Green Power Procurement in the Cement Sector in India

Green Power Procurement in the Cement Sector in India

Case Study: Shree Cement

Date of Release – August 2024

The Cement Industry is one of India’s most energy-intensive industrial sectors and is at the cusp of a major transformation. All leading manufacturers aim to decarbonize and green their manufacturing operations through strategic green power procurement, setting Net Zero targets. Majority of the leading manufacturers aim to attain net zero by 2050.

Figure 1: Emission Intensity roadmap of leading cement players

Source: Company annual reports, JMK Research

Renewable energy (RE) adoption, with its technological maturity and low cost, has become the immediate focus of manufacturers in enabling this decarbonization push. The three largest manufacturers of India by manufacturing capacity (Ultratech, Shree Cement, Dalmia) are all members of the RE100. As of FY2024, leading companies have installed a total renewable energy capacity of 1800+ MW, with 42% of it from WHRS and the remaining 58% from solar or wind.

Integrated and grinding manufacturing units pose unique set of decarbonization opportunities and challenges. Grinding units procure electricity from the state grid at an expensive Rs 8-10 per unit, thereby representing a strategic low hanging fruit renewable energy opportunity for the industry. However, with increase in RE penetration, the energy storage system (ESS) also becomes crucial for grinding units to meet the base load demands of their round the clock operations, primarily due to the lack of thermal captive power plants (CPP).

Integrated units, involving the energy intensive clinkerization process, primarily rely on captive thermal CPP for their electricity requirements, thereby making their green shift challenging vis-à-vis grinding units. However, innovative emerging solutions, such as electrification of rotary kiln, wherein majority of the emissions occur, will lead to an upsurge of RE addition in the integrated units in the future.

JMK Research estimates that around 4-5 GW of additional renewable energy capacity is likely to be added by the Indian Cement sector by 2030. This, in turn, is likely to require a significant capital investment of over US$4 billion (including energy storage).

Figure 2: Expected RE installations in Cement Industry in various scenarios by 2030

Source: JMK Research Analysis

Table of Contents

1. Indian Cement Sector Overview
2. Cement Manufacturing Process Overview
3. Ways to Decarbonize the Cement sector
4. Key decarbonization policy initiatives
5. Decarbonization initiatives by leading players
6. Case Study- Shree Cement Ltd.
   • Company Overview
   • Manufacturing Process and Energy Consumption
   • Sustainability Initiatives
   • Renewable Energy Installation by Shree Cement
   • Renewable Energy Generation and Consumption
   • Renewable Energy Benefits
   • Benefits accrued from other decarbonization measures
   • Outlook for Shree Cement
7. Way Forward

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To read insights on the Iron and Steel sector and a case study on JSW Steel on similar lines, you can refer to our earlier released report- Green Power Procurement in the Iron and Steel Sector in India