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DETAILED PROJECT REPORT

ON

ENERGY EFFICIENT MOTOR IN WHITENER SECTION (WARANGAL RICE MILLING CLUSTER)

Bureau of Energy Efficiency

Prepared By

Reviewed By

ENERGY EFFICIENT MOTOR (60 HP)

WARANGAL RICE CLUSTER

BEE, 2010

Detailed Project Report on Efficient Motor in Whitener Section

Rice Milling SME Cluster, Warangal, Andhra Pradesh (India)

New Delhi: Bureau of Energy Efficiency;

Detail Project Report No.: WRG/RICE/EEM/03

For more information

Bureau of Energy Efficiency (BEE)

(Ministry of Power, Government of India)

4th Floor, Sewa Bhawan

R. K. Puram, New Delhi – 110066

Telephone +91-11-26179699

Fax+91-11-26178352

Websites: www.bee-india.nic.in

Email:[email protected]/

[email protected]

http://www.bee-india.nic.in/

mailto:[email protected]/

mailto:[email protected]

Acknowledgement

APITCO limited is sincerely thankful to the Bureau of Energy Efficiency, Ministry of Power,

for giving us the opportunity to implement the „BEE SME project in “Rice Milling Cluster,

Warangal District of Andhra Pradesh”. We express our sincere gratitude to all concerned

officials for their support and guidance during the conduct of this exercise.

Dr. Ajay Mathur, Director General, BEE

Smt. Abha Shukla, Secretary, BEE

Shri Jitendra Sood, Energy Economist, BEE

Shri Pawan Kumar Tiwari, Advisor (SME), BEE

Shri Rajeev Yadav, Project Economist, BEE

Andhra Pradesh Industrial & Technical Consultancy Organization Ltd. (APITCO) is also

thankful to “Warangal Rice Millers Association, Warangal”, for their valuable inputs, co-

operation, support and identification of the units for energy use and technology audit

studies and facilitating the implementation of BEE SME program in Warangal Rice Milling

Cluster.

We take this opportunity to express our appreciation for the excellent support provided by

Rice making Unit Owners, Local Service Providers, and Equipment Suppliers for their

active involvement and their valuable inputs in making the program successful and in

completion of the Detailed Project Report (DPR).

APITCO Limited is also thankful to all the SME owners, plant in charges and all workers of

the SME units for their support during the energy use and technology audit studies and in

implementation of the project objectives.

APITCO Limited

Hyderabad

Contents List of Annexure iii

List of Tables iii

List of Abbreviation iv

Executive summary v

About BEE’S SME, program vi

1 INTRODUCTION .......................................................................................................1

1.1 Brief Introduction about Cluster ...................................................................................1

1.2 Energy performance in existing situation ....................................................................3

1.2.1 Fuel and electricity consumption of a typical unit in the cluster ...................................3

1.2.2 Average production by a typical unit in the cluster ......................................................3

1.2.3 Specific Energy Consumption .....................................................................................3

1.3 Existing technology/equipment ...................................................................................4

1.3.1 Description of existing technology ...............................................................................4

1.3.2 Its role in the whole process .......................................................................................4

1.4 Establishing the baseline for the equipment to be changed ........................................5

1.4.1 Design and operating parameters power consumption per year .................................5

1.4.2 Electricity consumption ...............................................................................................5

1.4.2 Operating efficiency of the existing motors ..................................................................5

1.5 Barriers for adoption of new and energy efficient technology / equipment ...................5

1.5.1 Technological Barriers ................................................................................................5

1.5.2 Financial Barrier ..........................................................................................................5

1.5.3 Skilled manpower .......................................................................................................6

1.5.4 Other barrier(s) ...........................................................................................................6

2. TECHNOLOGY/EQUIPMENT OPTION FOR ENERGY EFFICIENCY

IMPROVEMENTS ....................................................................................................................7

2.1 Detailed description of technology/equipment selected ...............................................7

2.1.1 Description of technology ............................................................................................7

2.1.2 Technology /Equipment specifications ........................................................................7

2.1.3 Justification of the technology selected & Suitability ..................................................8

2.1.4 Superiority over existing technology/equipment ..........................................................8

2.1.5 Availability of the proposed technology/equipment ......................................................8

2.1.6 Source of technology/equipment for the project ............................................................9

2.1.7 Service/technology providers ......................................................................................9

2.1.8 Terms of sales ............................................................................................................9

2.1.9 Process down time during implementation ..................................................................9

2.2 Life cycle assessment and risks analysis ....................................................................9

2.3 Suitable unit/plant size in terms of capacity/production ...............................................9

3. ECONOMIC BENEFITS OF NEW ENERGY EFFICIENT TECHNOLOGY ............... 10

3.1 Technical benefits ..................................................................................................... 10

3.1.1 Fuel savings per year................................................................................................ 10

3.1.2 Electricity savings per year ....................................................................................... 10

3.1.3 Improvement in product quality ................................................................................. 10

3.1.4 Improvement in production ....................................................................................... 10

3.1.5 Reduction in raw material consumption .................................................................... 10

3.1.6 Reduction in other losses .......................................................................................... 10

3.2 Monetary benefits ..................................................................................................... 10

3.2.1 Monetary savings ...................................................................................................... 10

3.3 Social benefits .......................................................................................................... 10

3.3.1 Improvement in working environment in the plant ..................................................... 10

3.3.2 Improvement in skill set of workers ........................................................................... 11

3.4 Environmental benefits ............................................................................................. 11

3.4.1 Reduction in effluent generation ............................................................................... 11

3.4.2 Reduction in GHG emission such as CO2, NOx, etc ................................................. 11

3.4.3 Reduction in other emissions like SOx ...................................................................... 11

4. INSTALLATION OF NEW ENERGY EFFICIENT TECHNOLOGY / EQUIPMENT .. 12

4.1 Cost of technology/equipment implementation .......................................................... 12

4.1.1 Cost of technology/equipments ................................................................................. 12

4.1.2 Other costs such as erection & commissioning costs ................................................ 12

4.2 Arrangement of funds ............................................................................................... 12

4.2.1 Entrepreneur‟s contribution ....................................................................................... 12

4.2.2 Loan amount ............................................................................................................. 12

4.2.3 Terms & conditions of loan ....................................................................................... 12

4.3 Financial indicators ................................................................................................... 12

4.3.1 Cash flow analysis .................................................................................................... 12

4.3.2 Simple payback period .............................................................................................. 13

4.3.3 Net Present Value (NPV) .......................................................................................... 13

4.3.4 Internal rate of return (IRR) ....................................................................................... 13

4.3.5 Return on investment (ROI) ...................................................................................... 13

4.4 Sensitivity analysis in realistic, pessimistic and optimistic scenarios ......................... 13

4.5 Procurement and implementation schedule .............................................................. 13

vii

List of Annexure

Annexure – 1: Energy audit reports used for establishing ....................................................... 14

Annexure – 2: Process flow diagram ...................................................................................... 15

Annexure – 3: Detailed technology assessment report ........................................................... 16

Annexure 4: Detailed financial calculations & analysis ........................................................... 17

Annexure 5: Details of procurement and implementation plan ................................................ 21

Annexure 6: Details of technology/equipment and service providers ...................................... 22

Annexure 7: Quotations or techno-commercial bids ............................................................... 23

List of Table

Table 1: Energy consumption of a typical unit (M/s Hanuman Industries) .................................. 3

Table 1.1: Specific energy consumption for a typical unit (M/s Hanuman Industries) ................. 3

Table 1.2 Motor Specifications .................................................................................................. 4

Table 1.3 Baseline .................................................................................................................... 5

Table 2.1: Motor Specifications ................................................................................................. 8

Table 4.1: Project cost details ................................................................................................. 12

viii

List of Abbreviations

BEE - Bureau of Energy Efficiency

DPR - Detailed Project Report

DSCR - Debt Service Coverage Ratio

GHG - Green House Gases

HP - Horse Power

IRR - Internal Rate of Return

MoP - Ministry of Power

MSME - Micro Small and Medium Enterprises

NPV - Net Present Value

ROI - Return On Investment

SIDBI - Small Industrial Development Bank of India

MoMSME - Ministry of Micro Small and Medium Enterprises

EEF1 - Energy Efficient Motor

ix

EXECUTIVE SUMMARY

Bureau of Energy Efficiency (BEE) appointed Andhra Pradesh Industrial Technical

Consultancy Organization Limited as the executing agency for Rice Milling Cluster of

Warangal under BEE‟s SME programme. Under this project, the executing agency carried

out studies in the Rice Milling cluster of Warangal. Out of a total of 110 rice mills, study

was conducted in 30 units. Preliminary audits were done in all the 30 units whereas

detailed energy audits were conducted in 30 of these units.

Based on the energy audits, the executing agency submitted their report to BEE in form of

a cluster manual with recommendations for energy conservation & savings potentials in

the Rice Milling units.

This DPR is prepared based on study conducted for potentials of replacing existing old

inefficient / less efficient electric motors (Efficiency 81.88%) to new Energy Efficient

electric motors (Efficiency 93.9%)..

This bankable DPR also found eligible for subsidy scheme of MoMSME for “Technology

and Quality Upgradation Support to Micro, Small and Medium Enterprises” under “National

Manufacturing and Competitiveness Programme”. The key indicators of the DPR including

the Project cost, debt equity ratio, monetary benefit and other necessary parameters are

given in table below:

S.No Particular Unit Value

1 Project cost `(in Lakh) 1.46

2 Electricity Savings kWh/Annum 14112

3 Monetary benefit `(in Lakh)/Annum 0.53

4 Simple payback period Years 2.75

5 NPV `(in Lakh) 0.58

6 IRR %age 21.25

7 ROI %age 24.89

8 Average DSCR Ratio 1.52

9 Annual CO2 emission reduction Tonne 11.4

The projected profitability and cash flow statements indicate that the project

implementation i.e. installation of efficient boiler will be financially viable and

technically feasible solution for the cluster.

x

ABOUT BEE’S SME PROGRAM

Bureau of Energy Efficiency (BEE) is implementing a BEE-SME Programme to improve

the energy performance in 29 selected SMEs clusters. Warangal Rice Milling Units Cluster

is one of them. The BEE‟s SME Programme intends to enhance the energy efficiency

awareness by funding/subsidizing need based studies in SME clusters and giving energy

conservation recommendations. For addressing the specific problems of these SMEs and

enhancing energy efficiency in the clusters, BEE will be focusing on energy efficiency,

energy conservation and technology up-gradation through studies and pilot projects in

these SMEs clusters.

Major activities in the BEE -SME program are furnished below:

Activity 1: Energy use and technology audit

The energy use technology studies would provide information on technology status, best

operating practices, gaps in skills and knowledge on energy conservation opportunities,

energy saving potential and new energy efficient technologies, etc for each of the sub

sector in SMEs.

Activity 2: Capacity building of stake holders in cluster on energy efficiency

In most of the cases SME entrepreneurs are dependent on the locally available

technologies, service providers for various reasons. To address this issue BEE has also

undertaken capacity building of local service providers and entrepreneurs/ Managers of

SMEs on energy efficiency improvement in their units as well as clusters. The local service

providers will be trained in order to be able to provide the local services in setting up of

energy efficiency projects in the clusters

Activity 3: Implementation of energy efficiency measures

To implement the technology up-gradation project in the clusters, BEE has proposed to

prepare the technology based detailed project reports (DPRs) for a minimum of five

technologies in three capacities for each technology.

Activity 4: Facilitation of innovative financing mechanisms for implementation of

energy efficiency projects

The objective of this activity is to facilitate the uptake of energy efficiency measures

through innovative financing mechanisms without creating market distortion.


1

1 INTRODUCTION

1.1 Brief Introduction about Cluster

Andhra Pradesh historically called as rice bowl of India has 77 % of cultivated land under

paddy cultivation and produces around 17 million tonnes of rice. There are around 6000

rice milling units are established in the state, out of which 408 registered rice mills are

within Warangal district to process the produced paddy. Due to high concentration of many

rice mills in Warangal district, the Warangal district rice milling units are considered for

BEE –SME Program. The rice mill units in Warangal district are formed association

namely The Warangal District Rice Milling Welfare Association and have around 408 rice

millers are registered. Warangal is well known for rice milling industry and about 110 rice

mills are in and around Warangal town.

These rice mills owners are procured the paddy from different sources and processed in

these rice mills. The final product i.e. rice from these mills is supplied to Food Corporation

of India (FCI), other marketing channels for selling. These units are in operation since 10-

15 years and most of rice mills are family owned. Majority of the units generally operate for

one shift a day but some run for two shifts both raw rice and parboiled rice mills. Rice

processing is seasonal in nature and has two main seasons in a year depending on the

paddy availability. First season is during April- May and paddy available during this season

is fit for the production of boiled rice whereas the paddy available during the second

season (November-January) is used mainly for raw rice production.

The major equipments employed in a typical rice mills are rubber shellers, polishers,

dryers, whiteners, boilers, elevators, air compressors, motors, etc which are operated by

power from the State Electricity Board (SEB). DG sets are operated when power off

situation by the SEB. The major fuel used in the cluster is rice husk which is generated in

the rice mills as a waste after process the paddy. The rice husk is used in boilers as a fuel

for generating the steam which is required for different process in parboiled rice mills.

Surplus rice husk from these rice mills is sold to outside buyers.

Existing production process & Technology:

The product i.e. Rice is produced by processing the paddy in mill by removing the husk.

There are two types of paddy processing technologies as discussed below:


2

Raw Rice Mills: Paddy procured from different sources is dried & then sent for milling

without any other process.

Parboiled Rice Mills: The procured paddy from different sources is first sent to partial

cooking with the help of steam and then dried with help of air dryers. The steaming of

paddy is two types: „Once steamed paddy‟, and „Twice steamed Paddy‟. After steaming

the paddy, it is sent to the driers for drying, then after it is sent for milling operations. The

drying of paddy is of two types, Open Dryers and Closed Dryers. The dried paddy from

dryer is then sent to the milling process which is similar to the raw rice processing.

Process description and flow: The paddy received from the farmers contains around 20 %

moisture and also contains lot of foreign matter. In order to maintain a uniform moisture

level of 12 %, the paddy is passed through a cleaner cum drier to reduce moisture and

remove foreign particles. Grading and cleaning operation would involve removal of

moisture and foreign material. The cleaned and dried paddy is stored for milling. The dried

paddy is again passed through a secondary cleaning system to remove the foreign

particles; stones etc are remained in preliminary cleaning. The cleaned paddy is de

husked in huller mill with the help of rubber roll hullers. The husk thus separated is either

sold or sent to the boiler section for use as fuel. The de-husked paddy is passed through

table separators and then to polishing section. In the polishing section the thick brown

layer of the paddy is removed with polishers/whiteners. The thick brown layer thus

removed by the polishers/ whitener is called bran and this will be used in the solvent

extraction plant as raw material. The polished rice is then passed through sieves to

remove broken. The broken rice obtained is put for sale in packed condition. The un

broken polished rice finally passes through sorters to remove discolored rice and then sent

for packing.

Pre Cleaning: Removing all impurities and unfilled grains from paddy

De-stoning: Separating small stones from paddy

Parboiling (Optional): Helps in improving the nutritional quality by gelatinization of

starch inside the rice grain. It improves the milling recovery percent during

deshelling and polishing / whitening operation

De-Husking: Removing husk from paddy

Husk Aspiration: Separating the husk from brown rice/ unhusked paddy

Paddy Separation: Separating the unhusked paddy from brown rice

Whitening: Removing all or part of the bran layer and germ from brown rice


3

Polishing: Improving the appearance of milled rice by removing the remaining bran

particles and by polishing the exterior of the milled kernel

Length Grading: Separating small and large broken from head rice

Blending: Mixing head rice with predetermined amount of broken, as required by

the customer

Weighing and bagging: Preparing the milled rice for transport to the customer

The flow diagram of the various unit operations are as follows:

1.2 Energy performance in existing situation

1.2.1 Fuel and electricity consumption of a typical unit in the cluster

The main energy used for a typical Rice Milling unit in the cluster is electricity and HSD.

Electricity is used for driving the prime movers of Whiteners, Rubber Sheller‟s, Cone‟s,

lighting etc. The HSD is used as fuel in D.G Sets for electricity generation during power off

situations by EB and is used in emergency situations only. The energy consumption of a

typical Rice Milling unit in the cluster using low efficiency motors is furnished in Table 1

below:

Table 1: Energy consumption of a typical unit (M/s Hanuman Industries)

Details Unit Value

Grid Electricity Consumption Lakh kWh/annum 3.9

HSD Consumption Liters/annum 1200

Production (Paddy) tons/annum 10080

1.2.2 Average production by a typical unit in the cluster

The average production in a year in a typical Rice Milling Unit is varies from 9000 to 12000

tons of Paddy per annum depending up on the requirements

1.2.3 Specific Energy Consumption

The major source of energy for Rice Milling is electricity and the specific electricity

consumption per ton of ice production for a typical unit in cluster is furnished in Table 1.1

below:

Table 1.1: Specific energy consumption for a typical unit (M/s Hanuman Industries)

S. No. Type of energy Units Specific Energy Consumption

1 Grid Electricity kWh/ ton 38.7


4

1.3 Existing technology/equipment

1.3.1 Description of existing technology

The motors installed for driving the Whitener in the cluster units are of very old and are

inefficient. As per the detailed studies undertaken in various units of the cluster and based

on the discussions with the supervisors and workers, the motors installed for Whitener are

re winded number of times due to burning of the windings and is a common practice for all

SME owners, It is well known fact that the re winded motors will have less efficiency and

hence increasing power consumption.

Power costs will certainly rise and further increase motor operating expense. it is observed

that rewound motor is never as efficient as the original; and well-executed rewind can be

better than the original design. These differences in suggest there may be several factors

involved. By understanding the factors that affect rewind, performance does not need to

be complicated. The ability of the repair shop to analyze and replace those parts which

most influence losses, such as the stator core, windings, and rotor losses, and will affect

the outcome of a rewind.

Table 1.2 Motor specifications

The Technical Specification of existing Whitener motor is furnished in Table 1.2 below:

Table 1.2 Motor Specifications

S.No Details Whitener

1 Rated HP 60

2 Voltage 415

3 Rated Amps 84

4 frequency 50 Hz

5 Power Consumption (kW) 37.6

6 transmission system v belt drive

7 RPM 1440

1.3.2 Its role in the whole process

The Whitener motor is the largest motor in the milling section the motor is used to remove

the bran layer of the Grain. The Capacity of the Whitener increases with the number of

passes required to the desired finish and Variety of rice. The motor is operated12 hours in

a day and for 280 days in a year


5

1.4 Establishing the baseline for the equipment to be changed

1.4.1 Design and operating parameters power consumption per year

The present power consumption of a motor is 32.8 kW. The motor is operated for 12 hours

in a day and 280 days a year.

Table 1.3 Baseline

MOTOR Annual Consumption Specific Energy Consumption

60 HP/ 45 kW 110208 38.7

1.4.2 Electricity consumption

The electricity consumption of various Whitener motors of three Rice Milling Units in the

cluster for category -1 Rice Milling Units is furnished in table 1.3 above:

1.4.2 Operating efficiency of the existing motors

The detailed energy audits studies had been undertaken in various units of the cluster to

evaluate the motor efficiencies. Based on the age and number of the times, the motor is

rewinded, the operating efficiency of the motor was found about 81.88%, against 93.9%

efficiency of energy efficient motors available in the market.

1.5 Barriers for adoption of new and energy efficient technology / equipment

1.5.1 Technological Barriers

The major technical barriers that prevented to implement the energy efficient motors in the

icemakers cluster are:

Lack of awareness of the energy efficient motors

Lack of knowledge on the disadvantages and efficiency of the rewinded motors

and in efficient motors

1.5.2 Financial Barrier

The replacement of bigger size motors requires high investment and the repair and

rewinding of the motor will cost very less. Hence, many of the owners don‟t show interest

due to high initial investment and lack of financial strength to invest.

Further, the lack of awareness of the losses and monetary benefit of energy efficient

motors one of the major factor for implementing the energy efficient motors.


6

Energy Efficiency Financing Schemes SIDBI‟s is focused on the cluster will play a catalytic

role in implementation of identified energy conservation projects & technologies in the

cluster. The cluster has significant potential for implementing energy efficiency motors.

1.5.3 Skilled manpower

Skilled manpower will not be required as there are not much interfaces between man and

machines.

1.5.4 Other barrier(s)

Information on the energy efficient technologies not available among unit owners in the

cluster


7

2. TECHNOLOGY/EQUIPMENT OPTION FOR ENERGY EFFICIENCY IMPROVEMENTS

2.1 Detailed description of technology/equipment selected

2.1.1 Description of technology

The project activity is replacement of inefficient motors with new energy efficient motors.

The new motor will have overall efficiency of more than 93.9% at full load. The high

efficiency of the energy efficient is due to the following special features:

These motors are available in TEFC construction for use in safe areas and also in

flameproof enclosure for use in Hazardous areas.

Low loss special grade of thinner laminations. This reduces the Iron loss even at

partial loads.

Thicker conductors and more copper contents reduce copper loss due to lower

resistance.

Longer core length, reduced and uniform air gap between stator and rotor to

reduce stray losses.

Special design of fan and fan cover to reduce windage losses

Considering the above facts and for reducing electricity consumption of the motors,

it is suggested to install energy efficient motors.

Applications: Best performance even at partial loads:

The benefits of using Energy Efficient Motors (EEF1) are maximum in continuous duty

applications like Whiteners, Rubber shellers & Cones etc. In many applications the load

factor of the motor will range between 60% and 80%. The efficiency curve of standard

motor is drooping in nature i.e. there is a sharp fall in efficiency at partial loads. But the

energy efficient motors have a flat efficiency curve and hence the fall in efficiency is

marginal. Thus energy saving is significant even at part loads also.

2.1.2 Technology /Equipment specifications

The detailed specifications of the motor suggested is furnished in table 2.1


8

Table 2.1: Motor Specifications

S. No. Parameter Motor

1 Rated Hp 60

2 Rated Amps 75

3 Speed 1480 rpm

4 Efficiency 93.9 %

5 Power Factor 0.89

2.1.3 Justification of the technology selected & Suitability

The Whitener motors are major energy consuming equipment in Warangal Rice Mill Units

Cluster. Based on the detailed energy audits conducted for various motors installed in the

cluster units, the motors are old and rewinded number of times leading reduction in

efficiency and high power consumption. The new energy efficient motor will operate at the

overall efficiency of 93.9 %, at full load. The following are the reasons for selection of this

technology

Energy efficient motors will reduce electricity consumption and will reduce the

It reduces the GHG emissions

Quicker payback period

2.1.4 Superiority over existing technology/equipment

The following are the superior features of energy efficient motors

Improved efficiency is available from 60 % to 100 % load. The efficiency curve is

almost flat resulting in higher energy savings as in most of the cases the motor is

not always fully loaded

The special design features also result in lower operating temperatures which

enhance the life of motor and reduce the maintenance costs.

These motors have inherently low noise and vibration

These motors having highest power factor in the industry due the special exclusive

design.

The higher power factor reduces the cable loss.

2.1.5 Availability of the proposed technology/equipment

The energy efficient motor suppliers are available at Hyderabad and Vijaywada. All the

major energy efficient motors suppliers like Siemens, Compton Greaves, NGEF, etc are

manufacturing energy efficient motors. The details of the suppliers are provided in

Annexure 7.


9

2.1.6 Source of technology/equipment for the project

The source of the technology is indigenous and is also available in local.

2.1.7 Service/technology providers

Details of energy efficient motors suppliers had been furnished in Annexure 6.

2.1.8 Terms of sales

The terms and conditions of equipment supplier for supply of energy efficient motors are

furnished in the Annexure.

2.1.9 Process down time during implementation

The process down time for installation of energy efficient motor is considered at two days

for dismantling the existing motor and installation of new motors and providing electrical

connections to the motor.

2.2 Life cycle assessment and risks analysis

The life of the energy efficient motors is considered at 20 years. There is no risk involved

as the motors are proven technology and are successfully in operation in the industries

2.3 Suitable unit/plant size in terms of capacity/production

The motors are selected similar to the existing capacity of the motor and also as

recommended by the Whitener supplier.


10

3. ECONOMIC BENEFITS OF NEW ENERGY EFFICIENT TECHNOLOGY

3.1 Technical benefits

3.1.1 Fuel savings per year

The installation of energy efficient motors will reduce electricity consumption and doesn‟t

have any effect on fuel savings.

3.1.2 Electricity savings per year

The efficiency of the new energy efficiency motor is more than the existing motor and

hence reduces electricity consumption. The power savings due to installation of new

energy efficient motor is 14112 kWh per annum.

3.1.3 Improvement in product quality

There is no significant impact on the product quality.

3.1.4 Improvement in production

There is no significant impact on the production.

3.1.5 Reduction in raw material consumption

There is no impact on the raw material consumption.

3.1.6 Reduction in other losses

Due to improved power factor of new energy efficient motor, the distribution losses will

reduce.

3.2 Monetary benefits

3.2.1 Monetary savings

The monetary benefit due to installation of new energy efficient motors is estimated as `

0.53 lakhs per annum due to reduction in electricity consumption.

3.3 Social benefits

3.3.1 Improvement in working environment in the plant

The installation of new efficient motor will reduce the breakdowns and hence working

environment may improve.


11

3.3.2 Improvement in skill set of workers

The technology selected for implementation of new and energy efficient motor will reduce

the attention on breakdowns and skills required by the manpower.

3.4 Environmental benefits

3.4.1 Reduction in effluent generation

Not applicable

3.4.2 Reduction in GHG emission such as CO2, NOx, etc

The major GHG emission reduction source is CO2. The technology will reduce grid

electricity consumption and emission reductions are estimated at 11.4 tons of CO2 per

annum due to implementation of the project activity.

3.4.3 Reduction in other emissions like SOx

No significant impact on SOx emissions.


12

4. INSTALLATION OF NEW ENERGY EFFICIENT TECHNOLOGY / EQUIPMENT

4.1 Cost of technology/equipment implementation

4.1.1 Cost of technology/equipments

The total cost for energy efficient motor is estimated at `1.36 lakhs.

4.1.2 Other costs such as erection & commissioning costs

There is no erection and commissioning charges is considered. A detail of project cost is

given in Table 4.1 below:

Table 4.1: Project cost details

S.No Particular Unit Value

1 Motor (` in lakh) 1.36

2 Panel, switch & cabling, Elec. modifications etc (` in lakh) 0.10

3 Total Investment (` in lakh) 1.46

4.2 Arrangement of funds

4.2.1 Entrepreneur’s contribution

The entrepreneur‟s contribution is 25% of total project cost, which works out at ` 0.37

lakhs.

4.2.2 Loan amount

The term loan is 75% of the total project cost, which is ` 1.10 lakhs.

4.2.3 Terms & conditions of loan

The interest rate is considered at 10.0%, which is prevailing interest rate of SIDBI for

energy efficiency related projects. The loan tenure is 5 years and the moratorium period is

6 months.

4.3 Financial indicators

4.3.1 Cash flow analysis

Considering the above assumptions, the net cash accruals starting with ` 0.31 lakhs in the

first year operation and increases to ` 1.44 at the end of eighth years


13

4.3.2 Simple payback period

The total project cost of the proposed technology is `1.46 lakhs and monetary savings due

to reduction in electricity consumption is ` 0.53 lakhs and the simple payback period works

out to be 2.75 years.

4.3.3 Net Present Value (NPV)

The Net present value of the investment at 10.0% interest rate works out to be ` 0.58 lakhs

4.3.4 Internal rate of return (IRR)

The Internal Rate of Return after tax for the Proposed Project works out to be 21.25%.

Thus, the project is financially viable.

4.3.5 Return on investment (ROI)

The average return on investment of the project activity works out at 24.89%. The average

DSCR is 1.52.

4.4 Sensitivity analysis in realistic, pessimistic and optimistic scenarios

A sensitivity analysis has been worked out to ascertain how the project financials would

behave in different situations like there is an increase in power savings or decrease. For

the purpose of sensitive analysis, two scenarios are considered are.

Increase in power savings by 5%

Decrease in power savings by 5%

In each scenario, other inputs are considered as constant. The financial indicators in each

of the above situation are indicated along with standard indicators.

Particulars IRR

%

NPV

` in lakh

ROI

%

DSCR

Normal 21.25% 0.58 24.89 1.52

5% increase in power savings 23.11% 0.68 25.19 1.60

5% decrease in power savings 19.37% 0.48 24.55 1.45

4.5 Procurement and implementation schedule

The project is expected to be implemented within 6 weeks from the date of release of

purchase order. The detailed schedule of project implementation is furnished in Annexure

5.


14

Annexure – 1: Energy audit reports used for establishing

The results of 2, 60 hp/ 45 kW Whitener section motors energy audit with efficiency is

given below

Audit No. 1:

Parameter Unit Whitener Motor

Present installed capacity hp 60

Present installed capacity kW 45

Present Power consumption kW 32.8

Motor load factor 0.6

Efficiency of motor % 81.88


15

Annexure – 2: Process flow diagram

Paddy

Cleaning

Drying

Open Steaming

Soaking

Parboiling

(Atmos. / Pressure)

Sun

Drying

Mechanical

Drying

Shelling Unit

Cleaning Dehusking Husk Seperator

PaddySeperator

Unshelled

Paddy

Brown

Rice

Polishing Unit

Bran Separator Bran

Rice Grader

Whole Rice Broken Rice& Impurities

Weighment &

PackingWeighment &

Packing

FLOW CHART FOR RAW RICE / PARBOILED RICE MANUFACTURE

For Parboiled Rice

For Raw Rice

For Raw / Parboiled Rice

Husk


16

Annexure – 3: Detailed technology assessment report

Parameter Unit Whitener Motor

Present installed capacity hp 60

Present installed capacity kW 45

Present Power consumption kW 32.8

Motor load factor 0.6

Estimated efficiency at present operating Conditions % 81.88

Proposed capacity of New Motor kW 45

Proposed efficiency of energy efficiency motor (eff1) % 93.9

Expected Power Consumption of New Motor kW 28.6

Reduction Power consumption kW 4.2

No of days operation (assumption) Days 280

Working hours per day hours 12

Energy Charges `/kWh 3.75

Estimated savings potential kWh/annum 14112

Estimated cost savings `/annum 52920

Initial Investment ` 146000

Payback Period Years 2.75


17

Annexure 4: Detailed financial calculations & analysis

Assumption

Name of the Technology Energy Efficient Motor

Rated Capacity 60 HP/45 kW

Details Unit Value Basis

Installed Capacity HP/kW 60/45 Feasibility Study

No of working days Days 280 Feasibility Study

No of Operating Hours Hrs./day 12 Feasibility Study

Proposed Investment

Plant & Machinery ` (in lakh) 1.36

Cabling & panel, E&C etc. ` (in lakh) 0.10

Total Investment ` (in lakh) 1.46 Feasibility Study

Financing pattern

Own Funds (Equity) ` (in lakh) 0.37 Feasibility Study

Loan Funds (Term Loan) ` (in lakh) 1.10 Feasibility Study

Loan Tenure years 5 Assumed

Moratorium Period Months 6 Assumed

Repayment Period Months 66 Assumed

Interest Rate %age 10.00 SIDBI Lending rate

Estimation of Costs

O & M Costs % on Plant & Equip 2.00 Feasibility Study

Annual Escalation %age 5.00 Feasibility Study

Estimation of Revenue

Electricity Saving kWh/Annum 14112

Cost ` /kWh 3.75

St. line Depn. %age 5.28 Indian Companies Act

IT Depreciation %age 80.00 Income Tax Rules

Income Tax %age 33.99 Income Tax

Estimation of Interest on Term Loan (ìn lakh)

Years Opening Balance Repayment Closing Balance Interest

1 1.10 0.06 1.04 0.13

2 1.04 0.12 0.92 0.10

3 0.92 0.16 0.76 0.09

4 0.76 0.24 0.52 0.06

5 0.52 0.28 0.24 0.04

6 0.24 0.24 0.00 0.01

1.10

WDV Depreciation (ìn lakh)

Particulars / years 1 2

Plant and Machinery

Cost 1.46 0.29

Depreciation 1.17 0.23

WDV 0.29 0.06


18

Project Profitability (ìn lakh)

Particulars / Years 1 2 3 4 5 6 7 8

Revenue through Savings

Total Revenue (A) 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53

Expenses

O & M Expenses 0.03 0.03 0.03 0.03 0.04 0.04 0.04 0.04

Total Expenses (B) 0.03 0.03 0.03 0.03 0.04 0.04 0.04 0.04

PBDIT (A)-(B) 0.50 0.50 0.50 0.50 0.49 0.49 0.49 0.49

Interest 0.13 0.10 0.09 0.06 0.04 0.01 - -

PBDT 0.37 0.40 0.41 0.43 0.45 0.49 0.49 0.49

Depreciation 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08

PBT 0.30 0.32 0.33 0.35 0.38 0.41 0.41 0.41

Income tax - 0.06 0.14 0.15 0.15 0.16 0.17 0.17

Profit after tax (PAT) 0.30 0.27 0.19 0.21 0.22 0.24 0.25 0.25

Computation of Tax (ìn lakh)


Profit before tax 0.30 0.32 0.33 0.35 0.38 0.41 0.41 0.41

Add: Book depreciation 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08

Less: WDV depreciation 1.17 0.23 - - - - - -

Taxable profit (0.79) 0.17 0.41 0.43 0.45 0.49 0.49 0.49

Income Tax - 0.06 0.14 0.15 0.15 0.16 0.17 0.17

Project Balance Sheet (ìn lakh)


Liabilities

Share Capital (D) 0.37 0.37 0.37 0.37 0.37 0.37 0.37 0.37

Reserves & Surplus (E) 0.30 0.56 0.76 0.96 1.19 1.43 1.68 1.92

Term Loans (F) 1.04 0.92 0.76 0.52 0.24 0.00 0.00 0.00

Total Liabilities D)+(E)+(F) 1.70 1.84 1.88 1.84 1.79 1.79 2.04 2.28

Assets

Gross Fixed Assets 1.46 1.46 1.46 1.46 1.46 1.46 1.46 1.46

Less: Accm. Depreciation 0.08 0.15 0.23 0.31 0.39 0.46 0.54 0.62

Net Fixed Assets 1.38 1.31 1.23 1.15 1.07 1.00 0.92 0.84

Cash & Bank Balance 0.31 0.54 0.65 0.69 0.71 0.79 1.12 1.44

Total Assets 1.70 1.84 1.88 1.84 1.79 1.79 2.04 2.28

Net Worth 0.66 0.93 1.12 1.33 1.55 1.79 2.04 2.29

Dept equity ratio 2.84 2.51 2.07 1.41 0.64 -0.01 -0.01 -0.01

Project Cash Flow (ìn lakh)

Particulars / Years 0 1 2 3 4 5 6 7 8

Sources

Share Capital 0.37 - - - - - - - -

Term Loan 1.10

Profit After tax 0.30 0.27 0.19 0.21 0.22 0.24 0.25 0.25

Depreciation 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08

Total Sources 1.46 0.37 0.34 0.27 0.28 0.30 0.32 0.32 0.32

Application


19

Capital Expenditure 1.46

Repayment of Loan - 0.06 0.12 0.16 0.24 0.28 0.24 - -

Total Application 1.46 0.06 0.12 0.16 0.24 0.28 0.24 - -

Net Surplus - 0.31 0.22 0.11 0.04 0.02 0.08 0.32 0.32

Add: Opening Balance - - 0.31 0.54 0.65 0.69 0.71 0.79 1.12

Closing Balance - 0.31 0.54 0.65 0.69 0.71 0.79 1.12 1.44

Calculation of Internal Rate of Return

Particulars / months 0 1 2 3 4 5 6 7 8

Profit after Tax 0.30 0.27 0.19 0.21 0.22 0.24 0.25 0.25

Depreciation 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08

Interest on Term Loan 0.13 0.10 0.09 0.06 0.04 0.01 - -

Cash outflow (1.46) - - - - - - - -

Net Cash flow (1.46) 0.50 0.44 0.36 0.35 0.34 0.33 0.32 0.32

IRR 21.25% NPV 0.58

Break Even Point (ìn lakh)

Return on Investment

Debt Service Coverage Ratio

Particulars / Years 1 2 3 4 5 6 7 8 Total

Cash Inflow

Profit after Tax 0.30 0.27 0.19 0.21 0.22 0.24 0.25 0.25 1.43

Depreciation 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.46

Interest on Term Loan 0.13 0.10 0.09 0.06 0.04 0.01 0.00 0.00 0.42

Total (M) 0.50 0.44 0.36 0.35 0.34 0.33 0.32 0.32 2.31


Variable Expenses

Operation & Maintenance Exp (75%)

0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03

Sub Total (G) 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03

Fixed Expenses

Operation & Maintenance Exp (25%)

0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Interest on Term Loan 0.13 0.10 0.09 0.06 0.04 0.01 0.00 0.00

Depreciation (H) 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 Sub Total (I) 0.21 0.18 0.17 0.15 0.13 0.09 0.09 0.09

Sales (J) 0.53 0.53 0.53 0.53 0.53 0.53 0.53 0.53

Contribution (K) 0.51 0.51 0.51 0.50 0.50 0.50 0.50 0.50

Break Even Point (L= G/I) (%) 41.64% 36.11% 33.80% 29.79% 25.16% 18.59% 17.38% 17.53%

Cash Break Even {(I)-(H)} (%) 26.45% 20.88% 18.53% 14.49% 9.82% 3.21% 1.96% 2.06%

Break Even Sales (J)*(L) 0.22 0.19 0.18 0.16 0.13 0.10 0.09 0.09

Particulars / Years 1 2 3 4 5 6 7 8 Total

Net Profit Before Taxes 0.30 0.32 0.33 0.35 0.38 0.41 0.41 0.41 2.92

Net Worth 0.66 0.93 1.12 1.33 1.55 1.79 2.04 2.29 11.71

ROI 24.89%


20

Debt

Interest on Term Loan 0.13 0.10 0.09 0.06 0.04 0.01 0.00 0.00 0.42

Repayment of Term Loan 0.06 0.12 0.16 0.24 0.28 0.24 0.00 0.00 1.10

Total (N) 0.19 0.22 0.25 0.30 0.32 0.25 0.00 0.00 1.52

Average DSCR (M/N) 1.52


21

Annexure 5: Details of procurement and implementation plan

Project Implementation Schedule

S. No Activity Weeks

1 2 3/4 5/6

1 Placement of Orders for Equipment

2 Supply of motors

3 Installation of the motors

4 Trial runs

Process down Time

S. No Activity Days

1 2

1 Dismantling of the existing motor

2 Electricity connections

3 Installation of the motor

4 Trial runs

The process down time is considered for only two days.


22

Annexure 6: Details of technology/equipment and service providers

Equipment details Source of technology Service/technology providers

Energy Efficient motors M/s .SLR Enterprises Authorised Dealer for Finolex Cables Ltd, Rotomotive – Motors & Worm Gear Boxes D.No.3464.(4-3-1 to6) , 3rd Floor, “Dundoo Vihar”, R.P Road , Secunderabad-500003

Energy Efficient motors M/s. Crompton Greaves Limited SECUNDERABAD BRANCH 94, SAROJINI DEVI RD, SECUNDERABAD 500 003 T: +91 40 4000 2324 M: +91 9966007488 www.cgglobal.com

Energy Efficient motors DEEPAK ELECTRICALS & ELECTRONICS 5-2-27, HYDER BASTI, R.P.ROAD, SECUNDERABAD – 500003 PH: 09533564104 / 09912550190 TELE FAX: 040 – 66323959 EMAIL: [email protected] / [email protected]

http://www.cgglobal.com/




23

Annexure 7: Quotations or techno-commercial bids


24

India SME Technology Services Ltd DFC Building, Plot No.37-38, D-Block, Pankha Road, Institutional Area, Janakpuri, New Delhi-110058 Tel: +91-11-28525534, Fax: +91-11-28525535 Website: www.techsmall.com

Bureau of Energy Efficiency (BEE) (Ministry of Power, Government of India) 4th Floor, Sewa Bhawan, R. K. Puram, New Delhi – 110066 Ph.: +91 – 11 – 26179699 (5 Lines), Fax: +91 – 11 – 26178352

Websites: www.bee-india.nic.in, www.energymanagertraining.com

APITCO Limited 8th FLOOR, PARISRAMA BHAVAN, BASHEERBAGH, HYDERABAD 500 004 Phones: +91- 040-23237333, 23237981, Fax: +91-40-23298945 e-mail: [email protected] Website: www.apitco.org

http://www.bee-india.nic.in/

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