Indian industry uses energy more intensively than is the norm in industrialized countries. While selected modern Indian units often display very high efficiency that approaches world best practice levels, the average intensity lags world best levels. Indian industry has undergone a transformation since 1991, the year the economy was opened to foreign investment and competition. Energy per unit of valued added in the industrial sector has declined since then. However, there still remains considerable scope for continued improvement of energy efficiency in Indian industry, and for learning from both worldwide and Indian best practices.
This scoping study assesses the intensity of energy use in Indian industry, identifies national and worldwide best practice energy intensity levels, and on the basis of the above assessment provides guidance on areas for improving energy efficiency. This work focuses on five energy-intensive industrial sectors -- fertilizers, textiles, chlor-alkali, cement, and petroleum refining. The intent of the scoping study is to increase knowledge and sector-specific understanding about industrial energy use in order to assist Indian industry, the Bureau of Energy Efficiency, and concerned stakeholders in efforts to improve energy efficiency in this sector in the country.
The approach used involves assessing the current trends in output and value added in Indian industry, energy use by fuel type and electricity use in the above sectors, and indicators of energy intensity. In addition, Lawrence Berkeley National Laboratory (LBNL) assessed the types of energy conservation measures that industry could adopt to improve efficiency, and compared these with worldwide best practices in each of the above sectors. It is recognized that cement and chlor-alkali sectors have limited numbers of technologies and are easier to assess, while fertilizers and refining are more difficult because of more complex plants, and finally textiles is even more difficult because of the large numbers of plants in the unorganized sector and the diversity of processes used. LBNL has relied largely on published literature for this assessment. Earlier studies have reported extensive potential for improving energy intensity in these sectors (Sethi and Pal, 2001), and a recent report by USAID corroborates these findings (Deneb, 2002).
Lawrence Berkeley National Laboratory (LBNL) has previously evaluated energy efficiency potentials for the Indian fertilizer sector (Schumacher and Sathaye, 1999a), the cement sector (Schumacher and Sathaye, 1999b), and energy-intensive industries overall (Mongia and Sathaye, 1998a and 1998b; Mongia, Schumacher, and Sathaye, 2001, Roy et al., 1999). In addition, LBNL staff assisted the Industrial Development Bank of India (IDBI) in setting benchmarks for 12 industrial sectors in order to select enterprises that would be worthy of modernization loans from the Asian Development Bank (Sathaye, Gadgil and Mukhopadhyay, 1999).
This assessment is organized by industrial sectors. We begin with the cement sector, and then focus on the refining, fertilizer, textiles, and chlor-alkali sectors, in that order. For each sector, we report on the basic production processes, economic and energy characteristics of that sector in India, its potential for energy efficiency improvement, and scenarios of future energy use. This is followed by a short summary of the future directions for efficiency improvement. In the final section, we provide some examples of policies that have been used in other countries that could be pursued in India for efficiency improvement. The length of each section depends on the complexity of the industry, and the material available for the assessment. We had access to more material on the cement and refining industry, which are reviewed more in-depth, while chloralkali is both an industry with limited number of products, and limited availability of studies, and hence its description is shorter than others.