Suresh 2017
Suresh 2017
Suresh 2017
Solar Energy for Process Heating: a Case Study of Select Indian Industries
PII: S0959-6526(17)30416-X
DOI: 10.1016/j.jclepro.2017.02.190
Please cite this article as: N.S. Suresh, Badri S. Rao, Solar Energy for Process Heating: a Case
Study of Select Indian Industries, Journal of Cleaner Production (2017), doi: 10.1016/j.jclepro.
2017.02.190
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Solar Energy for Process Heating: a Case Study of Select Indian Industries
Suresh N S* and Badri S Rao
Center for Study of Science Technology and Policy, No. 18&19, 10th Cross, Papanna Layout, Mayura Street, Nagashettyhalli, RMV II stage, Bengaluru-560 094, Karnataka, India
Abstract
The annual consumption of petroleum products in India was about 221 million metric tons in 2015. Of this, 84%
was imported. The Indian industrial sector accounts for about 16%–20% of the total fuel consumption for
thermal energy for different heating applications in the temperature range of 50°C–250°C. Solar collectors can
meet these temperature requirements and offer the possibility to mitigate the consumption of oil. This study
highlights the fact that conversion efficiency from solar energy is much higher for process heating than for
electricity generation and that process heating applications constitute a significant share of industrial energy
consumption. In this paper, a methodology has been developed to estimate the potential for integration of solar
collectors for process heating. The methodology employs process operating temperatures to select the type of
solar collectors. The size of the solar field is estimated taking into account the thermal heat loads, working fluid
and temperatures of these processes, the efficiency of the chosen solar collectors, location-based solar irradiance
and capacity utilization of the solar collectors. The proposed methodology has been validated with a software
tool called System Advisor Model (SAM). The techno-economic analysis will indicate the viability of solar
systems for integration in industries. Therefore, the consociated parameters on economic (capital cost, fuel oil
savings, monetary benefits), financial (Payback periods, Rates of Returns) and environmental (Carbon savings)
are estimated. Further, the methodology has been applied to select Indian industries to verify its potential
quantitatively. The industries selected include Textile, Pulp & Paper, Dairy, Leather and Automobile. Process-
wise energy demands are considered while estimating the potential as the fuel requirement offset by solar
energy in terms of absolute fuel oil savings, monetary benefits and carbon savings. The other economic and
financial parameters mentioned above were estimated to verify the capability and present the market position of
solar systems. Further, sensitivity analyses have been performed with respect to solar energy penetration and
fuel oil prices to address the viability of integration of solar energy for process heating.
Keywords: Solar Energy; Process Heating; Monetary Savings; Carbon Savings; Payback Period; Internal Rates of Return.
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Nomenclature
Symbol Variable Name Units
𝐴𝑐 Area of a solar collector m2
𝐴𝑝𝑟𝑜𝑐𝑒𝑠𝑠 Solar collector area required for a process m2
𝐶𝑓 Fuel oil equivalent carbon dioxide emission factor kg/ton of fuel oil
𝐶𝑝 Specific heat of working fluid kJ/kg/K
𝐼𝑑𝑎𝑦 Solar irradiance over the day kWh/m2/day
𝑘𝑓 Fuel oil equivalent energy factor GJ/ton
Abbreviations: DNI, Direct Normal Irradiation; ETC, Evacuated Tube Collector; FPC, Flat-Plate Collector; GHI, Global Horizontal
Irradiation; HTC, High-Temperature Collector; IEA, International Energy Agency; IREDA, Indian Renewable Energy Development
Agency Ltd.; LTC, Low-Temperature Collector; MTC, Medium Temperature Collector; NDCs, Nationally Determined Contributions;
NREL, National Renewable Energy Laboratory; RE, Renewable Energy; SAM, System Advisor Model.
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1. Introduction
The socioeconomic growth of a country depends a lot on the availability of energy (Adams et al., 2016;
Kanagawa and Nakata, 2007). The source of this energy is a critical parameter to be evaluated with respect to
energy security, sustainability and its impact on the environment (Dawn et al., 2016). As an example, the total
installed capacity of electricity in India is 306 GW, of which 70% is derived from fossil fuels, 15% from nuclear
and hydro, and 15% from Renewable Energy (RE) sources (CEA, 2016), with a small contribution from clean
energy sources. Further, 85% of the crude oil requirement in India is met through imports. According to
International Energy Agency (IEA), these imports will increase to 91.6% by 2020 (Mauthner and Werner,
2014). India spent about US$ 6711 million annually on oil imports from 1957 to 2016. The expenditure reached
an all-time high of US$ 45,281.9 million in May 2011, with an average of about US$ 25,000 million per month
only in the past decade (Trading Economics, 2016). At the same time, the Prime Minister of India recently
announced the government’s intention to reduce dependence on oil imports by 10% by 2022 and 50% by 2030
(Sudheer, 2015). India’s emissions presently exceed 2.5 Gt of CO2, which is 6.5% of the total world emissions
(Liu, 2016). In an effort to check these emissions, the government has taken many initiatives to reduce the
national carbon footprint as reflected in the National Action Plan on Climate Change, the Nationally Determined
Contributions (NDCs), The International Solar Alliance and RE goals. These initiatives are mainly to
mainstream alternate clean energy sources and increase the energy efficiency of existing technologies to address
the rising demand for energy, issue of climate change, energy security, reduce oil import dependence, etc. India
aims to achieve the following RE targets by 2022: 100 GW from solar, 60 GW from wind, 10 GW from biomass
and 5 GW from small hydro. In addition, India’s NDC goal is to achieve 40% of total installed power generation
capacity from RE and reduce the emission intensity per GDP unit to 33%–35% below the 2005 levels by 2030
(Ashok, 2015). In this context, the present study has been conducted to develop a methodology for assessing the
potential of solar energy for process heating in any industry. Further, a case study has been presented for select
industries in India to assess the techno-economic potential quantitatively.
Fossil fuels currently play a significant role in fulfilling the demand for process heating in industries for various
applications. A majority of these processes operate in the temperature range of 50°C–250ºC (Fuller, 2011;
Kalogirou, 2003). In India, these processes generate oil consumption of about 40% (70 Million Metric Tons) of
the total oil consumption of the country (EIA, 2013; MPNG, 2015; Rastogi, 2014). The use of solar collectors as
an alternative for supplying this heat can reduce the usage of fossil fuels to some extent. At present, most of the
solar collectors are used for domestic water heating. For use in industries for processes like sterilization,
pasteurization, drying, evaporation, washing, cleaning, bleaching, cooking, pre-heating, etc. (ETSAP and
IRENA, 2015), solar collectors will have to supply heat in the required temperature ranges for specific
processes.
The integration of solar collectors in existing process cycles is, however, a challenging task. Also, some
industrial processes operate round the clock and require constant energy continuously. Despite the potential of
solar collectors in meeting the required heat demand, their smooth operation is a challenge owing to the
intermittent nature of solar irradiance. Further, since sunlight is available for only one-third of a day, storage or
hybridization would be required (Kulkarni et al., 2008). Though a system containing solar with storage and
hybridization (with fuel source such as natural gas or fuel oil) is an option to avoid process intermittency, this
would generate additional costs. The working fluid must be pressurized if required temperatures are above
100ºC for heating applications to avoid boiling (in case of water) inside the solar collector system.
According to a report released by the IEA (Mekhilef et al., 2011), solar energy will be able to meet about 45%
of the global energy demand by 2050. Many strategic programs are already underway across the globe to
increase its adoption (ESTTP, 2008; MNRE, 2010; SERIIUS, 2016).
A brief summary of the literature findings on solar energy for process heating is covered in this paragraph.
(Carnevale et al., 2011) analyzed the impact of integration of parabolic trough solar systems in a Textile factory
both technically and economically. They found that although integration leads to annual natural gas savings of
40%–50% (out of 47 Nm3), it is not sufficient to recover the capital investment. However, a decrease of 50% in
the cost of solar components reduces the payback period to 6 years. (Fuller, 2011) reviewed the achievements of
solar industrial process heating in Australia and found that solar-based systems are technically feasible but not
viable financially (payback period is more than 17 years) due to high capital cost. (Silva et al., 2014) studied the
thermo-economics of a solar plant for industrial process heating and found that solar energy will play a vital role
if fossil fuel prices increase rapidly. (Koroneos and Nanaki, 2012) examined the life-cycle assessment of a solar
water heater and found that a 4 m2 flat-plate collector (FPC) can provide energy of 1,700 kWh/year and
monetary life-cycle savings of US$5,600 with a payback period of 5 years.
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The available literature is not sufficient if one is interested to verify the possibility of integration of solar
thermal collectors for process heating in industries and its potential at national level. Therefore, the current
study proposes a methodology to estimate the potential of solar energy collectors for process heating in
industries. Further, this methodology is applied to select Indian industries, as a case study, to understand the
gross potential of solar thermal collectors. The unique feature of this paper is that it considers the process-wise
energy demand in industries while estimating the potential at national level. The gross assessment is expressed
in terms of economic and environmental benefits. Sensitivity analyses are performed to observe the impact of
fuel oil price and solar energy penetration rate on key economic parameters. Details of the methodology and
potential findings from select Indian industries are explained in the following sections.
2. Methodology
A methodology has been developed to estimate the potential of solar energy for process heating in industries.
Initially, all processes in each industry that requires thermal energy are identified. The operating temperatures of
these processes are considered for the selection criteria for solar collectors. Further, the total quantum of thermal
energy required for each industry is estimated based on the production capacity of the industry at national level.
This total thermal energy is used to estimate the size of the solar field required for each industry. The associated
capital costs and payback periods for retrofitting solar collectors are then estimated. Benefits in terms of CO2
reductions and monetary are also quantified with offsetting of base-fuel. These economic and environmental
parameters are useful in addressing the sustainability aspects of this intervention. The method for integrating a
solar thermal collector for process heating is shown in Fig. 1.
Process
Conventional Heat
Source
Storage
Solar Heat Source
Fig. 1: Method for integrating a solar thermal collector for process heating
The sections below describe the detailed step-by-step methodology used to carry out the potential assessment.
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compared with FPCs and ETCs, but they can generate higher temperatures. The general plant life for an FPC, an
ETC and a Dish are 20, 15 and 25 years, respectively. Table 1 mentions the criteria for selecting the type of
solar collector based on the average operating temperatures of industrial processes.
Table 1: Selection of Solar Collector based on the Operating Temperature of a Process
Operating Solar collector Lifetime
temperature (Tavg), ºC (years)
40–80 Flat-plate 20
80–150 Evacuated tube 15
>150 Dish 25 (glass based)
where Cp is the specific heat of water or air (kJ/kg/K) and Tin is the fluid inlet temperature.
2.4. Estimation of the Energy and Solar Collector Area Requirements for a Specific Process
The solar collector area is estimated based on the thermal energy requirement of a specific industrial process.
The steps followed to estimate the solar collector area are shown in the flowchart in Fig. 2. The tilt factor
indicated in Fig. 2 is used to adjust the solar collector such that it receives maximum amount of solar energy
over the year. Tilting up a collector by an angle equivalent to latitude from horizontal (facing south for locations
in Northern hemisphere and facing north in Southern hemisphere) will increase the incident irradiance compared
to that of a collector which is at horizontal. This adjustment factor is called the tilt factor. Tilt is not required for
tracking systems (e.g., a dish).
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Fig. 2: Flowchart to Estimate the Energy and Solar Collector Area Requirements for Process Heating
The steps followed for estimating the capital cost of solar collectors used for process heating in industries are as
follows:
The benefits of the implementation of solar collectors in terms of fuel savings, monetary savings and carbon
emission savings in each industry are estimated as explained below.
2.6.1. Annual Fuel Oil Savings
Annul fuel savings are estimated based on the amount of thermal energy (Qthermal in GJ) supplied by solar
collectors as follows (Karbuz, 2004):
Fuel oil savings (toe) = Qthermal /(kf× combustion ), (2)
where combustion is the combustion efficiency and kf is the fuel equivalent energy factor in GJ per ton (e.g., kf
for fuel oil is 41.868 GJ).
Net monetary savings = (Price of fuel oil × Fuel oil savings–Annual O&M cost of solar collectors). (3)
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where A = Last time period in which the cumulated cash flow was negative, year
B = Absolute discounted cash flow corresponding to the year ‘A’
C = Discounted cash flow corresponding the subsequent year (‘A+1’).
Internal Rate of Return = IRR (all cash flows over the lifetime). (5)
Carbon dioxide savings due to reduction of fuel oil use for process heating are estimated as follows (Carbon
Trust, 2016):
Here Cf is the fuel equivalent carbon dioxide emission factor in kg per ton of fuel [e.g., Cf for fuel oil is 3,232.7
kg of carbon dioxide (Mauthner and Werner, 2014)].
The methodology presented above (Section 2) is applied to a few energy-intensive industries in India to assess
the economic and environmental parameters. These parameters give an idea of the sustainability of integrating
solar thermal systems for process heating in industries.
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0.7
0.6
0.5
Efficiency
0.4
0.3
0.2
FPC
0.1 ETC
Dish
0
0 50 100 150 200 250 300
(Top-Ta) °C
3.1.2. Assumptions
The assumptions for the techno-economic assessment of solar collectors are as follows:
i. Global Horizontal Irradiation (GHI) and Direct Normal Irradiation (DNI) for India vary from 4.5 to 6.5
kWh/m2/day (NREL, 2015). Therefore, an average value of 5.5 kWh/m2/day is taken as the reference
solar irradiance.
ii. The number of sunny days (Ns) in a year is 260 (Khare et al., 2013).
iii. The tilt factor (tf) of both FPCs and ETCs is taken as 1.1. See Section 2.4 for details.
iv. Solar energy penetration can technically go up to 100% with additional storage. The solar collector
area will increase proportionately with the storage capacity. However, industries may have the potential
of 20%–40% solar energy penetration (The base case study considers 20% of thermal energy demand
of a process by solar energy.) Reasons for this assumption are as follows: (a) sunlight will be
available for only a maximum of 10–12 hours a day; (b) most industrial processes require energy round
the clock—100% energy from solar without storage is not possible; and (c) industries have space
constraints.
v. O&M is taken as 2% of capital cost. Further, a 2% escalation is considered each year (UNDP, 2010).
vi. The thermal energy needs of the industries are predominantly met with fuel oil compared with coal and
electricity (Kalogirou, 1999; Thiruchelvam et al., 2003).
vii. The efficiency of solar collectors depends on ambient temperatures. Based on the temperature
variations across India, an average ambient temperature (Ta) of 25°C is considered for the analysis.
viii. The percentage consumption of petroleum products in Industries is estimated based on 2012 levels.
ix. The capital costs (in US $/m2) of FPCs, ETCs and Dish collectors are 178, 163 and 331, respectively.
x. The price of fuel oil over the past decade varied from US$1.0 to US$3.7 per gallon (Indexmundi,
2016). This range is considered in performing the economic analysis.
3.1.3. Validation of the methodology
The methodology presented in Section 2 has been validated with both simulation software and experimental
data. System Advisor Model (SAM), a performance and financial tool developed by National Renewable
Energy Laboratory (NREL), is used as simulation software for this validation. The input parameters considered
and output parameters estimated are presented in Table 2. It can be seen that the annual thermal energy
generated per m2 of solar collector area matches well between the model and simulation software, with the error
difference being 2.1%. With respect to experimental validation, we have used the data from the demonstration
system installed by the company CONTANK in Barcelona, Spain. CONTANK’s system uses 510 m2 of FPC
and it generated annual thermal energy of 429 MWht, equivalent to 841 kWh/m2. Hence, the results obtained
from the model are quite satisfactory to estimate the potential in process heating.
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Considering the above limitations, the study can be used to make a gross assessment of the solar thermal
collector potential for process heating in industries. Further, it is to be noted that the costs of the systems reduce
exponentially with capacity.
Details of assessment in each industry and findings are presented in the sections below.
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The Indian Textile industry has an annual fabric production capacity of about 9.6 million tons (Ministry of
Textiles, 2014; The Textile Magazine, 2013). Of the total domestic production, 20% of the fabric production
undergoes the processes mentioned in Table 3 via the organized sector. The thermal energy requirements of all
these processes can be met through FPC and ETC solar collectors as their operating temperatures are less than
150ºC.
The potential of solar energy penetration with FPCs and ETCs in the Textile industry for various processes at
national level is estimated and is given in Table 4. It can be seen that the total thermal energy demand in the
Textile industry is 8.3×107 GJ/year, which is similar to the observations of (Thiruchelvam et al., 2003). Of this,
the solar component can supply 1.7×107 GJ/year. This requires a solar collector area of 6.2 million m2, which
requires a capital investment of US$970 million. Details of higher solar energy penetration through thermal
energy storage are presented in the sensitivity analysis in Section 4.
Table 4: Energy demands and the possibility of solar energy integration in the Textile industry
Process Energy Solar Capital cost
demand collector to install
(×106 area solar
GJ/year) (million m2) (US$ million)
Sizing 6.23 0.40 60
Scouring 12.1 0.87 128
Bleaching 6.85 0.45 67
Mercerizing 4.82 0.34 55
Dyeing 39.78 3.29 537
Finishing 13.02 0.82 122
Total 82.79 6.18 970
The overall annual benefits are presented in Table 5. It is found that Textile industries have the potential to
make fuel oil savings of about 439 ktoe. This translates to annual net monetary savings of US$123 million and
annual CO2 reductions of about 1,420 kt (0.06% of total Indian emissions) with the integration of solar
collectors.
Processes in this industry that have scopes for integration of solar technologies are debarking, pulp making,
bleaching, stock preparation and paper making. These processes are highly energy-intensive and utilize heat
mainly for cleaning, boiler feed water heating and drying (Edenhofer, 2012; Gemechu et al., 2012). The
operating temperatures of these processes, the fuels used for heat generation and suitable solar technologies are
given in Table 6 (Mekhilef et al., 2011; The Textile Magazine, 2013).
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The solar energy potential estimation is done based on the gross production and thermal energy requirements
(ComSolar, 2011; IPMA, 2014). Details are given in Table 7. It can be seen that the solar component can
supply 2.5 PJ of energy. However, estimates made by (Sharma et al., 2016) indicate that the total process
heating potential of the Pulp & Paper industry in India is 25.2 PJ/annum. This estimation has been arrived at
based on the fact that the industry uses the parabolic trough technology, which supplies energy at high
temperatures. However, the present paper production process considers FPCs and ETCs for preheating at 70°C.
It can also be seen that the total solar collector area required is 0.9 million m2 and the capital cost is US$149
million.
Table 7: Energy demands and the possibility of solar energy integration in the Pulp & Paper industry
Description Quantity Units
Total production of paper and paperboard 10.11 Million tons/year
Hot water requirement for preheating @70°C 6.5 Tons/ton of paper
Energy required 12.38 PJ/year
Energy from solar collectors 2.48 PJ/year
Solar collector area required 0.91 Million m2
Capital cost for solar collectors 149 US$ million
Further, it can be seen from Table 8 that the total fuel oil required for all the processes is about 329 ktoe.
However, the amount of fuel that can be saved through the solar component is 66 ktoe, with annual CO2
reductions of about 213 kt. The net monetary savings due to replacement with the solar component is US$18.3
million.
Table 8: Overall annual benefits in the Pulp & Paper industry with solar energy
Description Quantity Units
Fuel oil demand 329 ktoe
Fuel oil saved by solar energy 66 ktoe
Net monetary benefits 18.3 US$ million
CO2 reductions 210 kt
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As per national norms, 0.034 kWh of electricity, 5 ml of fuel oil and 2 liters of water are required to process 1
liter of milk (ComSolar, 2011; Xu and Flapper, 2009). This is equivalent to about 0.33 MJ of energy. The
thermal energy requirements for the processes mentioned above and the potential for solar energy penetration
with FPCs and ETCs in the Dairy industry are given in Table 10. It can be seen that the solar component can
supply 0.49 PJ of thermal energy. The total solar collector area required to supply this energy is about 0.16
million m2 with an associated capital cost of US$25 million.
Details of fuel oil and monetary savings with integration of solar collectors in this industry are given in Table
11. The Dairy industry requires about 64.6 ktoe of fuel oil for process heating. Installation of solar components
can bring in fuel oil savings of 12.9 ktoe and annual CO2 reductions of about 41 kt.
Table 11: Overall annual benefits in the Dairy industry with solar energy
Parameter Value
Fuel oil demand (ktoe) 64.6
Fuel oil saved by solar (ktoe) 12.9
CO2 reductions (kt) 41
Net monetary benefits (US$ million) 3.7
Tanning operations (soaking, liming, pickling, splitting, dyeing, etc.) consume most of the thermal energy in
terms of heating water to a temperature of 40°C–80°C and air to a temperature of 70°C–100°C. This accounts
for 40% of the total thermal energy consumption in the Leather industry (Buddhadeb, 2010). The total capacity
of Indian tanning units is around 2 billion sq. ft. of hide/skin (annual production of about 0.7 million tons), with
about 1,600 kcal of thermal energy required to process 1 kg of hide/skin. Leather industry consumes about 21
billion liters of water annually. The solar energy potential in the Leather industry is estimated and presented in
Table 13 (ComSolar, 2011; Council for Leather Exports, 2014).
It can be seen that the hot water accounts for 8.4 billion liters, requiring thermal energy of 4.4 PJ per annum
(31% for hot water and 63% for hot air). The industry has potential of about 0.27 million m2 for ETC solar
collectors to supply thermal energy, which requires an investment of US$40 million.
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Table 13: Process requirements and solar energy potential in the Leather industry
Parameter Value
Hot water requirement (billion liters/annum) 8.4
Energy requirement for hot water (PJ/annum) 1.47
Energy requirement for drying (PJ/annum) 2.93
Energy for hot water from solar collectors (PJ/annum) 0.29
Energy for drying from solar collectors (PJ/annum) 0.59
Solar collector area required (million m2) 0.27
Capital cost for solar collectors (US$ million) 40
Further, it can be seen from Table 14 that 23 ktoe of oil savings translate to net monetary savings of US$6.7
million and 75 kt of CO2 reduction.
Table 14: Overall annual benefits in the Leather industry with solar energy
Parameter Value
Fuel oil demand (ktoe) 116
Fuel oil savings due to solar energy (ktoe) 23
Annual CO2 reductions (kt) 75
Net annual monetary savings (US$ million) 6.7
Most of the processes in the Automobile industry are mechanical and are driven by electricity. However, a few
processes require considerable amount of thermal energy for drying and cleaning. Generally, drying is done by
blowing hot air and cleaning by using hot water. The operating temperatures of these processes, the fuels used
for heat generation and suitable solar technologies are given in Table 15. The energy consumption of the
processes is analyzed considering an equivalent passenger vehicle. Therefore, for every vehicle, a weight factor
is assigned with respect to the energy consumption of an equivalent passenger vehicle. The equivalent weight
factors for two- and three-wheelers, small commercial vehicles, construction vehicles and heavy commercial
vehicles are 0.5, 2, 3.7, and 4, respectively. The thermal energy requirement for air heating at 200°C is about
1,000 kcal/Eq. vehicle and is about 1,000 liter/car for heating water at 95°C(ACMA, 2009; ComSolar, 2011).
The thermal energy requirements and solar energy potential in the Automobile industry are estimated and
presented in Table 16. It can be noted that a dish collector is used for drying at 200ºC and an ETC is used for
generating hot water at 95ºC. This industry has a potential of 0.29 million m2 for solar collectors.
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Table 16: Energy demands and the possibility of solar energy integration in the Automobile industry
Parameter Value
Dish (drying) ETC (water heating)
Total thermal energy per annum (PJ/annum) 0.07 4.34
Thermal energy from solar (PJ/annum) 0.013 0.87
Collector area (million m2) 0.005 0.29
Capital cost (US$ million) 1.57 43.4
Table 17 provides the overall benefits due to penetration of solar energy in the Automobile industry. It can be
seen that annual net monetary savings of US$18.15 million and total annual CO2 reductions of about 76 kt can
be achieved by using solar collectors.
Table 17: Overall annual benefits in the Automobile industry with solar energy
Value
Parameter
Dish ETC
Fuel oil demand (ktoe) 1.8 115
Fuel oil savings (ktoe) 0.36 23
Net monetary savings (US$ million) 0.1 6.5
CO2 reductions (kt) 1.2 75
5. Sensitivity Analysis
A parametric study has been performed in this section with respect to key sensitive parameters. This analysis
helps in making decisions on the implementation of these systems. The study identified capital cost, fuel oil
savings, IRR, DPP, and carbon savings to be the major output parameters. The analysis that follows investigates
the effect of key input parameters on these outputs.
Fig. 4 shows the variation of capital cost and solar collector area for various penetration scenarios. The thermal
energy storage cost is also accounted for the capital cost for higher solar energy penetration. It may be noted
that the capital cost for 20%–100% solar penetration varies from US$1200 to US$6100 million with a solar
collector area of 7.8–40 million m2. The corresponding supply of thermal energy is 21–106 PJ. The actual
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capital costs of solar collectors depend on the scale of the particular installation, which further depends on the
scale of the actual industrial unit/plant. This has not been considered in this study and could be further examined
depending on the scale of the system. The capital cost may decrease exponentially for systems of higher size.
However, the present study is useful to assess the scale of costs and savings through installation of solar
collectors.
Capital cost (US$ million)
10000 50
6000 30
4000 20
2000 10
0 0
0 Fraction
0.1 of0.2solar
0.3energy
0.4 penetration
0.5 0.6 0.7 0.8 0.9 1
Fig. 4: Variation of Capital Cost and Collector Area with Solar Energy Penetration
Fig. 5 shows the variation of fuel oil and carbon emission savings with solar energy penetration. It is important
to note that fuel oil and carbon emission savings are increase proportionately with solar energy penetration.
With 20%–100% solar energy penetration, these savings amount to 565–2827 ktoe and 1.68–9.0 Mt CO2,
respectively. 100% solar penetration (equivalent to 2,827 ktoe) in these industries could reduce the total oil
consumption in all industries by 6.5%. As indicated in Section 2.6, the savings of fuel oil will be proportional to
the energy supplied by the solar collectors. Therefore, the fuel oil savings and carbon savings will be in linear
proportion with the energy savings through solar energy.
3000 11
Carbon savings (Mt CO2)
Fuel oil savings (ktoe)
500 3
0 1
0 0.1of solar
Fraction 0.2 energy
0.3 0.4 0.5 0.6
penetration 0.7 0.8 0.9 1
Fig. 5: Variation of Fuel oil and CO2 emission savings with Solar Energy Penetration
The influence of fuel oil price on the DPP and the IRR is investigated in this section. Fig. 6 shows the variation
of fuel oil price from 2006 to 2016 (Indexmundi, 2016).
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Fig. 6: Trend of Fuel Oil Price for India in the Past Decade
Fig. 6 shows that the price of fuel oil varied continuously over the past decade. It is important to note that the
price of fuel oil was increasing during the period 2009–12, over which many initiatives were launched by the
Government of India to increase the penetration of solar energy. Further, subsidies on both the capital cost for
captive installation and the purchase cost of energy from solar were also offered to promote solar energy for
various applications. Since 2013, the price of fuel oil started falling. Fig. 7 and Fig. 8 show the effects of this
fall on the DPP and IRR of low-temperature solar collectors (FPC and ETC) and high-temperature collectors
(Dish), respectively. It is to be noted that subsidies on solar thermal collectors were discontinued in 2014. The
DPP and IRR are arrived at by considering 10% discount rate for LTCs and 5% for HTCs, 2% of capital cost for
O&M, and a 2% escalation in O&M for every year.
20 40
DPP
IRR
DPP (years)
15 30
IRR (%)
10 20
5 10
0 0
1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0
Fuel oil price (US$/gallon)
Fig. 7: Variation of DPP and IRR with Fuel oil price for LTCs
As can be seen from Fig. 7, both DPP and IRR of solar thermal collectors are sensitive to changes in fuel oil
price. With increase in fuel oil price, DPP decreases exponentially whereas IRR increases proportionately. At a
fuel price of US$1.19 per gallon (present oil price), the DPP of solar collectors is over 20 years (exceeds the life
of LTCs) and the IRR is 9.8%. In this condition, solar collectors are strictly not a viable option. However, DPP
decreases to 4.5 years and IRR increases to 29% when the fuel oil price exceeds US$2.5 per gallon (similar to
the rates in the period between 2010 and 2014).
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A similar exercise for a Dish collector is presented in Fig. 8. The DPP and IRR figures indicate that Dish
collectors for process heating are not viable with the preset capital costs of solar collectors and fuel oil prices.
However, when the fuel price is above US$2.5 per gallon, DPP is around 14 years and IRR is 13%, which is
slightly viable. Further, it is to be noted that dish collectors can offer higher temperatures (150°C–400°C) and a
longer lifetime (25–30 years).
These parameters can be optimized, but that depends on system costs, scale of the systems, solar irradiance and
fuel oil prices. It is obvious that any investor will expect high returns and lower payback periods. At the present
state, suitable solutions are largely dependent on fuel oil price. A possible solution could be when fuel oil price
is >1.8 $/gallon, at which the DPP is <7 years and IRR is >20% for the LTCs. And, for the dish collectors, the
fuel oil price has to be >2.5 $/gallon, at which the DPP is <15 years and IRR is >13%.
Overall, the viability of solar collectors will highly depend on the price of fuel oil unless the capital cost of solar
collectors falls or subsidies are offered.
25 25
DPP
IRR
20 20
DPP (years)
IRR (%)
15 15
10 10
5 5
0 0
1.0 1.2Fuel
1.4oil price
1.6 (US$/gallon)
1.8 2.0 2.2 2.4 2.6 2.8 3.0
Fig. 8: Variation of DPP and IRR with Fuel Oil Price for Dish Collectors
6. Policy Recommendations
India has installed about 40,000 m2 of solar collector area for process heating so far. However, the penetration of
solar energy for process heating has to be increased substantially if the government is to meet its set NDCs. In
this regard, the study proposes the following policy recommendations to meet the NDC targets:
A mandate to for energy audits assess the true energy demands and space availability of all industries
for solar integration
Mandate for a focus on process heating (and electricity generation) through solar route in all industries,
given that conversion efficiency is far greater in process heating applications
Regulations on fossil fuel use and emission rates in industries
Mandate of renewable energy mix for all existing and upcoming industries
Fiscal benefits for industries which use solar energy for process heating
Dissemination of information and advantages of solar systems for process heating
Research & Development for robust solar systems with reduced cost
7. Conclusion
In this study, a generalized methodology is developed to estimate the potential of solar thermal collectors for
industrial process heating. This methodology has been applied to verify the potential of select Indian industries
that have scope for integration of solar collectors. In the selected industries, namely, Textile, Pulp & Paper,
Dairy, Leather and Automobiles, the majority of the processes need thermal energy with an operating
temperature range of 50°C–250°C. FPCs, ETCs and Dish collectors are considered for operating temperatures
up to 80°C, 80°C–150°C and >150°C, respectively.
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The selected industries have a total annual thermal energy demand of 106 PJ, which is equivalent to 2,800 ktoe.
The sensitivity of the capital cost, DPP and IRR was analyzed with respect to solar energy penetration and fuel
oil price. The study found that 20% solar energy penetration to meet the energy demand in the selected
industries would translate to fuel oil savings of 565 ktoe and carbon savings of 1.8 Mt CO2. However, this
requires a capital investment of US$1,200 million to set up 7.8 million m2 of solar collector area. The
corresponding annual net monetary savings after accounting for O&M is US$158 million. For 100% solar
energy penetration with thermal energy storage, the fuel oil and carbon savings are 2,800 ktoe and 9.1 Mt CO2,
respectively. This requires a capital investment of US$6,000 million to set up 39 million m2 of solar collector
area. The net monetary savings per annum with 100% solar energy penetration is US$800 million. The selected
industries have the potential to reduce India’s carbon emissions by 0.1%–0.4%. Further, they have the potential
to reduce the fuel oil consumption by 6.3% (equivalent to 1.5% oil imports) of the total industries in India.
Though the above figures look promising, further investigation has been performed on DPP and IRR through
sensitivity analysis. The percentage of solar energy penetration has little impact on DPP and IRR. In contrast,
fuel oil price and discount rates (the former has a higher impact) greatly affect DPP and IRR.
The DPPs of the system for fuel oil prices of US$1 per gallon and US$3 per gallon are 20 years and 3.5 years,
respectively. The corresponding IRRs for the same fuel prices are 9.8% and 35%, respectively. The option of
integrating solar collectors is not viable considering the present fuel oil prices. However, it is viable if the fuel
price exceeds US$2/gallon (IRR–23% and DPP–6 years for LTC; IRR–13% and DPP–15 years for Dish).
Therefore, unless the capital cost of solar collectors decrease or subsidies are offered, their viability will highly
depend on the price of fuel oil.
The actual capital costs of solar collectors and the monetary savings depend on the scale of the particular
installation, which further depends on the scale of the actual industrial unit/plant. This has not been considered
in this study and could be further examined depending on the scale of the system. However, the present study is
useful to assess the scale of costs and savings through installation of solar collectors.
The study highlights the fact that the conversion efficiency for solar energy is much higher for process heating
applications as compared to electricity generation and provides compelling engineering economic analyses for
specific industrial sectors. This study suggests several policy recommendations that could be considered to
encourage industries to take up solar based process heating in an intensive manner.
Acknowledgements
This work is supported by the US–India Partnership to Advance Clean Energy-Research (PACE-R) for the Solar
Energy Research Institute for India and the United States (SERIIUS), funded jointly by the U.S. Department of
Energy and the Government of India, through the Department of Science and Technology under Subcontract
IUSSTF/JCERDC-SERIIUS/2012. The authors are grateful to Dr. Anshu Bharadwaj and Dr. Jai Asundi for
encouragement, support and guidance. The authors are also thankful to Dr. S.S. Krishnan, Dr. Mridula
Bharadwaj, Thirumalai N C and Sahil Ali for critical reviews and Abhijit Chakraborty for editing inputs on the
manuscript.
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