟s steel production capacity is 96 million tonnes per annum,

which is being expanded gradually and is set to reach 300 million tonnes by 2025.

6.2.5 National Manufacturing Policy

During 2011, the Government of India announced the National Manufacturing Policy (NMP). The policy is based on the principle of industrial growth in partnership with the

states. As per the policy, the central government creates an enabling policy framework,

provides incentives for infrastructure development on a public private partnership (PPP) basis through appropriate financing instruments, and the state governments are encouraged

to adopt the instrumentalities provided in the policy. The NMP aims to bring about a

quantitative and qualitative change with the following six objectives: 1. Increase manufacturing sector growth to 12–14 per cent over the medium term to

make it an engine of economic growth. This will enable the manufacturing sector

to contribute at least 25 per cent of the National GDP by 2022. 2. Increase the rate of job creation in manufacturing to create 100 million additional

jobs by 2022.

3. Creation of appropriate skill sets among the rural migrant and urban poor to make growth inclusive.

4. Increase domestic value addition and technological „depth‟ in manufacturing.

5. Enhance global competitiveness of Indian manufacturing through appropriate policy support.

6. Ensure sustainability of growth, particularly with regard to the environment

including energy efficiency, optimal utilization of natural resources and restoration of damaged/degraded ecosystems.

The policy envisages establishment of National Investment and Manufacturing Zones

(NIMZ) equipped with world-class infrastructure. Additionally, it proposes establishment of a Technology Acquisition and Development Fund (TADF) for acquisition of appropriate

technologies including environment-friendly technologies, creation of a patent pool, and

development of domestic manufacturing of equipment used for controlling pollution and reducing energy consumption.

6.2.6 Financial schemes for Indian MSMEs

Most of the programmes and schemes for the development of the MSME sector are being

implemented by Ministry of MSME through its field level organizations—state level MSME

Development Institutes (MSME-DI) and National Small Industries Corporation Limited (NSIC).


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6.2.6.1 Major financial schemes for MSMEs

Some of the important initiatives by the Government of India for development of the MSME sector as well as promotion of new technologies and energy efficiency are mentioned below.

National Manufacturing Competitiveness Programme (NMCP)

Credit Linked Capital Subsidy Scheme (CLCSS) Credit Guarantee Trust for MSEs ISO 9000 and ISO 14001 Certification

Reimbursement Scheme

Financial Assistance for using Global Standard (GS1) in Barcoding Sustainable Finance Scheme

Subsidies/schemes for undertaking energy audits by various state governments such

as Maharashtra, Gujarat, etc.

6.2.6.2 National Manufacturing Competitiveness Programme (NMCP)

The programme was launched by the Ministry of MSME (MoMSME) to support SMEs to improve their competitiveness both in national and international trade

market. It offers a bundle of 10 sub-schemes that are mentioned below:

1. Lean Manufacturing Competitiveness Scheme 2. Enabling manufacturing sector to be competitive through Quality

Management/Standards/Quality Technology Tools (QMS/QTT)

3. Promotion of ICT (Information and Communication Technology) in MSME sector

4. Technology and Quality Upgradation Support to MSMEs (TEQUP)

5. Marketing Assistance and Technology Upgradation Scheme 6. Marketing Support/Assistance to SMEs (Bar Code)

7. Design clinic scheme for design expertise to MSME sector

8. Setting up of Mini Tool Rooms 9. National campaign for building awareness on Intellectual Property Rights

(IPR)

10. Support for Entrepreneurial and Managerial Development of SMEs through Incubators.

The major schemes are summarized below.

TEQUP Scheme

The MoMSME launched the TEQUP scheme during May 2010. The scheme under NMCP is focused specifically on improving energy efficiency in the MSME sector. It provides support

for technical assistance for energy audits, preparation of DPRs, and also offers significant

capital subsidy to MSME units willing to adopt energy efficient technologies through a cluster approach. In addition, support is also offered to MSMEs in acquiring international

and national Product Quality Certification. The scheme also provides MSMEs an

opportunity to trade carbon credits through Carbon Credit Aggregation (CCA) centres. The TEQUP scheme is currently in operation, and the government has proposed to continue the

scheme during the 12th Plan with enhanced budgetary support.

Promotion of ICT (Information and Communication Technology) in MSME sector This is another scheme under the NMCP, which targets to provide financial support to the

potential manufacturing cluster to promote use of ICT in their production and business

process to sustain their business both in national and international markets.


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6.2.6.3 CLCSS Scheme

The CLCSS is one of the oldest schemes of MoMSME. It aims at facilitating technology up-

gradation in the MSME sector. It provides for 15 per cent capital subsidy (limited to

maximum 15 lakhs) to eligible micro and small units for adoption of proven technologies approved under the scheme. At present, there are over 1,500 technologies under 51 sub-

sectors that are eligible for subsidy under the scheme. Till March 2014—28,287 units had

availed subsidy of 1,620 crore under the scheme.

6.2.6.4 Credit Guarantee Scheme

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE) was

launched by MoMSME and SIDBI. It aims to make available collateral-free credit to the

MSEs to enable them to easily adopt new technologies. Both the existing and the new

enterprises are eligible to be covered under the scheme. Under the scheme, collateral free loans up to 1 crore can be provided to micro- and small-scale units. Additionally, in the

event of a failure of the MSME unit which availed collateral-free credit facilities to discharge

its liabilities to the lender, the Guarantee Trust would guarantee the loss incurred by the lender up to 75 /80/85 per cent of the credit facility.

6.3 Various credit lines and bank schemes for financing of EE There are several special lines of credit under which loans are provided to MSMEs at

reduced rate of interest for adoption of clean and energy efficient technologies. SIDBI is the

nodal agency for management and implementation of these lines of credit. Some of these schemes are mentioned below.

JICA–SIDBI Financing Scheme

KfW–SIDBI Financing Scheme AfD–SIDBI Financing Scheme

Sustainable Finance Scheme (SFS).

6.3.1 JICA–SIDBI Financing Scheme

New/existing MSME units shall be eligible for assistance under the scheme if the interested

unit has: Satisfactory track record of past performance

Sound financial position

No default history Willing to adopt one of the enlisted energy efficient equipment.

Sectors such as the arms industry, narcotics industry, or any unlawful businesses are not eligible for finance under this scheme.

6.3.2 KfW–SIDBI Financing Scheme

SIDBI has entered into a loan agreement with KfW to disburse loans at low interest to

interested MSME units.


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6.3.2.1 KfW-Energy Efficiency Scheme

A registered MSME unit is eligible for assistance under the scheme if it is willing to

implement energy efficient equipment that is covered under the list. The equipment should

result in CO2 emission reduction of at least three tonne of CO2 per lakh rupees of loan per year.

6.3.2.2 KfW-Cleaner Production Scheme

Existing MSME units shall be eligible for assistance under the scheme if the proposed

investment targets to improve at least one of the following measures within the plant:

Waste treatment handling

Raw material productivity

Waste intensity and reduction of pollution in air, water, and soil contamination.

The greenfield investments are not eligible under this scheme except investments in Central

Effluent Treatment Plants (CETP), Waste Treatment, Storage and Disposal Facilities (TSDF),

and waste recycling plants.

6.3.2.3 KfW Innovation Finance Programme

This scheme provides financial support to those MSMEs, who are engaged in development, demonstration, deployment, and commercialization of innovative clean technologies in

select sectors (products, processes, and services). The assistance could be either in the form

of secured term loan or subordinated debt/quasi equity/equity.

A technology can be considered as “innovative” for this purpose, if: (1) it is not yet widely

available in the respective region, (2) it has significant impact in terms of environment and climate protection, and (3) a significant part of the new products, processes, or services are

developed or adapted by the beneficiary.

6.3.3 AfD–SIDBI financing scheme

The scheme intends to foster credit towards Indian MSMEs with an aim to improve

awareness on energy efficiency aspects (such as reduce specific energy consumption and spread low carbon technology sources) among SMEs. The project financed under the line of

credit should target to achieve GHG emissions reduction of 440 ktCO2 equivalent per year.

6.3.4 Sustainable finance scheme (SFS)

Sustainable development projects which have significant impact towards energy

efficiency/cleaner production but not covered under the international/bilateral lines of credit as above shall be assisted under SFS.


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6.3.5 Common Facilities Centre (CFC) scheme for sand reclamation in foundry cluster

A group of at least 25 registered SME foundry units (formed as Special Purpose Vehicle-

SPV) within a cluster can avail financial support under this scheme to establish CFC for sand

reclamation and other common facilities. The brief details of the scheme are mentioned below.

Operating authority—The office of Development Commissioner, MoMSME. Eligibility criteria—SPV comprising at least 25 registered SME foundry units located in the

cluster.

Financial support—70 per cent by the central government and balance 30 per cent by SPV/state government for project value up to 15 crore.

The cluster members can apply through the state government or its autonomous body for

DSR (Diagnostic Study Report) for which a grant of up to 2.5 lakhs is available. The report must be submitted within three months to DCMSME which will justify the creation of CFC.

On acceptance of the DSR by DCMSME, a DPR is to be submitted for which a funding of 5

lakhs is available. The DPR, which needs to be appraised by SIDBI, establishes the tech-economic viability of the project. On acceptance of the DPR, the financial grant to set up the

CFC is released to the SPV through the state government.

6.3.6 Modified Industrial Infrastructure Upgradation Scheme (IIUS)

Objective The key objective of the modified IIUS continues to be to enhance growth and competitiveness of the industry by providing quality infrastructure, employment

generation, and technology upgradation.

Scope Projects are sanctioned to upgrade infrastructure in industrial estates and greenfield projects

in backward areas, including North Eastern Region (NER). However, priority is given to upgrade infrastructure in existing cluster over greenfield cluster. The scheme is demand

driven and covers components that are need based and identified through a diagnostic

study validated by stakeholders. An illustrative list of projects eligible for assistance is given below.

Technical infrastructure Common Facility Centres (CFCs) Research and Development—Product Development and Technical Demonstration

Facility

CETP and other Environment Protection Infrastructure Training Infrastructure

Quality Certification and Benchmarking.

Social infrastructure

Social infrastructure, like dormitories/hostels for working women.

Physical infrastructure

Solid waste management disposal/treatment

Water supply and roads


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Captive Power Plant (the project relating to „Captive Power Plant (CPP)‟ will only be

considered for sanction as per the provisions of Electricity Rules 2005.

Who can apply? State Implementation Agencies (SIA) such as SIDCs can apply for funding under the Modified IIUS.

Formulation of the project proposal The project proposal shall be well conceptualized and formulated meticulously after

conducting detailed survey and study of the identified industrial estates and generating

credible data for laying the foundation of the project proposal. The critical gaps in the infrastructure impinging upon the competitiveness of the industry should be clearly brought

out in the proposal. Measurable outcomes such as expected enhancement in productivity

and employment should be incorporated into the project proposal which would also be one

of the main criteria for sanctioning the projects. The Detailed Feasibility Report (DFR)

should include realistic cost estimate of construction, technical specifications, and cost

estimates for plant and machinery, in details.

Funding pattern The central government will contribute up to 50 per cent each of the project cost subject to a ceiling of 50 crore. The remaining contribution will be from the SIA, beneficiary industries,

and loan from FIs. The minimum contribution of the SIA will be 25 per cent of the project

cost. In case of NER, the central grant and the minimum contribution of the SIA will be 80 per cent and 10 per cent, respectively.

6.4 Gaps or other issues hindering the financing of EE projects in MSMEs The Organization for Economic Cooperation and Development (OECD) has observed that

MSMEs across the world encounter difficulties when trying to access finance due to an incomplete range of financial products and services, regulatory rigidities or gaps in the legal

framework, and lack of information on both the bank‟s and the MSME‟s side. The nature of

work in many MSMEs is such that they have a volatile pattern of growth and earnings, with greater fluctuations than larger companies. Thus, MSMEs are at a particularly severe

disadvantage when trying to obtain finance relative to larger and more established firms. As

has been mentioned earlier, more than 90 per cent of MSMEs in India do not access finance through the commercial/institutional route. A major reason for this has been the high risk

perception among the banks about the MSME sector, and the high transaction costs for loan

appraisal.

With regard to financing energy efficiency investments, it has been seen that „easy to

implement‟ energy efficiency investments in the MSME sector are low-cost measures. As a result, the loan required for energy efficiency is usually a small amount. However, the

transaction costs for energy efficiency financing are high. In reality, the transaction fees,

documentation required, risk assessment, manpower, time required, and follow-ups to process small loans for energy efficiency are similar to the requirements for large loans.

From the perspective of a banker, energy efficiency financing, i.e., a large number of small

loans, may not appear as lucrative as providing a small number of large loans for improving production capacity, mechanization, etc.


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Another issue is that bank officials usually do not have the capacity or wherewithal to

undertake complete assessment of energy efficiency proposals. To help address this barrier, SIDBI has formulated an „Energy Saving Equipment List‟— essentially a list of energy

efficient technologies that are approved for finance and that can be referred to while

applying for loans. This is useful in promoting a fixed number/type of energy efficient products and reducing the processing time for applications.

It has also been seen that a large number of loan applications in the small-scale sector are not „purely‟ for energy efficiency investments but for capacity expansion through the acquisition

of new, higher capacity equipment/machinery in which energy efficiency becomes an

integral part. The primary issues related to borrowing for financing of energy efficiency project in MSME are summarized below.

Improper book keeping and reluctance of SMEs to disclose financial information

required for the loan application

High charges of bank guarantee (4 per cent) required for security negates benefits of

supposed concessional EE financing

Financing schemes launched by commercial banks need to be backed up by marketing and process innovation efforts

Review of loan application processes needs to be simplified, both on the credit

worthiness and technical assessment side There is a knowledge gap among banking sector stakeholders on the potential of

lending to the MSME sector

Fear of stoppage in routine manufacturing process, apprehensions on additional costs towards fine tuning and troubleshooting during post implementation activities

on the part of the MSME unit

Different levels of expertise among professionals, like energy auditors and EE

practitioners developing technical proposals for SME clients and the local banks

evaluating the loan proposals who are usually not technically qualified

SMEs feel that the consultants and auditors provide essential services but they do not assume associated project risks

SME sector is not very attractive for leading EE technology suppliers. “Lack of

domestic sources of capital is rarely the true problem. Instead, inadequate systems for accessing funds are usually the main problem.” (The World Bank – ESMAP

Report May 2006, 1–4).

training manual for energy professionals in the foundry sector

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