Report Cement

Table of Contents
Table of Contents............................................................................................................................ i
About WADE................................................................................................................................. ii
Acknowledgements ....................................................................................................................... iii
Executive Summary ...................................................................................................................... 1
Introduction ................................................................................................................................... 4
The Cement Industry .............................................................................................................. 5
International Cement Markets ................................................................................................ 6
Onsite Power Benefits .......................................................................................................... 11
Environmental Impacts of Cement Production .................................................................... 13
Onsite Power and Cement .......................................................................................................... 19
Technologies ........................................................................................................................ 20
Baseline ................................................................................................................................ 23
Potential................................................................................................................................ 25
Barriers and Driving Forces ................................................................................................. 27
Conclusions .................................................................................................................................. 32
References .................................................................................................................................... 34
Annex 1. Selected Companies Involved in Onsite Power in Cement Plants.......................... 36
Annex 2. Statistics and the Cement Industry........................................................................... 37
Annex 3: The CDM and Cement............................................................................................... 38
About WADE
The World Alliance for Decentralized Energy (WADE) was established in 2002, as a non-profit
organization, to accelerate the worldwide development of high efficiency decentralized energy
systems that deliver substantial economic and environmental benefits. WADE represents the
interests of those involved in the entire value chain of combined heat and power (CHP) and
renewable decentralized energy (DE) systems.
WADE believes that the wider use of DE is a key solution to bringing about the cost-effective
modernization and development of the worlds electricity systems. With inefficient central power
systems holding a 90% share of the worlds electricity generation capacity, and with the DE share
at only about 10%1, WADEs overall mission is to have this share reach 14% by 2012. A more
cost-effective, sustainable and robust electricity system will emerge as the share of DE increases.
WADE undertakes a growing range of research and programs on behalf of its supporters and
members:
Cutting-edge research and analysis on energy and the environment;
Global advocacy of policies and programs designed to level the playing field for DE;
Organization of events and activities designed to promote and advance the market
for DE technology and showcase member product offerings;
Communications and public relations that delivers the DE message to policy-makers

and the general public;
Dissemination of market intelligence and breaking news to keep members informed

of the latest developments in the global DE marketplace.
ii
Acknowledgements
The author would like to thank the following individuals for their help in the researching and
writing of this paper:
Peter Bell, International Cement Review

Michael Brown, Delta Energy and Environment
Stefano Campanari, Milan Polytechnical
Edouard DeLafarge, Lafarge
Sytze Dijkstra, WADE
Ihab Elmassry, Carbon Capital
Hanno Garbe, Siemens
Sandeep Junjarwad, Cogen India
Dr. Howard Klee, WBCSD Cement Sustainability Initiative
Ludovic Lacrosse, EC-ASEAN COGEN Program
Eliane Lacroux, Cembureau
Arul Joe Mathias, EC-ASEAN COGEN Program
Dr. Brahmanand Mohanty, Asian Institute of Technology
H. Nagasako, Kawasaki Heavy Industry
Jonathan Sinton, International Energy Agency
K Sivaram, Confederation of Indian Industry
Ahmet Sonmez, Turbomach
Vivek Taneja, Thermax
Hendrik van Oss, US Geological Survey
Ernst Worrell, Lawrence Berkley National Laboratory
All efforts have been made to ensure that the data contained in this report is the best available at
the time of publication. If you are aware of any omissions or errors in the data used to make the
calculations in this report, please contact WADE and bring the error(s) or omission(s) to our
attention.
Lead Author:
Jeff Bell, the World Alliance for Decentralized Energy
iii
Executive Summary
The cement sector represents approximately 5% of total global CO2 emissions (see figure E-1).
About half of these emissions are a result of the chemical reaction necessary to transform the raw
material into the finished product. However, the other half of the sectors emissions results from
the combustion of fossil fuels for heat and power. The process of making cement is among the
most energy intensive of any industry. In order to catalyse the chemical reaction, extremely high
temperatures must be reached. Therefore, most of the fuel input is for heat. Power accounts for
less than 10% of the sectors emissions, yet electricity supply is fundamental to the process.
FIGURE E-1
GLOBAL ANNUAL CO2 PRODUCTION, BY INDUSTRY (30GT CO2)
Manufacturing Excluding
cement
17%
Other sectors
14%
Calcination 50%
Road transport
18%
Cement manufacturing
5%
Non-road transport
6%
Energy industry
5%
Fuel 40%
Heat and power

34%
Electricity/transport 10%
SOURCE: 5, 25
While generating electricity on cement manufacturing sites is a common practice in many areas
of the world, significant untapped potential for onsite power remains. Onsite power offers many
benefits, both to society in general and, in many cases, for the cement plant managers. System
level benefits include significantly reduced capital expenditure for transmission, distribution and
generation infrastructure, decreased vulnerability to fuel price volatility and vastly reduced smog
and climate change causing emissions. At a plant level, onsite power guarantees against
production interruptions from utility failures, saves energy costs, allows higher kiln utilization
and increases quality of the finished product.
Three types of onsite power are discussed in this report: bottom cycle cogeneration, top cycle
cogeneration and onsite power-only applications. Bottom cycle applications, where heat from the
kiln is recovered to generate electricity, may have the most potential for reducing the
environmental impact of the cement sector. Top cycle plants, where fossil generators are placed
on the cement plant site and the waste heat is used for some useful purpose, either in cement
manufacturing or for a neighbouring facility, also offer considerable promise to the industry.
Finally, standby plants in power only applications can also offer valuable benefits.
WADE has compiled documentation of over 2,900MW of installed electric generating capacity in
cement plants worldwide (see table E-1). This is certainly an underestimation. Data, although
imperfect, suggests that onsite plants are installed at a minority of the worlds cement plants. In
the top 20 cement producing countries alone it is estimated that the overall potential to generate
electricity at cement plants is about 57 TWh annually. Total potential is estimated to be about
68.3 TWh/year or 0.41% of total global electricity demand in 2003 (including all sectors: other
industries, residential agriculture, etc). If all or even some of the potential were realized
considerable emissions from the central power plants serving these cement plants could be
displaced. If it is assumed that all power displaces coal then about 68.3 Mt CO2 of total global
emissions could be displaced every year. Opportunities for either top or bottom cycle
cogeneration, or both, exist at many of the worlds cement plants.
In short, while the cement sector is responsible for a disproportionately high percentage of global
GHG emissions, there remains significant potential for investment in onsite power technologies
that can improve competitiveness, increase reliability and reduce environmental damage.
TABLE E-1
EXISTING ONSITE POWER CAPACITY* AND GENERATION IN CEMENT PLANTS BY TOP CEMENT PRODUCING NATION
Country
# plants
China
India
USA
Japan
Korea
Russia
Spain
Brazil
Italy
Egypt
Mexico
Thailand
Turkey
Indonesia
Iran
Germany
Saudi Arabia
France
TOTAL
570
365
109
# plants with Capacity

onsite power MW*
63
65
4
33
2
569
1,609
150
281
19
Gen (GWh)*
purchased
(GWh)
4,981
486
10,144
10,300
37
93
12
30
11
29
50
38
1,344
0
1
0
2
1
0
250
0
49
12
2
1
174
2,939
0
572
0
0
0
1,494
7,541
5,127
3,628
3,759
5,307
38,264
Potential
Onsite Power
(TWh/year)*
*
27.6
4.9
3.4
2.4
2.0
2.1
1.3
1.5
1.5
1.1
1.3
1.6
1.1
1.4
1.1
1.0
0.8
0.7
57
* INCLUDES TOP AND BOTTOM CYCLE COGENERATION AS WELL AS POWER ONLY APPLICATIONS.
** CALCULATED BASED ON AVERAGE POTENTIAL OF 32.5 KWH OF GENERATION/TON CLINKER (SEE TABLE 3)
SOURCE: WADE COMPILATION- WHERE CELLS ARE BLANK DATA IS UNAVAILABLE
Introduction
Question
The cement industry is one of the most important industrial sectors in the world both in terms of
the benefits it brings to society and the phenomenal impact it has on the environment. Energy use
is a key ingredient of plant productivity and efficiency. After the power sector and transportation
sectors cement uses more energy than any other industry. There is scope for improving energy
efficiency in the cement manufacturing process and there are various means of realizing this great
promise. Cogeneration of heat and electricity is one such means. Little public data exists on the
potential for onsite power in the cement industry to combat air emissions and increase economic
competitiveness. Similarly, little information exists in the public domain on the extent to which
onsite power is already being employed. This report aims to improve the general knowledge base
so that better decisions on the appropriateness of investment in onsite power in the cement
industry can be made. The main questions this study sets out to answer are:
What are the benefits of onsite power?
What potential exists for onsite power in the global cement industry?
What proportion of the potential has been realized?
What needs to be done to realize the remaining potential?
Audience
The reports ultimate beneficiaries will be the many companies active in the cement industry:
clinker-manufacturing companies, integrated cement plants and grinding-only plants. It will
interest plant engineers, commodity financiers, managers, and market researchers. Many of these
companies will have in-house research on onsite power relevant to their business, but this is the
first report looking at the potential from the perspective of the sector as a whole. The primary
intended audience of the report are those less familiar with the cement industry, but who care
about the impact the industry has: governments and policy makers, power sector professionals, as
well as environmental organizations and the general public.
Justification
The cement industry is a highly energy intensive industry. In 2004 it is estimated that fuel
consumption and electricity use in the cement industry accounted for about 3% of total global
primary energy consumption2,3,4 (See figure 1) and 5% of total global CO2 emissions.5 Given
increasing issues of energy supply reliability, price volatility and environmental impact of
inefficient energy use, the impetus to improve efficiency in every sector is pressing. Because the
2-5% depending on source
cement industry uses so much energy around the world it makes sense to re-examine the potential
for efficiency improvements in every aspect of the cement making business. The purpose of this
report is to examine the potential of one type of energy efficiency gain that has not been fully
realized: onsite power generation in the cement industry.
FIGURE 1
TOTAL GLOBAL PRIMARY ENERGY CONSUMPTION (EXAJOULES) (2002)
All other
sectors
64%
Industrial
sector
(excluding
cement)
33%
Cement
sector
3%
SOURCE: 2,3 &4
Cement manufactures operate in a highly competitive environment both at a local and

international level. Efficiency improvements in production can translate into important increases
in competitiveness. There are both economic and environmental gains to be made by optimising
investment in onsite power in the cement industry.
Taking a global perspective may lend new inspiration to those involved in the cement industry
and encourage people to look beyond the local industry to see what precedents exist in other
countries.
The Cement Industry

Cement is the binding material that, when mixed with an aggregate such as sand or gravel, forms
concrete, one of the most common construction materials in the world. Other uses include plasters
mortars and other widespread building materials. Portland cement is the most common type of
cement but various others also exist as illustrated in table 1. From a customer perspective the
various types can often be substituted for one another.
TABLE 1
TYPES OF CEMENT
Ordinary Portland Cement
Most common type of cement made of ground hydraulic calcium silicates
Aluminous cement
A cement based on calcium aluminates rather than calcium silicates
Blended cement
A cement where portions of the unmilled cement has been replaced with waste
materials from other industries (e.g. slag from steel furnaces, ash from power
plants, etc.) or natural materials (e.g. volcanic ash).
Specialty Cements
Cement that has been especially prepared for specific end uses such as high salt
water resistance, etc.
SOURCE: 7
International Cement Markets

Growing demand for roadworks, waterworks, residential commercial and industrial buildings are
all expected to result in steady increase in demand for cement in the long term all around the
world. Table 2 shows some of the top cement manufacturers in the world with total production
for 2004. Tables 3 and 4 show the top 20 countries for cement and clinker production over the
last half decade. Over the last five years total clinker capacity has increased 20% and cement
production 22%. Most markets around the world are expected to continue to expand cement
production, in some cases rapidly. Chinas annual cement production, for example, more than
doubled between 1994-2003, and there is every indication that growth will continue.6
TABLE 2
SELECTED TOP CEMENT PRODUCERS WITH RECENT PRODUCTION DATA
Company
Lafarge
Holcim
CEMEX
HeidelbergCement
Taiheiyo Cement
Italcementi
Buzzi Unicem
Cimpor
Gujarat Ambuja Cement Ltd
Cementos Molins
Annual Cement Production

capacity (MT in 2004)
130
111
66
65
53
52
38
24
13
2
SOURCE: WADE COMPILATION
TABLE 3
HISTORIC CLINKER CAPACITY BY YEAR AND COUNTRY
Year end clinker capacity (Thousand metric tons)

Country
China
India
United States
Japan
Korea
Russia
Spain
Brazil
Italy
Egypt
Mexico
Thailand
Turkey
Indonesia
Iran
Germany
Saudi Arabia
France
Other countries
World total
2000
2001
2002
2003
2004
2005
550,000
110,000
91,228
96,000
62,000
65,000
40,000
45,000
46,000
24,000
40,000
48,000
33,000
45,000
26,000
43,000
n/a
24,000
350,000
1,700,000
550,000
120,000
100,360
90,000
58,000
65,000
40,000
44,000
46,000
28,000
37,000
48,000
33,000
40,000
30,000
31,000
24,000
22,000
300,000
1,700,000
550,000
120,000
102,000
90,000
60,000
65,000
40,000
45,000
46,000
35,000
40,000
50,000
33,000
40,000
30,000
31,000
24,000
22,000
320,000
1,700,000
750,000
120,000
102,000
78,000
62,000
65,000
40,000
45,000
46,000
35,000
40,000
49,000
35,000
50,000
33,000
31,000
24,000
22,000
330,000
1,960,000
850,000
150,000
105,000
76,000
62,000
65,000
40,000
45,000
46,000
35,000
40,000
50,000
35,000
42,000
33,000
31,000
24,000
22,000
330,000
2,100,000
850,000
150,000
106,000
74,000
62,000
65,000
40,000
45,000
46,000
35,000
40,000
50,000
35,000
42,000
35,000
31,000
24,000
22,000
346,000
2,120,000
% growth
2000-2004
35
27
14
-30
0
0
0
0
0
31
0
4
6
-7
26
-39
0
-9
-1
20
SOURCE: 19
TABLE 4
HISTORIC CEMENT PRODUCTION BY YEAR AND COUNTRY
World Cement Production (Thousand metric tons)

2000
2001
2002
2003
2004
China
597,000
661,040
725,000
862,080
933,690
India
95,000
105,000
115,000
123,000
125,000
United States 89,510
90,450
91,266
94,329
99,015
Japan
81,097
76,550
71,828
68,766
67,369
Korea
51,255
52,046
55,514
59,194
53,900
Spain
38,154
40,512
42,417
45,000
46,790
Russia
32,400
35,300
37,700
41,000
43,000
Turkey
35,825
30,125
32,577
35,077
38,019
Brazil
39,208
38,927
38,027
34,010
38,000
Italy
38,925
39,804
40,000
38,000
38,000
Indonesia
27,789
31,300
34,640
35,000
36,000
Thailand
25,499
27,913
31,679
32,530
35,626
Mexico
33,228
32,110
33,372
33,593
34,992
Germany
35,414
32,118
31,009
32,349
31,954
Iran
23,880
26,640
28,600
30,000
30,000
Egypt
24,143
24,700
28,155
26,639
28,000
Vietnam
13,298
16,073
21,121
23,282
25,320
Saudi Arabia 18,107
20,608
22,000
23,000
23,200
France
20,137
19,839
19,450
19,660
20,960
Taiwan
17,572
18,128
19,363
18,474
19,050
Top 20 Total 1,337,441 1,419,183 1,518,718 1,674,983 1,767,885
World Total 1,660,000 1,750,000 1,850,000 2,020,000 2,130,000
Country
% growth
36
24
10
-20
5
18
25
6
-3
-2
23
28
5
-11
20
14
47
22
4
8
24
22
SOURCE: 20
Cement Making
Cement production is an intensive practice involving huge amounts of natural resources, capital,
labour and energy. Various types and qualities of end product exist.7 A variety of manufacturing
processes also exist depending on the age of the technology and type of cement. The most
common manufacturing processes include shaft kiln, wet kiln, dry kiln and precalciner. In figure
2, below, a diagram of the general simplified process is illustrated.
FIGURE 2
SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM
Quarrying
Crushing
Clinker
Cooling
Blending
Drying
Milling
Heating in Kiln
Preheating/
Precalcification
Blending
Clinker
Milling
Finished
Cement
Packaging and
Shipping
SOURCE: WADE FROM VARIOUS
In all processes first the raw material, limestone, along with much smaller quantities of clay or
sand, is quarried, transported to the mill, crushed, blended and milled. The wet kiln process and
shaft kiln process, although still more common in some regions than the newer dry process, are
much less energy efficient. With the wet kiln process the mixture is mixed with water to form a
slurry, which is then fed into preheaters and then a large rotating kiln. In the dry process, on the
other hand, the mixture is fed into the preheaters and kiln in a dry state.
Within the rotary kiln the mineral mix undergoes chemical reaction under extremely high
temperatures (between 1480C and 1870C) fuelled by a coal, oil or gas-fired burner. Out the
other end of the kiln emerges the new material, clinker, which is then cooled, ground and blended
with various additives depending on the type of cement being produced. For example, small
amounts of gypsum or other additive can be added to the cement prior to sale to control setting
time. The finished product is then ready for shipping.
With the precalciner process some of the waste heat from the rotary kiln is used to preheat the
raw materials on their way to the kiln but much scope typically exists for improved energy
recovery (see figure 3). With the aim of improving the efficiency of manufacture, a gradual shift
9
from wet technology to dry technology has been occurring around the world.8 Other cement
processes that are being phased out include hollow rotary kilns and earthen vertical kilns once
common in smaller cement mills in China.6 Old shaft kilns are being replaced with new
suspension preheater (NSP) kilns.6 New solutions for overcoming technical challenges which
prevent economic heat recovery are constantly being sought and much progress has been made in
the last 20 years.
FIGURE 3
SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM WITH MAIN ENERGY FLOWS

1.
heat
Quarrying
Crushing
Blending
Drying
Milling
fuel
for
heat
2.
heat
4.
heat
3.
heat
heat
Clinker
Cooling
fuel
for
heat
Heating in Kiln
fuel
for
heat
Blending
Clinker
Milling
Finished
Cement
Preheating/
Precalcification
Packaging and
Shipping
= Indicates electricity input requirement
SOURCE: WADE FROM VARIOUS
10
Onsite Power Benefits

The benefits of onsite power are numerous, and equally applicable whether the power is
generated at a cement factory, or elsewhere power is required. The diverse benefits have been
catalogued extensively in other reports. Nevertheless, it makes sense to list a few of the benefits
here in order to provide context to the cement industry. Benefits can certainly be accrued at a
project level but perhaps even more significant, and often overlooked, are the many benefits at a
larger system level.
Project Level
Cost Savings
Estimating potential cost savings at the level of an individual cement plant is a complex issue
because the only way to determine if an onsite plant is suitable is to examine the variables
particular to the plant, including quality and temporal availability of waste heat, existing and
expected fuel and electricity prices, local regulatory framework, age of plant and upgrade
schedule. There is no doubt, however, that in some circumstances investment in onsite power can
have a quick payback or offer even more important qualitative benefits such as a secure and
reliable power supply. For example, the Shree cement plant in India generates sufficient power
onsite to meet its own needs and also export additional power to the grid.
In the case of a new build, the use of waste heat to generate power onsite may reduce capital
requirements for gear such as line capacities, transformers and switchgear for interconnection and
distribution.9 These savings, however, are highly site specific, depending on local laws, utility
supply, local power cost, and the revenue potential from export of excess power. In some cases
these savings in capital expenditure may completely offset the cost of the waste recovery
equipment. These savings do not apply to existing plants unless the electrical conversion
equipment is reaching the end of its lifespan. Thus, the economics of heat recovery equipment
can be improved in periods when major upgrades or replacements of plant hardware are being
considered.
There is no question that in some countries, such as China and India, there is a strong motivation
to install power generation because the local system is relatively undeveloped and unreliable.
Distributed power generation from many multiple sources can help overcome reliability concerns
associated with large central power generation facilities.
Environment
In modern plants with 5-6 preheater stages, the efficiency of the plant is already quite high. In
some cases it will be still higher with the addition of power generation equipment. By installing
an onsite power application cement plants can reduce the GHG emissions of their own operations
independent of the far greater potential of displacing dirty electricity that would otherwise be
See for example other WADE reports at www.localpower.org/resources
11
purchased from a polluting and inefficient central generator.

Other
Other plant level benefits of installing cogeneration include:10
reduced downtime and interruption of kiln operation
improved fuel efficiency
lower consumption of refractories
enhanced clinker quality
higher kiln utilization
System Level
Grid Benefits
Having onsite power plants embedded into the grid, especially where load pockets exist, can
improve the quality of service offered by the grid by functioning as a stabilizing mechanism,
reducing transmission constraints, and reducing the frequency of brownouts. Several European
countries, such as Finland, Denmark and the Netherlands, have proven that grid performance is
not impeded even when onsite power accounts for more than 50% of total generation.1 Indeed
there is strong evidence that having DE embedded in the grid reduces the risk of power
11
outage, defers grid investment, alleviates grid congestion,12 and offers quantifiable benefits to
companies in the form of insurance from blackouts.13 In other words, even with DE saturation of
up to 50%, special controls for power distribution are not required.
Cost Savings
Research by WADE has shown that investment in onsite power, has the potential to consistently
deliver significant cost savings at a system level. Both cost savings in the form of reduced capital
cost expenditure and, more importantly, delivered energy cost can be realized via a shift in
investment from traditional central plants to smaller distributed plants to meet incremental
demand growth for electricity. Work that WADE was recently commissioned to conduct in the
UK, for example, demonstrates that a shift in investment towards DE results in about UK 1.4
billion of avoided capital costs and reduced delivered energy cost of 0.38 pence/kWh.14 Other
WADE work suggests that similar savings are achievable in other countries around the world.
Environment
Onsite power generation, where waste heat is put to use, can offer significant environmental
benefits compared to even the most efficient central electricity generating facility. This is the case
whether it is a cement plant displacing central fuel combustion or some other factory or building.
Centralized power plants average about 33% efficiency because the majority of the energy in the fuel burned is wasted as thermal
energy up the stack.
Refractories are special temperature-resistant materials used to line kilns/ furnaces etc in order to increase their lives.
12
The environmental benefits of onsite plants are realized via the displacement of power generation
that would otherwise come from (fossil-fired) centralized utility plants. The benefits are a result
of several factors and driven by the technology chosen (see section below on technologies). The
main environmental benefit of onsite power is reduced emissions of GHG. Just as important, but
often overlooked, are the other air pollutants arising from fossil fuel combustion that are also
reduced, such as SO2, NOx, mercury and particulates. Onsite plants may also benefit from
increased water use efficiency, but as of yet there is little research to verify this.
Fuel Savings and Independence
From a system level, the reduced fuel use associated with onsite power also means that less fuel
needs to be produced or imported in order for the economy to run. This is especially relevant in
any heavily fuel import-dependent economy where significant fuel imports has a strong negative
impact on the balance of payments and overall economy.
Environmental Impacts of Cement Production

The cement industry is among the worlds industries with the largest environmental footprint
because of the exceptional amount of energy and raw materials used. Manufacturing cement is
responsible for about 5% of total global GHG emissions. Because of its impact the industry is
under tremendous pressure to improve its environmental performance.
Table 5 shows the results from the Science and Technology Policy Research Institutes
Sustainable Cement Initiative study on benchmark figures for participating European cement
producers. Onsite power production is not tracked, but the table does provide some interesting
figures for a wide range of environmental performance metrics including energy and electricity
use per unit output. Of particular interest is the wide range of energy use per unit output for even
a small selection of European cement manufacturers. Future studies could consider including
power from waste heat/unit output or electricity generated onsite/unit output.
In total 27 separate indicators were tracked from such diverse categories as: energy, resource use and waste, pollution and social and
economic
13
TABLE 5
SELECTED GLOBAL CEMENT SUSTAINABILITY INDICATORS FOR PARTICIPATING CEMENT COMPANIES
Indicator
Energy Indicators
Total conventional energy use
Electricity use
Fossil fuel use
Use of alternative energy
Renewable/alternative fuel use
Renewable electricity use
Pollution indicators
CO2 emissions
SO2 emissions
NOx emissions
CO emissions
Dust emissions
Particulate emissions (PM 10)
Unit
Average
Lowest
Highest
Std.
Dev.
Megawatt hours / t cement

Percent
Percent
0.9
0.1
0.9
0.0
6.3
0.0
0.4
0.0
0.4
0.0
0.0
0.0
1.1
0.2
1.6
0.2
25.3
0.0
0.3
0.0
0.3
0.1
8.5
0.0
10
56
33
10
28
10
tonnes / t cement
Kilograms / t cement
0.7
1.6
2.5
1.6
0.1
0.0
0.0
0.5
0.0
0.1
1.0
7.8
5.6
5.1
0.1
0.2
2.0
1.3
1.3
0.0
60
56
59
37
5
0.2
0.0
0.9
0.2
30
SOURCE:21
Energy Use in the Cement Sector

In major cement producing countries the cement sectors demand for energy typically registers
between 1% and 6% of total commercial energy.2 In China, the second biggest energy consuming
nation after the United States, the figure was 7.1% in 2003.6 Energy costs account for a very large
proportion of total cement manufacturing costs, upwards of 30-50%.6,15,16,17 While the majority of
energy used in the cement manufacture process is fuel energy for heat, electrical energy is also an
important, and expensive, secondary requirement. Because heat is the main energy requirement
for process, large quantities of fuel are burned to generate heat but much heat is used once or
twice and discarded. The laws of thermodynamics prevent all the heat from being recovered.
Nevertheless, massive potential exists to capture and use low, medium and even high grade heat
for power generation, process drying and space heating/cooling. Figure 3, above, shows the main
sources of waste heat in the manufacturing process.
Figures 4 shows the energy intensity of some of the main cement producing nations over time. In
most areas there has been a gradual decrease in the energy required to make a unit of clinker, but
ample room for improvement remains. Japan is currently the country that sets the standard for
energy efficiency in the cement manufacturing sector. The Japanese currently use 25% less
energy per unit cement than Western Europe and 33% less than China. There are various reasons
for the success of the Japanese, such as a complete shift from wet to dry process. Another factor
that certainly plays an important role is that Japanese cement manufacturers are required by law
to hire an energy manager to examine onsite power potential and proceed with the investment if it
is viable.18
14
FIGURE 4.
ENERGY INTENSITY OF CEMENT PRODUCING REGIONS OVER TIME (MJ/KG CLINKER)
6.00
5.00
4.00
3.00
2.00
1.00
Middle East
Africa
Latin America
Other Eastern Europe
Former Soviet Union
India
South Korea
South East Asia
China
Japan
Canada
2000
Australia/ New Zealand
1990
Western Europe
USA
0.00
SOURCE. 3, PAGE 5
Figure 5, below, shows the typical energy intensity of various cement manufacturing processes.
Note that the most efficient method (which recovers waste heat from the kiln to preheat materials
as they enter the kiln) uses 30-40% less energy than some of the older methods which suggests in
general that there is considerable room for improvement.
FIGURE 5
ENERGY INTENSITY OF VARIOUS CEMENT/ CLINKER PRODUCTION TECHNOLOGIES

7
GJ/t clinker
6
5
4
3
2
1
0
Shaft kiln
Wet kiln
Dry kiln (four

stage preheater)
Precalciner dry
kiln (six stage
preheater)
SOURCE: 22
15
Greenhouse Gas Emissions in the Cement Sector

Greenhouse gas emissions, especially CO2, are of growing importance to cement manufacturers
and the public in general. The arrival of the European Emission Trading scheme, for example, has
made CO2 emissions an economic liability for manufacturers in Europe. Table 6 shows the GHG
emissions attributable to the cement industry for a select number of countries.
TABLE 6
GREENHOUSE GAS EMISSIONS FROM THE CEMENT INDUSTRY
Country
Mtons
CO2
year
Brazil
USA
Canada
Japan
Australia & NZ
China
Korea
India
Former Soviet Union
22
90
8
60
6
449
40
64
71
1996
2000
2000
2000
2000
2000
2000
2000
2000
Figure 6, below, shows the world cement industrys contribution to total global CO2 emissions.
The industry is responsible for about 5 % of total man-made CO2 emissions in the world.23,24
Unlike other industries, fuel-use is not the most important source of GHG in cement manufacture.
About half of the sectors emissions are derived from the chemical process of clinker production.
Under extremely high temperatures limestone (calcium carbonate) is calcinised into lime
(calcium oxide) and carbon dioxide:
CCaO3 +heat = CaO + CO2
The calcium oxide then reacts with the silicates to form dicalcium and tricalcium silicates
(cement). CO2 is one of the chemical by-products of the process. This means that, despite plant
efficiency, the clinker based cement industry will always be an important source of CO2
emissions. Fuel burned for heat and electricity account for the other half of emissions from the
sector. The actual portion of CO2 resultant in the cement industry can roughly be divided into
50% chemical reaction, 40% fuel consumption for heat and 10% fuel consumption for electricity
and transport of raw materials (see figure 6).
16
FIGURE 6
GLOBAL ANNUAL CO2 PRODUCTION, BY INDUSTRY (30GT CO2)
Manufacturing Excluding
cement
17%
Other sectors
14%
Calcination 50%
Road transport
18%
Cement manufacturing
5%
Non-road transport
6%
Energy industry
5%
Fuel 40%
Heat and power

34%
Electricity/transport 10%
SOURCE: 5, 25
CO2 Abatement Approaches

Various CO2 abatement approaches are possible in the cement industry, some of which have
greater potential to reduce emissions than can be realized from onsite power alone. Table 7
summarizes some of the main approaches for emission abatement in the industry, including
electricity generation, the main solution of interest here.
Because it accounts for such a high percentage of the industrys overall emissions, displacing
clinker with other cementous materials that do not require calcination has been the GHG
abatement approach that has so far garnered the most attention. Although fewer GHG emissions
abatements are achievable via power generation, the potential is nevertheless considerable, and in
many cases the payback period can be negligible. At the very least, the possibility deserves reexamination in light of changing electricity markets, volatile fuel prices and regulatory
frameworks that increasingly include the cost of carbon in their accounts. The various means of
power generation discussed in the following section are realistic solutions that deserve closer
scrutiny.
17
TABLE 7
GREENHOUSE GAS ABATEMENT STRATEGIES FOR THE CEMENT INDUSTRY
Approach
Bottom Cycle Cogeneration
Top Cycle Cogeneration
Blending cement
Fuel switching
Transport
Plant efficiency
Preheater/precalciner
Production of Reactive Belite Clinker
Off-site Green Power
Process
Use waste heat to generate electricity.
Generate power onsite and use waste heat from
power system to dry fuels for kiln or cement raw
materials.
Replace a portion of the clinker in the cement with
pozzolanic materials (the production of which
produces less CO2). Examples include ash, slag and
natural pozzolans.
Replace coal with gas or gas with biomass.
Replace transport fuels with biofuels.
Increase plant efficiency via insulation, eliminating
leaks, improvement of grinding systems, advanced
pyro-processing techniques, switch to dry from wet
process, etc.
Capture waste heat to preheat raw material prior to
entering kiln.
Allows lower clinkering temperature and therefore
reduced emissions because less fuel is required.
Buy grid-power from green sources.
SOURCE: WADE BASED ON 26,27 & 28
Using a heat exchange system to preheat raw material is usually more energy efficient than the cogeneration of electricity because
cogeneration systems convert thermal energy to electrical energy at about a 30% efficiency (typically about 9,935 Btu are required to
produce 1 kWh (3,412 Btu)). Source: 29
18
Onsite Power and Cement
Heat inputs are an important part of the cement manufacturing process (see figure 3). As a result,
opportunities for making use of waste heat are abundant. As mentioned above, although
electricity is a secondary energy requirement in cement plants compared to heat, supply is
nevertheless a prerequisite to the operation of any cement plant. Table 8 below shows the typical
electricity required of Indian cement plants of various cement production capacities. Figure 7,
below, illustrates the breakdown of a typical power bill faced by a cement manufacturer in Brazil.
Prospects for onsite power generation and cogeneration exist for all cement manufacturing
facilities including both wet and dry kilns, though the trend of wet kilns slowly being phased out
should be seen as an encouraging sign in the context of heat recovery. This is because exhaust
gases from even the best maintained wet kilns tend to be of insufficient temperature and have a
moisture content that is too high for optimal heat recovery via steam generators.9 All else being
equal, dry kilns tend to require more electricity per ton output,20 however, it is plant size that is
the main factor that determines electricity use. Larger plants require more power in absolute
terms irregardless of process (see table below). A Brazilian study estimates that cogeneration
represents between 11.8% and 12.1% of total energy efficiency improvement potential
realistically realizable in the cement sector between 1995 and 2015.30 The same study found that
14% of the sectors power demands could be met via cogeneration.
Even where there is potential for onsite power generation in a cement manufacturing plant the
economics of an upgrade that includes onsite power capacity may not always be favourable.
Plants considering major upgrades, such as switching to dry process, are in a good position to
simultaneously examine opportunities for investing in onsite power. Such major upgrades often
present good opportunities for onsite power investment because many of the incremental costs,
such as engineering studies, land acquisition studies, and financing options can be combined, thus
reducing significantly the costs that would be required if onsite power were to be considered on
its own.
TABLE 8
POWER REQUIREMENTS IN INDIAN CEMENT PLANTS
Plant capacity
Tons/day
1,200
3,000
4500
Typical electricity
requirements
(MW)
10
24
29
SOURCE: 28
19
FIGURE 7
TYPICAL ELECTRICITY CONSUMPTION BY USE IN BRAZILIAN CEMENT PLANTS
41%
2%
1%
3%
Preparation of raw material

Preparation and grinding untreated
material
Blending clinkering kiln and cooling
Finish grinding
General auxillary jobs
Lighting
32%
21%
SOURCE: 30
Technologies
CHP in the cement industry can be either bottom or top cycle. In other words, waste heat
produced in existing industrial processes can be captured and put to use generating power or
power can be generated using an onsite engine or turbine and its waste heat can be captured and
used for some industrial process such as drying, preheating, and cooling. With this in mind, there
are three options for onsite power in cement plants:
Bottom Cycle Cogeneration (waste heat recovery or energy recycling)
Onsite Standby/Baseload Power Generation
Annex One shows a list of selected companies involved in developing onsite power projects in
the cement sector.
20
Bottom Cycle Cogeneration - Waste Heat Recovery

This process is the most promising onsite power generation opportunity in the sector because of
the abundant waste heat of both high and low grade. All waste heat that is successfully recovered
directly displaces energy costs that would have otherwise been borne by the cement producer.
Table 9 summarizes the various sources of heat from a cement plant and the related estimations of
theoretically recoverable energy.
TABLE 9
TYPICAL HEAT RECOVERABLE FROM A 1000 TON/DAY OF CLINKER CAPACITY PLANT
Source of heat within process
Recoverable Energy
(MJ/ton of clinker)
?
388-457
120-241
345-457
raw material drying

cyclone preheater exhaust gas
by-pass gas
clinker cooler exhaust gas
Reference from Figure 3

1
2
3
4
SOURCE: BASED ON 10
Various approaches can be used for this bottom cycle approach including, a Steam Rankine
Cycle, an Organic Rankine Cycle or the Kalina Cycle. Table 10 summarizes three parameters of
the various approaches: heat resource requirements, cost and possible output.
TABLE 10
COMPARISON OF VARIOUS TECHNICAL APPROACHES OF WASTE HEAT RECOVERY FOR POWER GENERATION
Parameter
Waste heat temperature needed
(C)
Approximate capital cost
($US/kW generating capacity)
Electric Generation
(Steam Rankine=1)
Approach
Steam Rankine
Organic Rankine
Kalina
>250
>200
>200
1100-1400
1500-3500
1100-1500
1.3-1.7
1.3-1.6
SOURCE: BASED ON 9, TABLE 5
The Steam Rankine approach is the most common approach and the one used in existing onsite
power plants in US cement plants (examples include the Florida Crushed Stone, Brooksville
Florida and CalMat in Colton California which has been in operation since 1985).9 The Organic
Rankine Cycle (ORC) (also known as ORMAT energy converter (OEC)), though more
expensive, can make use of lower temperature waste heat. An example of a successful ORC
installation is the Heidelberger Zement in Germany.9 Examples of the successful application of
Kalina cycles also exist in industrial settings, for example in the Sumitomo Corporation Kashima
Steel works in Japan, but there are not yet any commercial applications in cement plants.31
21
Bottom cycle plants offer the most environmental benefits because they use waste heat to
generate electricity, so the power generated comes at no fuel premium. Power thus generated
would displace power from the local grid so the environmental benefits realized depend on the
local fuel mix. In the case of China, for example, generation would likely displace the need for
power from central coal plants. Indeed, there is actually an unintuitive multiplier affect of such
fuel displacement. Because a central plant is only 30% efficient, each kWh displaced by
generating power with top or bottom cycle cogeneration in a cement plant actually results in three
units of fuel being saved.9

Opportunities for standard top cycle cogeneration are also abundant in the cement industry, but
may require higher transaction costs if a neighbouring factory or community is used as a host for
the waste heat. Top cycle applications use waste heat or burn fuel to generate power onsite, and
subsequently use the heat exhaust from the generator to meet process needs. Examples of onsite
applications on the cement plant premises could include drying of raw meal (limestone/silicate
mix), or drying coal prior to its introduction into the system, both of which are desirable because
they can increase the efficiency of the plant. In blended cement plants, the raw material (slag, fly
ash etc.) can also be dried using cogeneration applications. For example, a plant in Rozenburg,
the Netherlands, uses gas turbines to generate power while the exhaust is used to dry slag.32
An almost inexhaustible array of opportunities exists for cement plants to use cogeneration to
supply heat needs to neighbouring plants or communities. Examples include greenhouses,
aquaculture, textile plants, food processing plants, and buildings via district heating networks.
Aalborg Portland plant in Denmark, for example, feeds heat into a district heating network
supplying approximately 15% of the municipal heat demand of the city of Aalborg.
For both buildings and industry, cooling is also possible through the use of absorption chillers.
For both heat and cooling distance is the main limiting factor as it is both expensive and
inefficient to move waste heat long distances. As a result, a very promising approach is to gather
industries together in industrial networking parks so that efficiency increasing measures, such as
top cycle cogeneration, can be realized.
In the case of top cycle plants the environmental benefits arise from increased efficiency. Even
the most efficient central CCGT plants max out at about 50-60% efficiency if they are not used in
cogeneration applications. Where fuel in cement plants is burned to generate power and the waste
heat is put to use for fuel drying or raw material preheating applications, the overall efficiency
can reach upwards of 90%. This efficiency saving directly translates into environmental benefits
in terms of reduced emissions (40% less fuel consumption means 40% lower emissions).
Additional environmental benefits are achievable via the fuel switching effect, for example, if gas
fired CHP replaces a combination of coal fired boilers and/or coal fired central plant.
In the Netherlands it is common to use CO2 from cogeneration applications to improve the growing environment for greenhouse
plants.
22
Onsite Standby/Baseload Generators

Power-only plants to supply cement plants electricity can be used for standby/emergency use or
for baseload. The important distinction is that no heat is recovered. An example of this approach
is seen at Grasim Cement in Chhatisgarh India. Although, from an environmental (and long term
economic efficiency) perspective this approach is suboptimal compared to the above two options,
there can be a strong economic case to invest in such technologies. Periodic power shortages and
power quality issues have led some cement plant operators to invest in this technology because of
its relative cheap upfront capital costs and its separation from the core processes (i.e. power
supply can be independent of operating the kiln). Such an approach has proven especially popular
in areas where grid power has been found insufficiently reliable to meet plant needs (such as in
India). For example, the Twiga Cement plant in Tanzania ensures continual operation thanks to a
3MW onsite power supply. The local electricity supply in Dar es Salaam is so unreliable that,
without the onsite power, the cement company could expect power outages up to five times a day.
Even though no heat is recovered, there may still be environmental benefits if inefficient and dirty
central generation (such as from coal) is displaced by cleaner onsite gas or biomass. In some
cases, however, the local environment may suffer as emissions shift from a remote central power
plant to the onsite generator or where the central grid is largely hydro based.
From a system perspective there may be some overall environmental benefits even with power
only applications as the elimination of transmission and distribution losses may allow central
thermal plants to reduce output by 5-10% of the cement plants load; an amount equal to average
transmission and distribution losses. Reduced line losses are of course applicable to top and
bottom cycle CHP as well. Clearly, an onsite power plant combined with some use of waste heat
is optimal but even power only can be a move in the right direction.
Baseline
Although onsite power technologies offer many benefits, they have been employed only
sporadically around the world. Table 11 illustrates the extent to which onsite power is currently
being used around the world based on an extensive survey by WADE. The results show that there
is an imperfect correlation between the amount of cement produced and use of onsite power
generation. In some countries the benefits from onsite power are already being widely realized,
elsewhere the potential has hardly begun to be tapped.
23
TABLE 11
EXISTING ONSITE POWER CAPACITY* AND GENERATION IN CEMENT PLANTS BY TOP CEMENT PRODUCING NATION
Country
China
India
USA
Japan
Korea
Russia
Spain
Brazil
Italy
Egypt
Mexico
Thailand
Turkey
Indonesia
Iran
Germany
Saudi Arabia
France
TOTAL
# plants with Capacity

onsite power MW*
# plants
570
365
109
Gen (GWh)*
63
65
4
33
2
569
1,609
150
281
19
0
1
0
2
1
0
250
0
49
12
2
1
174
2,939
4,981
486
9
37
93
12
30
11
29
50
38
1,344
0
572
0
0
0
1,494
7,541
Potential Onsite
Power
(TWh/year)**
27.6
10,144
4.9
10,300
3.4
2.4
2.0
2.1
1.3
1.5
5,127
1.5
3,628
1.1
3,759
1.3
1.6
1.1
5,307
1.4
1.1
1.0
0.8
0.7
38,264
57.0
purchased
(GWh)
* INCLUDES TOP AND BOTTOM CYCLE COGENERATION AS WELL AS POWER ONLY APPLICATIONS.
** CALCULATED BASED ON AVERAGE POTENTIAL OF 32.5 KWH OF GENERATION/TON CLINKER (SEE TABLE 3)
SOURCE: WADE COMPILATION- WHERE CELLS ARE BLANK DATA IS PUBLICLY UNAVAILABLE
Table 12, below, shows the installed onsite power capacity by country for three of the main
manufacturers in Asia. The Kawasaki plants are bottom-cycle cogeneration whereas the Thermax
and Siemens plants are a mixture of the top cycle, bottom cycle and power only plants.
24
TABLE 12
ONSITE POWER PLANT CAPACITY IN CEMENT FACTORIES BY SELECTED COMPANY AND COUNTRY
Country
China
Colombia
India
India
India
Japan
Korea
Saudi Arabia
Sri Lanka
Taiwan
Vietnam
TOTAL
Capacity(MW)
202
17
8
114
224
81
20
158
10
59
3
896
Company
Kawasaki
Siemens
Kawasaki
Siemens
Thermax
Kawasaki
Kawasaki
Siemens
Siemens
Kawasaki
Kawasaki
Potential
By most accounts the potential of onsite power for improved economic performance and reduced
environmental impact is significant. Potential can be gauged at both a system level (for example
the cement industry of a country as a whole) or a specific project level.
Project Level
From a project specific perspective cement owners must continuously consider energy efficiency
investments of all types in order to remain competitive. In some cases there is strong support for
investment in onsite power but lack of capital or redirection of capital to other investments
prevents projects from proceeding. In other cases onsite has been shelved indefinitely as a
promising option. A 2002 report in the USA called on the cement industry to re-examine the
potential CHP opportunities in the cement industry.9 There is some evidence that economies of
scale can be achieved with the potential CHP opportunities greater in larger facilities (investment
remains viable in smaller facilities). It is very difficult to generalize as to the appropriateness of
onsite power generation at a plant level because each facility will have to examine in detail the
specific circumstances before a decision can be made.
If it is possible to generalize on the appropriateness of onsite power at a project scale it is to say
that timing is important. Onsite power investments are most likely to cost effective when they can
be combined with the undertaking of other major upgrades. For example, shifting from a wet
process to a dry process results in much higher kiln exhaust gas temperatures, thus, creating
improved opportunity for waste heat recovery.10 Therefore, plants considering a shift from wet to
25
dry process may also consider investing in onsite power production. Kiln upgrades or other major
infrastructure changes may provide similar opportunities.
System Level
Little research seems to have been done on the scope for power generation technology in the
cement industry from a system perspective, although a recent report examining energy efficiency
opportunities in Chinas cement industry focused considerably on the opportunities for power
generation.6 It is safe to say that in any country with cement manufacturing capacity there is some
untapped opportunity for power generation.
Based on annual global clinker production and an assumption of the technical potential of heat
recovery per ton of clinker, a theoretical maximum electricity generation from the global cement
industry can be estimated. In a large cement plant, it is technically feasible to generate 30-35 kWh
via bottom cycle cogeneration per of ton clinker produced. Including top cycle cogeneration and
power only applications increases the potential considerably.
Since 2.1 billion metric tons of clinker were produced in 200519 and about 32.5 kWh of electricity
can be generated per ton clinker it would be possible to annually generate 68.3 TWh of electricity
if waste recovery opportunities in the cement industry were maximized. Total global demand for
generation was 16,661 TWh in 2003.33 Therefore, if power generation potential were realized the
cement industry could supply about 0.41% of total world generation. Less than one percent of
total global power generation may not seem like much, but it is in fact a phenomenal amount of
generation realizable from the cement sector with zero incremental pollution. If it is assumed that
all power displaces coal (and coal has an emission factor of 1kgCO2/kWh generated) then about
68.3Mt CO2 or 0.23% of total global emissions could be displaced every year. Coal is the main
source of fuel for power generation in many of the worlds top cement making countries
including China, India and the United States. Clearly if all this power displaced from central
fossil fuel major CO2 benefits could be realized. Emissions could be further reduced using top
cycle cogeneration.
Globally the current onsite generation capacity totals 2.9 GW (including bottom and top
cogeneration and power only plants in the worlds cement plants). This means that only a very
small proportion of this theoretical maximum generation (68.3 TWh) has been achieved. Also, the
above calculation provides an estimation of bottom cycle cogeneration potential only. The
significant potential for top cycle cogeneration is additional.
A similar calculation can be made at a national level. For example, since 105,000,00019 tons of
clinker were produced in the US in 2004, and 32.5 kWh/ton clinker is achievable, about 3.4 TWh
could be generated annually. The total demand for the electricity in the US cement sector was
13.7 TWh in 2004.20 Therefore, onsite power generation in the US cement industry could meet
25% of the industrys demand. Another study found that a similar proportion of the industrys
power demand could also be achieved in India.28 In China, a study estimated that large scale
onsite power uptake could save 4.2Mtce**of coal every year and displace 11.8 million tons of
Source: 6,9 (Source 10 uses 50-100 kWh/ton of clinker ; Source 30 uses 21.1kWh/ton clinker)
One Megaton coal equivalent equals 7.1 TWh therefore this is equivalent to about 29.82 TWh of energy.
**
26
CO2.6 Table 11, above, shows an approximate potential for onsite power production in various
cement producing nations based on 2005 clinker production figures. Indeed, various studies
suggest that about 20-30% of total power demand for the cement sector could be met by onsite
generation.9,28,30
Barriers and Driving Forces

Economics
Arguably, all barriers to developing onsite power projects in the cement sector are economic.
Although electricity accounts for a small proportion of the energy used in a cement production
facility it can account for a much higher proportion of production costs. This is true whether or
not the power sector has been deregulated. As fuel costs are expected to rise, this proportion of
the overall cost of cement manufacture can also be expected to rise, especially in countries
heavily reliant on fossil fuels to generate power. In most cement producing areas of the world
power was traditionally seen as a fixed cost, whereas fuel was a variable cost.9 Now that power
markets around the world are increasingly subject to competition, power managers must reexamine the economics of onsite power. Onsite power can be considered a form of buffer from
power price volatility, especially in areas where deregulation shifted the risk of energy price
volatility to purchasers, where before these risks were limited by fixed power rates and long term
contracts.
Figure 8 illustrates the typical costs faced by a cement manufacturer in China. In cases such as
this, where power accounts for a high proportion of overall costs, although power generation will
not be the approach to maximize CO2 reductions, it is one of the investment options with the
quickest payback. Figure 9 shows similar cost data for a plant in Egypt, where power accounts for
a considerably smaller proportion of total costs.
FIGURE 8
TYPICAL DISTRIBUTION OF CEMENT PRODUCTION COSTS OF PLANTS IN CHINA
Others
23%
Raw materials
23%
Electricity
26%
Coal
28%
SOURCE: 6
27
FIGURE 9
TYPICAL DISTRIBUTION OF CEMENT PRODUCTION COSTS OF PLANTS IN EGYPT

Miscellaneous Raw Materials
6%
6%
Heavy Oil
7%
Gas
8%
Packing
13%
Labour
9%
Financing
22%
Depreciation
11%
Parts and
M&O
9%
Electricity
9%
SOURCE: 34
Of course the above estimates are only illustrative. Every cement plant has unique operating costs
so only a detailed evaluation of the individual plant circumstances can suggest the
appropriateness of investing in onsite power. Among the factors that need to be considered are
the quantity, temperature and temporal availability of heat streams, local availability and cost of
financing and available technologies. A major factor that should also not be overlooked is
whether non-energy related plant upgrades will be required in the near future and, if so, what the
marginal cost of including onsite power in such upgrades would be. Economics for onsite power
investments are most attractive when the investment can be combined with other plant upgrades
or included in the original plant design.
Tax and Other Incentives
Tax considerations can play an important role in the economics of onsite power projects. For
example, one estimate suggests a capital cost of between $US 1,250 and 2,750 per kW nameplate
generating capacity depending mostly on the origin of technology.6 Of course the quality of the
technology is the main cost driver, but import duties and taxes are also an important factor. In
China, for example, one of the main factors preventing local plant operators from investing in
foreign waste heat recovery generators is cost. Import duties and other taxes create a disincentive
for plant owners to make the investment.
Depreciation policy is another factor of CHP economics over which policy makers have
considerable influence. Because onsite power equipment in cement factories tends to have
extremely high capacity factors (even compared to the power sector plants) they wear out faster
than other units that run less continuously.35 Depreciation rates for tax purposes do not always
allow for this distinction. In India, for example, estimates suggest that while energy (including
the landed cost of coal which is about 26%) and freight (15%) are the major cost components,
28
interest and depreciation can account for 25-30% of total costs36.

Financing
Because banks have little experience in financing energy conservation schemes, upgrades in
cement plants to generate power are often unappealing. Such projects can involve many
transactions with comparatively little investment and progress can be difficult to measure.
Employing Energy Service Companies (ESCOs), Joint Implementation (JI), and the Clean
Development Mechanism (CDM) (see box below) are three possible routes to successful
financing of onsite power in the cement industry.
ESCOs are a promising model, but several main challenges remain.6 First, there is a shortage of
specialized knowledge of the cement sector among ESCOs, who tend to concentrate on
equipment common in many industries. Second, existing ESCOs do not have access to the large
amounts of capital required for onsite power projects in the cement sector and are forced to
borrow. A typical strength of the ESCO model is therefore rendered moot (typically one of the
reasons an end user turns to an ESCO is because it has access to the necessary capital to
undertake a project where the user may not). There are strategies for overcoming this barrier. For
example, in China, rather than granting funds from the Global Environment Facility to ESCOs
directly, funds are pooled as a form of guarantee against ESCO borrowing. This in an effort to
allow ESCOs to prove themselves to the lending institutions which before were hesitant to lend to
ESCOs. Another idea being considered in China is the establishment of a specialist ESCO that
works only with onsite power projects.
One study cited the importance of technology transfer as a possible driver for improving investor
confidence in major cement plants investments in the developing world.6 The Kyoto protocols
Clean Development Mechanism (CDM) was cited as one promising means of modernizing the
cement sector. Laws can also provide an important means of realizing financing for onsite power
projects. A policy adopted in China May 2004 prohibited lending that permitted installation of
smaller, less efficient technology.6 As a result it is expected that the number of larger scale plants
with waste heat recovery potential will increase.
Reliability
It seems that the single most important factor driving cement industry investment in onsite power
is reliability. India has the most installed onsite capacity in the sector followed closely by China.
In both cases one of the most important factors in deciding the investment was that reliable grid
power was not available.6 On the other hand, the United States, the third most important cement
producing nation in the world, has comparatively very little onsite generation in the sector. This is
likely because the grid supply is relatively stable and projects must go ahead on payback alone.
To the extent that the benefits of increasing the reliability of a cement plant can be combined with
the other cost saving and environmental benefits, even plant owners in the US and other countries
with reliable grid power may want to reconsider investing in onsite power.
29
Technology
Technological change in industry is often slow because once a technology has been installed at a
factory businesses will try to maximize its payback by operating existing equipment for the
duration of its useful lifetime. As a result, new technologies may only have a short window of
opportunity to compete every 20 years or so (when existing equipment such as kilns and
preheaters needs to be replaced). Thus technological change and upgrade cycle are important
drivers for onsite power investment.
In the cement making process the waste gases are hottest, and therefore potential for heat
recovery for power generation is greatest, when the gases first leave the kiln. Unfortunately these
gases also contain dust and contaminants that can foul turbine blades. The exhaust gases must be
cleaned prior to feeding them into a power generation application. By the time the gases are
sufficiently clean they have lost much of their energy content. One persistent technical challenge
to waste heat recovery in the cement sector then is how to maximize recovery of useful heat from
gases leaving the kiln. One approach to overcome this challenge is to gather cement industry
professionals together to discuss possible solutions. For example in 2004 the China cement
Association organized a training course for ESCOs in the cement sector.6
Policy
General policy can play an important role in making power projects in the cement sector viable.
Broader regulatory decisions affecting the power sector is perhaps the best example of this. Does
the government or regulatory commission allow industrial facilities with onsite power facilities to
connect to the grid? To feed power into the grid? Are bilateral power contracts permissible? If the
cement plant ever fed power to the grid would a fair tariff be guaranteed?
Other more prescriptive rules are also possible to envisage. For example: Does the government
require all plants to look at the possibility of CHP in cement plants (as is the case in Japan)? What
kind of environmental regulations does the industry have to adhere to and how do these directly
or indirectly encourage onsite power production? Must a cement plant optimise waste heat
recovery in order to be granted approval for new build or renovation? Are there policies to ensure
that renovations that improve energy efficiency obtain favourable access to finance? Are there
any arrangements in place to permit a cement plant owner to take advantage of carbon savings
such as carbon trading?
A recent example of how policy can directly effect onsite power in the cement sector can be
found in the China Medium and Long Term Energy Conservation Plan introduced in 2004. The
plan actively promotes the use of low temperature heat for power generation in cement plants.6
Environment
Environmental issues such as air quality and climate change are increasingly rising on the
political agenda around the world. As these issues continue to gain momentum and rise in
importance in the eyes of the worlds governments the cement sector will be increasing pressure
to reduce its environmental footprint.
30
The environment issue will manifest itself in tougher anti-pollution laws as well as frameworks
that will facilitate cleaner production. Examples include the CDM (see annex 3), the EU emission
trading scheme or the Asia-Pacific Partnership on Clean Development & Climate which has
specific Task Forces for both the cement sector and distributed generation.
31
Conclusions
The cement sector is one of the worlds most energy intensive industries and is responsible for
large proportions of the worlds CO2 emissions as well as other pollutants. There are many
options at the sectors disposal for reducing its environmental footprint all of which merit
attention. Onsite power is one option which deserves renewed consideration. While generating
electricity on cement manufacturing sites is a common practice in many areas of the world,
significant untapped potential for onsite power remains.
From a system perspective it is clear that onsite power, especially waste heat recovery technology
and top cycle cogeneration, provides significant untapped potential to reduce the environmental
footprint of the cement sector as well as having significant scope for displacing a portion of the
environmental footprint of the power sector. If the full potential of onsite power in the cement
sector were realized about 0.41% of total worlds demand for electricity generation could be met.
If even a small percentage of displaced power was from central fossil fuel plants major CO2
benefits could be realized. If bottom cycle cogeneration were used to its maximum in the order of
0.23% of total global emissions could be avoided annually. The environmental benefits of onsite
power in cement plants depend not only on the efficiency increases that result but also on the fuel
mix of the local grid power which is displaced.
Major cost savings can also be expected as investments in onsite power in major industries such
as cement can displace the need for expensive local distribution and transmission infrastructure
and redundant remote generating plant. Other system level benefits include improved grid
reliability and decreased vulnerability to fuel price volatility.
Cogeneration can often reduce production costs without negatively affecting the core plant
operations or the quality of the end product. Indeed, operations can be improved due to increased
reliability and plant run time and end users can expect a more reliable and higher quality product.
At a plant level, onsite power guarantees against production interruptions from utility failures,
saves energy costs, allows higher kiln utilization and increases quality of the finished product.
Nevertheless it is difficulty to generalize whether an investment in onsite power makes sense for
a particular plant. Only a detailed evaluation of heat streams (quantity, temperature and
temporal), power demand patterns and energy prices can determine its appropriateness. Other
factors critical to deciding if onsite power is suitable include local rules related to grid connection
and feeding power into the grid, tax structures, available incentives, financing mechanisms and
management risk strategy.
In some cases major plant upgrades, for example a shift to dry process or major rotary kiln
upgrades, could include power generation equipment or make use of waste heat in cogeneration
32
applications with little additional cost. Certainly costs can be reduced if power production
capacity is included at the time of upgrade.
Leaders in the cement industry have much to gain by reconsidering the role that top and bottom
cycle cogeneration can have in improving the efficiency of their plants, the competitiveness of
their business and the perception with which an increasingly demanding public sees them. Policy
makers and the general public also have much to gain from the wider system level benefits
provided by clean, efficient and cost effective onsite power generation.
33
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http://cdm.unfccc.int/methodologies
35
Annex 1.
Selected Companies Involved in Onsite
Power in Cement Plants
TABLE 14
SELECTED COMPANIES THAT ARE INVOLVED IN POWER GENERATION PROJECTS IN THE CEMENT INDUSTRY
ABB Group
AEES
Alstom Power
Arab Swiss engineering Company
Autec Power Systems
CBMEC
Doosan Heavy Industries & Construction
FLSmidth
Hangzhou Boiler Group Co.
Huaxiao Resource Co.
Kawasaki
Kerpen Industrial
KHD Humboldt
Ormat Technologies
Polysius
Power Developments International
Rockwell Automation
Sadeven SA
Siemens AG*
Thermax Ltd*
Tianjin Nengda Technology Development Co., Ltd
VA Tech Elin EBG Gmbh
Virginia Transformer Corp
Wartsila*
Wedag
Zhongxin Heavy Machine Company
* DENOTES WADE MEMBER COMPANY

36
Annex 2.
Statistics and the Cement Industry
In general, public statistics on the use of onsite power generation in the cement industry are
poorly documented. Because of this lack of data, all forms of onsite power (bottoming, topping
and power only plants) have all been included together in the same column in table 11. Only by
starting to track this kind of information will we know when the market for generating powering
in the cement industry has been saturated in a particular region. The process is further
complicated because cement companies in some countries, during the process of electricity sector
reform, have outsourced electricity production assets, thereby complicating the statistical work.
Table 15 below illustrates the problem with poor data relating to onsite power by sector. The
table shows CHP capacity for the EU-25 including that capacity installed in the cement sector. It
is not clear how much of the capacity is attributable to cement versus glass and ceramics.
Although Eurostat does not track data of CHP use in the cement sector specifically, it is likely
that cement accounts for very little of the 483MW capacity cited1 (10% may be a realistic
estimate).
TABLE 15
CHP IN THE EU-25 BY ECONOMICAL ACTIVITY IN 2002
Non-metallic
mineral
products*
TOTAL
(all sectors)
Maximum CHP Capacity
CHP Production
Fuel Input
Electrical
MW
Heat MW
Electricity
GWh
Heat TJ
TJ (NVC)
483
1045
2599
20453
43429
91634
236136
299164
2844166
6487558
*INCLUDES, GLASS AND GLASS PRODUCTS, CERAMIC PRODUCTS, AND CEMENT AND PLASTER.
SOURCE: STATISTICS IN FOCUS, EUROSTAT, 3/2006
37
Annex 3:
The CDM and Cement
The Kyoto Protocols Clean Development Mechanism (CDM) is opening up new opportunities
for financing efficiency projects that did not exist even five years ago. For a detailed background
and explanation of the CDM see WADEs report: Clean Development through Cogeneration.
Various CDM methodologies have been developed which are directly or indirectly applicable to
onsite power projects in the cement sector:
TABLE 13
CLEAN DEVELOPMENT MECHANISM METHODOLOGIES RELATED TO THE CEMENT SECTOR
Methodology
AM0024
ACM0005
ACM0003
AM0027
AM0014
ACM0004
Description
Methodology for greenhouse gas reductions through waste heat recovery and
utilization for power generation at cement plants
Consolidated Methodology for Increasing the Blend in Cement Production.
Emissions reduction through partial substitution of fossil fuels with alternative
fuels in cement manufacture
Substitution of CO2 from fossil or mineral origin by CO2 from renewable
sources in the production of inorganic compounds
Natural gas-based package cogeneration
Consolidated methodology for waste gas and/or heat for power generation
SOURCE: 37
The Taishan Huafeng Cement Works was the inspiration for the main methodology that has been
established so far that is of interest to the cement plant owners considering onsite power
applications. AM0024 deals with bottom-cycle cogeneration projects where:
The electricity produced is used within the cement works where the proposed project
activity is located and excess electricity is supplied to the grid. It is assumed that
there is no electricity export to the grid in the baseline scenario to which the proposed
CDM project must be compared (in order to qualify for CDM credits carbon savings
from a project must be additional to those that would be realized if the project were
to go ahead without CDM- the baseline scenario).
Electricity generated under the project activity displaces either grid electricity or
38
power from an identified specific generation source. Identified specific generation

source could be either an existing captive power generation source or new generation
source;
The grid or identified specific generation source option is clearly identifiable;
Waste heat is only to be used in the project activity.
In the baseline scenario, the recycling of waste heat is possible only within the boundary of the
clinker making process (e.g. clinker production lines in baseline scenario could include some heat
recovery systems to capture a portion of the waste heat from the cooler end of the clinker kiln and
use this to heat up the incoming raw materials and fuel ).
This methodology is NOT applicable to project activities,
Where the current use of waste heat or the identified alternative business as usual use
of waste heat is located outside of the clinker making process;
That affect process emissions from cement plants.
Some other methodologies may not yet have been applied in the context of a cement plant but
there is no reason why they should not be in the future. It is possible to envisage for example
AM0014 being applied for a gas turbine at a cement plant where waste heat is used for drying raw
material or fuel prior to use.
39

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Table of Contents

Cutting-edge research and analysis on energy and the environment;

Communications and public relations that delivers the DE message to policy-makers

Dissemination of market intelligence and breaking news to keep members informed

Peter Bell, International Cement Review

GLOBAL ANNUAL CO2 PRODUCTION, BY INDUSTRY (30GT CO2)

Heat and power

# plants with Capacity

What are the benefits of onsite power?

What proportion of the potential has been realized?

What needs to be done to realize the remaining potential?

2-5% depending on source

TOTAL GLOBAL PRIMARY ENERGY CONSUMPTION (EXAJOULES) (2002)

SOURCE: 2,3 &4

Cement manufactures operate in a highly competitive environment both at a local and

The Cement Industry

Ordinary Portland Cement

Most common type of cement made of ground hydraulic calcium silicates

A cement based on calcium aluminates rather than calcium silicates

International Cement Markets

SELECTED TOP CEMENT PRODUCERS WITH RECENT PRODUCTION DATA

Annual Cement Production

SOURCE: WADE COMPILATION

HISTORIC CLINKER CAPACITY BY YEAR AND COUNTRY

Year end clinker capacity (Thousand metric tons)

HISTORIC CEMENT PRODUCTION BY YEAR AND COUNTRY

World Cement Production (Thousand metric tons)

SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM

SOURCE: WADE FROM VARIOUS

SIMPLIFIED CEMENT MANUFACTURING PROCESS DIAGRAM WITH MAIN ENERGY FLOWS

SOURCE: WADE FROM VARIOUS

Onsite Power Benefits

See for example other WADE reports at www.localpower.org/resources

purchased from a polluting and inefficient central generator.

reduced downtime and interruption of kiln operation

improved fuel efficiency

lower consumption of refractories

enhanced clinker quality

higher kiln utilization

Environmental Impacts of Cement Production

SELECTED GLOBAL CEMENT SUSTAINABILITY INDICATORS FOR PARTICIPATING CEMENT COMPANIES

Megawatt hours / t cement

Energy Use in the Cement Sector

ENERGY INTENSITY OF CEMENT PRODUCING REGIONS OVER TIME (MJ/KG CLINKER)

Other Eastern Europe

Former Soviet Union

South East Asia

Australia/ New Zealand

ENERGY INTENSITY OF VARIOUS CEMENT/ CLINKER PRODUCTION TECHNOLOGIES

Dry kiln (four

Greenhouse Gas Emissions in the Cement Sector

GREENHOUSE GAS EMISSIONS FROM THE CEMENT INDUSTRY

SOURCE: WADE COMPILATION

GLOBAL ANNUAL CO2 PRODUCTION, BY INDUSTRY (30GT CO2)

Heat and power

CO2 Abatement Approaches

GREENHOUSE GAS ABATEMENT STRATEGIES FOR THE CEMENT INDUSTRY

SOURCE: WADE BASED ON 26,27 & 28

Onsite Power and Cement

POWER REQUIREMENTS IN INDIAN CEMENT PLANTS

TYPICAL ELECTRICITY CONSUMPTION BY USE IN BRAZILIAN CEMENT PLANTS

Preparation of raw material

Bottom Cycle Cogeneration (waste heat recovery or energy recycling)

Top Cycle Cogeneration