Bridging the energy deficit

Pharmaceuticals are a $30 billion industry in India, made up of formulations (65 per cent) and bulk drugs (35 per cent) by value. The figures clearly show the exponential growth the pharma industry is witnessing. It is a highly fragmented industry, with 350 units constituting the organised sector (75-80 per cent value). The remaining 20 per cent consists of a large number of very small firms. Volume-wise, formulation units represent 77 per cent and bulk drugs units constitute the rest.

Vickram Jadhav

Pharma sector consumes about 13 TWh of thermal and 5 TWh of electrical energy, including their requirement for cooling at the level of 3.7 TWh. While a large amount of thermal energy is required for bulk drugs manufacturing, a relatively smaller amount is consumed by formulations manufacturing. Unlike other industries, many pharma boilers are powered by electricity rather than coal or gas to meet ambient air quality requirements of the US Food and Drug Administration (FDA). Even the cooling equipment runs on electricity. Other electricity needs, for operating machinery and lighting, etc. are relatively small. Energy requirements also vary depending on the size of the plants.

The industry is growing at 14 per cent per annum, driven by high export volumes and is expected to continue to grow at the same pace in the future . It has very limited CHP penetration presently, which can potentially grow given the high energy demand from this industry and the fact that many of the plants are situated together in clusters and require heat (or cooling) in their manufacturing process currently using heat-only-boilers (HoB), electricity, and other methods to fulfill their heat requirement and hence they can employ efficient CHP systems. Developing CHP systems to meet the requirements for thermal energy can help generate on-site power at double the efficiency.

Energy security has been identified as one of the critical challenges to India’s growth and bridging the energy deficit by increasing system efficiency and moving towards more diversified and cleaner energy sources is going to be the key priority also for the pharma industry with a global exposure in India. The increasing energy demand is challenging for India in view of problems such as fuel scarcity, raising costs of fuels imports, increasing emissions, high AT&C losses, lack of distribution reforms, and lack of new investments. While the country is taking definitive steps to overcome these challenges, higher energy efficiency and increased fuel flexibility will be vital for this industry to meet the rising energy demand.

Although the power generation capacity in India has grown at an impressive pace over the last decade, India’s power production is not enough to meet the base-load demand from its industrial, agricultural, domestic and commercial users.. Experts forecast that India will need a threefold increase in power generation by 2032 to achieve targeted long-term GDP growth rates. At the same time, the amount of fuel being used for industrial process heating is expected to grow in the same magnitude. More than 30 per cent of coal and 40 per cent of gas in India is already today consumed to meet industrial demand for heating and cooling.

Co-generation i.e. Combined Heat and Power (CHP) systems can help overcome some of the challenges connected to the ever increasing demand of energy. CHP systems make use of energy – that in conventional applications is wasted and thereby increase the total system efficiency substantially.

What is Combine Heat and Power (CHP)?

Combined Heat and Power (CHP) is a simultaneous production of electricity and heat, in India usually referred to as ‘co-generation’. Heat can be used as heat, steam or cooling (generated through absorption processes) depending on the need and application. A fundamental principle of co-generation is that, in order to maximise the system efficiency, the systems should be designed based on the heat demand of the end user – an individual building, industrial facility, cluster of industries or city where district heating or cooling infrastructure could be developed. Surplus electricity can be fed into the local network but heat produced in the process needs to be consumed locally.

Combined Heat and Power (CHP) Plant in Industrial Cluster

Figure 1: Illustrative benefits of a CHP plant with 75 per cent efficiency: Conventional centralised electricity generation and on-site heat generation has a combined efficiency of about 45 per cent after accounting for the 35 per cent efficiency of power generation, 20 per cent AT&C losses and the 70 per cent to 75 per cent efficiency of the low pressure heat-only-boilers. CHP systems, in comparison, can reach efficiency levels of up to 90 per cent

By locating small- to medium-sized power plants to serve industrial or commercial demand for steam, heat or cooling, it is possible to optimise the energy system so that steam or heat from the power production process can be used to substitu te individual steam boilers and traditional air conditioning units. In this way, the CHP system can be 60-90 per cent more energy efficient than a separate generation of electricity and heating/cooling, (see Figure 1).

Another type of a CHP plant is where excess heat from an industrial unit is used to produce power. This is done, for example, by the steel industry where blast furnace gas is used for producing power on-site through a waste heat recovery unit.

Since CHP plants are designed to fit the thermal demand side, e.g. the steam demand of an industrial cluster or cooling demand of a district cooling system, the optimal scale differs between applications. Community CHP systems can aggregate heat requirements of clustered, but fragmented applications and provide a common solution. For typical industrial and commercial purposes in India, the size spans from a few MWs up to approximately one hundred MW of electricity.

There are many different technologies used at CHP plants and they are classified based on the type of fuel they use (e.g. gas, coal, diesel, biomass or waste) and by the type of power producing system installed (e.g. steam turbine, gas turbine, gas motor, diesel motor). CHP plants with steam turbines can be built with flexible boiler systems so that multiple fuels can be used.