Promotion and Exchange of Waste Heat Recovery Power Generation Technology

Metallurgical Corporation of China Ltd .

June of 2010

Power Generation with Waste Heat

Recover the low-temperature heat for power generation in the waste steam, fume, hot water, secondary fuel (inflammable waste gases, waste solids and waste liquid) emitted from industrial production

Comply with the national industrial policy and promote energy saving and benefit increasing of industrial enterprises

Features
Recover waste heat and not consume primary energy Effectively reduce discharge of pollutants High generating efficiency, low operating cost, and remarkable economic effect

Stable operation of power plant with easy management and without influence on normal industrial production

Technology Application

HF, BOF, EAF, etc.

Steel industry

Cement, lime, glass, bricks, tiles, etc.

Building material

Copper, aluminum, plumbum, zinc, germanium, manganese, iron alloy, etc.

Nonferrous Metallurgical

Petrochemical

Tech. Application in Other Fields

Chemical industry Miscellaneous

Oil refining and chemical

Light textile

Porcelain and sugar making Graphite, carbon, geothermal energy, etc. 2

Sulfuric aid, calcium carbide, silicon, etc.

Current Waste Heat Recovery Power Generation Practices in Steel Sector

Waste heat recovery power generation by CDQ

TANK COG

TRT with HF gas

TANK

By-product gas

TANK

Power plant

BFG

Power generation by waste heat recovery from BOF flue gas

Fuel
LDG

CCPP

Coking coal

Coke oven

Coal injection

Ores
Sintering machine

BOF Continuous casting machine

HCR-billet

Power generation by sinter waste heat recovery

Air supply

Torpedo ladle car

O2

HF slag flushing water

Waste heat recovery from exhaust gas

Steel billet Blank plate

Electricity

Continuous galvanizing equipment

Power generation by waste heat recovery from heating furnace flue gas

Heating furnace Continuous caster and annealing plant

Cold rolling mill

Hot rolling mill

Waste Heat in Steel Industry

Coking process
Sensible heat in red coke, in flue gas from coke oven, in crude gas, etc.

Sintering process
Sensible heat in sinter, in flue gas from sintering machine, in exhausting gas from cooler, etc.

Iron smelting process

Sensible heat in BF slag, in BF gas, in flue gas from HBS, etc.

Steelmaking process
Sensible heat in steel slag, in BOF gas, in continuous cast bloom, and in EAF flue gas.

Steel rolling process

Sensible heat in the flue gas from heating furnace, annealing furnace, soaking furnace, quenching furnace, etc.

Projects in Waste Heat Recovery

Power Generation Field of Steel Industry

Matured projects (high temp. waste heat recovery)
CDQ, BF-TRT, CCPP

New technological projects (low temp. waste heat recovery)

Power generation with BOF saturated steam, by sinter waste heat recovery, by EAF waste heat recovery, by HF waste heat recovery, and by waste heat recovery from BF slag flushing water

R & D project
High-efficiency power generation with sensible heat recovered from BOF gas by full dry method

Power Generation Practice by Waste Heat Recovery

Waste heat in sintering flue gas

Waste heat in slag flushing water

Waste heat in BOF flue gas Waste heat in HF flue gas

Iron ore

Sinter

Molten iron

Sintering
Long process flow

BF

BOF
Molten steel Scrap steel
Steel Rolling

EAF
Short process flow

Steel

Waste heat in EAF flue gas

Systematic Sketch of Waste Heat Recovery from EAF Flue Gas

Currently, by-pass stack approach is adopted for the system. In case of a fault in any portion of the power generation system, the by-pass stack will be changed over to original flue system, not affecting the normal operation. 7

The steam produced by HRSG will be fed to the turbine and initiate the power generation of the generator.

Principled Thermodynamic System Sketch of Waste Heat Recovery Power Plant

Stacks

Circular Cooler of Sinter Plant

Steam turbine generator HRSG

10

Cooling Tower and Circulating Water Pump Shed

Turbine Workshop Building

11

Saturated Steam Turbine

12

500000

3/ h) m ( N

400000 300000 200000 100000 0

14: 16

14: 31

14: 46

15: 01

15: 16

15: 31

15: 46

16: 01

16: 16

16: 31

16: 46

Regenerator
EAF flue gas fluctuates much within one melting cycle, which results in fluctuating steam volume produced by heat absorption of HRSG while stable steam resource is normally required by the turbogenerating system. Therefore, the heat storing and pressure stabilizing equipment (regenerator) of a large volume is normally adopted to stabilize steam resource. The regenerator can only produce saturated steam which is required to be fed for power generation directly.

EAF for Steel Making

700 600 500

( )

400 300 200 100 0

2: 58

3: 06

3: 14

3: 22

3: 30

3: 38

3: 46

3: 54

4: 02

4: 10

4: 18

4: 26

4: 34

4: 42

4: 50

4: 58

5: 06

Waste Heat Recovery Power Generation Project References

1Waste heat recovery power plant with BOF saturated steam, No. 1 Steel Works, Jigang Group
Installed capacity 4500kWthe first power plant recovering BOF waste heat in China

Four 40T BOFs for steel making

Saturated steam at 1.0MPa and 32t/h to be produced by regenerator, annual generating capacity up to 32.4 million kWh, greater than that by conventional generating technology by 25%.

Project nature: Energy saving and emission reduction of steel industry Technology Technology of proprietary intellectual property right Tce saving 11,900 tons/year Reduced CO2 emission 32,000 tons/year Reducing the emission containing SO2 and considerable dust

15

Inter-stage Reheat Turbine

Turbine Workshop on 0m Level 16

Regenerator

2Sinter waste heat recovery power plant, No. 3 Sinter Plant of Wukun Steel Co., Ltd. (Two 130 m2 sintering machines)
Installed capacity: 5MW, the first sinter waste heat recovery power plant with independent intellectual property right in China

Project nature: Energy saving and emission reduction of iron & steel industry TechnologyTechnology of proprietary intellectual property right Tce saving14,500 tons/year Reduced CO2 emission 31,100 tons/year Reducing the emission containing SO2 and considerable dust

The first low temperature sinter waste heat recovery power plant with the technology of independent intellectual property right in China (Put into operation in December, 2007) In 2008, this power plant was certified as an excellent project by Metallurgical Industrial Construction Quality Supervision Station according to the state standard for metallurgical construction quality. Installed capacity5000kW Rated power output5340kW

17

18

3Low temp. waste heat recovery power plant of the environment friendly relocation works, Chongqing Iron & Steel (Group) Co., Ltd.
(A comprehensive low temp. waste heat utilization project with the largest investment and scale in China, total investment: over 300 million RMB, BOF: 18 MW, Sinter 24 MW)

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Three 360 m2 sintering lines Three 210 t BOFs

Project nature: Energy saving and emission reduction of iron & steel industry Technology Technology of proprietary intellectual property right Tce saving94,200 tons/year Reduced CO2 emission 27,740 tons/year Reducing the emission containing SO2 and considerable dust

20

(4) Power plant with waste heat recovery from EAF flue gas, Guangzhou Zhujiang Steel Co., Ltd.
(Installed capacity: 10MW, the first power plant capturing waste heat from EAF flue gas in China. )

Two 150T EAFs

Project nature: Energy saving and emission reduction of iron & steel industry Technology Technology of proprietary intellectual property right Tce saving22,300 tons/year Reduced CO2 emission 57,500 tons/year Reducing the emission containing SO2 and considerable dust

21

5Low temp. sinter waste heat recovery power plant, Honghe Steel Works under Wukun Steel

Two 90m2 sintering lines Two 40T BOFs

-The first project recovering waste heat from sintering process and BOF in China -The first project simultaneously recovering waste heat from sinter and cooler flue gas in China Installed capacity : 4500kW Put into operation in 2008

22

6Low temp. waste heat power plant, No. 4 Sinter Plant, Wukun Steel

One 300m2 sintering line

Project nature: Energy saving and emission reduction of iron & steel industry Technology Technology of proprietary intellectual property right Tce saving28,500 tons/year Reduced CO2 emission 33,000 tons/year Reducing the emission containing SO2 and considerable dust

The first low temperature waste heat recovery power plant simultaneously supplying steam and hot air for sintering process in China Put into operation in 2008 Installed capacity5000kW

23

7Low temp. sinter waste heat recovery power plant, Hunan Hualing Xiangtan Iron & Steel Co., Ltd.

One 180m2 sintering line Installed capacity4500kW Under construction 24

8Waste heat recovery power plant generating with saturated steam, Shaanxi Dongling Zinc Industrial Co., Ltd.

Heat resources Saturated steam at 3.0MPa and 70t/h Saturated steam at 0.25MPa and 17.5t/h

An energy saving and emission reduction project in the nonferrous metals sector, technical service EPC , installed capacity of 13000 KW.

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9Low temp. cement kiln waste heat recovery power plant, Yunnan Diandong Cement Co.
An energy saving and emission reduction project in the cement industry, in technical service mode, installed capacity of 3500 KW.

10Power plant recovering waste heat from flue gas, Yunnan Lincang Xinyuan Germanium Industrial Co. Ltd.
An energy saving and emission reduction project in the nonferrous metals sector, utilizing small-sized generator set, installed capacity of 2200 KW.

26

11Waste heat recovery power plant generating with BOF saturated steam, Pingxiang Iron & Steel Co., Ltd.
MCC OVERSEAS only provided the key equipment, steam turbine, with the installed capacity of 5000kW

27

Research project: Development of low temp. waste heat recovery power generation technology and installations
863 Program No.2006AA05Z253
Gas recovery system (OG method and LT method) Common disadvantage: Only part of waste heat in BOF gas recovered. Gas below 800-1000 to be cooled down by spraying water or mist.

A research subject in 863 Program of Ministry of Science and Technology: Development of low temp. waste heat recovery power generation technology and installations Completely recover waste heat in gas (sensible heat in flue gas at 800-1000)

No any potential safety hazard (taken with explosion-proof measures)

Generate power in stable operation and with high efficiency (saturated steam turbine) Form a new technology of independent intellectual property right in a leading position in the world. 28

Studies on Environmental Benefits and Economic Benefits

of Waste Heat Recovery Power Plant

Environmental Protection, Energy Saving and Emission Reduction

Discharge of wastewater Wastewater and sewage discharged from power plant: Circulating sewage, regeneration wastewater discharged from chemical water treatment and domestic sewage in small volume.

Discharge of waste solid

Waste heat recovery power plant directly utilizes the waste heat in flue gas for power generation, not producing any residue or other solid wastes.

Exhaust emission Waste heat recovery power plant does not use additional fuel and emit additional air pollutants. The power plant not only recovers secondary energy from high temperature flue gas, but also produces less flue dust, CO2 and SO2 than the generation with same electric quantity by coal combustion. It is a kind of environmental protection project with energy conservation and re-use.

30

Cost-effectiveness Analysis
No. Description Unit Amount Remarks

Example 1 (Long process flow)

Overall planning of low temperature waste heat utilization of a 2 million ton steelworks:

Basic data 1 2 3 Installed capacity Annual generating duration Annual generation kW h 104kwh 77,000 7200 49,766

To program a waste heat recovery power

plant with an installed capacity of 77 MW

Unit price of electricity Sales tax and additional tax rate Income tax rate

RMB/kWh

0.48

5 6

5% 15%

Economic data 7 Total project investment Annual revenue of power generation Static payback period Accumulated net cash inflow Internal rate of return (IRR) 10k RMB 65,450

8 9 10 11

10k RMB Year 10k RMB

23,888 2.74 203,252 19.99%

31

Note: The tariff of electricity supplied by the power plant is calculated on 0.5 RMB/kWh. The nonrecurring tce saving income is calculated on 200 RMB per ton standard coal. CDM (mainly CO2 credit trading income) is calculated on 8 Euros per ton standard coal .

32

Profit and Loss Statement

No 1 2 3 4

Description Sales revenue Cost (depreciation) Sales tax and additional tax Operating profit

1 23,888 3,273 1,194 19,421

2 23,888 3,273 1,194 19,421

3 23,888 3,273 1,194 19,421

4 23,888 3,273 1,194 19,421

5 23,888 3,273 1,194 19,421

19 23,888 3,273 1,194 19,421

20 23,888 3,273 1,194 19,421

Sum 477,757 65,450 23,888 388,420

Operating expenses

7,465

7,465

7,465

7,465

7,465

7,465

7,465

149,299

6 7

Profit Before-tax Income tax

11,956 1,793

11,956 1,793

11,956 1,793

11,956 1,793

11,956 1,793

11,956 1,793

11,956 1,793

239,120 35,868

8 9 10

Net profit Public welfare fund Unappropriated profit Accumulated Unappropriated profit

10,163 1,016 9,146

10,163 1,016 9,146

10,163 1,016 9,146

10,163 1,016 9,146

10,163 1,016 9,146

10,163 1,016 9,146

10,163 1,016 9,146

203,252 20,325 182,927

12

9,146

18,293

27,439

36,585

45,732

173,781

182,927

33

Cash Flow Statement

No.

Description Profit before tax Depreciation

0 -

1 11,956 3,273 15,229

2 11,956 3,273 15,229

3 11,956 3,273 15,229

4 11,956 3,273 15,229

5 11,956 3,273 15,229

20 11,956 3,273 15,229

Sum 239,120 65,450 304,570

Cash inflow subtotal

Fixed asset investment Income tax 2 Cash flow subtotal

65,450 1,793 65,450 1,793 1,793 1,793 1,793 1,793 1,793 1,793 1,793 1,793 1,793 1,793

65,450 35,868 101,318

3 4

Net cash flow Cash at end of period

-65,450 -65,450

13,435 -52,015

13,435 -38,580

13,435 -25,145

13,435 -11,710

13,435 1,726

13,435 203,252

203,252

5 6

Payback period (Year) IRR of project

5.87 19.99%

34

Cost-effectiveness Analysis

No. Basic data 1

Description

Unit

Amount

Remarks

Installed capacity Annual generating duration Annual generation Unit price of electricity Sales tax and additional tax rate Income tax rate

kW h 104kwh RMB/kWh

5,000 7200 3,240 0.48 5% 15%

180m2 sinter plant waste heat utilization: To program a waste heat recovery power plant with an installed capacity of 5MW.

2 3 4 5 6

Economic data 7 8 Total project investment Annual revenue of power generation 10k RMB 10k RMB 4,250 1,555

9
10 11

Static payback period

Accumulated net cash inflow Internal rate of return (IRR)

Year
10k RMB

2.73
13,242 20.05%

35

Note: The tariff of electricity supplied by the power plant is calculated on 0.5 RMB/kWh. The nonrecurring tce saving income is calculated on 200 RMB per ton standard coal. CDM (mainly CO2 credit trading income) is calculated on 8 Euros per ton standard coal .

36

Profit and loss statement

No. 1 2 3 4

Description Sales revenue Cost (depreciation) Sales tax and additional tax Operating profit

1 1,555 213 78 1,265

2 1,555 213 78 1,265

3 1,555 213 78 1,265

4 1,555 213 78 1,265

5 1,555 213 78 1,265

6 1,555 213 78 1,265

19 1,555 213 78 1,265

20 1,555 213 78 1,265

Sum 31,104 4,250 1,555 25,299

Operating expenses

486

486

486

486

486

486

486

486

9,720

6 7

Profit Before-tax Income tax

779 117

779 117

779 117

779 117

779 117

779 117

779 117

779 117

15,579 2,337

8 9 10

Net profit Public welfare fund Unappropriated profit Accumulated Unappropriated profit

662 66 596

662 66 596

662 66 596

662 66 596

662 66 596

662 66 596

662 66 596

662 66 596

13,242 1,324 11,918

12

596

1,192

1,788

2,384

2,979

3,575

11,322

11,918

37

Cash Flow Statement

No.

Description Profit before tax

0 -

1 779

2 779

3 779

4 779

5 779

6 779

19 779

20 779

Sum 15,579

Depreciation
1 Cash inflow subtotal

213
991

213
991

213
991

213
991

213
991

213
991

213
991

213
991

4,250
19,829

Fixed asset investment Income tax 2 Cash flow subtotal

42,500 117 42,500 117 117 117 117 117 117 117 117 117 117 117 117 117 117 117

4,250 2,337 6,587

3 4

Net cash flow Cash at end of period

-42,500 -42,500

875 -3,375

875 -2,501

875 -1,626

875 -752

875 123

875 998

875 12,367

875 13,242

13,242

5 6

Payback period (Year) IRR of project

5.86 20.05%

38

Cost-effectiveness Analysis
No. Basic data 1 Installed capacity Annual generating duration Annual generation Unit price of electricity Sales tax and additional tax rate Income tax rate kW h 104kwh RMB/kW h 6,000 7200 3,888 0.48 5% 15% Description Unit Amount Remarks

80T BOF low temperature low pressure waste heat utilization:

To program a waste heat recovery power plant with an installed capacity of 6MW.

2 3 4 5 6

Economic data 7 8 9 10 11 Total project investment Annual revenue of power generation Static payback period Accumulated net cash inflow Internal rate of return (IRR) 10k RMB 10k RMB Year 10k RMB 5,100 1,866 2.73 15,890 20.05%

39

Note: The tariff of electricity supplied by the power plant is calculated on 0.5 RMB/kWh. The nonrecurring tce saving income is calculated on 200 RMB per ton standard coal. CDM (mainly CO2 credit trading income) is calculated on 8 Euros per ton standard coal .

40

Profit and Loss Statement

No. 1 2 3 4

Description Sales revenue Cost (depreciation) Sales tax and additional tax Operating profit

1 1,866 255 93 1,518

2 1,866 255 93 1,518

3 1,866 255 93 1,518

4 1,866 255 93 1,518

5 1,866 255 93 1,518

6 1,866 255 93 1,518

19 1,866 255 93 1,518

20 1,866 255 93 1,518

Sum 37,325 5,100 1,866 30,359

Operating expenses

583

583

583

583

583

583

583

583

11,664

6 7

Profit Before-tax Income tax

935 140

935 140

935 140

935 140

935 140

935 140

935 140

935 140

18,695 2,804

8 9 10

Net profit Public welfare fund Unappropriated profit Accumulated unappropriated profit

795 79 715

795 79 715

795 79 715

795 79 715

795 79 715

795 79 715

795 79 715

795 79 715

15,890 1,589 14,301

12

715

1,430

2,145

2,860

3,575

4,290

13,586

14,301

41

Cash Flow Statement

No.

Description Profit before tax

0 -

1 935

2 935

3 935

4 935

5 935

6 935

20 935

Sum 18,695

Depreciation
1 Cash inflow subtotal

255
1,190

255
1,190

255
1,190

255
1,190

255
1,190

255
1,190

255
1,190

5,100
23,795

Fixed asset investment Income tax 2 Cash flow subtotal

5,100 140 5,100 140 140 140 140 140 140 140 140 140 140 140 140 140

5,100 2,804 7,904

3 4

Net cash flow Cash at end of period

-5,100 -5,100

1,050 -4,050

1,050 -3,001

1,050 -1,951

1,050 -902

1,050 148

1,050 1,197

1,050 15,890

15,890

5 6

Payback period (Year) IRR of project

5.86 20.05%

42

Cost-effectiveness Analysis
No. Description Unit Amount Remarks

Example 2 (Short process flow):

Overall planning of low temperature low pressure waste heat utilization for short process flow of a 2 million ton steelworks: To program a waste heat recovery power plant with an installed capacity of 10 MW

Basic data

1
2 3 4 5 6

Installed capacity
Annual generating duration Annual generation Unit price of electricity Sales tax and additional tax rate Income tax rate

kW
h 104kwh RMB/kWh

10,000
6400 5,760 0.48 5% 15%

Economic data 7 8 9 10 11 Total project investment Annual revenue of power generation Static payback period Accumulated net cash inflow Internal rate of return (IRR) 10k RMB 10k RMB Year 10k RMB 8,500 2,765 3.07 22,739 17.67%

43

Note: The tariff of electricity supplied by the power plant is calculated on 0.5 RMB/kWh. The nonrecurring tce saving income is calculated on 200 RMB per ton standard coal. CDM (mainly CO2 credit trading income) is calculated on 8 Euros per ton standard coal .

44

Profit and Loss Statement

No

Description

19

20

Sum

1
2 3 4

Sales revenue
Cost (depreciation) Sales tax and additional tax Operating profit

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

2,765
425 138 2,202

55,296
8,500 2,765 44,031

Operating expenses

864

864

864

864

864

864

864

864

864

17,280

6 7

Profit Before-tax Income tax

1,338 201

1,338 201

1,338 201

1,338 201

1,338 201

1,338 201

1,338 201

1,338 201

1,338 201

26,751 4,013

8 9 10

Net profit Public welfare fund Unappropriated profit

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

1,137 114 1,023

22,739 2,274 20,465

12

Accumulated unappropriated profit

1,023

2,046

3,070

4,093

5,116

6,139

7,163

19,441

20,465

45

Cash Flow Statement

No.

Description Profit before tax Depreciation

0 -

1 1,338 425 1,763

2 1,338 425 1,763

3 1,338 425 1,763

4 1,338 425 1,763

5 1,338 425 1,763

6 1,338 425 1,763

19 1,338 425 1,763

20 1,338 425 1,763

Sum 26,751 8,500 35,251

Cash inflow subtotal

Fixed asset investment Income tax 2 Cash flow subtotal

8,500 201 8,500 201 201 201 201 201 201 201 201 201 201 201 201 201 201 201

8,500 4,013 12,513

3 4

Net cash flow Cash at end of period

-8,500 -8,500

1,562 -6,938

1,562 -5,376

1,562 -3,814

1,562 -2,252

1,562 -690

1,562 872

1,562 21,177

1,562 22,739

22,739

5 6

Payback period (Year) IRR of project

6.44 17.67%

46

Advantage of Waste Heat Recovery Power Generation

Utilize waste heat emitted for power generation, not consuming any fuel. With low operation cost, all investment to be returned in less than four years. The power generation of waste heat recovery power plant equals to reducing the coal consumed for the same power generated by a thermal power plant and the flue dust, CO2 and SO2 produced. The CO2 emission reduced can be traded by CDM with considerable income according to the Kyoto Protocol. With the economic development, electricity tariff will raise higher and higher, which will become of advantage to waste heat recovery power generation. In terms of economic benefits, it is very economical to build and run a waste heat recovery power plant. Meanwhile, in terms of social benefits, waste heat recovery power plant is the key project supported by national policy and a good thing that benefits the nation and the people.

47