Tata Power and Tata Steel to Jointly Develop Combined Heat and Power Plant in Netherlands

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tata Steel Limited (BSE:500470) (Mumbai) and Corus Staal BV (Velsen-Noord, Netherlands), a wholly-owned subsidiary of Corus Group plc (London, United Kingdom), signed a memorandum of understanding with India's largest private power producing company, Tata Power Company Limited (BSE:500400) (Mumbai), for setting up a 525-megawatt (MW) combined heat and power (CHP) plant at Corus' IJmuiden steel mill in the Netherlands.

Tata Steel and Tata Power will form a joint venture company that will develop the power plant on a build-own-operate basis. Provided the joint venture obtains all the required permits, the power plant is scheduled to be commissioned in 2013. The CHP plant will consume a large part of the steel plant's excess process gases and convert them into steam and power. This will replace a part of the current power supply arrangement at the facility and take care of its steam and energy needs. On completion, the CHP plant will reduce the amount of off-gas flaring at the facility and help Tata Steel reduce its carbon footprint significantly.

The 7 million-ton-per-year Corus IJmuiden plant is a Strip Products manufacturing plant and produces cold-rolled, hot-rolled, and metallic-coated steel for industries such as building and construction, transportation and automotive, general engineering, electronics, packaging, and consumer appliances. The facility provides customers with supply-chain management, engineering solutions, end-product development and technical information.

The IJmuiden site also houses the IJmuiden Technology Centre, which focuses on product, process and applications research for the packaging and automotive sectors.

The IJmuiden steel plant is a green project, and the power plant is also specified as a green project. The facility will emit low amounts of carbon dioxide (CO2) and be part of the expanding sustainable energy portfolio of Tata Power and Tata Steel. Some of Tata Power's other green power projects include geothermal projects in Australia and the Dagachhu hydropower project in Bhutan. The company's renewable energy portfolio in India includes 155.5 MW of wind energy.

The steel industry's need to reduce CO2 emissions is recognized worldwide, and climate change is the biggest challenge facing the industry today. The past 25 years have seen a marked improvement in the reduction of CO2 emissions, consumption of raw materials and usage of energy by the steel industry. Iron reduction, the chemical reaction between iron ore and carbon in the blast furnace, generates most of the CO2 emitted by the steel industry. In advanced facilities, CO2 emissions have been curtailed, but industries using conventional technologies are hard pressed to bring about further reductions in CO2 emissions. Recognizing the need for breakthrough technologies to tackle the issue, nations and regions have invested heavily in research. The International Iron and Steel Institute (IISI) has recognized the need for an international collaborative program to address the issue. The IISI's CO2 Breakthrough Program takes a multiphase approach to dramatically decrease CO2 emissions from the steel industry.

In April 2008, the World Steel Association (Brussels, Belgium) launched a Climate Action program that measures the CO2 emitted by steel industries worldwide and enables individual plants to compare their performance against the best and average performances. The Climate Action recognition program was recently launched in recognition of the industry's efforts to bring down CO2 emissions. It recognizes those steel producers that have fulfilled their commitment to participate in worldsteel's CO2 emissions data collection program.

According to a recent Wall Street Journal report, the U.S. steel industry operates several carbon-intensive mills that could be adversely affected by a carbon-emissions cap and trade system. They would either have to increase prices to pay for emissions or decrease production targets to reduce their carbon footprints. The industry is now lobbying to get credit for the reduction in carbon emissions already secured since the 1990s. The U.S. steel industry has brought down its energy intensity per ton of steel by approximately 33% since 1990. Similarly, European steel makers have brought down their emissions by more than 20% between 1990 and 2005, the Kyoto Protocol reference years. The Kyoto Protocol mechanisms are designed to introduce energy-saving technologies in industries, reduce the adverse effects of industries on the environment and increase the energy effectiveness of industrial equipment.

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