Why Does Steel Industry Need to Adopt Solar Energy ?

India has the world’s second-largest steel industry and is the third-largest consumer of steel. India’s steel industry is considerably more diverse than that of many other nations, having a vast range of primary and secondary steelmaking facilities of various sizes. The Blast Furnace – Basic Oxygen Furnace (BF-BOF), coal-based Direct Reduction (DR), gas-based DR, Electric Induction Furnace (EIF), and Electric Arc Furnace (EAF) are some of the technologies now in use. 

The Indian steel industry uses coal-based direct reduction to meet localized steel demand. India’s reliance on this technique is fuelled by the country’s low-cost local coal deposits, as well as a dearth of domestic natural gas and high-quality coking coal. The steel sector, like that of every other industrializing nation, is critical to India’s economy, generating about 2% of GDP and employing around 2.5 million people in steel and associated industries (MoS 2019).

In 2018, India’s steel consumption reached 98 Mt, a 7.5% increase compared to the previous year (MoS 2019). Despite this rapid expansion, India’s real steel use per capita is just 64 kg of finished steel equivalent, much below the global average of 224 kg. Steel consumption in developed economies tends to peak at about 500 kg per capita, implying that Indian steel demand has room to expand as the country develops.

The Ministry of Steel (MoS) released the National Steel Policy in 2017 to stimulate faster growth and a stronger focus on energy-efficient techniques in the steel sector. The policy sets forth production and demand growth objectives through 2030. Steel production capacity was set at 300 Mt during 2030–31, corresponding to 158 kg of steel usage per capita (MoS 2017). In FY21, crude steel and finished steel output were 102.49 MT and 94.66 MT, respectively. Crude steel output is anticipated to reach 112-114 MT (million tonnes) in FY22, a rise of 8-9% YoY, according to CARE Ratings. In FY21, finished steel consumption totalled 93.43 MT.

The total amount of finished steel produced in May 2021 was 7.8 MT.

SAIL’s crude steel output was 1.30 MT in June 2021, while its saleable steel production was
1.27 MT.

In FY21, completed steel exports and imports were 10.79 MT and 4.75 MT, respectively. India’s exports increased by 121.6 percent YoY in April 2021 compared to April 2020. India exported 8.24 MT of finished steel in FY20.

The iron and steel industry is the most energy-intensive sub-sector within the industry, accounting for more than 20% of total energy consumption. The brick, cement, petrochemical, and fertilizer industries are among the other sub-sectors in India that use a lot of energy.

Coal is the primary source of energy for the steel industry, followed by electricity and natural gas. Although coal is abundant and inexpensive, substantial differences in quality can make the steelmaking process more difficult to manage. India has a limited supply of coking coal, therefore it imports a lot of it from other countries, mostly Australia.

The primary source of electricity is still coal, and it will continue to be so for the foreseeable future. With plans to install 175 GW by 2022 and 450 GW by 2030, the Indian government has set ambitious targets for renewable energy penetration. Due to the higher expense and unreliability of the electrical grid, several corporations have built massive captive power plants, or electricity produced on-site.

The iron and steel industry is no exception, with captive plants supplying 44% of the industry’s power in 2015–16. Coal, natural gas, and diesel account for 91%, 7%, and 1%, respectively, of this captive generation (CEA 2017). Captive power makes more economic sense than the electrical grid, but it is still a costly alternative for power generation. As a result, the profitability of electro-intensive steel manufacturing routes is jeopardized.

India’s natural gas reserves are limited, and imports are costly. Domestic natural gas is only used in a few areas that the government has designated. The fertilizer, electricity, transportation, and cookery (CGD) industries are among them. Because of restricted supply, the few iron and steel factories that are intended to utilize natural gas have been operating considerably below their ideal utilization factors. Natural gas’s future significance in India’s steel industry is unclear.

When compared to worldwide standards, the Indian iron and steel business is more inefficient in terms of energy use per unit of production. While a few facilities have recently been updated to the finest available technology to increase their efficiency, the industry as a whole has a lot of room for energy savings.

Steel needs energy and the energy system needs steel.

In our society, steel is firmly ingrained. Steel is used extensively in the construction of buildings such as houses, schools, hospitals, bridges, automobiles, and trucks, to mention a few.

Moreover, steel will play an important role in the energy shift, as solar panels, wind turbines, dams, and electric cars all rely on it to some extent. 

Steel demand has more than tripled since 1970, and it is expected to continue to climb as countries develop, urbanize, consume more commodities, and expand their infrastructure.

Since the steel industry is energy-intensive, it would benefit immensely from going solar. Solar generation would not only help in reducing monthly power costs but also protect an organization from the rising power tariff. Additionally, the iron and steel industry ranks first in terms of CO2 emissions. The iron and steel industry emits 2.6 gigatonnes of carbon dioxide (Gt CO2) per year, accounting for 7% of global energy system emissions and more than all road freight emissions combined. Steel is now the greatest industrial user of coal, accounting for around 75% of total energy consumption.

The use of solar energy would aid the industry in lowering its collective carbon emissions and safeguarding the environment.

Governments will play a key role in ensuring that the iron and steel sector transitions in a sustainable manner. Policy portfolios will be different, but the following suggestions are a good place to start for those looking to make a difference and speed up the transition:

• Establish a long-term and increasing signal for CO2 emission reductions.
• Manage existing assets and near-term investments.
• Create a market for near-zero emissions steel.
• Support the demonstration of near-zero emission steelmaking technologies.
• Accelerate material efficiency.
• Increase international co-operation and ensure a level of the global playing field.
• Develop supporting infrastructure for near-zero emission technologies.
• Track progress and improve data collection.

With this blog, we have tried to show you how energy and carbon-intensive the steel sector of India is. By adopting solar, not only CO2 emissions can be lowered but at the same time how much load can be shifted from the traditional power generating sources of India.

Hope this information about “Solar Solution for Steel Industry” helps you to design your solar solution for the steel production mill as per your requirement.

If you are planning to start a solar business or install a solar solution, you can connect with Ornate Solar to get the best assistance with the best prices for solar panels and inverters. We are the official partner of Canadian Solar panels & Renewsys solar panels in India. We are also the official distributor of SolarEdge inverters with DC optimizers, Enphase microinverters, Fronius On-Grid Inverters, and Havells solar inverters in India.

For more information, please give us a call at 011 4353 6666.