Boiler: Powering India’s growth story

Boilers play a big role in determining the energy efficiency of an industrial unit. Adoption of stringent emission norms and rising concerns toward environmental pollution are driving demand for eco-freindly boilers, says Rakesh Rao.
Boiler: Powering India’s growth story
Boilers play a big role in determining the energy efficiency of an industrial unit. Adoption of stringent emission norms and rising concerns toward environmental pollution are driving demand for eco-freindly boilers, says Rakesh Rao.
 
The demand for boilers - which are used to generate steam that can be used for a variety of purposes including space heating, sterilisation, drying, humidification and power generation - is closely associated with the growth of power sector and industries. Indian boiler market is expected to increase to $ 11 billion by 2022 from $ 5.1 billion in 2014. Rising electricity demand and high dependency on thermal power are the major drivers for the boiler market. Growing energy demand in conjunction with pervasive investment across the industrial sector is stimulating the boiler market in India. 
 
“Large population coupled with one of the highest GDP growth rates, makes India a predominantly consumption-led economy. India is also continually making efforts to reduce its trade deficits with major trade partners, which gives impetus to exports. These factors put together lead to higher investment in the industry. Any industry would need heat in the form of steam, hot water, hot oil or hot air, hence the market for boilers is growing at a steady pace,” says Rakesh Tripathi, Global Head - Heating Business, Thermax. 
 
Major users of process boilers are textiles, pharma, food & beverage, chemicals, woodworking, FMCG goods (such as sanitary products), automobiles & accessories, hospitality, and oil & gas. Sectors that need large industrial boilers & power boilers include oil & gas companies, sugar mills, cement, steel, fertilisers, and independent power plants.
 
The major factors affecting the boiler sector are fuel diversification, a move towards cleaner sources of power generation, and fluctuations in fossil fuel prices. Fuel efficiency has become a major priority for both power and industries. While rising investment across commercial & industrial establishments is aiding growth, replacement boiler market is also witnessing a surge as companies need to retrofit their legacy boilers with new-age boiler systems and solutions to be future-ready.
 
“While the demand for boilers is mainly driven by new projects, there is potential in the replacement demand from existing steam users as well,” opines K S Chandrasekhar, Manager (Proposal & Sales), Boiler Division, Forbes Marshall - which designs and manufactures package boilers suitable for oil & gas and biomass firing, and packaged waste heat recovery boilers.
 
Global scenario 
Global boiler market size in 2017 was valued over $ 50 billion and annual installation is anticipated to exceed 13 million units by 2024, according to Global Market Insights Inc. Emerging economies across Africa and Asia-Pacific have introduced various progressive programs toward the installation and upgradation of the existing boilers, which in turn is having a positive impact on the industry growth.
According to Market Study Report LLC, steam boiler market is predicted to exceed $ 19 billion by 2025. Increasing investments toward development and expansion of manufacturing facilities coupled with robust economic growth are stimulating the deployment of steam generating units. Gas fired steam boiler market is anticipated to grow over 4 per cent by 2025. Growing focus toward to reduce carbon footprint along with stringent government regulations toward adoption of fuel with low emissions levels is set to augment the business growth. 
Condensing steam boilers, the market for which is anticipated to grow over 5 per cent by 2025, are set to gain prominence on account of their ability to offer high efficiency along with reduced heating costs.
 
Rising investments toward power generation capacity expansion to mitigate the demand-supply deficit is fuelling the market of boilers having capacity of over 250 MMBtu/hr. These systems are primarily deployed for steam generation across thermal power plants and steam intensive industries. Developing economies across Asia-Pacific and Africa including India, Indonesia, Malaysia and South Africa have introduced plans to improve industrial productivity and expand the power generation capacity. For instance, in 2018, NTPC Ltd announced the commissioning of two 660 MW units in India.
 
New emission norms to drive demand for eco-friendly boilers
As a signatory to Paris agreement on climate change, India agreed to a long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels, by bringing down the greenhouse gas emissions. In line with this goal, India plans to bring down emission levels of all power plants to national standards by 2022.  
 
Rising emission levels is also leading to environment concerns. According to the global air pollution database of the World Health Organization (WHO), India has 14 of the 15 most polluted cities in the world. Emissions from power plants, along with vehicular emissions and crop burning, contribute significantly to the worsening air quality in Indian cities.
 
For controlling the pollution levels from thermal power plants (TPPs), Ministry of Environment, Forest and Climate Change (MoEFCC) has been regulating emission norms time and again. In December 2015, the MoEFCC brought out new norms for coal-based power stations to cut down emissions of particulate matter (PM10), sulphur dioxide (SO2) and oxides of nitrogen (NOx) to improve the air quality around power plants. While the earlier deadline for power stations to adhere to these guidelines was December 2017, the deadline has now been extended to 2022.
 
The Central Electricity Authority has chalked out a detailed plan to retrofit old plants with required equipment to meet new emission norms. The Central Government has reportedly directed National Thermal Power Corporation (NTPC) and Damodar Valley Corporation (DVC) to comply with emission norms by December 31, 2022. NTPC has 48 thermal power plants while DVC has nine such units.
Though retrofitting works are currently underway in some power plants, the emission scenario would further improve if new-age boiler technologies that aid emission reduction are implemented. All utility boilers as well as industrial and captive plant boilers have to comply with the latest NOx emission regulation. The implementation of advanced low-NOx technology at the primary source of emissions, ie at the boiler combustion, could be an ideal time-saving and cost-effective solution.
 
For example, NTPC, which expects the emission level at all its thermal plants to come down within permissible limits by December 31, 2022, has been carrying out pilot projects on NOx emission level. Last month, NTPC awarded its first large scale contract to GE Power India Ltd (GEPIL) for installing low NOx combustion technology at its thermal power plant fleet. As per the contract, worth Rs 142 crore ($ 20 million), GE Power India will supply and install low NOx combustion system for 10 GW of thermal power plant capacity across the country. The project involves in-combustion system modification of the boiler by staging the combustion air in the furnace to reduce the generation of fuel and thermal NOx during the combustion process. The combustion modification technology can help reduce 30-40 per cent of NOx emissions from these coal-fired boilers up to a level of less than 400 mg/Nm3 at 6 per cent oxygen content in flue gas on dry gas basis at induced draft (ID) fan outlet.
 
The demand for industrial boilers is expected to rise with the strict implementation of regulation to reduce emission of harmful gases. To meet this market requirement, leading manufacturers of industrial boilers are focusing on upgrading and enhancing their portfolios.
 
TCO vs product price 
Boilers play a big role in determining the energy efficiency of an industrial unit. The shift in the technology landscape toward the adoption of energy efficient boilers on account of stringent government regulations is further giving a boost to demand. Also, buying energy efficient equipment results in lower overall total cost of ownership (TCO) than alternatives that may come at a cheaper capital cost. 
 
Chandrasekhar says, “The most important aspect of delivering better efficiency is to get the capacity selection right. Given the fact that boilers have an average life of close to 20 years, it becomes important to base this CapEx decision on a total cost of ownership rather than just investment. An increase in the CapEx budget owing to a capacity related decision, additional instrumentation or inclusion of energy efficient components (burner, heat recovery), and of course an efficient steam system design, is more than offset by the additional savings provided over the years. Emphasis should be more on the overall cost of ownership of the asset instead of the narrow sphere of CapEx.”
The growing concern of the government to decrease the dependence on fossil fuel has resulted in industries to look for an alternative to fossil fuel. This has resulted in development of boilers that could use renewable fuels for example biomass. Biomass boiler helps to lower the greenhouse gas emission due to their low carbon footprints. For India, where disposal of agri-waste is a big environment concern (as these wastes are burned in open air causing pollution), biomass based boilers can be a big boon. To tap this market, many companies are now offering biomass boiler in the country. 
 
For example, in February 2019, Thyssenkrupp Industries, the Indian arm of German conglomerate, signed an exclusive license agreement with Babcock & Wilcox Volund of Denmark for a biomass boiler technology for India and neighbouring countries. Thyssenkrupp claims that its biomass boilers could help reduce pollution in North India, where burning of crop waste in fields has been a major source of pollutions and has resulted in pollution levels soaring in the capital. Through the agreement with Babcock & Wilcox, Thyssenkrupp Industries India aims to find a sustainable solution to this issue by utilising the crop waste for clean energy generation.
 
Adoption of stringent emission norms and rising concerns toward environmental pollution are likely to be the two key factors deciding the future course of boiler industry.
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