NEED FOR NEXT GENERATION REFORMS TO PROMOTE ENERGY EFFICIENCY AND CLIMATE CHANGE INITIATIVES FOR INDUSTRIAL BOILERS

ABSTRACT

The Steam Boiler is one of the most common and essential utilities for process industries. It is one of the most energy intensive and pollution prone utility for industries, so much so that smoke emitting chimneys and smoky skylines have become hallmarks of industrial townships. Since the beginning of the 21^st century, energy efficiency and climate change have become buzzwords for everyone and awareness about the same has been ever increasing.

In the post liberalization era after 1991, industrial consumers got benefitted by wider choice of technologically advanced and more efficient machines and utility plants from global suppliers. Products like refrigeration plants, air compressors, pumps, power tools, welding machines are illustrative examples. Even domestic industries, such as automobiles, white goods to name a few, exploited this opportunity to modernize and to get aligned with global markets for business growth.

However, Indian Boiler Industry has been heavily lagging behind on both these fronts. There has been no significant change in thermal efficiency levels and pollution from boilers during the last two decades. This is in sharp contrast to automobile industry, which has consistently improved its fuel efficiency and has also stood up to stringent emission standards year on year (EURO VI and Bharat VI being the recent standards).

Historically, in India, Boiler House in a plant has always been a “Black Box”operated by the most indispensable “Boiler Attendants” and regulated by the holy cow called “Boiler Inspectorate”. The apprehension about indispensability and nuisance value of these statutory creatures have been so profound that even large corporates have preferred to “align and accommodate” rather than to “confront and reform”.

The 2007 amendments in Boiler Act were limited to allowing third party inspection agencies to carry out inspection during manufacturing. However, the inherent and outdated provisions of the old 1923 Boiler Act have continued to promote monopoly of State Boiler Inspectorates and its consequent unease of doing business. In last two decades and even after 2007 reforms in Boiler Act, neither any global player in boiler industry has made any investment in India nor has there been any growth in export of boilers from India.

The Indian Boiler Industry has all along remained in the grip of nexus formed by State Boiler Inspectorates and old-fashioned boiler manufacturers, who have used the monopoly of State Boiler Inspectorates as protection to their technologically outdated products and it has also served as entry barrier to any kind of innovation to promote energy efficiency and climate change initiatives. Today the Indian Boiler Industry is a struggling industry overcrowded with supply of cheap and mediocre products.

It is high time to carry out sweeping next generation reforms in the Boiler Act. It will not only transform every Boiler House from being a “Black Box” to “Green Energy House”; but it will also set a right environment for India to become a global supply hub for boilers and pressure vessels.

Regulatory Framework for Boilers in India

In India, use of steam boilers started with industrial development in around 1850 and subsequently two separate acts, Indian Boilers Act, 1860 and Bombay Boiler Legislation Act, 1869 were enacted by the British Government. Later on, both these Acts were amalgamated to form the Indian Boilers Act, 1923 and Indian Boiler Regulations, 1924. Boilers figured in the Concurrent Legislative List” of the Government of India, Act of 1935 and since then it has remained in the concurrent legislative list even after independence, with State Governments having powers to modify the Act for its implementation in respective states. Central Boiler Board in New Delhi and Boiler Inspectorates in respective states were formed subsequently.

Till 1959, the sphere of activities of the Indian Boiler Act was limited to inspection of boilers, all imported, installed in various industries. The scope of activities subsequently expanded to inspection of boilers during their manufacturing. The sphere of influence of State Boiler Inspectorates have steadily widened over years; controlling every single aspect of boiler from its birth to death.

The process of inspection during manufacturing also includes design approval and with control of design approval with State Boiler Inspectorates, Steam Boiler became a fabricator’s product rather than a designer’s or researcher’s product. The boiler business has remained excessively regulated by fabrication inspection and even the process of design approval became fabrication centric, with no consideration for equally vital aspects of thermal efficiency, combustion efficiency, water treatment, automation and exhaust emissions.

The rules and regulations, that were enacted based on vintage fabrication technologies of 1960s, did not keep pace with technological reforms. As a result, the entire boiler business has remained regulated and driven by licenses and permits related to fabrication. The influence and monopoly of State Boiler Inspectorates have been so profound, that the user industry finds it compelling to buy boilers from only those manufacturers who are in good books of respective State Boiler Inspectorates; however mediocre and inefficient they may be.

The excessive monopoly of State Boiler Inspectorates also resulted in a classic anomaly that a boiler imported from overseas with third party inspection certificate was eligible for installation in India, but a boiler manufactured in India under the inspection of the same third-party inspection agency was not eligible for installation in India. This classic anomaly, was conveniently exploited by the nexus of established licensed boiler manufacturers, including large corporates and State Boiler Inspectorates as protection to their technologically outdated products and also as “entry barrier” for innovative and forward-looking new players, from India as well as abroad. As a result, boiler industry in India became a coterie of established licensed manufacturers and their offshoots, offering mediocre products based on vintage and outdated technology.

Regulatory Reforms for Boilers in 2007

In 1991, market forces were said to have been unleashed but the old regime of “Inspector and Permit Raj” did not crumble automatically. The nexus between State Boiler Inspectorates, their “preferred” boiler manufacturers and repairers and a set of politicians was powerful enough to resist and hold back the bill for amendments in Boiler Act for more than 10 years. Finally, the amendments in Boiler Act were enacted in 2007, wherein third-party inspection agencies were also allowed to carry out inspection of boilers during manufacturing.

These amendments, undoubtedly a major step in regulatory reforms, have given a relief to boiler manufacturers by way of freedom to carry out design approval and inspection of boilers during manufacturing through third party inspection agencies. However, the State Boiler Inspectorates continue to have absolute monopoly in registration of new boilers procured by the user industry and their annual inspection. As a result,every boiler manufacturer, however innovative and efficient his product may be, is still required to remain in good books of State Boiler Inspectorates to avoid the potential risk of forced seclusion from user industry, who is still unable to shed its concealed apprehension about consequences of procuring a boiler from a meritorious manufacturer who is not in “good books” of the local State Boiler Inspectorate.

The limitations of the regulatory reforms in 2007 are evident from the fact that Boiler Industry in India is probably the only industry segment that has neither received any foreign investment nor have said reforms resulted into any significant growth of export of boilers from India.

Need for Next Stage of Regulatory Reforms for Boilers

The 2007 amendments in Boiler Act were limited to allowing third party inspection agencies to carry out inspection of boilers during manufacturing. However, following inherent and outdated provisions of the old 1923 Boiler Act, continue to promote monopoly and its consequent unease of doing business:

• Wide discretion to State Governments to make modifications and exemptions in the Central Act. This is often misused by State Governments to practise favouritism.
• Every Boiler Inspector is a Public Servant as per Section 21 of IPC. This is the single most provision that is exploited for corruption.
• The “power of entry” is misused by inspectors for carrying out discretionary “surprise visits”.
• The judicial framework for redressal of grievances is totally dysfunctional and ineffective. The process of redressal is such that time lost in redressal process makes the outcome redundant, whether favourable or not.
• The constitution of Central Boilers Board (CBB) is such that the monopoly of State Boiler Inspectorates is always reinforced and perpetuated.
• There are no technical rules and regulations for repairs of boilers. State Boiler Inspectorates enjoy unlimited discretion on this front. As a result, repairs business is in the grip of local touts, most of whom have no technical expertise and competency.

Sweeping Regulatory Reforms will encourage new generation boiler manufacturers to promote Energy Efficient and Emission Compliant Boilers

The boiler user industry has till now been largely content in ensuring uninterrupted availability of steam for its production requirement from the “Black Box” called Boiler House. The energy consumption and exhaust emissions have been of far less importance. The fraternity of established boiler manufacturers have always preferred to discourage the user from benchmarking the peer products on efficiency and emission compliance; and further, any innovation on this front by a new player has been collectively played down through negative marketing propaganda. The effect of prolonged negative approach from established boiler manufacturers has been such that even a new design of boiler with a genuine claim of a higher efficiency and reliable emission compliance seldom receives serious attention from the buyer. It takes sustained effort for a sincere boiler manufacturer to educate a buyer that the boilers can reliably deliver high energy efficiency with clean exhaust emissions. The perception of buyer about boiler being a low technology product to be bought from a “licensed manufacturer” through hard bargain for price will change only if sweeping regulatory reforms are seriously implemented to transform the image about boiler being a fabrication centric product to an efficient, reliable and enviro-friendly utility. The new generation of boiler suppliers will then be able make a client believe that instead of buying a traditional boiler with an investment of ₹10 crore (illustrative number) which will consume fuel (coal) worth ₹250 crore (illustrative number) in its life span of 20 years; it would be wiser to buy a modern and efficient boiler needing an incremental investment of ₹3 crore (illustrative but realistic number) that will save fuel worth ₹20 crore (illustrative but realistic number) in the same life span.

Way Forward for Regulatory Reforms in Boiler Act

The present Central Government has been strongly in favour of sweeping reforms in all sectors for improving the ease of doing business. The thought process for completely repealing the outdated Boiler Act is already in place at senior level in the Central Government. It is certainly necessary to repeal the outdated Boiler Act and replace the existing regulatory framework with following provisions to align the Indian Boiler Industry with global standards, norms and practices:

• India needs to urgently create its own Boiler and Pressure Vessel Code on similar lines with ASME Code for Boiler and Pressure Vessel Code as well as Pressure Equipment Directive (PED) of European Union. This task should be assigned to Bureau of Indian Standards (BIS) instead of creating another regulatory body.
• A separate code for Inspection and Repairs of Boilers and Pressure Vessels should be developed on similar lines with the present code in countries like USA.
• Inspection during manufacturing as well as use should be completely privatized in the hands of well-known third-party inspection agencies. Functional Safety Audit by third party should also be a part of period inspection.
• Supervision and monitoring of inspection activities should be handed over to Factory Inspectorates and the Boiler Inspectorates should be merged into Factory Inspectorates.
• Central Boilers Board (CBB) and Office of Chief Controller of Explosives (CCE) should be dissolved, with its functions assigned to BIS.
• Universities and Engineering Colleges should be asked to formulate degree courses in Design, Quality Assurance and Inspection of Boilers and Pressure Vessels. The Boiler Attendants and Proficiency Engineers should be necessarily selected from such qualified professionals.

Promoting Energy Efficiency through Star Labelling Programme

We have an excellent body called Bureau of Energy Efficiency (BEE) that has a good track record of successfully promoting energy efficient products, mostly domestic appliances till now, through Star Labelling Programme. Boilers of all types put together consume large quantity of fossil fuels (comparable to automobiles) but it has not caught the attention of policy makers. The past efforts by some boiler manufacturers way back in 2011-12, to develop Star Labelling Programme for boilers, in collaboration with BEE, have been successfully played down by large established manufacturers.

BEE has again revived its efforts to develop the Star Labelling Programme for Boilers since 2020. Countries like China have already taken lead by formulating and implementing the Star Labelling Program for Boilers, with highest rating for best available technology and thermal efficiency. Based on the same principle, certain boiler manufacturers have proposed following threshold levels of thermal efficiency to BEE for Star Labelling Programme (Table 1).

Table 1. Proposed Efficiency Levels for Star Labelling (Fuel Wise)

Here again old-fashioned boilers manufacturers and users are systematically attempting to defeat the whole initiative by pushing for Star Labelling Norms based on presently installed boilers of mediocre efficiency as benchmark rather than having best available technology and efficiency as benchmark.

The Star Labelling Program for industrial product like boilers also must have periodic performance monitoring of every Star Labelled boiler as essential element of the program and this monitoring can be done through well-known third-party agencies, such as PCRA, NPC, TUV and others. This vital aspect is currently being played down by established players by seeking one time Star Labelling, which will be nothing but an eyewash.

The present members of CBB, in spite of not having any domain knowledge and expertise about boiler efficiency, have been preferentially nominated on the committee that is formulating the Star Labelling Program merely because of their regulatory influence and they have been toeing the line of large established players for obvious reasons. The need for sweeping regulatory reforms is therefore vital for achieving this goal.

Potential for Fuel Savings from Replacement of Old Inefficient Boiler with New Generation Boilers (7 Star Rated)

The population of process steam boilers in India is more than 50000 even by conservative estimates, most of which are old and inefficient boilers. A scheme for financing of replacement of old inefficient boilers by Star labelled efficient boilers also needs to be urgently introduced. Table 2 gives an illustration of fuel savings for a typical 10 ton/hr capacity boiler, after replacement with Star labelled efficient boiler.

Table 2.

The nationwide potential for savings in fuel cost over a span of 20 years by way of replacement of old inefficient boilers is in excess of `6 trillion. The corresponding potential for CO2 emission reduction over a span of 20 years is in excess of 500 million ton, with corresponding reduction in global warming. The new generation boilers also have substantially lower exhaust emissions of particulate matter, SOx and NOx.

Promoting Emissions Compliance through uniform regulations and strict monitoring

Control of Pollution and Smoke Nuisance from Boilers was originally administered by Boiler Inspectorates, which had no domain knowledge and expertise. Even the regulations only stipulated taller chimneys for more polluting boiler, only to spread pollution over a longer distance rather than controlling it. Now it is under preview of Central Pollution Control Board (CPCB) for making Laws / Regulations and under State Pollution Control Boards (PCBs) for implementation and monitoring.

Here again the CPCB and PCB norms are highly inconsistent and irrational. As an illustration, the emission norms for boilers of different capacities are so made that 1000 small capacity boilers in an industrial township are collectively polluting much more than one large boiler of equivalent capacity and all this is within compliance norms. This is very contrary to automobile industry where even a 100-cc motorbike has to comply with the same emission norm as that of a large vehicle. For large coal fired boilers, typically burning coal having upto 1% sulphur content, there are SO2 emissions control norms now in place awaiting implementation; but the users of heavy oil-fired boilers, burning furnace oil having typically 4% sulphur, have been left free. Such anomalies result into lack of seriousness among the users, with one group of users pointing fingers at the other to justify mutual non-compliance. Similar anomalies exist even for particulate emissions and some PCBs have exceeded their authority and jurisdiction by mandating specific pollution abatement device as only appropriate technology for complying with the stipulated norms. This is prejudicial to other competing, and often more appropriate, technologies and it also leaves the users free to install a cheap and non-performing pollution abatement device of stipulated technology and claim deemed compliance on paper. It is high time that the regulatory mechanism for emissions based on strict online monitoring is adapted as uniform code requirement.

Conclusion

Sweeping regulatory reforms followed by an awareness program is the key to promote energy efficiency and climate change initiatives among boiler manufacturers as well as boiler users. Implementation of this strategy will not only transform every Boiler House from “Black Box” to “Green Energy House” but it will also benefit the whole country in following ways:

• Large savings in foreign exchange through savings in petroleum fuels and imported coal.
• Sustainable development through reduced CO2 emissions and reduction in even more hazardous emissions of particulate matter, SOx, NOx, etc. leading to improved quality of life.
• Fair and meritorious competition among boiler manufacturers leading to sustained technological betterment.
• Large employment generation at all levels
• Many world-class foreign players will enter Indian market in a big way to tap Indian Market and exports from India. Their Indian counterparts will either reform or perish.
• Numerous global employment opportunities for Indian professionals, on similar lines to that of software and IT industry.
• Avoidance of wasteful expenditure of government funds and higher revenue earning for government through fees from service providers.
• Substantial reduction in corruption and black money generation.

References

• “The Boilers Act needs to be done away with” – Article by Dr. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, Govt. of India, published in Indian Express, 19^th October 2019.
• “Weapons of Crony Capitalism – Licenses -Permits – The Inspector Raj and How a First-Generation Entrepreneur, Ashok Atre, challenged it successfully – A True Story”, Book by Mr. Ashok Atre as told to Shilpa Shivalkar., published by Diamond Publishers, Pune, September 2018.
• “Safety and Efficiency in Boilers – A Systems Engineering Approach” – Article by Mr. Ashok Atre, Past President – Indian Boilers Manufacturers Association (IBMA) and Chairman, Transparent Group of Companies, Pune, 1^st April 2012.
• “Improve Boiler Efficiency and Recover Water from Flue Gases” – Article by Mr. Shymal Kumar De, General Manager – Atul Ltd., published by Chemical Industry Digest, April 2016
• “Transparent Energy – 102% - Indian Company Puts Its New Boiler to The Efficiency Field Test.” – Today’s Boiler – American Boiler Manufacturer’s Association (ABMA.COM), 2013
• “Boiler Efficiency Guide” – Cleaver-Brooks Inc., USA
• “Utilization of Calorific Value”, Expert Report by Matthias Raisch (Dipl, Ing), Loos International – The Boiler Company
• “Veissman - Climate for Innovation”, The Veissman Group, Germany
• Private Correspondence by Transparent Cogen Systems Pvt. Ltd. with Bureau of Energy Efficiency.

ABOUT THE AUTHOR:

Ajit Apte

Executive Director – Corporate Affairs, Transparent Energy Systems Pvt Ltd, is a post graduate in Energy Systems Engineering and distinguished alumnus of IIT, Mumbai. He is also a certified Energy Auditor from Bureau of Energy Efficiency (BEE). He has been associated with Transparent Energy Systems Pvt. Ltd. all along his professional career.

ORIGINAL PUBLISHER:

Ajit Apte, "Need for Next Generation Reforms to Promote Energy Efficiency and Climate Change Initiatives for Industrial Boilers", Chemical Industry Digest, Vol.34.9. September 2021, Page 37-41.