Water consumption in an industrial unit depends mostly on the type of manufacturing process. Thermal power plants, oil refineries, steel and cement manufacturing, and the engineering, paper and textile industries are some of the key off-takers of water. While thermal power, textiles, pulp and paper, and iron and steel are highly water-intensive sectors, industrial sectors such as copper, zinc and plastics require comparatively less water.
According to India Infrastructure Research, the total water consumption by key industries increased at a compound annual growth rate (CAGR) of over 4 per cent during the five-year period 2015-20, increasing from 29 billion cubic metres (bcm) in 2015-16 to about 35 bcm in 2019-20. Industry-wise, the maximum growth was witnessed in the steel and cement industries, registering a CAGR of 5.5 per cent and 4.3 per cent, respectively, during the period under consideration.
Indian Infrastructure takes a look at key emerging trends in industrial water consumption, recent regulatory developments and the sector outlook…
Freshwater paucity denting business activities
From being water stressed to now water starved, many industries in the country are facing problems in continuing their operations owing to non-availability of water. According to a CDP report, in 2018, 64 companies with a global presence reported 84 water-related risks in India, including increased water stress, drought, deteriorating water quality and rising water scarcity. The country’s leading position as a metal manufacturer is facing a looming threat of water scarcity. Key steel producers such as JSW Steel and Tata Steel have raised their concerns with regard to the risks associated with non-availability of water for future operations.
A study conducted by the Federation of Indian Petroleum Industry suggests that a 5 per cent drop in water availability at a refining unit near the coasts results in a monetary loss of Rs 1.3 billion. In May 2019, Mangalore Refinery and Petrochemicals had to shut down its 4 million tonne per annum unit owing to a shortage in water availability.
Zero liquid discharge gaining traction
In light of the increasing water risks faced by a number of industrial users, companies have started moving towards recycling and reuse of wastewater through the installation of captive zero liquid discharge (ZLD) plants. ZLD is a water treatment process involving ultrafiltration, reverse osmosis, crystallisation and fractional electrodeionisation of wastewater. After the process, the entire treated wastewater is fit for reuse.
Deployment of ZLD systems is gaining traction in a number of industries, particularly in textiles. Tiruppur, a textile manufacturing hub in Tamil Nadu, was the first industrial cluster to implement ZLD in the country and the first textile cluster in the world to do so. The increasing use of ZLD plants is also reflected in the swelling order books of ZLD solution providers.
Key players in the textile industry are making efforts to ensure better and more efficient utilisation of water resources and most of them are investing extensively in technologies that facilitate reuse of water. Orient Paper Limited has made various efforts to ensure efficient utilisation of water resources and reduce water consumption by investing heavily in advanced technology. The company achieved a considerable reduction in water consumption from 110 cubic metres (cum) per metric tonne of finished product to as low as 48 cum per metric tonne of paper. A number of companies have also installed ZLD plants to reduce wastewater economically and produce clean water suitable for reuse. Grasim Industries has installed a ZLD plant with a capacity of 2,700 kilolitres per day in order to reuse water. Trident maintains a ZLD facility for towel processing, saving 6 million litres per day (mld) of fresh water. NTPC Limited is in the process of implementing ZLD at all their power stations. So far, ZLD has been achieved at 10 stations.
Quantifying water efficiency parameters
Practices such as rainwater harvesting, and recycling and reuse of treated water are reported in “sustainability reports” released by a number of companies across industries. While not mandatory, these disclosures are increasingly being made by firms. The shift towards making disclosures by Indian companies points towards the increasing value being attached to the disclosure of non-financial parameters, and these are finding place in the evaluation process of fund managers/investors globally.
In 2019-20, Indian Oil Corporation Limited recycled 41.35 billion litres of wastewater to reduce its freshwater requirement. Recycled wastewater accounted for 30 per cent of the company’s total operational water consumption. The percentage of water recycled/reused/ recirculated by Hindustan Petroleum Corporation Limited in 2019-20 amounted to about 60.2 per cent of its water needs. With regard to private players, Adani Power Limited has set an internal target of 2.5 cum per MWh for surface water consumption at their hinterland plants, well below the stipulated limit of 3.5 cum MWh set by the Ministry of Environment, Forest and Climate Change.
In December 2018, the Central Ground Water Authority notified revised guidelines for groundwater extraction, effective June 1, 2019. The revised guidelines aim to ensure a more robust groundwater regulatory mechanism in the country.
One of the important features of the revised guidelines is the introduction of the concept of a water conservation fee (WCF). The WCF payable varies with the category of the area, type of industry and the quantum of groundwater extraction. It is designed to increase progressively from safe to overexploited areas and from low- to high- water- consuming industries as well as with the increasing quantum of groundwater extraction. The high rates of WCF are expected to discourage the setting up of new industries in overexploited and critical areas. The other salient features of the revised guidelines include encouraging the use of recycled and treated sewage water by industries; provision of action against polluting industries; mandatory requirement of digital flow meters, piezometers and digital water level recorders (with or without telemetry depending upon the quantum of extraction); mandatory water audits by industries extracting 500 cum per day or more of groundwater in safe and semi-critical and 200 cum per day or more in critical and over-exploited areas; among others.
At the state level, Tamil Nadu has been at the forefront in implementing norms for water usage by industries. The Tamil Nadu Pollution Control Board has made the ZLD system mandatory for all highly polluting industries including textile dyeing and bleaching industries. The government has also included treatment and recycling of sewage under the government’s Vision 2023 for the state. The Chennai Metro Water Supply and Sewerage Board has come up with a plan to treat 60 per cent of the sewage generated for industrial and indirect reuse by 2023. Meanwhile, in September 2019, the Maharashtra government released a new water policy, the Maharashtra State Water Policy, 2019, which focuses on industrial water usage, besides other areas.
The way ahead
With the fast pace of growth in industries, the demand for water is increasing significantly, with most of the demand coming from thermal power plants. This has put a great deal of pressure on the existing surface as well as grounwater resources. Other industrial sectors such as paper and pulp, steel, oil refineries and textiles are also major consumers of water. Going forward, the water demand by these industries is expected to increase manyfold.
In order to keep the use of existing water resources in check, the government has formulated regulations that enforce the use of treated wastewater by the industries. The stringent water usage rules that have increased recycling and reuse of treated wastewater has contributed to a greater number of effluent treatment plants coming up in the segment. Besides, there has been an increase in the construction of desalination plants to meet the water requirements of industries. According to India Infrastructure Research, a lucrative pipeline of 19 projects in the industrial segment involving a capacity addition of over 700 mld offers immense opportunities for various stakeholders such as engineering, procurement and construction contractors, technology providers, consultants and equipment/ material suppliers in the sector.