From an industrial perspective, Bhavnagar, a medium sized town 200 km from the state capital Gandhinagar in the state of Gujarat, is an important energy intensive hub. Along with the adjacent town of Shihor, this steel re-rolling cluster comprises of roughly 90 re-rolling units that convert steel ingots to hot rolled bar and flat products. The raw material for the industry, i.e. ingots, are made by melting steel scrap obtained from the nearby Alang port, one of the biggest ship breaking yards in Asia. The ingots are heated in a reheating pusher type coal fired furnace up to a temperature of around 1,200 °C. The red-hot ingots are then repeatedly passed through rollers to obtain the final products i.e. thermo mechanically treated (TMT) bars, flats, special section bars, etc.

International Center for Environmental Technology Transfer (ICETT), Japan initiated a project about three and a half years ago in Bhavnagar. The project, which aimed at promoting cleaner technologies in the cluster had so far helped in demonstrating an energy efficient reheating furnace. The new furnace was not only energy efficient, but also showed significant reduction in metal losses. ICETT decided to move on after the demonstration exercise, but there is still a need to bring the demonstrated technologies to scale.

IIP India plans to provide the necessary technical and financial support to the cluster to mainstream the demonstrated technology. The intervention proposes a bottom up participatory approach to engage the stakeholders in a meaningful manner, to further improve the performance of already demonstrated technology and then take the necessary accompanying measures for completely saturating the cluster with energy efficient furnace design – thus demonstrating Bhavnagar as a model cluster. This model can then be replicated in other such clusters in India.

With this objective, IIP is carried out a feasibility study, which was concluded by the middle of April 2012. The study conducted a detailed inventory of the cluster in terms of the number of units/ production levels/ energy performance/ technology status, develop a project energy use baseline, and estimate total cost and the associated benefits of the proposed intervention (in terms of CO2, energy and monetary savings). The feasibility study also looked at possibilities of mobilizing support from other donors, a cost-sharing plan between different project partners, and a detailed implementation plan.

Based on the outcome of a feasibility study that was launched in 2011, IIP launched the implementation phase of the project in 2012, to provide technical backstopping support to three representative units of the cluster and in demonstrating improved designs of energy efficient reheating furnace. Depending on the success of the implementation phase, IIP will take the necessary measures including leveraging support from other sources to bring the project to a stage, where mainstreaming becomes a reality and the model can then be replicated in other similar clusters in India.