Basic Survey for Joint Implementation, Etc.

Basic Feasibility Study on Energy Conservation at

Tadeusz Sendzimir Steelworks

March, 2000

The New Energy and Industrial Technology Development Organization (NEDO)

Entrusted Organization : Nissho Iwai Corporation

NEDOBIS E99007

020004909-6 Basic Survey for Joint Implementation, Etc. in 1999 Fiscal Year Basic Feasibility Study on Energy Conservation at Huta Sendzimira Steelworks

Entrusted Organization : Nissho Iwai Corporation Drawn up in March 2000 Total pages of 227

The Kyoto protocol was adopted at COP3 held in Kyoto in December 1997, in which a new international framework was established for the reduction of the greenhouse effect gases by means of joint implementation with the advanced countries and the clean Development mechanism (CDM) with the developing countries (herinafter referred to as 'Joint Implementation, Etc.')

This basic feasibility study on energy conservation at Huta Sendzimira Steelworks was conducted for the purpose of promising projects finding closely linked with Joint Implementation, Etc. as a part of the basic survey for Joint Implementation, Etc. offered for public subscriptions by The New Energy and Industrial Technology Development Organization (NEDO). PREFACE

This report is compiled by Nissho Iwai Corporation as a study result of the "Basic Survey for Joint Implementation, Etc, Basic Feasibility Study on Energy Conservation at Huta Sendzimir Steelworks in ", which is entrusted to Nissho Iwai by The New Energy and Industrial Technology Development Organization (NEDO) as a survey activity in 1999 fiscal year.

Japan is actively proceeding the Joint Implementation, Etc. initiated in the Kyoto Protocol adopted by COP3 held in Kyoto in December 1997, which aims reduction of the green house effect gasses to prevent the global atmospheric warming.

This survey has been conducted for the purpose of promising projects finding closely linked with Joint Implementation, Etc. from the viewpoints of applicability of installation of energy saving equipment to sintering process, steel making process and energy process at Huta Sendzimir Steelworks, a leading steelworks in Poland, where a large quantity of energy is being consumed.

March, 2000 Nissho Iwai Corporation Contents

Outline

I . Fundamental matters of the project ...... 1 1. Status of the partner country ...... 1 1.1 Political, economical and social situation ...... 6 1.2 Energy status ...... 20 1.3 Needs of the joint implementation project ...... 24 2. Need of an introduction of energy saving technology to the objective industry ...... 24 3. Significance, need and effect of the project, and its wider application to others under the same industry ...... 26

II. Realization of the project schedule ...... 28 1. Project plan ...... 30 1.1 Outline of the project area ...... 30 1.2 Contents of the project ...... 32 1.3 Greenhouse effect gas targeted for the project ...... 32 2. Outline of Huta Sendzimira Steelworks ...... 34 2.1 Concern of Huta Sendzimiara Steelworks ...... 34 2.2 Status of the related facilities at Huta Sendzimira Steelworks ...... 34 2.2.1 Outline of the steelworks ...... 34 2.2.2 Sintering process ...... 60 2.2.3 Steel making process ...... 76 2.2.4 Energy process ...... 90 2.3 Execution capability of the project by Huta Sendzimira Steelworks ...... 127 2.3.1 Technology capability ...... 127 2.3.2 Management capability ...... 127 2.3.3 Management base and policy ...... 127 2.3.4 Capability of financial arrangement ...... 128 2.3.5 Capability of personnel arrangement ...... 128 2.3.6 Execution organization ...... 128 2.4 Contents of the project and the specification of related facilities after modification at Huta Sendzimira Steelworks ...... 129 2.4.1 Blast furnace TRT ...... 129 2.4.2 Hot stove waste heat recovery ...... 133 2.4.3 Sinter cooler waste gas recovery ...... 136 2.4.4 Basic oxygen furnace waste gas recovery ...... 139 2.5 The scope of finance, machines and facilities, services to be rendered by both parties for the project execution ...... 163 2.6 Preconditions and problems at the project execution ...... 163

- 1 - 2.7 Implementation schedule of the project ...... 164 3. Realization of financing schedule ...... 165 3.1 Financing schedule at the project execution (required fund, and arrangement method, Etc.) ...... 165 3.2 Forecast of the finance arrangement ...... 166 4. Related subjects for the joint implementation ...... 167 4.1 Establishment of conditions for the project execution and the adjustment of scope of work with the partner country to concrete the joint implementation project in consideration of the actual conditions at the project site ...... 167 4.2 Possibility of consent to the joint implementation project (the essential conditions of the partner country for the joint implementation project in consideration of the related governmental organizations and the partner enterprise) ...... 167 m. Effects of the project ...... 168 1. Effects of energy saving ...... 169 1.1 Technical background to expect energy saving ...... 169 1.1.1 Blast furnace TRT ...... 169 1.1.2 Hot stove waste heat recovery ...... 169 1.1.3 Sinter cooler waste heat recovery ...... 171 1.1.4 Basic oxygen furnace waste gas recovery ...... 172 1.2 Base line for the fundamental estimation of the energy saving effect (on the assumption of energy consumption in case of the project unrealized) ...... 179 1.2.1 Blast furnace TRT ...... 179 1.2.2 Hot stove waste heat recovery ...... 179 1.2.3 Sinter cooler waste heat recovery ...... 179 1.2.4 Basic oxygen furnace waste gas recovery ...... 180 1.3 Expected amount, effective period and accumulated amount of the energy saving effect ...... 180 1.3.1 Blast furnace TRT ...... 182 1.3.2 Hot stove waste heat recovery ...... 182 1.3.3 Sinter cooler waste heat recovery ...... 183 1.3.4 Basic oxygen furnace waste gas recovery ...... 183 1.4 Practical method for confirming energy saving effect ...... 186 1.4.1 Blast furnace TRT ...... 186 1.4.2 Hot stove waste heat recovery ...... 186 1.4.3 Sinter cooler waste heat recovery ...... 186 1.4.4 Basic oxygen furnace waste gas recovery ...... 187

- ii - 2. The reduction effect of the greenhouse effect gasses ...... 188 2.1 Technical background to expect the reduction effect of the greenhouse effect gasses ...... 188 2.1.1 Blast furnace TRT ...... 188 2.1.2 Hot stove waste heat recovery ...... 188 2.1.3 Sinter cooler waste heat recovery ...... 188 2.1.4 Basic oxygen furnace waste gas recovery ...... 188 2.2 Base line for the fundamental estimation of the reduction effect of the greenhouse effect gasses (on the assumption of exhaust amount in case of the project unrealized) ...... 189 2.2.1 Blast furnace TRT ...... 189 2.2.2 Hot stove waste heat recovery ...... 189 2.2.3 Sinter cooler waste heat recovery ...... 189 2.2.4 Basic oxygen furnace waste gas recovery ...... 189 2.3 Expected amount, effective period and an accumulated amount of the reduction effect on the greenhouse effect gasses ...... 191 2.3.1 Blast furnace TRT ...... 191 2.3.2 Hot stove waste heat recovery ...... 191 2.3.3 Sinter cooler waste heat recovery ...... 192 2.3.4 Basic oxygen furnace waste gas recovery ...... 192 2.4 Practical method for confirming the reduction effect of the greenhouse effect gasses (the monitoring method) ...... 194 2.4.1 Blast Furnace TRT ...... 194 2.4.2 Hot stove waste heat recovery ...... 194 2.4.3 Sinter cooler waste heat recovery ...... 194 2.4.4 Basic oxygen furnace waste gas recovery ...... 195 3. Influence on the productivity ...... 196 3.1 Blast Furnace TRT ...... 196 3.2 Hot stove waste heat recovery ...... 196 3.3 Sinter cooler waste heat recovery ...... 196 3.4 Basic oxygen furnace waste gas recovery ...... 196

IV. Profitability ...... 197 1. Recoverable economical effect of the investment ...... 198 1.1 Blastfurnace ...... 198 1.2 Hot stove waste heat recovery ...... 200 1.3 Sinter cooler waste heat recovery ...... 202 1.4 Basic oxygen furnace waste gas recovery ...... 204 2. Effective investment to the project (the effect on energy saving and the reduction effect on the greenhouse effect gasses) ...... 211 2.1 Blast furnace TRT ...... 211

- iii - 2.2 Hot stove waste heat recovery ...... 211 2.3 Sinter cooler waste heat recovery ...... 211 2.4 Basic oxygen furnace waste gas recovery ...... 211

V. Verification of Spreading Effect ...... 212 1. Possible wide application of the related technologies introduced for the project in the partner country ...... 212 1.1 Blast furnace TRT ...... 212 1.2 Hot stove waste heat recovery ...... 212 1.3 Sinter cooler waste heat recovery ...... 212 1.4 Basic oxygen furnace waste gas recovery ...... 212 2. Effect in consideration of wide application ...... 213 2.1 Effect of energy saving ...... 213 2.1.1 Blast furnace TRT ...... 213 2.1.2 Hot stove waste heat recovery ...... 213 2.1.3 Sinter cooler waste heat recovery ...... 213 2.1.4 Basic oxygen furnace waste gas recovery ...... 214 2.2 Reduction effect of the greenhouse effect gasses ...... 214 2.2.1 Blast furnace TRT ...... 214 2.2.2 Hot stove waste heat recovery ...... 214 2.2.3 Sinter cooler waste heat recovery ...... 214 2.2.4 Basic oxygen furnace waste gas recovery ...... 214

VI. Influence on others ...... 215 The influences of the project over the environmental, economical and social aspects, in addition to the effects of energy saving and the reduction effect of the greenhouse effect gas emission 1. Blast Furnace TRT ...... 215 2. Hot stove waste heat recovery ...... 215 3. Sinter cooler waste heat recovery ...... 215 4. Basic oxygen furnace waste gas recovery ...... 215

Conclusion ...... 217 List of reference books ...... 218 Report of site survey ...... 219

- iv - OUTLINE

The Third Conference of the Parties to the Framework Convention on Climate Change (hereinafter, COP3) was held in Kyoto, Japan in December 1997, and at the conclusion of the conference, the Kyoto Protocol was adopted. In the Protocol, a new international cooperative framework to reduce overall emissions of greenhouse gases, such as Joint Inplementation (JI) among developed countries and the Clean Development Mechanism (CDM) for underdeveloped countries was initiated (hereinafter, "Joint Inplementation, Etc). The survey has been conducted as a basic feasibility study on energy saving at Tadeusz Sendzimir Steelworks (hereinafter, "Huta Sendzimira") in the of Poland, as a part of the "Basic Survey Project for Joint Inplementation, Etc which was publicly invited by the New Energy and Industrial Technology Development Organization (NEDO) for the purpose of materializing the most feasible development projects for Joint Inplementation, Etc.

Poland is an ethnically and religiously homogenous nation having over 95 percent of Roman Catholic believers among 39,000,000 population on a plane territory of 320,000 square- kilometers. The nation of Poland remolded its national and social systems after the collapse of the socialistic system in 1989 into a market economy under the democratic congressional system, ahead of all other Eastern European nations. Although, such a dramatic change has once caused a sharp increase of jobless in 1992 to a level of 2,500,000 (a jobless rate of 16 percent), the Polish society is directing itself toward more stable situation since then. The consumer products prices steadily declined since 1990 and by the end of 1999, the inflation rate has been reduced to a 9.8 percent compared with the same period of the previous year. In 1992, the gross domestic products (hereinafter, GDP) has turned to a growth of 2.6 percent compared with the previous year for the first time after the revolution and been kept on a steady growth trend after that. And in 1999, it marked a growth of 4.1 percent, showing a very favorable economic trend. The foreign reserves marked 25.5 billion dollars at the end of 1999 while the investments from the foreign economy exhibited a favorable increase of 35.6 billion dollars in June 1999.

Under the old COMECON system, the steel industry in Poland marked an annual pig iron production of 20 million tons at its peak having an advantage of the abundant and low cost coal supply. The Polish steel industry has though experienced a drastic production decline after the 1989 revolution. Although, the pig iron production has turned to an increase since 1993, its production has been still dwindling at a little over 10 million tons level to this day. The Polish steel industry is now improving its equipment for the production of high added-value and high quality products having demands for the high quality steel sheet products corresponding to the introduction of automobile industry in Poland. The Polish steel industry also began to look into the plan for the introduction of energy saving measures as a part of production cost reduction policy. The ecocide is a serious problem to Poland which has been relying on the coal as the basic energy supply source. In this country, the steel industry alone is responsible for ten percent (air pollution six percent, scraps two percent, water pollution one percent and others one percent) of the entire industrial waste of Poland. The ecological problem in the southern district of Poland or the neighboring area of Katowice and Krakow, where the coal mine and the steel industries concentrate, was so serious that the Polish finally introduced an environmental protection standard and in case certain industries which did not conform to the standard would be penalized. The energy saving measures are well recognized in view of the environmental protection among industries though, such measures are not well practiced due to more urgent production equipment improvement problems, financial problems or for the reason of less costly energy accessibility. Such industrial situation will bring further difficulties to Poland when this country joins the (hereinafter, EU) expectedly in 2003 because then, the nation must observe the EU regulations and routines.

Huta Sendzimira, the subject of the basic energy saving investigation conducted this time, is one of the largest steel mills of Poland (the two steel mills produce 65 percent of the entire pig iron in Poland) located in Krakow, the city situated 300 kilometers south of , the capital of Poland. The pig iron production of Huta Sendzimira is 2.5 million tons a year and its steel plate production leads other steel industries in Poland.

The first field investigation was conducted from September 25 to October 17, 1999 and the second took place from January 22 to 30, 2000. The object, subject matters and results are summarized as below.

(1) The object and subject matters of the investigation The energy saving basic investigation was conducted at the substantial energy consumption factories such as the blast furnaces and the sintering plants in the upper production processes and the basic oxygen furnaces and steel making plants. The investigation was extended to the power plants to investigate the total energy consumption, the circulation and amount of by-product gases and the purchased amount of electricity. The investigation looked into the utility effect of the recovered energy in view of the basic energy utilization system of Huta Sendzimira, provided that a large scale waste heat recovery equipment would be introduced in accordance with the energy saving policy. In parallel with the investigation of the energy utilization system, the introduction probabilities of the large scale waste heat recovery equipment as well as the energy saving equipment into the pig iron production, steel making and power generating processes. Then, the results of the investigations were analyzed and discussed for the possibilities of above mentioned equipment introductions in practical as well as overall views. (2) Abstract of the investigation results ©The investigation proved that the energy saving project can be practiced at the Huta Sendzimira without much problems. Because, when the large scale waste heat recovery equipment and the energy saving equipment are introduced, corresponding amount of energy can be reduced in form of reduction of the coal consumption at the power plants. ©About the introduction of energy saving measures to independent production processes: The following four equipment introductions are proposed as the result of the investigations and analyses of the independent production processes. ■ Top pressure recovery turbine of blast furnace ■ Hot stove waste heat recovery ■ Sinter cooler waste heat recovery, and • Basic oxygen furnace waste gas recovery.

In case, all four energy saving measures listed above are practiced, the annual reduction of the greenhouse effect gas (C02) will be approximately 180,000 tons.

(3) Carrying on the project The management of Huta Sendzimira highly evaluated the energy saving basic investigation conducted this time and took the results of the investigation positively. The management expressed that it would totally analyze the data not only in the view of the efficiency of the finance required for the introduction of the energy saving equipment, but also in the light of the production efficiency and the environmental protection effects including side effects of ecology problems. When looked at the project in the aspect of the efficiency of investment under the investment conditions discussed in this time investigation, the possibility of introducing energy saving project to Huta Sendzimira seems to be low, since the energy price is quite low in Poland. And yet, the energy price will expected be escalated after acquiring the membership of EU in 2003, the project proposed this time seems highly probable by utilizing low interest loans.

We, Nissho Iwai would like to have a very close contact with the management of Huta Sendzimira in the future to provide good conditions to realize the project. In particular, we will discuss the financing, the most important factor of the project, with the management to investigate a possibility of obtaining a special yen credit (or yen credit for environmental protection) and/or an escrow account (appropriating sales income of the steel mill for repayment). And when necessary, we will have discussions with Polish government (the Ministry of Treasury, the Ministry of Finance, the Ministry of Economy and so on) to realize the project. I. Fundamental matters of the Project

[Outline]

Politically, Poland is tracking a sure route to join the European Union in 2003 having a stable growth after the 1989 revolution with its coalition government, economically tracking a favorable trend since 1992 and socially, improving its jobless problem though slowly. In view of energy situation, Poland yields an abundant coal and therefore, the price of energy is considerably less expensive comparing with Japan. Having such an energy situation, Polish steel industries have not introduced any saving energy measure to this day. Naturally, the needs for the joint project for installing such means to save energy are very high. Although, the assessment conducted this time revealed as expected, the possible joint project did not have much attraction in terms of the investment efficiency, the management staff of Huta Sendzimira is foreseeing the energy price hike in a long run corresponding acquisition of the EU membership. By this reason, they are strongly in needs of installing an energy saving facilities in order not only to improve the productivity but also to advance in the environmental protection activities.

In this chapter, the political, economical, social situation of Poland, the subjected nation of this fundamental assessment will be elaborated in addition to the energy situation and the needs of the joint project. Also, detailed in this section of the report are the needs of introducing the energy saving technology to the subjected Polish steel industries and the value of the project, the effect of such a measure and finally the possibility of popularizing the energy saving measure among the subjected industries.

1. Status of the partner country The Republic of Poland (hereinafter Poland) is bordered by seven nations, on the west, and the on the south, Blarus (White ) and on the east, and Russia on the northeast, and bordered on the north by the , extending its trapezoidal land narrowly to west and broadly to east. According to the Polish Federal Census Bureau, the length of the national border lines between above listed neighboring countries are as listed in Table 1.1-1 and its total length is extended to 3,054 km. The coastline on the Baltic Sea expends approximately 500 km. and includes non-freezing trading ports of Gdansk, Szczecin, and Gdynia.

The area of Poland expands approximately 32 square km that roughly equals to the area of Japan less Shikoku and Kyushu and consists almost entirely of lowlands. Seventy five percent of its area has below 200 m in elevation, and the area of less than 300 m in elevation shares up to 91 percent of the entire country. The land including the morainic plain with lakes and marshes expanding from the northern Baltic Sea coast to the central lowlands and further extends to the only mountain area in the south on the Slovakian border. The southern border line holds high mountains of 1000 to 2000 m in elevation represented by the Tatra Mountains and its Mt. Zakopane, a renown summer resort, once became a contender for the winter Olympic games. Poland is well portrayed as an endless flat land having little mountain areas. For example, the name of the country came from, among various

1 theories of course, a word "pole" or planes and/or land for cultivation.

Poland's population is ethnically homogeneous Western Slavic race that shares up to 98 percent of the entire population of 39 million. Its capital Warsaw lies on Vistula (Visla) River that runs from southern mountain region to the Baltic Sea. Warsaw is the largest city of Poland having population of 162,000 and the center of the nations political, economical and cultural activities. The city of Krakow where HUTA SENDZIMIRA steel mill is located and the fundamental assessment of the energy saving project is conducted is the thirdly large city in Poland, next to the city of UDZZI, having population of 750,000. Krakow was once the capital of the country from 11th to 17th Centuries having a long historical tradition and modem industries. Geographically, Krakow is located on Vistula River on which Warsaw also lies and approximately 100 km north of Zakopane Mountain on the Slovakian border.

Poland's political system is a constitutional republic having a president as the head of the state, two house congressional system comprising the upper house with 100 parliamentarians, the lower house with 460 representatives both elected for four-year terms. Poland's administrative districts newly assigned by the 1998 administrative restructuring comprise, since January 1, 1999, 16 prefectures (49 until the end of 1998), 308 counties, and 65 cities that hold the same status as counties.

In addition to the outline in light of geographical, economical and political views of the Republic of Poland described briefly heretofore, a historical background of this country is inevitable to understand Poland in some depth. A brief overview of the will be described below.

Ethnically, Polish people belonged to the Western Slavic family and settled in the area currently called Poland from the Sixth Century to the Seventh Century. A state was established uniting a number of tribal clans having the Piast clan as its leader in 966, as shown in Table 1.1-2 Historical Outline of Poland. This primitive state is the origin of Poland. The people of this country converted their religious belief to Roman Catholic Church, which influenced over Poland's tumultuous history, in the latter part of the Tenth Century. Krakow became the capital of Poland in the 11th Century to be not only the center of the country but also the center of European political and commercial arena. Having the grand castle of Wawel constructed in Krakow in the beginning of the 16th Century, Poland enjoyed the cultural developments of Renaissance arts and sciences. In the beginning of the 17th Century, the capital was transferred Krakow to Warsaw which directed Poland to its prosperity as the center of politics. However, the prosperity of this country did not live long. Poland lost one-third of its people through an unbearable difficulty, the First (1772), brought upon the country by Russia, and Austria rising powers of Europe. This historical difficulty of the nation was followed by the Second and Third Partitions (1793 and 1795 respectively) also by Russia, Prussia and Austria and as the result, once the state of Poland has been wiped out of the map of Europe. Long waited restoration of national independence had not been realized until after the World War I and the Russian Revolution which led the German, Russian and Austrian empires to their falls. The blessings

2 of the independence could only live for 20 strong years. Poland was again partitioned in the confusion of the World War II and then the people of Poland continuously agonized under the old socialistic regime of Soviet Russia until the recent independence.

Through a number of revolutionary uprising by the laborers in the communist monopoly under the Polish United Workers' Party after the World War II, emerged finally in 1980 was Independent self- governing Trade Union Solidarity led by Lech Walesa (the former president) and an overwhelmingly storing and organized movement was directed in order to fall a "socialist" state. As the result of such a movement, Polish United Workers ’ Party was miserably defeated in the election held in June 1989 and the Third Republic of Poland, the current constitutional republic was borne. Lech Walesa the leader of Soridarity was elected as the first Republic (the Third Republic of Poland) in 1990, the next year, by direct electoral votes. The second and current president of Poland Republic is Aleksander Kwasniewski of the ex-communist Democratic Left Alliance who was elected in 1995, five years after the election of the first president of the republic.

As described herein above, the plane that occupies the entire land of Poland has been advantageous in a view to expand its own territory. On the contrary though, the geographical structure forced Poland to share long national borders with many neighboring nations and therefore, it was vulnerable to external invasions. This defenseless situation caused Polish people to experience immeasurable miseries throughout their history. One basic factor which encouraged the people of Poland to overcome their turbulent historical experiences and to establish current independent state against adverse historical pressure that could wipe this country out of the Earth, is said the people's strong belief in Roman Catholic Church which was introduced in this country in the latter half of the Tenth Century. The national borders of Poland were forced to be redrawn numerical times by external invasions and the territory was moved toward west and area shrank considerably. And yet, it may be a blessing for the people of Poland that they have ethnically homogeneous, Polish of the Western Slavic family, linguistically homogeneous, Polish of the Western Slavic language family, and religiously homogeneous, 95 percent of the people belong to Roman Catholic Church, nation. Nagao Hyoudo, the former Envoy Extraordinary and Ambassador Plenipotentiary to Poland expressed his view of the future of the Republic of Poland in his interview with Henric Ribszits, the former Envoy Extraordinary and Ambassador Plenipotentiary to Japan, held at PAIZ (Foreign Investment Bureau of Poland) in Warsaw on April 8, 1997, "It is historical fact that the people of Poland had experienced unbearable dooms, tragedies, or difficulties because of the nations geopolitical situation. This negative geopolitical situation though, so generally trusted, will convert itself into a positive and prosperous situation in the future. In other words, the geopolitical position of the Republic of Poland in the world will attracts prosperity and stability for the people of this country in the 21st Century. Poland surely joins the EU in the beginning of the 21st Century. With the economic power the similar size of the Great Britain, French Republic, Italian Republic, or Kingdom of Spain and with its zooming energy, or the energy that develops the country's economy in rapid pace have a considerable possibility to develop this country to its prosperity."

3 A number of improvements and restructuring in political, economical and social field are pressing on in Poland after the revolution took place in 1989, in order to build a modem democratic nation. Poland, establishing the foundation for the parliamentarian governmental system and the market economy only within ten years since the revolution, applied for a membership of the EU in 1994 and preparing for joining the EU on January 1, 2003.

Table 1.1-1 Profile of the Republic of Poland

Name of State The Republic of Poland Capital Warsaw Area 322,577 square km (approx. 4/5 of Japanese land area Population 38,667,000 (December, 1998) Population growth rate -0.04% (1998) Life expectancy 72.77 years (male: 68.6 years, female: 77.2 years) Polish (Western Slavic) 98 %, Others 2 % (including. Russians, Ethnic identity Ukrainians, Germans, Belarusians) Language Polish (a Western Slavic language) Roman Catholic 95 %, Others 5 % (including. Russian Orthodox, Religion Protestant, others) Note: Current Pope Jhohannes Paulus II came from Poland. Political System Constitutional Republic Head of State President Aleksander Kwasniewski, (Inaugurated in Dec. 1995) Two-house system (Senate: 100 members, Legislative System Diet: 460 members, both elected to 4-year terms) Monetary Unit Zloty (Zl) A denomination took effect in January, 1995. Seven nations having 3,054 border lines in common. (Germany on west: 467 km, Czech on south: 790 km, Neighboring Countries Slovakia on south: 539 km, Ukraine on east: 529 km, on east: 416 km, Lithuania on Northeast 103 km, Russia on northeast: 210 km. Gdansk, Szezecin, Gdynia, all of them on Baltic Sea and Trading Ports nonfreezing ports. Baltic coast extends to approx. 500 km. Warsaw: 1,624,843 Lodz: 812,317 Populations of Major Cities Krakow: 740,537 Wroclow: 639,399 Poznan: 580,000 (Censor conducted in Dec. 1998)

Source of information: Statistical Yearbook of the Republic of Poland 1998 JETRO Warsaw Branch Office "Information on Poland No.12" Issue. Aug. 1,1998

4 Table 1.1-2 Historical Outline of Poland

Piast family founds a Dynasty and rules the Polish land. 966 Shortly after, Roman Catholic becomes the national religion. Beginning of Boleslaw I is crowned as the first king of Poland. Krakow becomes the capital 11th Century and continues to be the capital of the nation until the beginning of the 17th Century. Boleslaw II, the Prince of Mazovia builds a fortress in his palace premises Circa 1300 which later becomes the origin of Warsaw, the capital.

Beginning Half of Warsaw wins an independence. 14th Century Prince of Mazovia establishes his residence and government Casimir III the Great founds an academy at Krakow 1364 which later becomes current Jagiello University. 1386 Jagiellon Dynasty is founded by Wladyslow II Jagiello, the grand duke of Lithuania. 1493 Two-house (Senate & Diet) congressional system is established.

Beginning of 16th Wawel castle is constructed in Krakow. Century

1569 Warsaw becomes the seat of the congress for both Poland and Lithuania The reign of Valoi Dynasty begins as a result of election of a king to the throne after 1573 Jagiellon Dynasty comes to an end. The central offices of the government are transferred to the Warsaw palace, 1619 thus Warsaw becomes the capital and the center of the new political system. 1772 The First Poland Partition (by Prussia, Russia and Austria) 1791 A constitution is established and Poland becomes a constitutional monarchy state. 1793 The Second Poland Partition (by Prussia and Russia) 1795 The Third Poland Partition (by Prussia, Russia and Austria)

1918 Poland regains its independence. The People's Republic of Poland is established under the monopolistic government 1945 and national reconstruction starts after WW II. A large scale protesting activities against the government is staged by coalition 1980 of workers, and the government is forced to recognize Solidarity (Solidamoshc) Upon the fall of Communist government established is the democratic government 1989.09 led by Premier Tadeusz Mazoviecki. Lech Walesa is inaugurated as the first President of the Republic of Poland 1990.12 (The Third Republic). Aleksander Kwashniewski is inaugurated as the second president and is holding his 1995.12 term to this day.

Information source: "Warsaw Royal Palace" published by Polish Royal Publication Center in 1995

5 1.1 Political, Economical and Social Situations

(1) Political Situation Poland is a large country having a population of 39 million, ethnically 98 percent of which is the Western Slavic, speaking Polish, a Slavic language, and religiously, 95 percent of the population belong to Roman Catholic Church. The religious tradition of Roman Catholic belief has been inherited through generations among Polish people and strongly influenced the revolutionary movement to fall the socialistic regime. Laborers' movements are repeatedly carried out against the socialistic state and finally to establish Independent self-governing Trade Union Solidarity as the major power to revolutionize the country in 1980. Ethnic conflicts, a by-product of revolutionary movements which often hinder the cause of the movements, was not materialized in Poland, thanks to the ethnically homogeneous society. Polish people therefore commonly shared the cause of the revolution and could establish a democratic nation backed by the parliamentary political system. The turned into a growth in 1992 and is tracking its favorable trends to this day.

The political situation of Poland will be described dividing the after-the-revolution flow (since 1989) into three periods herein below specifically referring to "The State and Affairs of Poland" published in August, 1999 by Japan Embassy in Poland, and "Chronological Table of Political and Economical Development of Poland, 1989 to 1998" by Masahiro Taguchi, Associate Professor of Okayama University.

1. Period of Solidarity Regime (1989 to 1993) A fundamental revolutionary policy was agreed between the communist regime and Solidarity at the roundtable conference held from February to April 1989 and an unrestricted genera] election was planned to be materialized. The Solidarity power won a landslide victory in the general election held in June 1989 and clinched the Communist regime to its fall. The Mazoviecki cabinet, a non-Communist regime, set sail in following September. Such an unprecedented achievement inspired Eastern European nations and finally caused the fall of the Communist system in the Soviet Union itself. Under the Mazoviecki cabinet, energetic restructuring of the government and society were pressed onward in order to introduce the market economy into Poland. Since 1990, Poland, the leading edge of the democratization movement of the Central and Eastern European countries, further advanced to stabilize the democratic parliamentarian system and the market economy in its own society. In November 1990, Lech Walesa, the leader of Solidarity was elected to the office of the first president of the Republic of Poland (the Third Republic) by a popular presidential election. Mazoviecki cabinet was succeeded by Jan Krzysztof Bielecki, Jan Olszewski, Hanna Suchocka cabinet consecutively before the temporary "Small Constitution" was enacted.

2. Period of old Communists Regaining Power (1993 to 1997) Unemployment rate rapidly increased under the radical revolutionary policies of the new

6 regime that widened the difference between the rich and the poor, a nostalgic feeling spread toward the socialistic political system in which Polish people dreamed of everybody employed. In the parliament election held in September 1993, the United Democratic Leftist Party (SLD) and the Farmers Party (PSL) dominated the parliament seats and Waldemar Pawlak cabinet (PSL) was formed as a coalition cabinet between both parties in October of the same year. Although the new cabinet emphasized the continued pursuance of the economic reform policies of the former cabinet, it could not form an alliance with either President Walesa or SLD its coalition partner and Premier Pawlak was forced to resign in March 1995 and Jozef Oleksy Diet Chairman of SLD succeeded Pawlak as prime minister. Jozef Oleksy though had to step down as the prime minister in a suspected espionage charge less than a year after his inauguration and was followed by Wlodzimierz Cimoczewicz of the same SLD Party. Cimoczewicz government successfully enacted various reorganization policies including restructuring of the central bureaucratic system, reforms of social security and medical systems, legal measures to reduce crime rate, and activating rural productivity by January 1997. In addition, the long awaited new Constitution after the revolution was ratified by a public referendum in May 1997.

Aleksander Kwasniewski, the party chairman of SLD narrowly defeated incumbent President Lech Walesa in the presidential election held in November 1995 to assume the presidential office as the Second President. In his inauguration speech, President Kwasniewski emphasized that his government would keep a good communication with oppositions, the Roman Catholic Church as the popular president of Poland and inheritance of existing foreign policies from former government, especially to put most importance on joining NATO and the EU. The government was transferred from the former president Walesa who had been supported by Solidarity power to current president Kwasniewski of the United Democratic Leftist Party (SLD) through two presidential elections held in 1990 and 1995, though the fundamental policy of the Republic of Poland was kept on the same track pursuing the introduction and stabilization of the democratic parliamentarian system and the market economy.

3. Period of Solidarity Regaining the Power (1997 to this day) The Solidarity Election Activity (AWS: 38 political-parties group comprising Solidarity backed political parties and other union supported parties) won 201 seats in the Diet to be the majority and 60 seat went to the Liberal Alliance (UW), a member of former Solidarity group in the general election held in September 1997. This landslide victory brought a coalition Buzek cabinet between AWS and UW in October of the same year. Buzek cabinet put the most importance in domestic affairs emphasizing to reform the decentralization of authority, the social welfare system, the educational system, the social security system, to promote privatization plans of various industries, reshuffling of the mining industry organizations and to support agricultural activities. President Kwasniewski though, had a tough time in enacting his policy, due to his political background came from the old Communist Party, with his leadership in foreign policy and/or defense policy. Despite such difficulties, Buzek cabinet successfully enacted the local autonomy reform comprising a large scale transferring of authority from the central government to local as its main policy, and reforms of the health insurance and social security systems on January 1, 1999. The reforms above described though induced considerable confusions and adverse reactions at the enforcement level and caused nationwide general strikes. Such a political trouble is enhanced by the wide spread difference in the living standards of the riches and the poor within ten years after the revolution. Through the political and social situations mentioned above, the popularity of the opposition, SLD went over the majority, AWS since January, 1999 and the in August of the same year, SLD got a popular support rate of 34 percent against 18 percent obtained by AWS having an 18 percent of large difference between them.

The political theater in Poland in the future will be determined by the presidential election planned in October or November 2000 and the general election of the Senet and Diet slated in autumn of 2001. The popular support of Buzek cabinet continually drops as described above while the popularity of President Kwaneiwski is favored at 76 percent (in a survey conducted in August 1999). Currently, the attention of politically related people is concentrated to the presidential candidate from the right wing that has been considered to be Lech Walesa, the former president until recently. As detailed in the overview above, the fundamental reform policies of Poland comprising the parliamentarian democracy, foreign policy and economic policy with regard to foreign countries have been held firmly throughout alternate governments and cabinets formed between the left and the right since 1989 and the Republic of Poland is proceeding toward a main political and economical aim of joining the EU on January 1, 2003. Table 1.1-3 Political Background

Political System Republic Diet: 460 Seats Senate: 100 Seats Solidarity Election Movement (AWS) 201 51 Democratic Leftist Union (SLD) 164 28 Major Political Parties Liberal Union (UW) 60 8 Farmers Party (PSL) 27 3 Poland Reform Movement (ROP) 6 5 Chief of State President Aleksander KWASNIEWSKI Prime Minister Jewrzy BUZEK (AWS) Vice Prime Minister & Minister of Finance Leszek BALCEROWICZ (UW) Major Cabinet Vice Prime Minister & Minister of Internal Affairs Janusz TOMASZEWSKI (AWS) Members Minister of National Property Emil WASACZ (AWS) Minister of Foreign Affairs Bronislaw GEREMEK (UW) Minister of Economics Janusz STEINHOFF (AWS) 1986 IMF: International Monetary Fund 1990 GATT 1992 EU Council Memberships of 1994 PFP (Partnership For Peace) International Organizations 1995 WTO 1996 OECD 1999 NATO 2003 EU (as planned)

Source of information: JETRO Warsaw Branch Office "Information on Poland No. 12" Issue. Aug. 1,1998 Table 1.1-4 Chronicle of Polish Politics and Economics (1989 to 1999)

1989 June Solidarity won landslide victory in unrestricted general election. September First non-Communist regime, Mazoviecki cabinet (Solidarity supported non-partisan) is formed. "Balzelovicz Plan" is announced by Vice Prime Minister & Minister of Finance Balzelovicz November Berlin Wall falls. 1990 November Agreement to establish national borders signed between Poland and Germany December Lech Waresa (Solidarity leader) elected as President. 1991 January Jan Krzysztof Bielecki cabinet (Liberal Democratic Conference) formed. July Warsaw Pact organization dismembered. opens December Cooperative Agreement signed between EC and Poland. Jan Olszewski cabinet (middle coalition) formed. 1992 October Senete and Diet passes the Little Constitution. July Signs Central European Free Trade Agreement (CEFTA) effective of March 1993. December Hanna Suchocka cabinet (United Democrats) formed. 1993 January Military Cooperation Agreement signed between Poland & Germany. October Waldemar Pawlak cabinet (Polish Farmers Party ) formed. 1994 April Applies for EU membership. (Plans to be a formal member starting from Jan. 1, 2003.) July Partnership for Peace Agreement signed between NATO & Poland. 1995 March Jozef Oleksy cabinet (United Democratic Leftist) formed. July Joins WTO November President Kwasniewski (Chairman of United Democratic Leftist) elected as president and serves as president to this day. 1996 February Wlodzimierz Cimoszewicz cabinet (United Democratic Leftist) formed. July Joins OECD. 1997 April Draft of the New Constitution passes Diet & Senate. May The New Constitution ratified by popular vote. June Poland is accepted as a member candidate of the EU by the EU Council. July NATO Council approves of the membership of Poland. October Buzek cabinet (Solidarity Election Movement) formed and serves to this day. 1998 Negotiation for the EU membership begins. 1999 March Poland becomes a official member of NATO with Czech & Hungary

Source of Information: "Chronicle of Politics and Economics of Poland (1989-1998)" by Associate Professor Masahiro Taguchi of Okayama University

- 10 - (2) Economical Situation

Poland, a large country on Baltic Sea, having a population of 9 million, sharing its national borders with seven countries, Germany Czech, Slovakia, Ukraine, Belarus, Lithouania and Russia and its northern border facing the Baltic Sea which offers a number of trading ports. The socialistic political system was fallen in 1989 by the unrestricted general election and Poland is since then on its process of rebuilding its political and economical systems as a democratic nation. After the revolution, Poland established its fundamental reform policies on the newly formed parliamentarian democratic system and market economy system. Polish economical trend turned to a growth trend from 1992 and applied for a membership of the EU and currently working to fulfill the membership requirements by the beginning of 2003.

Poland faced a dramatic transition from the planned economics system to the free market economics backed by Western Economics after the socialistic system collapsed in 1989. The transition process followed the steps described in more details herein below. The free general election of June 1989 brought a landslide victory to Solidarity led by Lech Walesa and Solidarity backed Mazoviecki cabinet was formed in following September, as the first non-Communist party cabinet after the World War II. Balcerowicz who was appointed as Vice Prime Minister and Minister of Finance announced "" to carry on the transformation of the economic system from the planned economy to the market economy. The plan mentioned above is a so-called "shock treatment" in which reduced were subsidies, bullied were privatization of national enterprises, liberated were market prices and wages, opened were foreign monetary exchanges, freed were trading, and introduced were foreign investments in order to rapidly reform the economical system of Poland. This drastic policy resulted an inflation surge over 600 percent of consumer product prices in 1989. However, such shocking inflation began to settle in 1990 to a little over 100 percent and consumer goods began to be circulated and the credibility of Polish currency was reclaimed. On the other hand, the tight deflation policy caused a sharp drop of domestic sales which consequently caused a sever recession to trigger bad import-export businesses. For example, the mining production dropped to 35 percent within two years, 1990 to 1991, comparing with the annual production before the reform policy. The number of unemployed people rose to 2.5 million by the end of 1992 from zero level in the planned economy system under the socialistic regimes. Under such circumstances, the social instability was unavoidable. Yet though, the economic condition in Poland began to be stabilized to mark a first growth of 2.6 percent in gross domestic products or GDP after the revolution in 1992. The economy has since been firmly tracking on the growth trend to this day. Also, the removal of trade restrictions encouraged private business sectors especially distribution businesses grew rapidly and therefore, currently the private business sectors share 60 percent of the entire employment in this country.

Acceding to the EU Council report on the reform of each EU membership candidate nation issued in October, 1999, Poland is highly appraised in economic growth in view of investment, service

— 11 shifting, bank privatization, monetary and financial policies etc., although the report at the same time pointed out the slow improvement in legislative policy of the agricultural, environmental, judicial systems. In general, Poland is determined by the Council to be the secondly economically favorable nation next to Hungary. Generally, the economics situation of Poland in recent years keeps the most favorable position among Central and Eastern European countries. The major economic indices of Poland are as illustrated in Tables 1.1-5 and 1.1-6 in accordance with the reference materials issued by the Polish Central Statistic Bureau, the Japan Embassy to Poland and JETRO Warsaw Field Office.

Table 1.1-5 Major Economic Indices of Poland

1991 1992 1993 1994 1995 1996 1997 1998

Gross Domestic Products -0.7 2.6 3.8 5.2 7.0 6.0 6.8 4.8

Gross Mining Products -0.8 2.8 6.4 12.1 9.4 8.3 11.5 4.8

Gross Agricultural Products -1.6 -12.7 6.8 -9.3 10.7 0.7 -0.2 6.6

Gross Construction Products -11.4 6.6 8.0 0.5 8.1 4.6 17.1 11.6

Consumer Prices 60.4 44.3 37.6 29.5 21.6 18.5 13.2 8.6

Imports 18.3 -11.5 7.2 21.9 32.8 6.7 5.4 9.6

Exports 72.6 2.5 18.4 14.5 34.7 27.8 13.9 11.2

Information Source: The Polish Statistics Bureau "Polish Economic Situation" (Dec. 1999) by The Japan Embassy to Poland & JRTRO Warsaw Field Office

Table 1.1-6 Major Economic Indices 1998 to 1999

(Source : Polish Statistics 1998 1999 1999 Bureau) December Jan. - Dec. Mining Products (Growth 4.8 19.1 Compared to prev. year) 4.4 8.6 Compared w/end, Consumer Prices (%) 9.8 Compared w/same 9.8 Compared w/end of 1999 mon. of prev. year prev. year Export (US$ million) 30,247(11.1) (Compared to prev. year in %) 2,515 (-6.6) 26,387 (-12.4) Import (US$ million) 43914(13.9) (Compared to prev. year in %) 4221 (-1.7) 40866 (-6.8) Balance between export and -13,667 -1,706 import (US$ million) -14,479 Ordinary account balance (USS End, 1998 (- million) 6,810) Dec., 1999 (-11,672) Foreign currency reserve (USS 27,382 Dec., 1999 25,494 million) Number of unemployed End 1998 1,831 mil. Dec., 1999 2,349 mil. (13.0) (Unemployment rate %) (10.4)

Information source : "Major Economic Indices of Poland" published by the Japan Embassy to Poland (published in Dec. 1999)

12 - The overall views of the major economic factors of Poland will be described below with specific reference to the statistic data published by the Central Statistics Bureau of Poland, the Japan Embassy in Poland and Warsaw Field Office of JETRO.

(D Gross Domestic Products (GDP): GDP turned into a growing phase of 2.6 percent (in comparison with the previous year) in 1992, first time after the revolution. The growth of GDP is kept in the favorable phase and tracking a steady growth trend since then. The preliminary report made public by the Japan Embassy in Poland, the official statistics of Polish economy will be announced by the Central Statistics Bureau of Poland shortly, the growth rate of Polish GDP in 1999 was 4.1 percent and is expected to reach a 5 percentage point in year 2000. In accordance with the Central Statistics Bureau, GDP in 1997 comprises 28.9 percent of mining industries, 5.7 percent of agricultural and fishery industries, 8.7 percent of construction industries and 56.7 percent of service and other industries. The per-capita GDP in 1998 has increased to US $4,080.

The growth index of GDP in 1999 is 117 on the standard figure 100 of the year 1998, the year when the economic reform started in Poland. The growth in GDP since the economic reform is only observed in Poland and Slovenia among all Eastern European nations.

(2) Industrial Products: Mining and manufacturing industries are in steady growth trend and the growth marked 4.8 percent in fiscal year of 1998 compared with the previous fiscal year. With regard to the fiscal year 1999, the figure declined in Jan - July period, as shown in Table 1.1-7, it picked up though a large growth after August especially in December to mark 19.1 percent compared with the same month of the previous year (5.7 percent increase in comparison with the previous month), as show in Table 1.1-6, and the annual figure registered a 4.4 percent growth in 1999.

Table 1.1-7 Trend of mining and manufacturing products in 1999 (Comparison with previous month in %) Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. -10.9 -0.4 22 -7 1.3 0 -1.9 1.9 0.3 0.3 0.9 5.7 Information source: "Major Economic Indices of Poland" published by the Japan Embassy in Poland (published in Dec. 1999)

(3) Consumer prices: The consumer prices tracking steadily a declining trend since 1990 and was came to less than ten percent level to mark an 8.5 percent in 1998. This steady trend though shifted toward increase phase in 1999 fiscal year dragged by gasoline, food and beverage prices, which followed the upward trend intermittently. By this not favored trend, the inflation again began to track an increasing trend marking 0.9 percent (ref. Table 1.1-8) in December, or 9.8 percent increase comparing with the figures at the end of the previous fiscal year.

13 Table 1.1-8 Transition of consumer prices in 1999 (compared with prev. month on %)

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. 1.4 0.6 1 0.8 0.7 0.2 . -0.3 0.6 1.4 1.1 0.9 0.9 Information source : (Major Economic Indices of Poland! published by the Japan Embassy in Poland (published in Dec. 1999)

(4) Unemployment: Increasing unemployment after the economic reform started in its full power in 1990, turn to a decrease in 1997 and it dropped to 1.83 million or an unemployment rate of 10.4 percent in 1998 as shown in Table 1.1-6. However, the unemployed began to increase again in 1999 when mining and manufacturing industries began their company restructuring because, those laborers lost their jobs could not be re-employed by newly developing service industries. As shown in Table 1.1-9, the jobless marked 2.34 million (unemployed rates of 13.0 percent) in December 1999. This number is the highest since March 1997. The unemployment is now the most important political problem of the Polish government to solve in view of the political aim of being awarded a membership in the EU in 2003.

Table 1.1-9 Trend of Unemployment in 1999 (millions)

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. 2.04 2.15 2.17 2.12 2.07 2.07 2.11 2.14 2.18 2.18 2.25 2.34 Information source: "Major Economic Indices of Poland" published by the Japan Embassy in Poland (published in Dec. 1999)

© Trend of Import and Export: Having a favorable economic growth, both export and import quantities are steadily increasing. Yet though the import surpasses the export and the balance between the import and export is tipped on deficit side. The deficit on imports marked US $13,667 billion in 1998 that increased to US $14,479 billion in 1999. Such a considerable trade deficit mainly comes from the current economic structural situation of Poland in which the domestic spending is sharply increasing while the domestic production of Poland is still hovering at a low level due to its not-yet- well-developed production systems and is triggering more imports, in addition to the considerable amount of foreign investments. Although, foreign investments are needed to activate the export- related industries, they also help increase the import of machinery and their various parts. Major trade partners are the EU member countries and nearly 70 percent of both imports and exports of Poland are shared by these countries. The major Polish trade partners, according to the 1998 statistics, are as follows. Export: Germany 36.3 Percent, Italy 5.9 percent, and Russia 5.6 percent Import: Germany 25.8 Percent, Italy 9.4 percent, and Russia 5.1 percent

14 (6) Trend of Japan-Poland Trade: The export and import between Japan and Poland reached to a US $5.51 million in 1991 as listed in Table 1.1-10. Since then though, the trade between these two countries had decreased continuously until 1995 caused by the increased Polish tariff and the Japanese recession, when it began to track an increasing trend. The share of the trade between Japan and Poland is only 0.5 percent in the Polish total foreign trade which shared up to 70 percent by the EU member countries as stated above.

Table 1.1-10 Trend of Japan-Poland Trade (Japan custom clearance statistics) (US$ million)

Year Export Import Total Balance from Japan to Japan 1991 361 190 551 171 1992 238 159 397 79 1993 151 96 247 55 1994 114 66 180 48 1995 170 85 255 85 1996 220 90 310 130 1997 296 102 398 194 1998 302 74 376 228 Information source : EMajor Economic Situation of Polandt published by the Japan Embassy in Poland and JETRO Warsaw Field Office (published in Dec. 1999)

(7) Official Discount Rate: The official discount rate or the bank rate has been kept at a high level of 19 percent since November 1999 as shown in Table 1.1-11. To compensate for the uncertainty of future economic trend caused by the increases in unemployment and consumer price index, a large interest rate increasing policy, as much as 3.5 percent, was brought into force in November, 1999 and the official discount rate is hiked to 19 percent accordingly. This interest rate policy is feared to have certain influence over the future economic situation in Poland.

Table 1.1-11 Trend of Official Discount Rate in 1999

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. 15,5 15.5 15.5 15.5 15.5 15.5 2.11 15.5 15.5 15.5 19 19 Information source : "Major Economic Indices of Poland" published by the Japan Embassy in Poland (published in Dec. 1 999)

(8) Foreign Currency Reserve: The foreign currency reserve of Poland is following a favorable trend having US $25,494 billion in Dec. 1999 as shown in Table 1.16.

(9) Accumulated Debt: Poland reached a basic agreement between the Paris Club in April, 1991 to cut down its official debt by 50 percent and also reached an agreement in September, 1994 between the

15 London Club (Private Bank Representatives) to cut down its private sector debt by 49.20 percent. In accordance with the agreements mentioned above, Poland repaid its debts and remaining foreign debt reduced to US $40.5 billion by December 1996. Polish foreign debts itemized are; the debt related to the Paris Club: US $24.6 billion, the debt related to the London Club: US $7.7 billion, the debt related to the World Bank: US $2.2 billion and others: US $4.1 billion.

©- Privatization of Enterprises: The privatization policy has been initiated by the Balcerowicz Plan announced in 1989 by Mazoviecki cabinet, the first non-Communist regime after the World War II. According to the material compiled by the Central Statistical Office of Poland (ref. Tabale 1.1-12), 5X 708 enterprises among 8,500 national enterprises either have been privatized or being privatized at the end of 1998 and the number of national enterprises are reduced to only less than 3,000. In the field of iron and steel industries, shipbuilding industries, energy providing service industries where the privatization policy had not been practiced speedily, have been underway to the privatization since 1997. In the case of Huta Sndzimira Steel Mill, the subject enterprise of the Fundamental Assessment for Energy Saving conducted this time, strategic foreign investors were recruited in order to privatize the enterprise and negotiated for an agreement with West Alpine Stahl of Austria and Hoogovens Consortium of Netherlands in 1998. The negotiation was observed once to be successful but it ended without any fruitful outcome, at the end of 1998. As the result Huta Sendzimira Still Mill remains as a national joint stock company of the Ministry of National Property. As described above, the privatization plan is not performed in equal speed in all industrial fields and the iron and steel industries, shipbuilding industries and energy related industries are significantly behind in privatization compared with other industrial fields. The privatization of large-scale industries could be a serious impediment for Poland's joining the EU.

Table 1.1-12 Privatization Privatization Total 1990 1991 1992 1993 1994 1995 1996 1997 Plan Number of Privatizing 5708 130 1128 1401 1271 791 485 385 117 Enterprises Break Down Privatizing Capital 1245 58 250 172 156 209 230 151 19 (Completed) (199) (6) (24) (22) (46) (36) (25) (24) (16)

Direct 1309 44 372 246 203 120 113. 149 62 Privatization (1290) (15) (227) (307) (184) (180) (126) (182) (70) (Completed)

Privatization after 1500 28 263 294 155 133 85 36 506 (29) Liquidation (544) (3) (89) (94) (82) (86) (111) (52) (Completed) Privatizing Agricultural 1654 — — 720 618 307 9 — — Farms Information source : "Major Economic Situation of Poland" published by the Japan Embassy in Poland and JETRO Warsaw Field Office (published in Dec. 1999)

— 16 — (Qy Trend of Investment: Poland enacted "The Foreign Investment Company Act" as a special legal measure for promoting the introduction of foreign investment into Poland right after the revolution. The outline of foreign investment to Poland in 1991 is as shown in Table 1.1-13. Foreign affiliated enterprise shares, in Polish economy in 1998, 48 percent in exports, 53 percent in imports and 62 percent of them are in deficit in export and import balance. Foreign investment is quite important for Poland in view of the introduction of new technologies and management know-hows. According to the data disclosed by the Central Statistical Office, foreign investment companies which invest over a million US dollars to Polish economy are 11 and their total investments amount to US $190 millions at 17th rank in the total Polish investments. Polish government expects more investments from Japan. Polish investment market is signified by the following factors. * Poland is located in the and has a large market comprising 40 million populations. * Highly educated and highly qualified labor source is available. * Polish society is rapidly restructured under the democratic reform policy and its political and social situations are well stabilized. * Economy is expanding since 1992 and is expected further expansion in the future. * Polish economy is highly valued by various economic organizations and institutes.

Table 1.1-13 Trend of Foreign Investment (Number of Investors: Over million US$ investors, Investment Unit: Million US$) 1992 1993 1994 1995 1996 1997 1998 1999 Amount of Inv. 1,478 3,041 4,321 6,832 12,028 20,600 30,700 35,600 No. of Investors 67 197 267 362 492 585 714 Note: Over million US$ investors are counted.

Information source: The Central Statistical Office "Major Economic Situation of Poland" published by the Japan Embassy in Poland and JETRO Warsaw Field Office (published in Dec. 1999)

3. Social Situation

Ethnically, Polish people belonged to the Western Slave family and began to settle in the Polish premises in Sixth Century. The Piast Dynasty in Poland was established in 966. The dynasty as its entirety converted to Roman Catholic Church in the latter half of Tenth Century and today, 95 percent of Polish population belongs to Roman Catholic Church. In a long span of its history, Poland expanded its territory into Ukrane, Belarus, Lithouania and once flourished in Europe with its political, economic and cultural powers. However, Poland was partitioned by Austria, Prussia and Russia in the latter part of 18th Century and one time the state of Poland has been wiped out of the European maps. Polish people regained their independence having the current territory after the World War II experiencing a hard time during the World War I and the Russian Revolution. As the result of such a long struggle, the Polish territory was forced to be smaller and moved toward west from the

— 17 — original premises but fortunately, they could keep a homogeneous ethnical identity having 98 percent of Polish of the Western Slavic family and a single and unique tongue of which also belongs to the Western Slavic linguistic family. The perseverance of Polish people that overcome their recurring and unbearable miseries and hardships through their history to win their independence came from their Roman Catholic faith. Currently 95 percent of all Polish people belongs to the Roman Catholic Church which has a Polish Pope, the John-Paul II as its leader who are loved by all Polish people.

After winning independence as an ethnically homogeneous nation or literally a racially autonomous country, Polish people took a challenge upon themselves since 1989 to reform their country as a democratic nation. Poland as a whole continues to put at most effort to be recognized as a member of European nations. The vast task of reforming a nation comprises the political, economical and social reforms along the common basis among European nations of the parliamentary democratic system and the market economy system. Polish reform is positively advancing leaving tangible results on each steps of joining GATT in 1990, joining WTO and OECD in 1995 and 1996 consecutively and in 1999, Poland was recognized as a member of NATO to conclude its internationalization. The current and most important task for Poland is to obtain a membership in the EU in 2003. Poland is boldly advancing toward this long sought aim.

The shops in brightly lit and colorful Polish towns are filled by abundant consumer commodities, domestically produced as well as imported. Any foreigners living in Poland do not have anything to complain if they decided to be a bit generous about the quality of these commodities. Hypermarkets find their domains in the suburbs of large cities including Warsaw attracting considerable number of shopping populations. Contrary to such an image of consumer haven, the gap between the riches and poor is in progress since the social reform set forth in 1989 and in addition, the jobless issue, which began to be improved considerably since the latter half of the fiscal 1996, is still imposing serious social problems in conjunction with the rapid population reduction in rural communities. Although, there are not so grave security problems, auto-thefts or pickpockets are quite common. Especially in terminal railway stations in large cities such as Warsaw or Krakow, railway passengers must take good cautions at their ascending and descending of railway cars where syndicated robbers are quite active.

Polish societies wakes up very early. Most offices generally open at eight in the morning and some of them even start their activities from seven. Factories commonly start their day's works at seven and a few of them even open their doors as early as five o'clock. Polish work routine does not include a lunch break and workers normally continuously work for eight hours a day without breaks. Instead, they terminate day's work far earlier than the normal working pattern observed in the Western European societies and start returning home from as early as two o'clock in the afternoon. The rush hour with returning home workers therefore is peaked at between three to four in the evening. Polish workers having an early breakfast and no lunch break normally bite on snacks such as apples, bananas

18 or sandwiches brought with them around ten in the morning at their working place without taking special breaks. Polish people call this light meal as a second breakfast. For example, if you visit a Polish company around 11 or 12 to have a meeting or conference, biscuits, Danishes and juice will be served without exception. Polish counterpart does not hesitate to eat them in the meeting although you, the guest act indecisively on such an on-job meal, because, this is the second breakfast for the Polish people. The evening meal in Poland is enjoyed by whole family after the early coming home from works around four o'clock or as early as three o'clock in the evening. The Polish rhythm of daily life is concluded by a light evening meal about the hours of Japanese supper before bed hours. Polish people as described heretofore, takes four meals a day, namely, a breakfast, a second breakfast or lunch in our sense, a supper and a night snack.

Flowers look more colorful in Poland, which locate at high latitude. When invited to a dinner party, people of Poland often give bouquet to the hosting family. Vodkas are the well-known drinks in this country and are served commonly at a dinner party. In recent years, beers have gained their popularity among Polish people in parallel with old good vodkas. Having planes which are not too advantageous for growing grapevines and consequently no wines of their own, Polish people enjoy imported wines.

The adverse situation in Poland, with serious problems with the unemployed and the widening gap between the riches and the poor with advent of the all-out reform started in 1989, is considered as a necessary stage of transferring process to the democratization of the society and to the market economy system. Therefore, the people of Poland stride confidently toward the grand aim of joining the EU in 2003 equipping themselves with improved social infrastructures.

19 - 1.2 Energy status

Poland is abundant with natural resources such as coal, zinc, copper, phosphor, lead, silver, halite, amber and so on. Especially coal, zinc, copper are precious Polish export commodities.

Poland relies on coal as its energy source. The estimated coal reserve is as enormous as listed on Table 1.2-1 which includes 50 billion tons of bituminous coal and 14 billion tons of brawn coal. In contrast, the estimated natural gas and oil reserves are extremely small as shown on Table 1.2-1 at 142 million tons and 14 million tons respectively. This means that Poland has no other way but rely on its coal as the major energy source and at the same time, Poland has to face the a large problem how effectively use the coal and how to solve the pollution resulted from such energy source.

Table 1.2-1 Estimated Reserves of Coal, Oil and Natural Gas

Natural Resources Number of Mines Estimated Reserve (Mil. tons) Total Under Development Total Under Development Bituminous Coal 127 59 50,907 20,137 Brawn Coal 77 11 14,065 2,214 Hard Coal 1 1 48 48 Natural Gas 245 168 142 120 Crude Oil 96 83. 14 14 Information source: "Statistical Year Book 1999 published by Poland Statistical Office

A detailed analysis of Polish energy situation reveals that Poland has overwhelmingly large reserves on coal and this country has but a choice to rely on coal energy. In accordance with the 1998 IEA report on coals (ref. Table 1.2-2), the energy consumption in Poland under the socialistic regime came from coal up to 79 percent. The coal consumption began to reduce since then, and after the 1989 revolution, the coal consumption began to decline sharply and by 1998, it came down to 66 percent of total energy consumption in Poland. On the other hand, the weight on petroleum consumption has hiked sharply with the proliferation of automobiles in Poland even though Poland had to rely largely on the imported oil. Until 1973, shares of oil in total energy consumption took only 13 percent but it shot up to 20 percent by 1998. Natural gas is also an imported energy source in Poland and yet, consumption of natural gas is gradually increasing from seven percent in 1973 to ten percent in 1998 because natural gas is considered as a clean energy. The energy supplies of Poland at present comprise coal 66 percent, oil 20 percent, natural gas ten percent, and small amount of hydraulic power and waste heat as detailed in Table 1.2-2.

— 20 Table 1.2-2 Domestic Energy Supply of Poland

1973 Source 1980 1996 1998 Mtce % Mtce % Mtce % Mtce % Coal 106.71 79.26 137.11 76.90 108.20 69.86 92.66 65.69 Oil 17.08 12.69 26.39 14.80 25.73 16.61 27.78 19.69 Natural Gas 8.94 6.64 12.53 7.03 13.49 8.71 13.59 9.63 Waste Heat 1.94 1.44 2.01 1.13 7.62 4.92 7.16 5.08 Hydraulic Power 0.18 0.13 0.28 0.1-6 0.24 0.15 0.30 0.21 Export -0.22 -0.16 -0.16 -0.02 -0.38 -0.25 -0.43 -0.30 Total 134.63 100.00 178.29 100.00 154.89 100.00 141.06 100.00 Note Mice: Million metric tons of coal equivalent

Each energy supply source regarding coal, crude oil and natural gas will be outlined herein below.

Coal The coal production in Poland once marked 14.4 billion tons in 1973 and 16.6 billion tons in 1980 under the socialistic regime. The production turned to a reduction with advent of the reform of 1989 and come down to 11.4 billion tons in 1998. The domestic coal supply is also in gradual decline according to the production reduction.

Table 1.2-3Trend of Coal Supply (Unit: Mtce)

1973 1980 1996 1997 1998 Production Bitumi Coal 132.6 155.7 116.1 112.9 95.7 Brawn 11.3 9.9 18.8 18.6 18.5 Total 143.9 165.6 134.9 131.5 114.2 Import 2 1 2 3.3 4.2 Export -38.5 -30.3 -27.9 -28.1 -26.5 Stock 0.2 0.8 -0.9 -4.8 0.8 Domestic Supply 106.7 137.1 108.2 101.8 92.7 (Note) Mtce : Million metric tons of coal equivalent Information Source : fCOAL INFORMATION 1998J 1999 annual published by IEA

21 The segmented consumption of coal in Poland is as shown on Table 1.2-4. Approximately 60 percent of coal are consumed by the power plants and heat oriented industries. Manufacturing industries such as steel mills comes next to above said industries and last consumers of coal are general consumers such as residential use and others.

Table 1.2-4 Trend of Coal Energy Consumption

1973 1980 1996 1997 Mtce % 1980 % 1996 % 1997 % Power Plant & Heat- 55.9 52.39 77.1 56.24 63.2 58.41 60.6 Orient Ind. 59.53

Manuf. Indust. (Steel 10.8 (3.0) 10.12 12.5 (3.8) 9.12 21.5 (4.1) 19.87 16.5 (3.9) 16.21 mills) General Cons. 29.2 27.37 33 (20.4) 24.07 16.3 15.06 14.1 13.85 (Household) (18.1) (12.2) (10.5) Others 10.8 10.12 14.5 10.57 7.2 6.66 10.6 10.41 Domestic Consumption 106.7 100 137.1 100 108.2 100 101.8 100 (Note) Mtce : Million metric tons of coal equivalent Information Source : fCOAL INFORMATION 1998J 1999 annual published by IEA

(2)Oil As afore-described, the oil reserve in Poland is so low that almost all oil supply comprises the imported oil. The domestic oil production is less than five percent in Poland according to the data listed on Table 1.2-5 supplied by Central Statistical Office of Poland.

Table 1.2-5 Oil Supply Situation

1990 1995 1997 1998 1,000 toms % 1,000 toms % 1,000 toms % 1,000 toms % Domestic 163 1.2 Production 487 3.6 289 1.9 658 4.1 Imports 13,126 98.8 12,957 96.4 14,713 98.1 15,367 95.9 Total 13,289 100 13,444 100 15,002 100 16,025 100 Information Source : f STATISTICAL YEARBOOK. 1999J published by Central Statistical Office

Natural Gas Natural gas reserve is not so abundant in Poland and therefore, Poland has been relying on the import from the Russian Republic since its socialistic age. Polish government has been actively developing its own natural gas resources and despite the gradual developing speed and its still very

— 22 high import dependability, Poland's domestic natural gas production marked approximately 38 percent of the total supply in 1990 and in 1998, it reached to a 43 percent.

Table 1.2-6 Natural Gas Supply Situation (Unit : hm3 Cubic hecto-meter)

1990 1995 1997 1998 hm3 % hm3 hm3 % hm3 % Domestic 4,764 37.8 5,711 45.8 5,708 Production 42.6 5,745 43.2 Imports 7,836 62.2 6,772 54.2 7,682 57.4 7,539 56.8 Total 12,600 100 12,483 100 13,390 100 13,284 100 Information Source : fSTATISTICAL YEARBOOK 1999J published by Central Statistical Office

(D" Electricity Poland's electric power supply is almost self sufficient with 97 percent of domestic supply and only three percent is supplied by imports according to the statistics in the year 1999. Ninety two percent of said domestic supply is shared by thermal power generation as listed on Table 1.2-7.

Table 1.2-7 Electric Power Supply Situation

(Unit : GWH Giga Watt Hour)

1990 1995 1997 1998 GWH % GWH % GWH % GWH % Domestic Product. 136,311 93 139,006 97 142,790 96 142,789 97 (Ratio of Thermal (124,899=92%) (126,805=91%) (130,960=92%) (130,959=92%) Generation) Imports 10,438 7 4,356 3 5,357 4 4,608 3 Total 146,749 100 143,362 100 148,147 100 147,397 100 Information Source : fSTATISTICAL YEARBOOK 1999J published by Central Statistical Office

— 23 1.3 Needs of the joint implementation project

Although the iron and steel manufacturing industries in Poland are operated on the highly qualified management, labor resources and the plentiful of traditional experiences, the facilities they use are those installed at the time of old COMECON alliance and not only old type but also, in view of energy utilization, quite inefficient. All the iron and steel manufacturing industries in Poland are keenly interested in the energy saving plan and some of them have been in process to install such technologies in their businesses. However, the energy saving technologies and facilities are not popular at all among these industries due to their lack of funds.

The environmental protection and improvement plans also attract strong interests among these industries because the air pollution caused by the iron and steel manufacturing industries are currently enormous. A large scale recycle system of waste heat and waste gas system can be the means to greatly contribute to the ecocide problems as well as to the energy saving plan in Poland where the energy source conversion from solid state source to liquid or gas energy source is way behind other advanced countries and industrial facilities are not restructured for the energy saving purposes.

The energy saving policy and environmental protection policy are the essential factors for Poland to be a member of the EU in 2003 and therefore, the needs of the joint project for which the assessment is conducted is considered quite high.

2. Need of an Introduction of Energy Saving Technology to the Objective Industry.

The annual output of iron in Poland that marked 20 million tons under the socialistic regime in 1970 gradually reduced since the revolution 1989 and in 1998, it dropped to 9.9 million tons in 1998 as shown in Table 2.1-1. The domestic consumption of iron and steel products in Poland in 1998, as listed in Table 2.1-2, stands at the domestic production 7.94 million tons, imports 1.94 million tons, exports 3.20 million tons and the apparent domestic consumption is at 6.68 million tons. Polish iron consumption reliance on the imports is increasing every year. The iron and steel production sank some 1.36 million tons in 1998 from the 1997 level of 9.30 million tons shows the considerable influence of the recession among Russia and the South Eastern Asian countries. Having Polish tariffs on iron and steel imports reduced to zero from the previous three percent since January of 2000 to conform to one of the preliminaries to be an EU member in 2003, the Polish domestic iron and steel manufacturing industries lost their competitiveness against European countries and it is feared that the iron imports to Poland will further increase. It is obvious that Polish iron and steel manufacturing industries must equip themselves with certain measure to export their products to other countries but for the purpose they definitely need to improve their production technologies and cut down their production cost.

— 24 — The Polish iron and steel industry is consisted of 25 steel mills including Huta Katwice and Huta Sendzimira, the two largest steel mills which shares 65 percent of total domestic iron production in Poland as listed in Table 2.1-1. Despite the substantial effort put in to the technological reform and privatization, Polish iron and steel industries are, ten years since the revolution in 1989, still struggling under the over-aging of their plants due to the long-waited but not practiced large scale investment for the plans. Introducing the energy saving technology, namely the large-scale waste heat and gas recovering system, to those large steel mills is definitely needed under such a circumstances stated above, in order not only to solve the problems of energy saving but also to solve the ecocide in Poland

Table 2.1-1 Production of Polish Major Steel Mills (1,000 tons)

Steel Mills 1995 1996 1997 1998 Katwice 4,774 4,256 4,869 4,013 Sendzimira 3,035 2,502 2,662 2,209

Total of above two (7,809: 66%) (6,758: 65%) (7,531:65%) (6,222: 63%) mills

Zawiercie 1,080 1,027 1,014 898 Czestochowa 844 788 796 768 Ostrowiec 750 739 842 630 20 Others 1,407 1,121 1,408 1,398 G. Total 11,890 10,433 11,591 9,916 Information Source : Sendzimira Steel Mill

Table 2.1-2 Demand of Iron and Steel (1,000 tons)

Apparent Years Production Imports Exports Consumption 1994 8,900 820 3,780 5,740 1995 9,000 1,030 3,230 6,800 1996 8,500 1,180 3,610 6,070 1997 9,300 1,480 4,180 6,600 1998 7,940 1,940 3,200 6,680 Information Source : "Polish Steel Industry in 1998" by Steel Industry League of Poland

25 3. Significance, need and effect of the project and, its wider application to others under the same industry.

Huta Sendzimira still mill is located in the city of Krakow, three hundred kilometers south of Warsaw, the capital of Poland. This steel mill is founded as a "Nowa Huta," new national steel mill, in 1949 after the World War II by the order of the Minister of Trade and Industry. In 1954, the name of the mill was converted to Huta Lenin and enjoyed its glorious age under the Communist system under the Soviet Union control. The name of the mill again changed in 1990 to current Huta Sendzimira after Tdeus Sendzimira, a Polish who invented the reduction roll technologies.

The city of Krakow, a city having a long tradition and cultural background, was the capital of Poland 11th to the beginning of 17th Century being the center of politics and economics of the nation. On the other hand, this area is currently proliferated with steel, tobacco and pharmaceutical industries, which adversely enhance the worsening air pollution.

Huta Sendzimira is a Joint Stock Company, owned and operated under the management of the Ministry of National Property. Currently, the steel mill is trying to privatize itself having foreign strategic investors, in order to be independent and vital enterprise. A new board of management was introduced to Huta Sendzimira in September 1999 having a young (44) Piotr Janeczek as its president and five new board members. The new president and the board members are coming to grips with reforms of the enterprise aiming at a sound management. Practical reform plans undertaken at the time of the assessment are as described below.

CD Restructuring for open system: Restructure the organization and moving right people to right positions. (2) Strengthen competitiveness in domestic as well as foreign markets: Increase exports share by ten percent over current figures. (3) Restructuring the production system by re-evaluating it in order to improve the production efficiency. @ Labor force cut down: The steel mill has already reduced its labor force to 14,500 by the end of 1999 from 17,000 at the end of 1998 and plans to cut down to 8,500 by the end of year 2000. (5) Improvement of technologies and aiming at higher product quality. (6) Practice the environmental protection improvement plans

The president of Huta Sendzimira commented upon the presentation of the project describing the project was supposed to contribute to the environmental protection and improving ecological conditions as well as reducing the energy cost that the company was expecting to count the effect of such an environmental protection and ecological improvement by the project as a effect of a production cost reduction and investment return because the current ecocide problem of the

26 - company forced it to pay a considerable amount of penalty. The expectation toward the project hereof, by Huta Sendzimira is not so small despite the fact that the project requires a large investment and therefore is not too attractive in view of the currently very low energy cost in Poland. Huta Sendzimira steel mill views the energy saving project as an attractive one in the light of the sharp energy cost hiking in the future and the severe competition that would surely come after the enrollment to the EU in the year 2003.

In view of such circumstances, Huta Sendzimira expresses its plan to evaluate the proposition in various aspects such as the improvement of ecological problem, the production cost reduction, the production efficiency and also in the light of the possibility of raising its own fund for the project. At the same time, the company is expecting some form of an attractive Japanese financial support.

Once the project is set forth in Huta Sendzimira, one of the two largest steel mill in Poland, there will be a great possibility of practicing similar project at Huta Katwice, the other of the two largest steel mills and other middle sized steel mills. II. Realization of the Project schedule

[Outline]

Preparing the energy saving plan installing a large-scale waste heat recovering system, firstly, an assessment on the fundamental energy utilization structure of Huta Sendzimira was conducted and then, waste energy recovering capacity of the mill was evaluated. In parallel with the structural energy utilization, the possibility of installing a large scale waste heat recovery facility and a basic oxygen furnace gas recovery facility in the pig iron production processes, from blast furnace to sintering furnace processes, was investigated and analyzed. The results of the assessment are as follows.

(1) Annual pig iron production capacity of the plant is approximately 3.00 million tons while the actual production in 1998 is 2.21 million tons. The plant produces mostly thin plates manufactured by the hot roll processes. The plant used to produce 7 million tons of steel products when open-hearth furnaces were in operation.

(2) A cokes dry quench system (herein after CDQ), a large-scale energy saving system has been installed in 1999, and two waste heat recovery boilers were found in the rolling process. Energy consumption per ton of pig iron manufacturing of 31,259 Mj/Ts (7,466 Mca/Ts) at this plant, recorded in 1998, is 6,126 Mj/TS (1,463 Mcal/Ts) larger than that of the energy consumption of the Japanese integrated steel mills at 25,133 Mj/Ts (6,003 Mcal/Ts).

(3) What significantly different at Huta Sendzimira from most Japanese integrated steel mills are; 1) Fuel consumption (BFG, COG, coal and natural gas) is higher with Huta Sendzimira and therefore, the energy cost per pig iron product is higher at the Polish steel mill. 3) The amount of the electric power purchase is greater at Huta Sendzimira (approximately 2/3 of electric power consumption at the mill is the purchased electricity), despite the fact that its own power plant utilized the by-product gases (BFG and COG) as well as coal. 4) The steam power consumption in the factory is higher at Huta Sendzimira, and even at the cost bases it amounts to 5.6 times of the Japanese counter part. 5) The oxygen and nitrogen consumption are smaller at Huta Sendzimira (only 60 percent of Japanese integrated steel mills), instead though, the oxygen balance is not proper because a half of generated oxygen is wasted in emission.

(4) In view of itemized energy consumption of Huta Sndzimira, any of by-product gases (BFG, LOG), natural gases, electric power and steam power will be subjected to the energy recovery when the waste heat recovery system is installed and there are its own power plant and purchased electricity to utilize the recovered heat energy. One or other type of energy to be the subject of the recovery is

28 determined by the operating conditions of the iron and steel making processes. In this time's energy saving plan, the aim was placed on the reduction of the coal consumption.

(5) Analyzing the iron and steel manufacturing processes and the specifications and operational conditions of each system, the following large-scale energy recovery systems are found to be possibly installed. 1) Blast furnace TRT 2) Hot oven waste heat recovery 3) Sinter cooler waste heat recovery 4) Basic oxygen waste heat recovery.

(6) The problems and preliminary conditions of the project all concerned parties must consider before setting out for installment are; 1) How important is the reduction of the greenhouse effect gas (C02) when Huta Sendzimira is facing a high barrier of modernizing its production facilities and further, how Huta Sendzimira is planning to raise enough fund for these projects, 2) And, the greenhouse effect gas (C02) reduction will not efficiently work in terms of profit making due to the very low energy cost in Poland. The energy cost is approximately a half of what cost in Japanese or European countries.

To solve these problems, Huta Sendzimira must obtain a financial support in favorable terms or to take advantage of financial aid from Western nations including Japan. Many of the equipment and/or services, such as control systems, needed to materialize the project, other than those available in Huta Sendzimira or in Poland, will be manufactured and exported from Japan. Also, the equipment, its installment and operating services, for example, setting up the basic engineering for operations and education must be prepared and offered by Japanese makers, in this case a Japanese integrated steel mill. The management of Huta Sendzimira will be in negotiation with the related governmental offices of Poland in order to materialize the energy saving project. A more practical adjustment for the joint project activities must be continued in the future.

29 1. Project plan

l.lOutline of the project area Krakow, the city of tradition and cultures having 740,000 population, is located on the hills, 300 kilometers south of Warsaw. It took an honor of being the capital of Poland from the 11th Century to the early 17th Century as the center of Polish politics and economics. After the revolution of 1989 that enforced the democratization of the society and conversion toward market economics, a number of private enterprises flew in the city and developed into a large industrial city next to Warsaw and Lodz. The main industries in this district are iron and steel manufacturing, tobacco and pharmaceutical industries.

Geographically, Krakow is located on the hills 300 kilometers south of Warsaw, the capital of Poland, and takes approximately two-and-half hours by an express train, one hour weak by a plane and four to five hours by a car. To study the geographical situation of the country as much as possible, our group who took the responsibility of the project assessment this time decided to go by a train. The travelling from Warsaw to Krakow was a comfortable 2 hour ride as expected for the nation which was applying for the membership to the EU starting from 2003, except though the risk we committed to face a syndicated pick pocket robbery at both stations. Seeing the vast plane, especially the frozen flat land with scattered silver frosts on the occasion of the second assessment trip (January 22 to January 30), from the train compartment sped through to the destination was a precious experience for us. If we continued the travel some 100 kilometers toward south, we would be standing at the nation's border between Slovakia overlooking the mountain ridges of Tatry soaring up along the border. In the mostly flat country of Poland as described before, mountain areas are limited to the border region between Poland and Czech and Poland and Slovakia. Among border mountains, Mt. Zakopane is a well-known mountain resort and was once was a candidate for a Winter Olympic site. The city of Krakow was divided into two sections by the Vistula River that runs through Poland from south to north and on the top of a hill on the Vistula is the castle of Wawel. Facing the Wawel Castle is the Japan Art and Technology Center on the other bank of the Vistula that is very popular among Polish and sightseers to the city. The Japanese Art and Technology Center was founded in 1994 by the collaboration among Polish and Japanese people initiated by a world famous movie director Billy Wilder for the purpose of exhibiting over 5000 Japanese traditional art works including Ukiyoes collected by Polish fine art collector Jaczinski. Finally gaining a support from the Japanese government — the Japanese government offered the return of the emergency aid fund given to Poland in 1989 — the center opened in 1994 as a symbol of international friendship between Poland and Japan.

Krakow, regarding its history, had become the capital of Poland in the 11th Century and has been served as the political, economic and cultural center of Poland for 600 years long until the capital was moved to Warsaw in the beginning of the 17th Century. The city of Krakow currently displays a dignity acquired through such a historical background. In the Renaissance era, Krakow flourished

30 as the center of arts and trading having symbolic Wawel Castle, a Gothic-Renaissance style towering architecture built in the beginning of the 16th Century to serve as the palace of successive kings, on the hill top on the Vistula River in the southern part of the city. The civic center of Krakow is still one of the most popular and large trading and sightseeing spot in Europe and since the traditional city areas which did now suffer any damage in the World War II attract lots of sightseers. A Fabric Center building established as the trading center of fabrics in the 14th Century is located in the traditional civic center which now nestles a number of souvenir shops of fabrics, amber ornaments or glass ware. Krakow also has been the center and the fortress of Roman Catholic Church in Poland for long span of years having the Saint Maria Cathedral in its old civic center, built in the 14th Century in Gothic style with its 15th Century built chapel in the center. The Saint Maria Cathedral is a great inheritance of historical Poland in parallel with Wawel Castle.

In an aspect of education, Krakow is one of the most advanced cities in Europe having the Krakow Academy, founded in 1364 as the first university in Poland, from which Jagiellonian University is evolved. Nicolaus Copernicus was a student in this academy and the Copemican globe made in the 16th Century is its archive.

Krakow is also known as an advanced industrial city appointed one of the technoparks of Poland by the central government for developing the Polish technologies under the reform policy. By this appointment, enterprises located in the city of Krakow are subjected to the exemption from corporate taxes for up to six years, depending on the amount of investments. Having such a background, the city of Krakow enforces an environmental protection and ecological improvement policy.

- 31 1.2 Contents of the project

The project will aim at embodying following three categories according to the analyses based on the assessment and the hearing taken place at Huta Sendzimira this time. (1) Blast furnace TRT To recover waste energy in form of electricity by installing blast furnace top pressure recovery turbine (hereinafter TRT) to No. 3 and No. 5 blast furnaces. (2) Hot oven waste heat recovery system To reduce the consumption of the fuel gas (hereinafter BFG) by installing waste heat recovery equipment to the hot ovens of No. 3 and No. 5 blast furnaces. (3) Sinter cooler waste heat recovery system To reduce the consumption of steam for the factories supplied by the power plant by recovering the apparent heat of the waste gas of sinter coolers in form of steam. (4) Basic oxygen furnace waste gas recovery system To recover the apparent and latent heat of waste gas and reduce the electricity consumption of the induced draft fans comprising the basic oxygen furnace waste gas treatment facility by recovering the basic oxygen furnaces.

1.3 Greenhouse effect gas targeted for the project

The calculated reduction of each type of the first generation energy is listed on Table 1.3-1 based on the energy balance variation when energy saving measures taken place at Huta Sendzimira as described in aforementioned article. Ninety five percent of the paid first generation energy at Huta Sendzimira is shared by coal (coal as material and general fuel coal), natural gas and paid electricity and therefore, when energy saving equipment is introduced, some parts of these energy sources will be reduced. In view of such circumstances, the greenhouse effect gas subject to reduction in this project will be CG2 gas produced by above mentioned three types of energy sources. The major part of energy reduction contributed by the proposed project will be the coal (of general use) and natural gas used for the in-plant power generator.

32 Table 1.3-1 Calculated Effects of First Generation Energy Balance after Installment of Energy Saving Equipment

Directly reduced or recovered energy (Mj/Ts) Variation of 1st gen. energy (Mj/Ts) Processes Energy Saving Equipment Natural Reduction of 1st dectricit Steam BFG N2 LDG Type of 1st generation energy Gas generation energy

Blast furnace TRT 260 Purchased Electricity 260 Power generation for Heat recovery at heat oven 146 internal consumption (fuel 146 Pig Iron coal) Power generation for Waste heat recovery at Sinter Cooler 117 internal consumption (fuel 117 coal) (Subtotal 524) Natural gas and Basic LDG recovery (recovery equip.) Power generation for Oxygen 28 -501 391 -6 606 519 internal consumption (fuel Furnace (inch storage & delivery equip.) coal) Total 288 -384 391 146 -6 606 1043 Power generation for Coke Oven Steam recovery by CDQ (322) internal consumption (fuel (322) (refer.) coal) * CDQ is not included because the equipment has been working since 1999.

* Itemized total deduction of 1st gen. energy reduction by fuel types (Mj/Ts) • Purchased electricity reduction: 288 • Natural gas reduction: 391 • Fuel coal reduction: 362 2. Outline of Huta Sendzimira Steelworks

2.1 Concern of Huta Snedzimira Steelworks

The city of Krakow in which Huta Sendzimira is located enforces a strict legal measure for environmental protection and it applies certain penalty to the enterprises, which contribute to ecocide. Huta Sendzimira has been positively working to protect and improve environmental pollution and has already installed a coke dry quench equipment (hereinafter CDQ) to its cokes plant on its own expenses. From this fact, it is obvious that the company realizes the needs to install energy saving systems into its plants. Upon accepting the joint fundamental assessment project conducted this time, Huta Sendzimira had collected information from Huta Katwice in which a similar assessment is conducted in 1999 and requested the detailed processes of assessment being described beforehand.

The assessment on location was conducted in a few limited times, three weeks from the end of September to October 1999 and one week at the end of January 2000. The management of Huta Sendzimira showed in these occasions their keen interests in this assessment. Piotr Janeczek, the new president of the enterprise since July 1999 and all five board members joined the assessment operations to show the great concern with the project proposed this time. The president of the company attended the presentation meeting of the assessment to comment on the investment efficiency calculated on Japanese yen basis. According to his comment, approximately 20 percent of expenditure will be cut down if the equipment installment expense is recalculated in Polish currency (Zloty) and such a saving will be added to the investment efficiency to the amount exempted from the penalty of environmental protection ruling. The company will reanalyze the results of the assessment in the light of such savings.

2.2 Status of the related facilities at Huta Sendzimira Steelworks (outline, specifications and operational conditions)

2.2.1 Outline of the works Huta Sendzimira is the secondly large steel mill in Poland, next to Huta Katwice, producing 2.2 million tons of pig iron (1998 performance). The proportion of Polish pig iron productions (1997) 1) Huta Katwice: 43 percent 2) Huta Sendzimira: 23 percent 3) Huta Zawiercie: 9 percent

(1) A brief history of Huta Sendzimira 1) 1949 Planned to be founded as a national enterprise. 2) 1950 Construction starts.

— 34 — 3) 1951 Steel construction plant begins to operate. 4) 1954 Blast furnace and coke oven begin to operate. 5) 1955 Open-hearth furnace, rolling mill starts to operate to satisfy the integrated steel mill production system. 6) 1966 Basic oxygen furnace begins to operate. 7) 1991 Privatization policy enacted. 8) 1996 CC starts to operate. 9) 1997 Enterprise is converted to a joint-stock company having the Ministry of State Property as the major shareholder.

Currently Huta Sendzimira is working to be a thoroughly private enterprise recruiting more investors as future shareholders. The organizational structure of Huta Sendzimira is exhibited in Table 2.2-1. The management of the steel mill comprising the president Petre Janeczek and five board members is working on a company restructuring plan and so far rationalization measure reduced the labor force to 14,500 at the end of 1999 from 17,021 of the end of 1997, and the plan calls for further reduction on labor force to 8,500 by the end of year 2000.

(2) The layout of the steel mill The layout of Huta Sendzimira is illustrated in Fig. 2.1-1. The premise of the steel mill expands to 4 km X 2.5 km and is well vegetated. The premise of HTS is located next to the city of Krakow, which was awarded the World Heritage status, and therefore, the environmental protection measure is tightening the manufacturing operations every year. Coal on which HTS greatly relies on are supplied by domestic production and imports from Russia, Ukraine, the South African Republic and others, 50 percent of which are supplied in pellet form.

(3) Production facilities The major production facilities are listed on Table 2.2-1 below. Huta Sendzimira is in process of replacing old and out-of-date equipment, mostly constructed having Russian technical assistance with new facilities as well as introducing new technologies. The pig iron production is in decline and many of the facilities are currently not in active status.

35 — Table 2.2.1-2 Major production facilities of Huta Sendzimira

1 No. 4 coke oven 57 ovens (shut down) No. 6 coke oven 57 ovens (shut down) No. 7 coke oven 57 ovens No. 8 coke oven 65 ovens Iron making plant WK.l coke oven 36 ovens x 2 2 No. 2 sintering machine 75m2 No. 4 sintering machine 75m2 3 No. 3 blast furnace 1719m3 No. 5 blast furnace 2002m3 1 No. 1 BOF 140tons No. 2 BOF 140tons Steel making plant No. 3 BOF 140tons 2 1X2 strand slab CC 155/175mm-t X 700-1500mm-w 1 1X1700mm Slabbing 2 1X1700mm wide hot strip with 11X4 high and 1X2 high strands 3 IX hot strip and hoop with 15X2 high horizontal Rolling mill and vertical stands 4 1X4 stands 4 high cold strip 5 1X5 stands 4 high cold strip 6 1X4 high reversing 7 1X20 roll sendzimir Tube and pipe mill 1 Welded two Mannesmann Induction 1 1X600- 1250mm hot-dip galvanizing 2 1X700-1500 mm electrolytic galvanizing Coil coating lines 3 1X500- 1000mm electrolytic tinning 4 lX2in-159mm dia. polyethylene plastic tube coating line 1 Cold forming line for sections Other plant 2 IX reversing multi-roll sendzimir mill (Stalprodukt Ltd.) for grain oriented and non-oriented electrical steels

- 36 Table 2.2,-1 The Organizational Structure of Huta Sendzimira

President of the DN Board General Director

Strategic Director • Chief of ihc Strategic Board Technical Financial Sen-ice Representative for Legal Advisors Development and Privatisation Investment Office g m. Environ. Protect. Chief Specialist for Board Office • T)v?j Quality System Office- Environ Capital Investments Director Represcmative Management Representative

Office of ihc Quality Chief Computer Property Supers isors Scientist President ol The Assurance Board 4# and Geodesy Otlicc

Ownership and CO Kesiruciurizaiitm “<1 Supervision Office Chief of Safely u /.,\J of work service L Defence Office

Director of Production Manager Sales Manager Quality Mar.agvi Teilmivjl nuiu^v DP DH DE Economy DJ DT

A vlwntitiil IXmirHK a*l«> Vhwl ZK DHK C'hK't ACCitwAUri* DJI DTE IV* ci Servn

Ut»*l F WtWH'V 1‘KKlwlKll OlHVl I* — ZS DUE k>|t.rn «i|1'kv Fuancul OMk « l)KJ Chief of personnel- OEK k, l.H l l:kv«n« TEE F.ligllWff TEN hi-ymvvi Zll Swvl I'iam OHM Miirki’imt Oflkx DEZ ZE I-.,.,, W2f lUy. l*v)s»miw*w Chief of adimmsii L'hn l SfK'vut.M lot ZC ll««t Shw A SMip & Social Sen ices M.M IW UI1S Mlk» MVlWOfl. Chief «*( Ivvhmv H iMyai.i/diitNi DTI: XX22 KP, xx 2t> kM» l K-fWiHirn*

Zll kVW KWkU I'uiv l)l‘Z i'n* wmiK'W vllWc M.M M*w Industrial secuniy ZA KUvvn. IX'jtl | i r .M XX 2V lf.|s>nnw'n«

ZZ kkx lik.l IvIk IM.mm WlU I l !*•%■» l.uyHK'vi i««: 1 ZM < Slwtf I TIM k •« muni TV IhlM'uw Hu ky.lwwx l*y,.X f iS-fJlIMIfi't ZTK JvfWUlWHl TKJ k,

Bp„ T "^"-v^.a;/ ' V^f / 11-^2. mr-%M &//""f p ]\ \b \ ! «li \ I " iv:fl PjStfcrf X, fro 1

P#L Estimated Premise of HTS Length: Approx. 4 km Width: Approx. 2.5 km x Area: 10 km2 = 10,000,000 m2 !X c.f. Kimizu Plant of Nippon Steel: 10,200,000 m2 [;„ Table 2.2.1-1 The Layout of Huta Sendzimira Steel Mill (4) Production Status

The pig iron productions in five year span from 1994 to 1998 and the trend of the product sales from 1997 to 1998 are illustrated on Table 2.2.1-3 below. Both pig iron production and the sales of the products in 1998 dropped dramatically from the level of 1997. The major factor for such reductions are;

1) Economic recessions in Russia and the South East Asian countries, 2) The reduction of tariff applied to Polish imports of iron and steel products, especially for the hot- roll and cold-roll plate products. Despite such an adverse conditions, the damage caused by above described recessions was compensated even though a small amount by the considerable cost reduction of cast-iron products made possible by zoomed up production with continuous slab casting machines which had began to operate in 1996,

Table 2.2.1-3 Pig Iron & Products Manufacturing and Sales

Fiscal year Pig iron production Product sales Remarks 1994 2,779 1995 3,035 1996 2,501 1997 2,662 2,092 1998 Annual report 1998 2,209 1,791 ditto

(5) Production flow

The production flow of Huta Sendzimira in 1998 is shown in Fig. 2.2.1-2

— 39 (6) Variety of products

The major products manufactured by Huta Sendzimira are listed on Table 2.2.1-4.

Table 2.2.1-4 Variety of HTS Products Type of products 1 Hot-roll thin plates (coils and sheets) 2 Hot-roll plates (checker plates) 3 Hoop iron, band steel 4 Cold-roll plates (coils and sheets) 5 Hot-bath zinc plated plates 6 Electrolytic plated plates 7 Tins 8 Welded pipes 9 Lightweight pipes

(7) Energy consumption outline at Huta Sendzimira

1) Current status of energy consumption per ton of steel The energy consumption per ton of crude steel production in 1998 fiscal year (April, 1998- March, 1999) stands at 31,259 Mj/Ts (7,466 Mcal/Ts, crude steel production: 2.08 million tons/year) which is broken down in first half (April-September) of 28,797 Mj/Ts (6,878 Mcal/Ts, crude steel production: 1.19 million tons/year) and second half (October, 1998-March, 1999) in which energy consumption dramatically increased to 34,558 Mj/Ts (8,254 Mcal/Ts, crude steel production: 890 thousand tons/year). Note that the fiscal year was divided in a Japanese style (the fiscal year starts from April 1998 and ends March 1999) here and the first half is considered as a "warm spring and summer season, while the second half was considered as a "cold autumn and winter season." When above energy consumption is compared with Kimitsu Works, an integrated steel manufacturing plant of Nippon Steel Corporation whose energy consumption per ton of crude steel production is at 25,133 Mj/Ts (6,003 Mcal/Ts, crude steel production: 7.47 million tons/year, approximately three times as large as that of Huta Sendzimira) in 1998, the difference between the two steel mills is 6,126 Mj/Ts (1,463 Mcal/Ts) as shown in Fig 2.2.1-3. The difference above described almost directly shows the difference of fuel consumption between the two steel mills (ref. Fig. 2.2.1-4). The greatest key in view of the energy saving project will therefore be how to reduce the fuel consumption at Huta Sendzimira.

— 40 2) The current situation of the first generation paid energy at Huta Sendzimira

(a) General essence of the first generation paid energy (ref. Fig. 2.2.1-3)

(a-1) Overall

The amount energy purchased from external source is approximately the same at Huta Senzdimira (33,465 Mj/Ts (7,993 Mcal/Ts)) as that of the typical Japanese integrated steel mill (33,557 Mj/Ts (8,015 Mcal/Ts)).

The amount of energy sold to external consumers of Huta Sendzimira is substantially smaller at 2,206 Mj/Ts (527 Mcal/Ts), which is only 0.26 times of the typical Japanese integrated steel mill 8,424 Mj/Ts (2,012 Mcal/Ts).

(a-2) Purchased energy

* Huta Sendzimira purchases coal for blast furnace (coke making) and for power plants. Its share of paid coal in the energy consumption per ton of pig iron production (the total purchase of coal for blast furnaces) is smaller than that of the typical Japanese integrated steel mill. The reason behind it is considered as the considerable amount of steel scrap used at the basic oxygen furnace process at Huta Sendzimira, which reduce the pig iron production ratio to the steel production.

* Huta Senszimira purchases a lot of general coal all of which is used by power generating boilers equivalent to Japanese powder coal mixed fuel boiler).

* Huta Sendzimira is supposed to be a self sufficient power supply type steel mill, though it purchases approximately two-third of its electricity 4,446 Mj/Ts (1,062 Mcal/Ts) from external source.

* Forty six percent of iron ore materials used for blast furnaces are purchased in pellet form which are estimated to be equivalent to 1,143 Mj/Ts (273 Mcal/Ts). This means amount of sintered iron material production which consumed great amount of energy is quite smaller than the typical Japanese integrated steel mill whose materials used for blast furnaces are almost entirely sintered iron ore. Therefore, Huta Sendzimira appears to be an energy saving steel mill.

(a-3) Energy sales

* Sales of energy is not so large at Huta Sendzimira. Sales of energy are mostly in form of utility electricity to other companies within Huta Sendzimira premises. In a typical Japanese integrated steel mill, the half of the sales is the waste gas sales to the joint plant of electric companies supplemented by the sales of cokes to outside purchasers. The total energy sales of Japanese steel mills are therefore greater than that of Huta Sendzimira.

* Used to Huta Sendzimira supplied hot water to the city of Krakow though, after some troubles in steady supply, the sales share shrunk considerably. Hot water production and

— 41 consumption of the company is listed in an accompanying table.

(b) The first generation paid energy situation

(b-1) Material coal, fuel coal and natural gas (ref. Fig. 2.2.1-3)

The by-product gases mainly COG and BFG are recovered (LDG is not recovered yet) through the crude steel manufacturing processes from the paid material coal. The amount recovered is approximately 45 percent (9,387 Mj/Ts (2,242 Mcal/Ts)) of the material coal (20,804 Mj/Ts (4,969 Mcal/Ts)). The recovered gases are utilized as fuels of heat oriented facilities of various plants including power-generating plant but the gases do not entirely cover the fuel needs of these plants, which is the case in Japan. This difference comes firstly from the considerably larger fuel consumption within Fluta Sendzimira premises and secondly, the manufacturing proportion of pig iron at Huta Sendzimira which is smaller than that of a typical Japanese steel mill, though there is not much difference between the amounts of by-product gases extracted from cokes ovens, blast furnaces of both steel mills. By this reason, the amount of energy not satisfied by the by-product gases at Huta Sendzimira is purchased in form of general fuel coal and natural gas from outside sources and the quantity amounts to 7,700 Mj/Ts (1,839 Mcal/Ts) or one-quarter of the entire energy consumed by Huta Sendzimira operation.

The price of fuel coal in Poland is less than the price of natural gas and therefore, most of purchased fuel from external supply sources is general coal.

The share of natural gas among all purchased fuels is as low as 6.6 percent, while the general fuel coal amounts to 16.4 percent. Because the energy consumption at Huta Sendzimira is substantially large and major part of the energy consumption is covered by fuel coal used at the power plant for electricity generation as well as the heat supply to other sections.

Approximately 3.5 percent or 724 Mj/Ts (173 Mcal/Ts) of paid coal is sold to outside purchasers in form of tar and kerosene. Approximately 15 percent of purchased natural gas (331 Mj/Ts (79 Mcal/Ts)) is sold to other companies as an energy source.

(b-2) Purchased electricity (Fig. 2.2.1-5)

Huta Sendzimira is equipped with an independent power plant and yet it purchases two-third of needed electricity from outside source. The amount of electricity required for a unit amount of pig iron is not so much different from that of typical Japanese steel mills, though, the power generating capacity at Huta Sendzimira is considered to be not sufficient.

(b-3) Purchased pellets

Up to 46 percent of iron ore charged to the blast furnace is purchased from outside source in form of pellets. Sintered iron ore used for the blast furnace at Huta Sendzimira is 0.85 T/Tp while the same in a typical Japanese integrated steel mill is 1.42 T/Tp.

42 3) Balances of various energies at Huta Sendzimira (based on 1998 performance)

(a) Fuel balance (Fig. 2.2.1-4)

As much as 5,669 Mj/Ts (1354 Mcal/Ts) difference is found between the typical Japanese integrated steel mill and Huta Sendzimira (deducted by heat energy sales) and the difference is mainly caused by the energy consumption per unit of pig iron production.

The balance of the difference is as follows.

(a-1) Fuel consumption per unit of production

* Power plant: 2,479 Mj/Ts (592 Mcal/Ts)

* Crude steel production: 42 Mj/Ts (10 Mcal/Ts)

* Rolling process: 2,361 Mj/Ts (564 Mcal/Ts)

* Others: 787 Mj/Ts (188 Mcal/Ts)

Power plant and rolling process shares 85 percent of the entire difference stated above.

The difference is mainly caused by the product compositions and types of products, the energy utilization efficiency as well as the climates of both still mills.

(b) Electricity Balance (Fig. 2.2.1-5)

The balance of electricity at Huta Sendzimira is approximately the same as that of the Japanese steel mill. As much as 98 kWh/Ts of hidden dissimilarity is found when the amount of electricity consumed by the electrically driven machines (fans) applied by many of Japanese integrated steel. At Huta Sendzimira, the rolling process consumes more electricity than Japanese steel mills.

(c) Steam balance for processing (including hot water) (ref. Fig. 2.2.1-6)

The most difference found between Huta Sendzimira and the typical Japanese integrated steel mill is this steam energy. The difference in the energy per unit of production between them is at 3,052 Mj/Ts (729 Mcal/Ts). This difference includes the amount of energy caused by the climate gap. Seventy eight percent of all steam energy at Huta Sendzimira is supplied by the power generating plant. The rest is the recovered steam from the basic oxygen furnace and from the rolling plant. In the Japanese steel mills, the demand of steam as the heat source is smaller than the amount of recovered steam and therefore, a part of recovered steam is utilized by the turbine power generator. On the contrary, at Huta Sendzimira, the demand of steam as the heat energy source is far larger than the amount of recovered steam and therefore, waste heat recovery in order to reduce the fuel consumption is still probable.

43 (d) Oxygen and nitrogen balance (ref. Figs. 2.2.1-7 and 8)

A 15 Nm3/Ts difference in oxygen is found between Huta Sendzimira and the Japanese integrated steel mill. However, oxygen is not utilized effectively at pig iron production processes and the oxygen consumption at the pig iron production process smaller at Huta Sendzimira by 38 Nm3/Ts and the loss is greater by 53 Nm3/Ts than Japanese steel mills.

Such difference is caused by the occasional needs of the second oxygen plant operation in the balance of production. When the second oxygen plant is starts to operate, the demand and supply balance is temporarily thrown off and considerable amount of oxygen is lost.

4) The characteristics of Huta Sendzimira in view of production structure

(a) Energy consumption per unit of production of the pig iron production line in the total production structure of Huta Sendzimira

The characteristic differences of the production structure of pig iron production section which consumes considerable amount of energy at Huta Sendzimira when compared with that of the Japanese integrated steel mills (ref. Table 2.2.1-5) are;

(a-1) Coal charges vs. pig iron production is higher (Huta Sendzimira: 0.770 T-coal/Tp, Japanese steel mill: 0.637 T-coal/Tp),

(a-2) Sintered ore vs. pig iron production is lower (Huta Sendzimira: 0.848 Tsin/Tp, Japanese steel mill: 1.423 Tsin/Tp),

(a-3) Pig iron production vs. crude steel production (pig iron to steel ratio) is smaller (Huta Sendzimira: 0.897 Tp/Ts, Japanese steel mill: 1.138 Tp/Ts).

In case of (a-2), higher pellets ratio of Huta Sendzimira balances the low sintering ore application. In case of (a-3), the difference is caused by the considerable amount of scrap iron as a cold iron resource used at Huta Sendzimira.

Although the product structure can not be properly evaluated only in view of energy consumption, the energy balance of Huta Sendzimira may be evaluated by adjusting the difference the product structure and compared with between Huta Sendzimira and Japanese steel mills.

Replacing the Japanese steel mill production structure with that of Huta Sendzimira, the energy consumption per unit of production is recalculated herein below based on the figures of the energy consumption per unit of production of each production process at Huta Sendzimira. The energy consumption difference between two types of steel mills increased by 708 Mj/Ts (169 Mcal/Ts) [188 Mcal/Ts x 0.897] caused by the structural differences of both types of mills in coke, sintering and pig iron production structures. In addition, the difference increases by 4,695 Mj/Ts (1,122 Mcal/Ts) caused by the pig iron to steel production ratio difference (pig iron production vs. crude steel production). In other

44 words, the difference between two types of steel mills increases to 5,406 Mj/Ts (1,291 Mcal/Ts) when production structures are adjusted between two ty pes of steel mills than the simple energy consumption comparison.

This finds that Huta Sendzimira is still a energy saving type steel mill despite its high coal charge and having no PCI. And yet, the difference is apparent with the energy consumption difference of 6,125 Mj/Ts (1,463 Mcal/Ts) which increases to 11,531 Mj/Ts (2,754 Mkcal/Ts) when the production structures are adjusted.

Such differences are considered as results of the low production efficiency caused by the small production, of the production structural difference, of the climatic difference and of the difference of the energy saving equipment between the two ty pes of steel mills.

Table 2.2.1-5 Compensation for Pig Iron Product Breakdown

Individual Energy Product Ratios Difference in Energy Consumption per Consumption per Production Production Unit Unit (Product Ration Japanese Integrated Difference) Huta Sendzimira Steel Mill (compensated)

Coke 874 Mcal/T-coal 0.770 Tcoal/Tp 0.637 Tcoal/Tp -116 Mcal/Tp Sintering 528 Mcal/Tsi 0848 Tsi/Tp 1.423 Tsi/Tp +304 Mcal/Tp Blast Furnace 3533 Mcal/Tp — — —

Pig Iron Production Total 4654 Mcal/Tp — — + 188 Mcal/Tp

Pig Iron to Steel Ratio 0.897 1.138 — , ~

Pit Iron to Steel Ratio + 1,122 Mcal/Ts Compensated

(b) Major energy consumption indices

Large amount of energy consumption is found in the basic oxygen furnace and the hot rolling process other than the pig iron production, even after the amount of energy recovered is deducted from the consumption. The energy consumption per unit of production of the hot rolling process is significantly large.

(c) The detailed data of the energy consumption at Huta Sendzimira

Flow charts of various type of fuels and their applications made from a variety of the energy application records given by Huta Sendzimira is attached below for reference.

In these balance charts, break downs of each processes, various apparent heats and reaction heats are estimated values and the approximate energy flow structure is determined by such estimated values.

(a) Table 2.2.1-9 Huta Sendzimira (Poland): Energy Balance (Utility 1) (Fiscal year 1998 April 1998 to March 1999) (b) Table 2.2.1-10 Huta Sendzimira (Poland): Energy Balance (Utility 1) (Beginning half of

— 45 Fiscal 1998 April 1998 to Sept. 1998) (c) Table 2.2.1-11 Huta Sendzimira (Poland): Energy Balance (Utility 1) (Ending half of Fiscal 1998 October 1998 to March 1999)

— 46 Table 2.2.1-6 Major Energy Indices (1998 fiscal year actual) Note: Gray sections represent large contrast between the two mills.

Major Energy Indices Huta Sendzimira Japanese Int. Mill Remarks

Crude Steel Production 1998 K.T/Y 2075.1 7472.2

Total Energy per Crude Steel Production Mcal/Ts 7,466 6,003 Electricity per Crude Steel Production KWHTs 580 580 Japan incl motorized blower (98)

Tp/Ts 1.138 Pig Iron ProdVCrude Steel Pig Iron vs. Steel 0. 897 Material Coal vs. Pig Iron Production TcoalTp 0.77 0.637 Material Coal/Pig Iron Prod. Production Sintered Ore vs. Pellet Tsin/Tp 1.423 Sintered Ore/Pig Iron Prod. Share 0. 848 Pellet vs.. Pig Iron Production Tpe/Tp 0.762 - Pellet/Pig Iron Prod. Hot Roll (coil) vs. Crude Steel Tcoil/Ts 0.637 0.444 Hot Roll Prod./Crude steel

COG Generation per Unit of Coal Nm3/Tcoal A330.0 *1) A288.1 *2) *1)4195 *2)4800 kcal/Nm3 Fuel Energy per Unit of Coal Mcal/Tcoal 615.9 592.5 Dry Distillation Heat etc. Coke Electricity per Unit of Coal KWHVTcoal 35.8 47.8 CDQ is not installed at Huta Sendzimira in Steam Energy per Unit of Coal Mcal/Tcoal 155,4 66.6 1998. Recovered Steam Energy per Unit of Coal Mcal/Tcoal AO.O A292.8

Fuel Energy per Unit of Sintered Ore Mcai/Tsin 422 367.7

Electricity per Sintered Ore KWH/Tsin 42 38.8 Sintering Steam Energy per Unit of Sintered Ore Mcal/Tsin 0.9 - Recovered Elect per Unit of Sintered Ore KWH/Tsin - A4.5

BFG Generation per Pig Iron Prod. Nm3/Tp A 1,842 *3) A1,581 *4) *3)778 *4)800 kcal/Nm3

Cokes per Pig Iron Prod. Kg/Tp 563.2 *5) 371.3 *6) *5)6976 *6)7200 kcai/Nm3

PCR Kg/Tp (Mcal/Tp) - 141.9(1050) Powder Coal Injection

NOR Nm3/Tp (Mcal/Tp) - - Natural Gas Injection

Pellet per Pig Iron Production Kg/Tp 761.5 .

Blast Furnace Fuel Energy per Pig Iron Prod. Mcal/Tp 582.3 448.6 HS Fuel etc.

Blown-in Air per Pig Iron Prod. Nm3Tp 1,799 1,049

Oxygen per Pig Iron Prod. Nm3/Tp - 312 Steam energy per Pig Iron Prod. Mcal/Tp 32.1 11.6 Electricity per Pig Iron Prod. KWHTp 17.3 37

Recovered Elect per Pig Iron Prod. KWHTp - A40.1 TRT Installed in Japanese Plants.

Recovered LOG per Pig Iron Prod. Nm3Tp - A97.1 LOG Calories: 2000 Kcal/Nm3

Oxygen per Steel Prod. Nm3Ts 512 51.1

Steam energy per Steel Prod. McalTs 10.2 21.6 Basic Oxygen Electricity per Steel Prod. KWHTs 12 40.8 Furnace Fuel Energy per Steel Prod. McalTs 136.8 12.5 Sendzimira Basic Oxygen Furnace B bums LNG Recovered Steam Energy per Steel Prod. McalTs A157.4 A36.3 and generated LDG as well.

Electricity per Hot Roll Prod. KWHTcoil 136.3 818

Hot Rolling Fuel Energy per Hot Roll Prod. McalTcoil 650. 1 264.2 Factory Steam Energy per Hot Roll Prod. McalTcoil 3 7.8

Recovered Steam Energy per Hot Roll Prod. McalTcoil 21519 - Energy per Pig Iron Production -4.000 10,000 - 2.000 2,000 4,000 8,000 6,000 <7, Annual

Fig. 466

Energy 2.2.1-3

Mcal/Ts> <

Huta

Comparison Configuration

Sendzimira <6,878Mcal/Ts> Upper

Between

per >

Half

Pig

Huta Sindzimira Japanese

Iron

Sendz.

<8,254Mcal/Ts> Production Lower <8.845>

and Annual 2,075.1 7,472.2 Half

Japanese

<6, Upper 3,979.2 1,189.4

003 Annual

Half < 2

, Mcal/Ts> 01 Lower 2 3,526.6 > 885.7 <

Japanese

Half <5,819Mcal/Ts> Upper <1,859>

Integral

Half

Steel Upper Annual: Lower

Mill <6,155Mcal/Ts>

>

Lower Half: Half:

<2,166> April, <8,32 1,247 1,176 5,567 1.276

April, Oct.

Half

1998 1> 34 m

197 1998 24

1998

to

to March,

to

March,

Sept.,

1999

1998 1999

Heat Energy (Mcal/Ts) 2000 1000 1500 2500 3000 3500 4000 4500 500 0 Fig. Generated Petroleum

2.2.1-4 BEG COG NG Regular 1,313 Coal

20 •

1,286

Purchased 526 Fuel 956

O O

The BFG

Balance <4,101 Huta fuel

and

Japanese steel

balance

Sendzimira COG

Mcal/Ts

mill.

generated

mill: It is

larger is

>

considered 1.138) Sale Consumption Power Others

Rolls at

Pig per Manuf.

153 1,713 Huta 962

pig Iron

Plant 896 caused

377 Sendzimira iron

FUEL

production

by

the

BALANCE by

lower

50

at

%,

production Huta caused Generated

Sendzimira Petroleum

COG BFG by NG

rate the

194

1,440 of 1,003 • larger

Japanese Purchased is

steel

slightly 17

fuel compared <

2,654

consumption smaller

Integrated

Mcal/Ts

to

than

pig

Iron that at

Steel

> Its

at of

Consumption Power power Others

Rolls

Sendzimira the Pig Mill Manuf. Sale Joint 1,121 952 Japanese

Iron

plant 332 Plant

60 189

and (Sendzimira:

Integrated rolling factory.

0.897

ELECTRICITY BALANCE Huta Sendzimira Japanese Integrated Steel Mill 700 < 650 KWH/Ts > <610 KWH/Ts > Compensated for electric fan (-98): 512 KWH/Ts Sales 70 600 Others 16 Sales 30 Others 10 Water Plant 41 Power Plant 66 500 Purchased Oxygen 69 Electricity Water Plant 434 78 Purchased Fans 98 400 4% Gas Plant (mainly from 112 joint power plant) U1 Rolling o 300 158 Rolling Factory 204 200 Steel Manufacturing Self Steel Generated Manufacturing 100 Electricity 31 Self Pig Iron 217 Pig Iron Generated Manufacturing Manufacturing Electricity 140 72 114 0 Generated • Purchased Consumption Generated • Purchased Consumption

Fig. 2.2.1-5 Electricity Balance

G A 2/3 of electricity is purchased from outside source at Huta Sendzimira while the Japanese integrated steel mill make a balance between the sales of gas to Its joint power plant and purchase generated electricity from that plant. O The power consumption at the rolling factory at Huta Sendzimira Is relatively large. STEAM BALANCE Huta Sendzimira Japanese Integrated Steel Mill 900 Rolling 39 < 833 Mcal/Ts > Sales 17

800 Basic Oxygen Furnace 157 Heating & 700 Others 368 600

500 Boiler <140 Mcal/Ts > Power Plant 96 1 400 687

Utilities 300 163

200 Rolling 93 Sales 17 Steel Maiiuf. 10 Others 17 Heating & Machines 13 Others 37 100 Pig Iron Basic Oxygenl Furnace 36 Utilities 3 “ Rolling 34 Manuf. Steel Manuf. 22 CDQ74 137 Pig Iron Manuf. 41 0 Generated • Purchased Consumption Generated • Purchased Consumption Fig. 2.2.1-6 Steam Balance

0 Some 635 Mcal/Ts greater volume of steam is consumed for processing at Huta Sendzimira than the Japanese Integrated steel mill. (The figure is compensated for the consumption by boilers and basic oxygen furnace boiler.) This Is a several time greater consumption In terms of the energy per unit of production and Is considered to be caused by the difference of atmospheric temperatures and production scales of both manufacturer and their locations. Oxygen (NmVTs) 100.0 120.0 40.0 60.0 80.0 20.0 0.0 Fig. Generated

2.2.1-7 Produced Purchase in

Plant • 48 72

Purchased Oxygen O

The Huta <

balance 120 Balance operation. The The (AOPOL

Sendzimira

Nm

average heat

of

VTs

the

accumulate of

Alrliquid >

production consumption Consumption Manufact. Others Loss

Steel

type Corp.) 56

arrangement

62

No. of 2 OXYGEN

oxygen on

4

Sales the plant

premise is

of

17 of

at

Huta BALANCE Huta 13.8

which

kNm-Vh Sendzimira Sendzimira Generated

consumes

and Produced in

inherently made about

105 Plant

ISkNm-Vh

•

Japanese Purchased in 92

Russia

%

creates <

of

of 105

the

waste oxygen.

Integrated

considerable NmVTs consumption

oxygen

> Measuring

at Steel

amount

the of Consumption &

Manufact. Manufact. another

Pig

beginning

Mill others Loss, Steel 41 55

Iron of Deviations

losses.

plant

9

of

Its

Nitrogen (NrilfTs) 100.0 120.0 40.0 60.0 80.0 20.0 0.0 Fig. Generated

2.2.1-8 Purchased

• 66

Purchased Nitrogen O O

Considering In Huta

< the

66

Japanese consumption Huta Balance

Sendzimira Nm

Sendzimira the 3 /Ts

Integrated production

>

of

Consumption 16

can

Manufact. kNmVh Others

Sales steel

Steel

level correspond 56 NITROGEN

5 mill,

of

10 when

the nitrogen

other

the to

an system

plant

BALANCE Is Increase mainly

(ALPOL Is

changed

of used Generated

nitrogen

of at

to

Alrliquid steel Produced

in OG

by 103 Plant

manufacturing

system. a •

Purchased Japanese few

Corp)

hundred <

having 103

Integrated

and over Nm 30kNm rolling

VTs I

kNm-Vh

> 3 /h

Steel processes.

(fineness:

Consumption Others from Manufact. Manufact.

Pig Rolling Mill Steel 25 31 32

Iron current

15 99.995%),

average

Energy Level per Unit of Pig Iron Production = 7,466 McaVT-s

Tars 173 Recovered HTS and Utility 96 Utility 339 Steam 39 Others 13 Heat Reaction Sinter­ ing ^Heat Radiation BwiC AppireitHcilofMollei I mm Apparent & Utvnt Oxygen Tkai\ After Furnace Radiation Material Heat of Molten Iron CC Coke Cokes 3842 Coal 4969 Oven

Energy Heat Recovered Steam 157 (Compressed Air, Oxygen Radiation Utility 2599 Water and others) 647

COG 956 Loss 133 (BFG 27, Oxygen 106)

Heat Reaction & Utility 929 Others 604

Utility 605 ...... !..../ Sales 183 (BFGl COG, NG 153 Utility (1) 400 Compressed Air, Oxygen, Nitrogen 13 Steanfr 17 Processing Steam 686 Utility © Heat ReactionVSc Others 485 Electricity 531

Electricity 171

NG 526 Oxygen 83 Oil 20 Regular Coal 1313 Purchased Electricity 1062 Nitrogen 20

Fig. 2.2.1-9 Energy Flow in Huta Sendzimira (Fiscal 1998): Pig Iron Production = 2,075,146 tons/year Energy Level per Unit of Pig Iron Production * 6,878 Mcal/T-s

Tan 171 Recovered HTS and Steam 37 Othen 12 Heat Reaction Sinter­ ing .Heat Radiation Apparent Heart of Molten Iron Apparent* Latent After Heat \ Heat of Molten Iren CC Radiation' Material Cokes 3835 Coal 4905 Reaction Heat in Reduction Energy Heat Recovered Steam 120 (Compressed Air, Oxygen Radiation Utility 2431 Water and others) 584

COG 936 Loss 13$ (BFG 27, Oxygen 106)

Heat Reaction & Utility 868 Others $36

Utility 573 Sales 160

Utility (D 400 Compressed Air, Oxygen, Nitrogen 12 Steam 8 Processing Steam 686 Utility©

Electricity 531

Electricity 148

NG451 Oxygen 67 Oil 17 Regular Coal 907 Purchased Electricity 993 Nitrogen 17

Fig. 2.2.1-10 Energy Flow in Huta Sendzimira (Beginning Half of Fiscal 1998): Pig Iron Production = 1,189,395 tons/half-t-year Energy Level per Unit of Pig Iran Production - 6,878 Mcal/T-s

Tars 175 Recovered ETSand Utility 116 Utility 376 Steam 48 Others 13 >L n Heat Reaction Sinter­ 1 333 ing yltst Radiation \ Apparent Heal of Molten Iron Appem** Latent 0*3V* Heat After Heat ioX Material Hod of Motets iron Siam. CC RadiationV Coke Cokes3852 s Coal 5056 Oven Reactiea Heat 3506 in Redaction Energy Recovered Heat (Compressed€ Air, Oxygen \ Steam 208 Radiations Utility 2825 Water and others) 733 z COG 982 X BFG\1322 Loss 135 (BFG 27, Oxygen 106) X Heat Reaction & Utility 2310 Utility 1041 Others 696 X Sales 214(BFG, COG, NG 140 Utility 648 Compressed Air, Oxygen, Nitrogen 14Steam 30 X ~Air\jlupply 315 Utility (D 369 1 Processing Steam 1063 ^ Utility (D 384 Heat ReactionS^ Others 624 Electricity 612 ^ 7X” X Electricity 202 => r u J NG626 Oxygen 103 Oil 25 Regular Coal 1858 Purchased Electricity 1155 Nitrogen 22

Fig. 2.2.1-11 Energy Flow in Huta Senddmira (Ending Half of Fiscal 1998): Kg Iron Production = 885,751 tons/half-year (8) Various types of energy costs at Huta Sendzimira

Various types of energy costs at Huta Sendzimira are listed on Table 2.2.1-13

Costs on Table 2.2.1-13 are listed in Zloti as well as in yen applying an exchange rate of 30 yen/Zloti (October 1999).

The energy cost at Huta Sendzimira is slightly lower or approximately the same as the energy cost in Japanese steel mills when evaluated on Japanese yen basis. The price of natural gas, which will be the essential factor to determine the price of by-product gases generated in Huta Sendzimira, is as low as one-half of the price in Japan. The 1000 kcal natural gas at Huta Sendzimira costs only 0.0534 zl (April 1998 to December 1998), or 1.6 yen. This cost may be a little higher when Poland joins EU.

On the contrary, general use fuel coal is approximately the same level as in Japan or in some cases, it is costlier than Japan. Considering the mining and transporting coal within its own country, Polish coal price is judged reasonable.

57 Table 2.2.1-7 Various types of energy costs at Huta Sendzimira

1998: Jan. 1 - March 31 1998: April 1 - Dec. 31

Goods/service UnitiOf Standard Cal. Price Yen Rate Price per Price Yen Rate Price per Measure kcal'unit [zl] [30 yen /zl] lOOOkcal [zl] [30 yen/zl] lOOOkcal

Power Net Plant W-22 Electric Duct a) Electricity from power plant to network plant zl/Mwh 2450 151.46 4543.8 1.85 172.38 5171.4 2.11 b) Electricity for steel manufacturing plant zl/Mwh 2450 135.01 4050.3 1.65 140.16 4204.8 1.72 Transmitted by PNP

Thermal Plant W-22 Steam and Hot Water Duct Processing Steam from PP (O SMpa) zl/Nt 640 32.58 977.4 1.53 38.27 1148.1 1.79 Processing Steam (0.9Mpa) zl/Nt 640 37.05 1111.5 1.74 43.28 1298.4 2.03 Distributed by Thermal Plant Processing Steam from PP (1,6Mpa) zl/Nt 640 40.17 1205.1 1.88 46.44 1393.2 2.18 Processing Steam (1,6Mpa) zl/Nt 640 44.64 1339.2 2.09 51.45 1543.5 2.41 Distributed by Thermal Plant Hot Water from PP zl/GJ 238.8 13.85 415.5 1.74 16.09 482.7 2.02 Hot Water from PP zl/GJ 238.8 18.32 549.6 2.30 21.10 633 2.65 Distributed by Thermal Plant Treated Water from Chemical Water Treatment zl/nm3 2.31 69.3 2.40 72 Steam Recovery zl/Nt 640 5.16 154.8 0.24 5.81 174.3 0.27

Gas Plant W-26 Gas Duct High Purity Oxygen for Processing 99.5% zl/km3 1720 192.05 5761.5 3.35 198.24 5947.2 3.46 Compressed Oxygen for Welding zl/nm3 1720 1.72 51.6 0.03 1.76 52.8 0.03 Carbon dioxide zl/Nt 2063.77 61913.1 2151.15 64534.5

Blast Furnace Gas Price of Gas for Gas Plant from Blast Furnace Plant a) For other than PP zl/km3 778 27.63 828.9 1.07 27.63 828.9 1.07 b)PP zl/km3 778 14.82 444.6 0.57 18.98 569.4 0.73 Distribution Cost (Gas Plant) z!/km3 778 6.27 188.1 0.24 6.08 182.4 0.23 Sales Price a) For other than PP zl/km3 778 33.90 1017.0 1.31 33.71 1011.3 1.30 b) PP zl/km3 778 21.09 632.7 0.81 25.06 751.8 0.97

Coke Oven Gas Price of Gas for Gas Plant from Coke Oven Plant a) For other than PP zl/km3 4195 217.63 6528.9 1.56 217.63 6528.9 1.56 b)PP zl/km3 4195 93.66 2809.8 0.67 119.98 3599.4 0.86 Distribution Cost (Gas Plant) zl/km3 4195 14.92 447.6 0.11 14.76 442.8 0.11 Sales Price a) For other than PP zl/km3 4195 232.55 6976.5 1.66 232.39 6971.7 1.66 b)PP zl/km3 4195 108.58 3257.4 0.78 134.74 4042.2 0.96

Natural Gas (NG) 1 .Purchased Gas from PGNiG S.A zl/km3 8605 459.54 13786.2 1.60 459.54 13786.2 1.60 2 Distribution Cost (Gas Plant) zl/km3 8605 27.58 827.4 0.10 27.5 825 0.10 3 Sales Price zl/km3 8605 487.12 14613.6 1.70 487.04 14611.2 1.70

Compressed Gas a)for P-61 .P-62.P-63/1800/ zl/km3 1.49 44.7 1.54 46.2 b)for P-65/500 zl/km3 1.08 32.4 1.12 33.6 Compressed Oxygen for net zl/km3 1720 95.58 2867.4 1.67 97.95 2938.5 1.71 Compressed Air zl/km3 300 26.05 781.5 2.61 26.83 804.9 2.68 Compressed Nitrogen (net) zl/km3 300 63.74 1912.2 6.37 65.43 1962.9 6.54 Gas Argon by net for HTS zl/ nm3 1.40 42.0 1.45 43.5 Gas Argon in cylinders for S P zl/nm3 3.12 93.6 3.21 96.3 Liquid Argon for HTS in containers zl/kg 0.76 22.8 0.81 24.3

Water Plant W-29 Processing Water zl/knm3 123.72 3711.6 125.53 3765.9 Drinking Water zl/ nm3 4.87 146.1 4.87 146.1

Power Plant Electricity from Power Plant zl/Mwh 2450 151.46 4543.8 1.85 172.38 5171.4 2.11 Air Supply to Oxygen Plant zl/km3 300 30.91 927.3 3.09 38.03 1140.9 3.80 Air Supply zl/km3 300 15.85 475.5 1.59 17.52 525.6 1.75 Hot Water for Heating Zl/GJ 238.8 13.85 415.5 1.74 16.09 482.7 2.02 Steam (8 atm) zl/ nt 640 32.58 977.4 1.53 38.27 1148.1 1.79 Steam (16 atm) zl/ nt 640 40.17 1205.1 1.88 46.44 1393.2 2.18 Clean Water to ZG and ZW zl/ nm3 6.64 199.2 6.65 199.5 Demineralized Water zl/nm3 3.09 92.7 3.33 99.9 Powder Coal zl/nt 5118 132.71 3981.3 0.78 164.10 4923 0.96

58 (9) The status of the energy saving facilities at Huta Sendzimira The currently working energy saving facilities of Huta Sendzimira is listed on Table 2,2.1-8 below. The most noteworthy point of the energy saving operations at Huta Sendzimira is the advanced waste heat recovery system in form of steam due to the demand of heat for building heating throughout the year. For instance, a waste gas boiler is facilitated with the heater booster of the hot rolling process that is rarely seen in Japanese still mills. In addition, the heat from the waste gas is entirely, without exception, recovered in form of steam. Since, the waste heat recovery system of Huta Sendzimira is the major subject of the investigations of this assessment, the table below only lists the waste heat recovery equipment and its specifics.

Table 2.2.1 -8 Waste Heat Recovery System at Huta Sendzimira

No. of Location Steam Quantity (t/h) Pressure (Mpa) Temperature (oC) Remarks Equipment

Basic Oxygen *LDG burning Type 58.2 2.5 225 3 Furnace Plant *NG after burning

CDQ operates since Coke Plant 30 40 410 3 April 1999. Hot Rolling Factory 12.7 0.8 175 6 Small Product 1.9 0.8 175 Not Available Rolling Factory

(*) The high-pressure steam recovered from the CDQ is depressurized and supplied to medium to low pressure steam circulation systems having 1.6 Mpa and 0.8 Mpa. Although the initial plan spelled a few sets of expansion turbine having a few-MW output, the turbines were not installed for the reason of low productivity and for the considerable vicissitudes of energy supplies to the turbine.

— 59 — 2.2.2 Sintering process

(1) Coke oven

The specifications of coke mills are displayed on Table 2.2.2-1. Coke ovens No. 4 and No. 6 operations have been terminated in relation to the crude steel production reduction after over 40 years of operations. Currently therefore, three coke ovens, No. 7, No. 8 and WK-1 are kept in active status.

Table 2.2.2-1 Major Specifications of Coke Ovens

Coke Oven No. 4 No. 6 No. 7 No. 8 WK-1 Type PWR-51 PWR-51 PWR-51 PWR-51 PWR-63 Stamp Insert Stamp Insert Stamp Insert Stamp Insert Number of Ovens 57 57 57 65 36X2 Production Capacity t/d 959 959 959 1068 1731 Dimensions Height m 3.71 3.71 3.71 3.71 5.50 Width m 0.46 0.46 0.46 0.46 0.41 Length m 13.35 13.35 13.35 13.35 15.04 Effective Volume m3 20.96 20.96 20.96 20.96 32.0 Starting Operation 1955 1958 1961 1961 1999 Terminated Terminated In Operation In Operation In Operation 1998.12.15 1999.9.30 A group: 3/10 B group: 4/07 Years of Operation 43 41 39 39 1 CDQ Installed No No No No Yes

Operational records of coke ovens from April 1998 to March 1999 are displayed on Table

2.22-2. Regarding the WK-1 oven, listed are average figures between July 1999 and September 1999 since the oven started to operate for only a few months.

— 60 Table 2.22-2 Operational Record of Coke Ovens

Coke Oven No. 4 No. 6 No. 7 No. 8 Wk-1 Coal Charge t/d 1142 1144 1145 1152 1880 Production Capacity t/d 859 861 861 866 1298 Ovens in Operation 54.3 54.5 54.1 59.5 72.0 Idle Ovens 2.7 2.5 2.9 5.5 0 Number of Extrusion /d 59.1 59.4 59.4 59.7 79.3 Dry Distil. Heat Capacity kcal/t-coal 516 582 635 533 540 Moisture Rate of Coal % 8.5 8.5 8.5 8.5 8.4 Fuel Type C B+C B+C C C Fuel Gas Calorie kcal/Nm3 4192 1631 1635 4196 4075 Average Flue Temperature eC 1293 1302 1308 1286 1183 Average Exhaust Gas Temp. “C * 280 276 316 221

CDQ and automatic equipment are not installed in coke ovens No. 7 and No. 8 which are much overworn after 40 years of operations. They have to be constantly maintained by changing firebricks because 0.1 to 10.9 ovens per month do not work properly in average. During such a maintenance work, ovens on both sides also must terminate their operations. Coal is stamp fed into these ovens having enormous dust troubles, which clearly indicates significant deterioration of these ovens. In view of such conditions of the ovens, installation of energy saving equipment is not advisable in terms of economy. Generally, the life of coke ovens is considered approximately 40 to 50 years and therefore, when new coke ovens are facilitated, energy saving equipment may be considered to be installed. The coke oven WK-1 is, on the other hand, the most advanced equipment installed in place of coke ovens No. 11 and No. 12 to avoid an environmental protection problem, planned in 1984 and began to operate since March 1999. This new coke oven equips various automatic systems in order to help ease oven-front works, dust collecting system and operational control system. CDQ installed in this coke oven began to operate since April 1999. Its specifications and operational condition are as shown on Table 2.2.2-3.

61 Table 2.2.2-3 CDQ Specifications and Operational Record

Specifications No. 1 No. 2 No. 3 Coke Treating Capacity t/d 1200 1200 1200 Steam Generating Capacity t/h 25 25 25 Steam Temperature °C 430 430 430 Steam Pressure MPa 3.9 3.9 3.9 Begins to Work in Apr. 99 Apr.99 Jul.99 1999 1999 1999 Operational Record 7 8 9 7 8 9 7 8 9 Coke Treating Quantity (actual) t/d 678 628 0 619 527 677 382 653 692 Servisability % 100 87 0 74 16 100 10 100 100

Having two-third operational turn among three CDQs, the CDQ unit is working in 100 percent serviceability. All the cokes produced by WK-1 coke oven therefore, go through the CDQ unit producing 30 t/h of 40 atmospheric pressure (hereinafter atm.) steam. The generated steam is reduced on pressure to 16 atm. and 8 atm and supplied to various sections of the premise through steam pipes. Although the original plan specified to use the steam also in the power plant, the unstable steam pressure caused by singularly working CDQ unit led Huta Sendzimira to give up on the steam application at least for present.

— 62 X

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1) Outline of equipment Two sintering furnaces, 2DL and 4DL, are supplying sintered ores to No. 3 and No. 5 blast furnaces at Huta Sendzimira. The plan of these sintering furnaces are illustrated in Fig. 2.2.2-2 and their work flow of the same furnaces is illustrated in Fig. 2.2.2-3. The main specifications of the sintering furnaces are listed in Table 2.2.2-4. Pulverized iron ore is imported from Ukraine and secondary materials such as silica stones and limestone are from domestic mines. The ratio of sintered ore to pellets is 50 percent, and the pellets, the other half of the materials charged to blast furnaces, are also imported from Ukraine. The two sintering furnaces are of the same dimensional size having 75 m2 sintering spaces. Any type of material graininess control system is not attached to the loading device. Both of them do not have floors attracting attention. Sintered ore is cooled by slate type coolers and transferred through strainers to blast furnaces by belt conveyers.

2) Operational status The actual data and the trend of sintering operations are illustrated in Table 2.2.2-5 and Fig. 2.2.2- 4 respectively. The production of sintered ore is 4,332 t/d and production per area is 29 t/d/m2 which are approximately 20 percent less than that of the Japanese production. The thickness of ore is also about 30 percent thinner than that of the Japanese product.

3) Energy consumption The energy consumption per unit of product of the sintering process is shown on Table 2.2.2-6.

Table 2.2.2-6 Major Energy per Sintered Ore

Unit Value Energy Unit Value Coke 66.0 kg/t 402.0 Mcal/t (1,683 Mj/t) BFG 6.2 Nm3/t 4.8 Mcal/t ( 20 Mj/t) COG 3.6 Nm3/t 15.0 Mcal/t ( 63 Mj/t) Steam 1.3 kg/t 0.8 Mcal/t ( 3 Mj/t) Compressed Air 7.5 Nm3/t 2.3 Mcal/t ( 10 Mj/t) Electricity 42.0 kWh/t 102.9 Mcal/t ( 431 Mj/t) Utility Water 1.3 m3/t 0.7 Mcal/t ( 3 Mj/t)

— 64 — 4) Installment situation of energy saving equipment There is no waste heat recovery equipment installed in the sintering plant of Huta Sindzimira. Following system installments are, therefore, under consideration in this joint project. The waste heat recovery system of the sinter cooler can be extremely effective when installed. Fuel consumption per unit of sintered ore of the existing ignition furnace is considered slightly higher at 20 kcl/t (84 kj) but has a simple and inexpensive structure to control the heat of gas. The burner of the ignition furnace is considered not advisable to modify since the heat distribution is well balanced due to its narrow (2.5 m) pallet width.

— 65 UAPA OGOLNA

HUT A IM.T.SENDZIMIRA SA

SRIEKALNIA NR 2

FIg. 2.2.2-2 layout of Sintering Factory 1 - zasobofci wytadowcze kamieme wap ft Onego i dotamitu Merititno 2 • kruszaroifi i stxtown* fcamtemo wcpenne^o t docmrtu 3 ' wywoVtCB wagooowa 4 - zacobnti pykz wo i wapna potarotiowegs 5 * miobnfci wybdowcze koksku i :oor?eflny 6 * kruoczarnm lcdcs*u ? • 9kbdowigt» rud I topntrow 9 ■ r»sobnl:| zahdowcie ocbodowej zgorztimy 9 * mmerowne » * mteszaliXt U - tasma box *a me?a t? - lamed soietu O - chtodma apietu m - sonownta spjetu 15 • mvitrykbn

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Fig. 2.2.2-3 Sintering Process Flow Table 2.2.1-4 Main Specifications of Sintering Furnaces

Furnace No. 2 4 1) Sintering Furnace Type DL DL Pallet Width m 2.5 2.5 Sintering Space m2 75 75" Production Capacity t-sinter/day 1150 1150 Productivity t-sinter/day/m 2 15.3 15.3 2) Loading System Graininess Control Device None None Angle 42 42 3) Ignition Furnace Dimensions Length m 1.5 1.5 Width m 2.75 2.75 Height m 0.15 0.15 Volume m3 0.6 0.6 Burner Capacity Mcal/h/a burner 250 250 Number of Furnace 8 8 Total Capacity Mcal/h 2000 2000 4) Main Exhaust Blower Sucking Air Volume nfVmin. 6500 6500 m3/t-sinter 8139 8139 Sucking Air Pressure mm H20 -1200 -1200 Temperature °C 130 130 Motor Capability kW 2000 2000 Number of Motor 1 1 5) Cooler Type Straight Straight Press-in Press-in Cooling Capacity t/h 150 150 Cooling Space m2 152 152 Cooling Blower Cooling Air Volume nfVmin. 2600 2600 Pressure mm H20 200 200 Temperature °C 750-150 750-150 Number of Blower 5 5 Total Air Volume m3/min. 13000 13000 Total Air Volume m3/t-sinter 16278 16278 6) Waste Gas Sensible Heat Recovery System None None

68 Table 2.2.2-S Operational Data of Sintering Furnace

No.2DL+No.4DL Sintering Area mz 75+75 Production 10*3t-sinter/month 131 Production t-sinter/day 4332 Productivity t-sinter/day/m 2 28.9 Serviceability % 96.5 Ore Thickness mm 420 Pallet Speed m/m in 1.2~1.6 Main Exhaust Gas Temp. —1100 Main Exhaust Gas Pressure mm H20 120-160 Oxygen Ratio in % —17 Main Exhaust Gas Average Graininess of Material mm 3.1 Ratio of -0.125 mm Grain % 14—19 in Material Moisture in Material % 4.5—5.5 Average Graininess of mm 2.02 Powder cokes Average Graininess of mm 19.4 Sintered Ore >40mm % 6.6 40'■''25mm % 13.3 25—10mm % 61.5 10—6.3mm % 14.0 ~6.3mm % 5.4 Sinter TSO - T % 85.3 TSO-A % 4.1 Sintered Ore T. Fe % 51.8 FeO % 6.8 SiOz % 7.2 CaO % 15.2 A12Oj % 1.0 MgO % 2.4 CaO/Si02 - 2.17 Furnace Energy Mcal/t-sinter 19.7 per Sintered Ore BFG,COG Electricity per Sintered Ore kWh/t-sinter 42.4 Iron Ore per sintered Ore dry-kg/t-sinter 735 Limestone dry-kg/t-sinter 185 Caustic Lime dry-kg/t-sinter 4.3 Secondary Materials dry-kg/t-sinter 104 Returned Ore of Blast Furnace dry-kg/t-sinter 24.1 Returned Ore of Sintering Furnace dry-kg/t-sinter 28 —32 Powder Cokes dry-kg/t-sinter 57.6 Blast Furnace Ashes dry-kg/t-sinter 2.9

69 (t/d)

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Fig. 2.2.2-4 Sintering Operation Work Shift 2DL + 4DL (April 1998 to March g (3) Blast Furnace

1) Outline of Facility Two blast furnaces. No. 3BF and No. 5BF, are currently in operation at Huta Sendzimira, having No. 4 BF has been terminated in 1997. No. 3BF went through a complete modification in 1992, intermediate modification in 1995 and then went through a simple modification taking four months from July to October 1999, replacing heat bricks and furnace cooling equipment. No. 5BF has started to work in January 1997. The blast furnace plant is laid out in parallelogram format as illustrated in Fig. 2.2.2-6. The main specifications of the blast furnaces are listed in Table 2.2.2-7.

Table 2.2.2-7 Blast Furnace Specifications

3BF 5BF Production Capacity tHM/day 2700 3450 Active Volume m3 1537 1763 Internal (Effective) Volume m3 1719 2002 Shaft Floor Diameter m 9.10 9.75 Mid Shaft Diameter m 10.20 11.35 Furnace Top Diameter m 6.90 7.30 Floor Height m 3.55 4.87 Blast Bell Height m 2.35 2.81 Furnace Main Frame Barrel Base Height m 0.00 0.00 Shaft Height m 18.75 19.44 Runout Height m 2.12 2.30 Stock Line to Tyere Height m 23.8 24.6 Stock Line to Runout Height m 26.6 27.8 Number of Runout set 2 2 Number of Tyere set 20 24 Furnace Cooling System Stave Stave Charging Type Bell-less Bell-less Top Hopper Volume m3 20 27 Charge m3 System 20 27 Top Pressure kg/cnf G 1.5 1.5 TGR None None Dust Catcher set 1 1 Venturi Scrubber set 1 1 (+Gas Washer) (+Gas Washer) Pressure at Gas Cleaning System Gas Exit kg/cnf G 0.06 0.06 Cleaning BFG Component CO vol. % 22.5 22.5 CO vol. % 17.5 17.5 H2 vol. % 0.5 0.5 TRT None None

— 71 Table 2.22-1 Blast Furnace Specifications

Type of Hot Oven Internal Internal Combustion Combustion Number set 4 4 Heating Space m2/st 46372 46978 Pressure kg/cm 2 G 2.7 2.9 Supply Air Temperature °C 1100 100 Hot Oven Air volume NmVmin. 2833 3333 Dome Temperature °C 1350 1350 Fuel Type BFG Exhaust Gas Temperature °c Max 350 Max 350 Burning Air Pressure mmH20 200 200 Waste Gas Apparent Heat Recovery System None None

2) Operating situation The operational records and trends of the blast furnaces are listed on Table 2.2.2-8 and Fig. 2.2.2 7 respectively.

Table 2.2 2-8 Operational Record of Blast Furnaces

3BF 5BF Monthly Pig Iron Production tHM/Month 66650 88375 Pig Iron Production (Po) THM/day 2497 3130 Pig Iron Prod. Ratio tHM/day/m3 1.27 1.45 Serviceability % 87.4 92.5 Coke Prod. Ratio kg/tHM 559 531 Powder Coal Ratio kg/tHM 0 0 Natural Gas m3/tHM 0 0 Sinter. Ore Ratio % 47.9 51.6 Pellet Ratio % 51.4 48.3 SPR % 99.3 99.9 Top Pressure kg/cm2G 1.42 1.45 Top Temperature °C 140 144 BFG Quantity NmVtHM 1826 1787 Blow Air Volume NmVtHM 1498 1353 Oxygen Volume Nnf/tHM 0 0 Blow Air Temperature °C 932 952 Slug Ratio kg/tHM 315 335 Dust Quantity kg/tHM 6.7 6.7 Hot Oven Heat Quantity Mcal/tHM 552 516

— 72 3) Energy consumption The energy consumption of the blast furnaces of Huta Sendzimira is shown on Table 2.2.2-9.

Table 2.2.2-9 Energy Consumption of Blast Furnace per Unit of Coke

Unit Energy per Unit Coke 563.0 kg/t 3929.0 Mcal/t (16,450 Mj/t) BFG 721.2 Nm3/t 568.2 Mcal/t (2. 379 Mj/t) COG 3.3 Nm3/t 14.0 Mcal/t ( 59 Mj/t) Steam 50.1 kg/t 32.1 Mcal/t ( 139 Mj/t) Compressed Air 30.6 Nm3/t 9.2 Mcal/t ( 39 Mj/t) Nitrogen 51.3 Nm3/t 15.4 Mcal/t ( 64 Mj/t)

4) Installment situation of energy saving equipment The energy saving equipment, commonly installed in all Japanese steel mills such as the blast furnace TRT, the hot stove waste heat recovery equipment, blast furnace top hopper gas recovery equipment (herein after TGR), are not installed at Huta Sendzimira. The joint project considers the blast furnace TRT and hot oven waste heat recovery equipment among those mentioned above will be greatly effective at Huta Sandzimira. The blast furnace of Huta Sendzimira controls equal distribution of its top hopper pressure by nitrogen gas in place of BFG and therefore, energy saving effect by TGR cannot be expected so highly. The joint project found TGR installment to Huta Sendzimira blast furnace is not practical. Presently, blast furnaces at Huta Sendzimira are operated entirely on coke. The pulverized coal injection (herein after PCI) sy stem is now under construction at Huta Sendzimira. Actually, when the assessment was taking place at the premise, PCI itself was completed but the transporting pipes of pulverized coal were not fully installed. Because of the budget limitation, the management could not predict the completion date of the above mentioned equipment. An earliest possible commencement of the operation is desirable. The temperature of blast furnace blow er at Huta Sendzimira is approximately 950 deg. C that is around 300 deg. C lower than the ty pical Japanese blast furnace. Such a low temperature is caused by the hot oven capacity. To compete with other steel makers, substantial improvements of the facilities at Huta Sendzimira are inevitable.

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Fig.2.2.2-5 X W/e/Ave Piece 111 Layout of Blast Furnace

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Fig. 2.2.2-6 Blast Furnace Operational Trend

75 2.2.3 Steel making process

Huta Sendzimira commenced its operation with its 380-ton open-hearth furnace in 1955, added by the 140-ton basic oxygen furnace in 1966. When it came to a highest production period under the communist era, the annual crude steel output reached seven million tons with its ten open-hearth furnaces and three basic oxygen furnaces. Later, open-hearth furnaces including tandem hearths have terminated their operations in 1991 and the entire steel manufacturing works are distributed among three 140-ton basic oxygen furnaces which operate on two-third turn basis. In 1996, a new slab continuous casting equipment has been installed to improve the production cost and product quality.

(1) Basic oxygen furnace plant outline

1) Outline of facilities and their configurations

Two 140-ton basic oxygen furnaces were installed in 1966 and operated taking equal operating hour turns in block output system. Later, a third basic oxygen furnace was installed and in 1996, a continuous slab casting equipment was additionally installed in the basic oxygen furnace plant to reinforce its productivity.

One of the effective energy saving measure at a basic oxygen furnace plant is recovering the apparent and latent heats of the waste gas (i.e. burning heat of recovered waste gas of a basic oxygen furnace and reapplied as a fuel source) and eliminating a blooming process by changing over to a continuous casting process from making blocks out of molten steel.

After the installation of the continuous slab casting equipment, continuous casting process began to pick up its share in the steel production, and in 1998, 57 percent of crude steel production of 2.209 million tons was processed by continuous casting system. It is expected that the continuous casting process will reach its full production capacity of 1.80 million tons within a few years.

Considering the balance between the production level of the basic oxygen furnace plant and the capacity of continuous casting process, it is not expected the blooming process can be entirely eliminated from the plant but the energy saving effect introduced by the continuous casting system has brought a considerable benefit to Huta Sendzimira.

Current waste gas treating equipment of the basic oxygen furnace is a "waste heat boiler + multi­ venturi scrubber" type machine made in the old Soviet Union which bums the waste gas from the basic oxygen furnace in the waste gas boiler then burnt gas was cooled by generating steam and by the excessive air supply. Finally, the waste gas is removed of dust contents by the multi-venturi scrubber to be clean exhaust gas.

Unfortunately though, the recovered heat in the waste gas cooling process in form of steam is a low level heat having only 2.5 MPa steam saturation level and therefore, it is not effectively utilized as a heat source and consequently, it is not an effective energy saving means.

76 The major equipment and the layout plan of the basic oxygen furnace plant are illustrated in accompanying Table 2.2.3-1 and Figs. SEND-D300001 to SEND-D300004.

The following significant points are found in the layout of the basic oxygen furnace plant of Huta Sendzimira.

(a) Melt pig iron is transferred from the blast furnace to two mixed iron furnace located at east side of the basic oxygen furnace plant, and after storage and desulferization process, the melt iron is brought into the charging floor (FL+8.15 m) of the basic oxygen furnace by a diesel locomotive.

(b) The scrap iron is also brought into the charging floor (FL+8.15 m) of the basic oxygen furnace from the scrap shoot loading area located at the west side of the basic oxygen furnace.

(c) The floor plan of the basic oxygen furnace plant is made to accommodate four furnaces when completed and therefore, the distance between No. 2 and No. 3 furnace is extremely wide having 72 meters in between.

(d) The slag of the basic oxygen furnace is brought out by open pot type slag carts, popular among Japanese steel mills also, drawn by a diesel locomotive to slag dump.

(e) Three induced draft type exhaust gas fans are installed in and operated from a special building located at the north side of the basic oxygen furnace plant.

(f) The continuous casting equipment is installed in two buildings annexed to the south side of molding charge building. The plant layout is spacious having maintenance sections for mechanical equipment such as tundish, molding, segment and so forth.

(g) Exhaust gas treating facilities are mostly installed in the basic oxygen furnace plant leaving the thickener and cooling equipment outdoors.

(h) The space between the basic oxygen furnace plant and the slag dump channel located at north of said furnace plant is temporally applied for a storage space of heat resistant components used for the basic oxygen furnace. Table 2.2.3-1 Major Equipment in Basic Oxygen Plant

Equipment Main Specifications Remarks Mixed pig iron furnace Pig iron storage Capacity: 13501 Desulfurization unit installed Number: 2 in mixed pig iron furnace plant. Capacity: 140 t/heat Ladle of No. 1 basic oxygen furnace Number: 3 made in old Soviet Union was Basic oxygen furnace Type: Trunnion ring support replaced with new one by VAI. furnace bottom separating Bottom blow system: Ar, N2 blow Type: Waste gas burning Made in old Soviet Union Gas cooling: Waste heat boiler + Details are shown in article 3.1.3. Waste gas treating system Air diluting Gas purification: Multi-venturi scrubber + Mist separator Type: Two strand bent type Continuous casting system Continuous slab casting Maker: SMS Number: 1 Molten steel ladle: Turret type Continuous casting system, cont. Mf WiCapacity: 401 Slab size: 1120 X 175 X 5000 At the time of inspection Casting speed: 0.91 m/min. At the time of inspection K)000Cq-QN3Sj

1

CD

NOTE * 1 ! TO BE CONFIRMED tmss i nee» j i«m ! nm | i«eoe J SENZOIUIR IRON I STEEL Y081S 60F SHOP crl LAYOUT MIOlPMM NIPPON STEEL CORPORATION-NSC PLANT ENQ* O l TECMNOUXJY CENTER SEND-D300001 oo o COOOOCO-ON3S

SCHZOIUI* IHOH l STEEL KORtS 80F SHOP •IMMltlH « 10HGIIUDINAI SECTION Of CONVENE: BAT * NIPPON STEEL CORPORATION -fTSC il»e-e»»eei . i RANT EHQ’O t TECHMOLCOT CENTER GO tXD 2) Production and operational status

(a) Production status The crude steel production trend in five years from 1994 to 1998 is illustrated on Table 2.2.3-2 below. The continuous casting operation has started in July 1996.

Table 2.23-2 Crude Steel Production Trend (1.000 tons/year) Crude Steel Production Remarks Year Continuous Total Molding Casting 1994 2,779 2,779 0 1995 3,035 3,035 0 Starts continuous 1996 2,501 2,349 152 (6.1) casting works. 1998 Annual 1997 2,662 1,539 1,123 (42.2 Report 1998 2,209 954 1,255 (56.8) Ditto

(b) Operational status The specifics of the basic oxy gen furnace operational status are listed on Table 2.2.3-3 below.

Table 2.2.3-3 Basic Oxygen Furnace (BOF) Operational Specifications

Article Unit Specifications Remarks

[1994]:2,779 [1995]:3,035 l Annual Production ktons/y [1996]:2,501 [1997]:2,662 [19981:2,209

2 BOF Capacity ton/heat 140 3 Number of BOF unit 3 4 Operating Units unit 2 2/3 operational 5 Yearly Production Cycles heats/y 15,771 6 Steel Manuf. Time min/heat 45 Charge to tap time 7 Blowing Time min/heat 22 8 Pig Iron Ratio % 76 860 kg/ts 9 Scrap Ratio % 24 225 kg/ts Good block/Main 10 Steel Yield Rate % 88.3 Material Waste Heat Boiler 11 Blowing Oxygen volume NrrrVh 19,200 Load Limit Blowing from Gas Type Ar,N, 12 Bottom Volume Nrrr’/h 180-540 Charging Speed kg/min. — 13 Iron Ore Charge/Steel kg/ts -

— 83 — Table 2.2.3-3 Basic Oxygen Furnace (BOF) Operational Specifications

[C] :4.5 [SI]:0.60 % [Mn]:0.25 14 [P] :0.67 Molten Desulfur [S] :0.005/0,025 /unsulfur Temperature °C 1,300 15 Decarbon Ratio % 98 16 Reblowing Ratio % 50 17 BOF Brick Life heat/camp 1,200 18 BOF Construction Time days/camp 6 3-shift operation Calculated Value: O; 19 Exhaust Gas Volume (Furnace Exit) NnrVh 38,100 x 2 Exhaust Gas Volume (Cooler 20 Nrri/h — Entrance)

21 Excessive Air Ratio % 150 22 Exhaust Gas Dust Density g/Nnr ’ — [CO]: 67 [C02]: Measured at Feston 23 Exhaust Gas Components % 17 [N2]: 16 of boiler (Russian [H2] : data copied) Exhaust Gas Temperature (Furnace Not measured to this 24 °C 1,500-1,700 Exit) day.

25 Exhaust Gas Volume (Cooler Exit) °C 350

Steam/Prod. kg/ts 115.5 Unit 130 t/heat Designed for 4.0 26 Steam Recovery Pressure MPa 2.35-2.50 (saturated) MPa Temperature °C Saturated Consumption t steam/h Electricity KWh/t.s 11.69 Steam kg/t.s 117.68 Oxygen Nirf/ts 55.23 For Blowing Nitrogen Nm'/ts 1.85 Argon Nnf/Ls 0.85 Blast Furnace Nm’/t.s 0 Gas Utility per 27 Coke Gas Nnf/Ls 10.92 Production Unit Natural Gas Nnf/Ls 10.87 Crude Oil kg/Ls 0 Kerosene kg/t.s 0 Industrial Water nf/Ls 11.57 Filtered Water nf/Ls 0 Soft Water nf/Ls 0 Pure Water nf/t.s —

84 3) Major facility specifications The major specifications of the waste gas treatment equipment of the basic oxygen furnace, a subjected facility of the Energy Saving Fundamental Assessment conducted this time, among the major facilities of the basic oxygen furnace plant is listed on Table 2.2.3-1 below.

Table 2.23-4 Basic Oxygen Furnace (BOF) Waste Gas Recovery Equipment Specifications

Equipment Article Unit Specifications Remarks

BOF Blowing Oxygen Volume Nrrr’/h 19,200 Equipment Capacity : 30,000

Waste Gas Treatment System Complete Burning A = 1.5 Waste Gas Volume (Cooler Entrance) NmVh 140000 Burning at A =1.5 Waste Gas Temperature (Cooler Entrance) °C 1,500-1,700 Contact heat transfer Waste Gas Temperature (Cooler Exit) °C 350 incorporated Waste Gas Cooling System Boiler nr Hood 580 Old SSSR OKG-100, ref. Fig. Heat Transfer Space Radiation m2 SEND-D300007 Contacts nr 2,330 Boiler Operating Conditions Waste Gas Water Supply Volume t/h 260 Cooling System Temperature °C 102-104 Circulating Water t/h Approx. 1700 Volume Circulation Pump Capacity m'/h. unit 500 x05 Units unit 7 Generated Steam Pressure MPa 2.35-2.50 Designed for 4.0 MPa Temperature °C Saturated Designed for 259 °C Volume t/h 260 Drum Volume: 50 m' Accumulator m' 130x4 Steam Recovery Quant./Product ion kg/t.s 115.5 Steam Balance in Premise: 246 Yearly Average, Released in Consumption t/h Atmosphere: t/h Supplemental NG Gas NmVt.s 10.9 Ref. Fig. SEND-D300007 Type Wet Type Venturi Scrubber + Mist Model Made in Old SSSR Dust Collector Separator Pressure Loss mmAq 1300 Waste Gas Cleaning System Volume m'/h 490 Waste Gas Volume Control None Waste Gas Temp, (at Dust Collector Exit) °C 50 Dust Density post-cleaning mg/Nm* 60-80 Type 6500-11-30 Made in Russia Gas Volume . m’/h 318,000 Actual Gas Volume Induced Draft Static Pressure mmAq 1650/320 Fan Motor Capacity kW, kV 5,000, 6 Saving Energy Measure Motor Speed Control Pole change: 1500/750 Steel Sheet made, 3 Stack Type combined Burning Gas Radiation Tower Diameter, Height mm, meter 3000, 80 Gas Burning System None

85 — 4) Energy consumption status The utility energy consumption status in 1998 is shown on Table 2.2.3-5 below.

Table 2.2.3-5 Basic Oxygen Furnace Energy Consumption (1998)

Consumption Consumption/Pr Remarks Energy Source Unit (U) oduction (U)/y (U)/t.s Natural Gas Nm3 23,749 x 103 10.75 (1) Pig Iron Production : Coke Gas Nm3 27,278 x 103 12.35 2,209 kt/y Electricity kWh 33,475 x 103 15.15 (2) Including CC Steam kg 35,259 x 103 15.96 Factory Clean Water m3 45,501 x 103 20.6 Compressed Air Nm3 239,563 x 103 108.4 Nitrogen Nm3 4087 x 103 1.85 Oxygen Nm3 122,787 x 103 55.58 Argon Nm3 1,878 x 103 0.85

5) Record of energy recovery process The apparent and burning heats generated by the basic oxygen furnace during its smelting process are recovered in form of steam. The records of steam recovery in 1998 are shown on Table 2.2.3-6.

Table 2.2.3-6 Basic Oxygen Furnace (BOF) Steam Recovery Record (1998)

Recovered Recovery/Prod. Unit Energy Source Unit (U) Volume Remarks (U)/y (U)/t.s Pig Iron Production: 2209 ton 543.4 x 103 246 kt/y Recovered Steam Saturated Steam Entropy: T joule 1.46 x 103 6.6 x HP 2.68 Mj/kg

6) Energy saving equipment installation situation The installation situation of the energy saving equipment of the basic oxygen furnace is shown on Table 2.23-1 below.

Table 2.23-1 Equipment for Energy Saving Measure

Section Measure Equipment Situation Remarks Apparent Heat of BOF, Burning Heat Equipment Waste Heat Recovery (Steam Recovery) Recovery: Equipment to Treatment by Complete Burning

Equipment Saving Electricity BOF Waste Gas Induced Draft Fan: Speed Control Equipment Process Simplification Continuous Casting (57 %): Slubb CC x 1

86 Table 2.2.3-7 Equipment for Energy Saving Measure

Section Measure Equipment Situation Remarks Apparent Heat of BOF, Burning Heat Equipment Waste Heat Recovery (Steam Recovery) Recovery: Equipment to Treatment by Complete Burning Equipment Saving Electricity BOF Waste Gas Induced Draft Fan: Speed Control Equipment Process Simplification Continuous Casting (57 %): Slubb CC x 1

7) Energy balance (a) The precondition for the OG heat balance calculation and the calculated result of the basic oxygen furnace under afore mentioned operating conditions are shown on Tables 2.2.3-8 and 2.2.3-9 and the energy balance which illustrates the status of the recovery of energy of the basic oxygen furnace waste gas and the recovered energy utilization is displayed in Fig. 2.2.3-1.

Entire Energy = 1.51 x 103 Mj/t.s

Heat of Waste Gas 0.39 x 103 from Basic Oxygen Furnace 1.12 x 103

Burning Heat 763 % Apparent

Waste Gas Loss 13.3% Radiation Loss Heat Recovery 42.4 % 44.3 %

Fig. 2.2.3-1 Energy Balance of Waste Gas of Basic Oxygen Furnace Table 2.2.3-8 Precondition of OG Heat Balance Calculation

OG HEAT BALANCE CALCULATION 1 2000/2/22 1 CALCULATION BASIS CASE 1 IV V 1) HEAT SIZE t/heat 140 140 140 2) PIG IRON RATIO 76 76 76 3) TAPPING STEEL YIELD % 88.3 88.3 88.3 4) DECARBURIZATION 4.41 4.41 4.41 5) OXYGEN BLOWING RATE Nm3/h 19200 19200 19200 6) FE-ORE CHARGED kg/ts 0 0 0 7) BLOWING TIME min 22 22 22 8) TAP-TO-TAP TIME 45 45 45

9) COMBUSTION IN CONVERTER % 5.0 5.0 5.0 RATE IN HOOD 101.0 140.0 150.0 10) GENERATING GAS TEMP. °C 1450 1450 1450

11) NON GAS BEGINNING min 1.5 1.5 1.5 RECOVERING ENDING 2 2 2 TIME 12) DUST GENERATION kg/ts 18 18 18

13) COOLING SKIRT 0 0 0 SURFACE HOOD 145 145 145 AREA 1ST RADIATION m2 435 435 435 CONVECTION 2320 2320 2320 2ND RADIATION 0 0 0

13) COOLING SKIRT NON BOILER NON BOILER NON BOILER SYSTEM HOOD BOILER BOILER BOILER 1ST RADIATION BOILER BOILER BOILER CONVECTION WITH WITH WITH 2ND RADIATION BOILER BOILER BOILER 14) COOLING WATER SKIRT INLET 35 35 35 TEMP OUTLET 95 95 95 HOOD INLET 223 223 223 OUTLET 223 223 223 1ST INLET °C 223 223 223 RADIATION OUTLET 223 223 223 CONVECTION INLET 30 30 100 OUTLET 223 223 223 2ND INLET 223 223 223 RADIATION OUTLET 223 223 223 Table 2.2.3-9 Result of OG Heat Balance Calculation

0 G HEAT BALANCE CALCULATION 2000/2/22 SENDZIMIR STEEL MAK 2 CALCULATION RESULTS CASE 1 IV V 1 WASTE GAS FLOW AND TEMP. ' 1) WASTE GAS 02-BALANCE NmJ/h 102.7E+03 135.0E+03 143.2E+03

FLOW RATE CARBON-BALANCE . 2 Z (AFTER COMBUSTION) 2006 1648 1576 2) OUTLET HOOD 1377 1242 1211 GAS TEMP 1ST RADIATION °C 877 893 892 CONVECTION 294 317 333 2ND RADIATION 294 317 333 2 LOG RECOVERY 1) RECOVERED LATENT HEAT BY LOG kcal/ts 0 0 0 2) RECOVERED LOG VOLUME!2000kcal/Nm3) Nnr / ts 0 0 0 3) LATENT HEAT LOSS BY FLARING kcal/t s 203.3E+03 203.3E+03 203.3E+03

3 STEAM RECOVERY 1) SENSIBLE HEAT INPUT TO OG kcal/ts 2.600E+05 2.600E+05 2.600E+05

2) RECOVERED SENSIBLE HEAT BY STEAM RECOVERY kcal/ts 2.283E+05 2.168E+05 2.122E+05

3) AVERAGE STEAM GENERATION (Max)t/h 154. 147. 144. AT BOILER DRUM OUTLET (LOSSStit/h 142. 135. 132. 4) GENERATING STEAM RECOVERY (Max) BY BOILER AT DRUM OUTLET kg/ts 404.6 384.2 376.0

5) UTILISABLE STEAM FROM OG (Max) AT 20* C FEEDWATER TEMP. kg/ts 351.6 333.9 326.8 (1oss8%t£) 323.5 307.2 300.6 6) UTILISABLE STEAM FLOW FROM OG (Max) TAP TO TAP AT 20*C FEEDWATER t/h 65.6 62.3 61.0

7) SKIRT HEAT ABSORPTION (Max)kcal/ts 0.0 0.0 0.0

4 HEAT ABSORPTION 1) SKIRT O.OOE+OO O.OOE+OO O.OOE+OO 2) HOOD 3.36E+07 2.63E+07 2.48E+07 3) 1ST RADIATION 2.56E+07 2.20E+07 2.11E+07 4) COVECTION kcal/h 2.80E+07 3.44E+07 3.51E+07 5) 2ND RADIATION O.OOE+OO O.OOE+OO O.OOE+OO TOTAL 8.72E+07 8.28E+07 8.10E+07 6) 2ND RADIATION OUTLET HEAT 1.21E+07 1.65E+07 1.83E+07 7) TOTAL HEAT 9.93E+07 9.93E+07 9.93E+07 5.GENERATING HEAT BEFORE COMBUSTION (SENSIBLE HEAT+LATENT HEAT) kcal/ts 260.0E+03 260.0E+03 260.0E+03 (1)LATENT HEAT INPUT(%) 78.2 78.2 78.2 (2)SENSIBLE HEAT(%) 21.8 21.8 21.8 TOATL INPUT ENERGY 100. 100. 100. (3)LDG COMBUSTION HEAT RATIO AT MOUTH 78.2 78.2 78.2 (4)LDG FLARING RATIO 78.2 78.2 78.2 (5)LDG RECOVERED RATIO 0.0 0.0 0.0 (6SENSIBLE HEAT RECOVERED RATIO 87.8 83.4 81.6 (T)SENSIBLE AND LATENT HEAT RECOVERED RATIO 87.8 83.4 81.6 (B)SENSIBLE HEAT LEAVING RATIO OF COOLER 12.2 16.6 18.4 (9)T0TAL HEAT LOSS 12.2 16.6 18.4 (10)GENERATED GAS+DUST ENTHALPY kcal/m3N 592.1 592.1 592.1 (U)COOLER OUTLET GAS40UST ENTHALPY kcal/m3N 117.9 122.3 127.5 (12)GAS COMPOSITION (%) CO 0.0 0.0 0.0 CO, 34.4 26.1 24.6 N? 65.4 68.7 69.3 o 2 0.2 5.2 6.1 TOTAL 100. 100. 100. (b) Currently, the waste heat boiler, which bums the exhaust gas from the basic oxygen furnace, is in operation. In order to stabilize the waste gas burning operation, natural gas is burned additionally during the non-oxygen blowing-in period. Fig. 2.2.3-1 illustrates that the recovered steam shares a 44 percent in the entire energy comprising the energy of the exhaust gas from the basic oxygen furnace and the energy of the additional natural gas burnt and the energy scattered into the atmosphere amounts to 42 percent of the entire energy described above.

2.2.4 Energy process

(1) Outline of the on-premises independent power plant 1) Outline of equipment The power plant of Huta Sendzimira, built in 1954 and located in the center of the premises having power generators, blowers, processing steam and hot water production facilities, forms an ideal energy application and supply center of the steel mill. This power plant generates 33 percent of electricity needed on premises, also, supplies compressed air to the blast furnaces, the processing steams to various plants on the premises and hot water to a variety of facilities including the ones in neighboring district.

The steam turbines of the power generators are of bleeding-and-condensing types or back pressure types. The steam turbines for air supply fans are of condensing turbines, which extract steam heat for heating of the hot water supply within the bleeding cycle. However, the plant does not have a special low-pressure boiler in order to produce processing steam. Being an inland type steel mill, the condensing cooler of Huta Sendzimira utilizes the cooling water circulating through the cooling tower.

The processing steam is supplied by the extracted and depressurized exhaust steam from the bleeding turbines as well as back pressure turbines, and in addition, the steam from boilers during the winter time when the demand for steam rises. Such high demand of heat stimulated the installment of waste-gas boilers which utilize the waste gas from the basic oxygen furnaces and/or the re-heating furnaces to share a part of the demand of the process steam utilized in various facilities of the premises.

Fig. 2.2.4-1 illustrates "the main production flow of the power plant" hereof. "The balance of the power plant" is shown in Figs. 2.2.S-2, 3 and 4 itemized in first and second halves and the entire fiscal year.

(a) Power plant (boiler- and turbine-generators) (a-1) The boiler facility having relatively high steam temperature and pressure of 10 Mpa and 510 deg. C to 540 deg. C at their injection nozzles comprises seven 230 T/H type boilers having total steam output of 1610 T/H. The fuels used for steam generation are by-product gases (BFG and COG) and coal, supplemented by a small amount of natural gas used for

— 90 the pilot burner. The plan says that more natural gas will be used for heating purposes and the surplus of the by-product gases will be used at the power plant. Table 2.2.4-1 lists the facilities at the power plant. (a-2) The turbine power generator comprises three bleeding-condensing type turbine generators having an output of 25 Mwh each and a back pressure type generator having an output of six Mwh. The total power output of generators described above sums up to 81 Mwh. Fig. 2.2.4-S illustrates an example of the steam flow of the turbine generators. The most significant nature of the flow is that there are as many as five water supply heating equipment to raise efficiency of the bleeding cycle. (a-3) All the facilities including the turbines and boilers are of inside building type because the plant is located in the cold district.

(b) Blast furnace blower The blowers are installed in the power plant building. The steam turbine type blowers is positioned in parallel with the power generating turbines using the same steam supplies of nine Mpa (533 deg. C) and 3 Mpa (400 deg. C). The air output of the blowers is 200,000 to 240,000 Nm3/H in 0.35 Mpa. Two blast furnaces, No. 3 and No. 5, were in operation in 1998 and the compressed air of 9 Mpa was supplied by condensing turbine blowers. No. 1 blower having 240 kNm3/h, 0.35 Mpa, 22 Mw turbine output supplied air to No. 5 blast furnace and No. 7 blower having 220 kNm3/h, 0.33 Mpa, 22Mw supplied air to No. 3 blast furnace. Table 2.2.4-2 illustrates the features of the blower facility.

(c) Hot water production facility Having steam from the bleeding turbine and the waste heat boiler of the basic oxygen furnace, four water supplying facilities, three to satisfy the on-premises demand and one to satisfy extra-premises demand, supply the hot water to the various places of internal and external premises. Output: 80 to 140 deg. C, 0.6 to 1.2 Mpa (less than 1.6 Mpa) Intake: 40 to 60 or 70 deg. C.

(d) Others (d-1) Compressed air for oxygen plant The compressed air for the oxygen plant is supplied on demand basis by a material air compressor activated by the high-pressure steam generated by the same boiler described above. (d-2) Water treating facility Taking in water from the Dtubnia River, a tributary water of the Wista River, the water supply facility of Huta Sendzimira supplies water to the boilers of the power plant and to the steel manufacturing plants after treating the water to suit to the purpose.

— 91 I Basic Production Processes of Power Plan# ]

Hot Steam from Turbine & Ma lertai: Coal Pepressurlzer Demineralized Water Predegassing la supplement [ Water Pump ~~] Water * Steam Circulatian Clean Water from ■— No. 2 Water Coal Storage Boiler Degassing Water Treatment Plant Treatment Plant Water kir Boiler u Raw Water tram Fuel Gas: Coke Gas the Dtabnla River Umiprastx) Uiw Blast Furnace Gas Cendensed Steam Level Steam tram Tarbo-Genrrater Chemicals: from Power P.laet HCI; NaOH-, CaO

Hot Shim from Recovered Hot Water Tarbiae & Cendensed Steam from HTS & Deprase rizer tram Heat Cepverter NOWA Hata District co Water Supplement Degassing for Water Ducts & Degassing machine Machine 3j[ T^rho-Blastcr | Hot Steam from Tarblac Dcpraserbw Heat Converter Hot Steam from Tarbiae & ------1= Depraserl»r hr Steel Manufacturing

Hot Water (or Demlaeraftzcd HTS & NOW a Hita CCM Utility Water District Sir Steel Maaelactariag

Fig. 2.2.4-1 Basic Production Processes of the Power Plant For

No.

3

BF For No. 5 BF Fig.

2.2.4-2 Coal NG COG: BFG

:

: :

94,288

5,064 3 60.8 Note:

Nm

* * * * NmVh Nm Operational of

Two Three Three Oxygen T/h 3 /h

3 Huta /h

blast

out out

plant Sendzimira

furnace of of

four seven Flow

fan

turbine

operates

fans boilers

and

(Fiscal are

Balance

—

generator

are

on in

93

operation. demand in

Year

operation. —

of are

1998)

Independent from

in (Two

operation.

In the

backup units winter,

modern

One Power five

oxygen

is boilers

in a

Plant negative addition)

plant

operate

(independent

pressure corresponding

turbine.

organisation). to

steam

demands. For

No.

3

BF Fig. For No. 5 BF

2.2

Coal NG COG BFG 4-3

:

: :

:

115,352 5,676 Note: 48.0 6 of Operational

Nm * * * *

Nm Nm Huta Two Three Three Oxygen T/h 3 /h

3 Vh /h

blast

Sendzimira out out

plant

furnace

of of Flow

four seven

fan

turbine fans operates and

boilers

(Beginning

Balance are

generator

are

on in

operation. 94 demand in

of operation.

Half

are Independent

from

in of (Two

operation.

Fiscal

In the

backup winter,

modern

Year Power

One is

five units

oxygen

boilers 1998)

in Plant a

negative pressureturbine. addition)

plant

operate (independent

corresponding organisation).

to

steam

demands. For

No.

3

BF For No. 5 BF Fig.

2.2

NG Coal BFG COG 4-4

:

: :

:

73,109 4,449 Nm Note: 37.6 0 of Operational

Nm * * * * *

Huta

Nm

Two Three Three Oxygen Steam T/h 3 /h 3 3 /h /h

blast Sendzimira

out out for

(From plant

furnace of

Flow of Factories

four seven

fan

207.0

and

turbine

operates

fans

boilers (Ending increases increases t/h

Balance

are

to

generator 376.5 are

on in

95

Half

operation. by demand in

of

t/h) operation. 1.8

Independent of

times are

Fiscal from

in (Two

compared operation.

In

the

backup

winter, Year

modern

Power

1998) with

One

five units

oxygen

boilers that

is Plant in a

negative

addition) of

plant

the beginning operate

(independent pressureturbine.

corresponding

half

organisation). of

the to

fllcal

steam

year

demands. Fig. 2.2 4-5 Steam Flow of Condensing Bleeder Turbine Power Generator (Simplified with One Condensing Bleeder Turbine Generator)

Bleeder

Water Supplement Boiler

Low-Pressure Circulating Water Heater High-Pressure Circulating Water Heater

Processing Steam DFP-1 DFP-2

Hot Water

Hot Water Generating Heat Converter

Note BFP: Water Circulating Pump for Boiler DFP: Water Circulating Pump for Bleeder

— 96 Table 2.2.4-1 List of Power Plant Facilities

1 Boiler ______BFG:Blast furnace gas. COG:Coke oven gas No. main steam fuel installed pressure, temp. flow LNG oil BFG COG coal(*) efficiency year Remarks Mpa. °C t/h kNm3/h kl/h kNm3/h kNm3/h t/h %

1 10 510 230 S80 = 12 = 36 87 1954 In 2 10 510 230 S80 = 12 S36 87 1954 operation

3 10 510 230 <80 S12 S36 87 1955 In

4 10 § operation 510 230 IIA S12 = 36 87 1956 In 6 10 540 230 S80 S12 = 34 87 1964 operation

7 10 540 230 S80 ^12 ^34 87 1967

8 10 540 230 _ S12 = 36 88 1983

£tt 1610 480 84 248 (*)powdered bituminous coal

2.Turbines main extractive exhaust No. heat rate steam steam steam speed installed pressure temp. flow pressure temp. flow pressure flow rpm year

kca 1/kwh Mpa. °C t/h Mpa. °C t/h mmHg t/h

3 2500 9 500 160 0.12 130 100 720 min 15 3000 1955

4 1200 9 500 100 3 400 100 3000 1959

5 2500 9 535 200 0.8 250 0/130 720 nin15 3000 1961

0.12 130 100/0

6 2500 9 535 200 0.8 250 0/130 720 min 15 3000 1965

0.12 130 100/0 □"It 660

3.Generators No. type Active Apparent Voltage Frequency speed installed power power yea Remarks

MW MVA KV Hz rpm

3 TW2-30-2 25 37.5 6.3 50 3000 1955 In ope ration

4 T-2-6-2 6 7.5 6.3 50 3000 1959 In ope rat on

5 TWS-30 25 37.5 6.3 50 3000 1961 In operat: on

6 TWS-30 25 37.5 6.3 50 3000 1965

Sit 81

97 Table 2.2.4-2 List of Blower Facilities

1.Blower No. Blower installed max.Air flow max.Pressure year Remarks

Nm3/h Moa. For No. 5 1 240000 0.35 1996 BF

Auxiliary 4 200000 0.35 1958 equipment

6 220000 0.33 1963 For No. 3 7 220000 0.33 1967 BF

2.Steam turbine or Motor Steam turbine or Motor installed Capacity. main steam type Vacuum Specific heat rate year Remarks pressure temp. kw Mpa °C mmHg kcal/kwh 22000 9 535 K-22-90-2 720 2500 1996 For No. 5Bl 18000 3 400 AKW-18-1 720 2900 1958 Auxiliary Equipment 22000 9 535 WKW-22 720 2800 1995 22000 9 535 WKW-22 720 2800 1993 For No. 3 B

— 98 — 2) Operations and energy consumption status

(a) Energy consumption and generation at the power plant Table 2.2.4-3 displays the itemized fuel types and consumption by the power plant in 1998. Seventy seven percent of the energy consumed is supplied by coal while the by-product gases (BFG and COG, LDG is not recovered yet) supply only 23 percent. In terms of energy saving, a great amount of energy saving may be allocated to the reduction of the first generation coal purchased from external source, compared with cutting down on by-product gases in other plants and waste-heat recovery equipment that will be installed in the future.

Table 2.2.4-3 Itemized Fuel Consumption at On-Premises Power Plant

Quantity of Fuel Consumption (kNm3(ton)/h, Tcal/year) BFG COG Natural Gas Coal Others Total Annual kNm3/h 94.3 5.1 0.003 60.8 0 — (t/h) Tcal/year 643.3 186. 1 0.2 2724. 0 0 3553.6 (%) (18.1) (5.2) 0 (76.7) (100.0) Beginning kNm3/h 115.4 5.7 0.006 48.0 0 — Half (t/h) Tcal/B. Half 397. 8 104. 7 0.2 1078. 4 0 1581. 1 (%) (25.2) (6.6) 0 (68.2) (100.0) Ending kNm3/h 73.1 4.4 0 73.6 0 — Half (t/h) Tcal/E. Half 245.5 84.1 0 1645.6 0 1972.5 (%) (12.5) (4.1) (0.0) (83.4) (100.0) *BFG standard heat volume (low class basis): 778 kcal/Nm3 *COG standard heat volume (low class basis): 4195 kcal/Nm3 *Natural Gas standard heat volume (low class basis): 8605 kcal/Nm3 *Coal standard heat volume (low class basis): 5118 kcal/Nm3

Table 2.2.4-4 shows the energy outputs of the power plants, the process steam (extraction steam), the blast furnace blowers and of the oxygen plant blowers in 1998. What attracts attention in the data is that the average yearly demand on the process steam (extraction steam) takes 45 percent of the generated energy by the power plant. This shows that, at Huta Sendzimira, considerable portion of energy is spent for the heating due to the low atmospheric temperature in the district of Huta Sendzimira. The average temperature of the year is as low as 7.8 deg. C. The yearly average of the electric power consumption per hour at Huta Sendzimira is approximately 150 Mw/h and 33 percent of which is generated within the premises and the rest

99 of all is purchased from outside sources. Such a high electricity purchase ratio, or 67 percent of the year around electric energy consumption relies on the purchased electricity, lets Huta Sendzimira consider the energy saving project is worthwhile as a cost reduction means.

Table 2.2.4-4 Energy Generated in Premises

Generated Energy Electricity Process Steam Compressed Air Air Supply to Total (Tcal/year) (Extraction Steam) Supply to Blast Oxygen Facility (Tcal/year) (Tcal/year) Furnaces (Tcal/year) (Tcal/year) Annual 1101.9 1424.1 615.3 24.7 3166.0 (34.8) (45.0) (19.4) (0.8) (100.0) First 559.9 482.5 336.3 24.7 1403.4 Half (39.9) (34.4) (24.0) (1.7) (100.0) Second 560.0 914.6 279.0 0 1762.6 Half (30.8) (53.4) (15.8) (0.0) (100.0) * ( ): Percentage * Standard heat energy of electricity: 2450 kcal/kwh

(b) Seasonal difference in demands of electricity and steam The monthly average temperature at Huta Sendzimira drops below freezing point in the wintertime. Naturally, the heating energy demand increases. The demand for steam and hot water in the second half of the fiscal year 1998 was approximately 2.3 time of the first half of the same fiscal year while the demand on electricity stayed at an approximately 1.2 times difference. The electricity and steam consumption of the first, second and full fiscal year 1998, converted into the unit cost of crude steel is listed in Table 2.2.4-5.

The monthly and year around average atmospheric temperatures of both Poland and Japan is listed on Table 2.2.4-6. Table 2.2.4-7 illustrates the hot water production (Fiscal 1999 actual) from the steam valued in the unit cost of the crude steel. It is not necessary to say that the hot water consumption in values of unit cost of crude steel of the second half quadrupled the consumption of the first half.

Table 2.2.4-S Energy Consumption Difference between First and Second Halves

Electric per Unit of Process Steam per Unit of Annual Production Crude Steel (kwh/T-S) Crude Steel (Mcal/T-S) of Crude Steel Inch Sales Excl. Sales Inch Sales Excl. Sales (tons) Through 578 508 883 866 Fiscal 1998 Fiscal 1998 2,075,146 First Half of 597 537 562 554 Fist Half, FY 1998 Fiscal 1998 1,189,395 Second Half of 721 639 1,315 1,285 Second Half, FY 1998 Fiscal 1998 885,751 Second/Fist 1.21 1.19 2.34 2.32

— 100 (c) Power generation efficiency of on-premises power plant Approximate yearly and half year term estimates of the power generation efficiency, calculated from the actual figures of fed energy, electricity output, amount of heat energy supply of the heat and electricity generating plant of Huta Sendzimira, are recorded on Table 2.2.4-8. It secures over 30 percent of power generation efficiency. However, the power generation efficiency in the winter season is not so high as expected despite the sharp increase of the heat demand. It is assumed that in the wintertime, additional boilers start to operate preventing the temperature and the pressure of the steam from reaching as high as designed. Three boilers are working in the summer season, while in the winter season, five boilers are in service. Considering the age (first turbine was installed in 1954 and the newest one was installed in 1983), and the capacity of the turbines, the power generating efficiency is not any less than the efficiency of current Japanese in-plant electric generating facilities.

Table 2.2.4-8 Power Generation Efficiency of In-premises Turbine Power Generator

Fiscal Year a:Fuel Consumed (Teal) b: Process steam c: Air Supply d: Electricity T1: Estimated Turbine 1998 By-Product Gas Natural Gas Coal Total Supply Generated Elec. Generation of Iron Prod. (Teal) (Teal) Efficiency (%) Annual 829.4 0.2 2,724.0 3,553.6 1,226.1 639.7 449,761.0 31.6 First Half 502.5 0.2 1,078.4 1,581.1 396.6 361.0 228,539.0 31.8 Second Half 326.9 0.0 1,645.6 1,972.5 8292 279.0 221222.0 31.3

* Power Generation Efficiency: 7) = {(d X 860 kcal/kwh)/[(a x Boiler Effic.)-b-c]} x 100 % * Boiler Efficiency: 87 % (taken from Huta Sendzimira supplied technical data and applied to estimate figures posted above) * The process steam supply (b) does not include the steam energy consumed by the boilers, for the fuel consumption (a) does not include the energy consumed the by facilities.

Table 2.2.4-6 Average Temperature of Poland and Japan Average Atmospheric Temperature of Poland and Japan (in °C)

Fig. 2.2.4-6 Plan to Improve Efficiency of Independent Power Plant of Huta Sendzimira Table 2 2.4-7 Hot Water Production (GJ or Gcal) in 1999 and its Energy per Pig Iron Production Hot Water Consumption (GJ) Hot Water Production (GJ)

101 — Table 2.2.4-6 Average Temperature of Poland and Japan (Unit: oC) Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Average Poland -3.3 -2.1 2 7.8 13.4 16.6 17.9 17.3 13.3 8.4 3.2 -0.9 7.8 Japan 6.6 6.9 9.1 14.1 18 21.0 24.8 26.6 23.0 18.4 13.4 9.1 15.9

The average temperature listed here is taken at Warsaw. The temperature at Krakow is considered as same as that of Warsaw. In the most severe winter days, temperature drops to -15 in the day and to -25 at night. The average Japanese temperature listed here is taken in Tokyo and is considered to be the same level as in the city of Kimitsu.

In Poland, the processing steam including hot water consumption increases sharply in the winter season because the average winter temperature is approximately 8 degrees lower than Japan and such a climate requires thawing works at steel mills.

Average Atmospheric Temperture of Poland and Japan (in oC)

Poland Japan

102 — Oct

Heat Quantity (GJ/Month) Second April First Fiscal Total December November October August July June February September May April March January Table 350000 250000 300000 200000 100000 150000 50000

to Half to 2.2.4-7 Year March

Half Sept

0

Hot Sub Sales Premises Consumption Sub Premises Consumption Sales Total Sales Consumption Hot Premises Hot In

Total the Water

Total Water

Water 2,068,020

1,630.489 Premises 205,227 260,179 250.734 156,245 132,685 111,169 184,282 55.522 65,736 51,113 92,670

64,927 Production

Consuption

Consumption

in in in

______GJ Hot

(GJ Sales 2,068,020

1,550,902 1,189,352 1,630,489 Water Consumption

441,137 361,550 517,118 437,531 437,531 or 75,981 66,068 65,046 20,570 24,812 54,375 76,930 78,561 11,765 10,924 12,239

(GJ) 9,614 6,627 Gcal)

in Gcal Sales

1999 In Consumption Sales

to and 370,427 284,072 493,938 389,436 437,531 206,309 105,364 123,512 104,502

86255

Plant 37,036 37,600 26,933 18,148 39,548 38,481 Town (Gj) 4,053 4,204 3,977 3,316 9,826 1,335

its

Energy 0

Mcal/Ts Sales ______

103 per

to 231,222

Pig Others 28,468 28,010 40,080 27,442 37,382 16,517 10,904 14,986 7,561 6,947 6,298 6,627

418 321 238 104 188 Iron 97 89 50 15

Plant BOF Sub Water Plant BOF Power Power Total BOF Power Sub Water Plant Water Hot Production I I | | 1 _ 1

Power

Total 350000 300000 Total Water 200000 250000 100000 150000

50000 Treat Treat Treat 2,068,020 Plant Plant Plant 1,968,540 249,100 232,540 202,510 331,370 323,060 137,280 101,670 131,910

Plant 59,730 72,980 57,610 68,780

Production Hot 0

Water GJ Hot

Water BOP Production 2,068,020 1250,902 1475860 1968540 517,118 492680 48,197 42952 32090 51283 48197 16107 4207 2,774 3,582 3,117 4,071 6210 3(239 6,117 5,739 6,235 1,532 1,374 8331

Production

Pig Pig Gcal Pig ment Plant Water (Gj)

Iron Iron Iron

Treat

493,939 370,427 = = 123,512 = 352503 470178 (GJ) 117675 51,283

15,985 14,574

12,393 10259 12249 11512 2075 886 1189 2,989 5,342 7665 3847 1990 ­

k'

0 1 kT/Y r Mcal/Ts /Y □ ■ B

Plant Water Basic Poweer Furnace

Oxygen

Treatment

Plant 419 227 398 239 104 12 9 6 6

3) A proposition for the improvement of the power plant efficiency and of the environmental protection measures.

The assessment found that Huta Sendzimira is better to introduce a power generating system having higher temperature, higher pressure and re-heating systems to modernize the plant and improve environmental protection means. Judging from the current seven boilers lacking the desulfurization or denitrification equipment and consuming approximately 60 tons/hour of coals even though the sulfuric contents is very low (0.5 %), and also knowing that approximately 100 Mw of electricity is currently purchased from outside supply sources, above described proposition is more than reasonable. Also, if electric transmission capacity which currently used to purchasing electricity from external source is interpreted as the capability to transmit supply electricity to outside demands, the introduction of larger power generating facilities into the plant by the collaboration with the electricity supplying companies of the district is more than probable, because then Huta Sendzimira can supply electricity to the neighboring district. A case study will be shown below on the bases of installing a new power plant having 42 percent of re-heating and energy recycling efficiency applying the same fuel efficiency of 60 t/h (5118 kcal/kg) coal energy (77 ). The total power generating energy efficiency including the efficiency of the boiler is estimated at 30-percentage point. To keep the current power generating level of 107.1 MW, e.i. 60 t/h x 5,118 kcal/kg x 0.30 x 1/860 kcal/kwh = 107.1 MW, the amount of coal required for the re-heating and energy recycling type generator is estimated at 42.8 t/h, e.i. 107.1 MW x 860 kcal/kwh x 1/0.42 x 1/5118 kcal/kg = 42.8 t/h. Thus the coal consumption reduction is estimated at 17.2 t/h and the amount of energy saved is also estimated at 3067.2 Tj/y, e.i. 5118 kcal/kg x 17.2 t/h x 8760 h/y x 0.95 x 4.1868 kj/kcal = 3067.2 Tj/y. The reduction on C02 then comes up to 284.4 thousand tons/ year (3067.2 Tj/y x 25.8 Ton-C/Tj x 44/12 x 0.98 = 284.4 thousand tons/year).

The plan described above may equal to replace two existing boilers having 230 t/h coal consumption with new equipment and the investment required is estimated at approximately 15 billion Japanese yen. By such a replacement of old equipment with new ones, Huta Sendzimira can achieve an improvement in terms of environmental protection having desulfurization, denitrification and dust component reduction capability. The operational flow of the on-premises power plant with the improved energy efficiency is illustrated in Fig. 2.2.4-6.

The proposed plan described above will result as much as 143.1 kt/y (17.2 t/h x 8760 h/y x 0.95 = 143.1 kt/v) of coal savings or approximately 0.7 billion Japanese yen (4,923 yen/t-coal) merit. Furthermore, the reduction on C02 brought by the plan described above will equal to four energy saving means subjected to deploy in accordance with the joint project hereof.

Although, the merit brought by the plan described above is not attractive in economical standpoint, the plan may be worth to seriously consider when renew the current equipment for overwearing. Incidentally, the reduction of S02 resulted by the proposed plan will be 1,431 Ton/year (143.1 kt/y x 0.005 x 64/32 = 1,431 t/y). — 104 Stack, Desulferizing Equipment Fig.

2.Z.4-6 Recovered 169k.566 Main Reheated

3Qk,538*C Plan Operational 0.8

Power Processing Steam

MPa

and to ”

C (* Steam

&

Generator 1 Improve )

Reheated 1.6MPa Steam

V

Flow

\

of Efficiency

Steam Processing

0.12 (*

MPa

2 )

Steam

of

Independent Blast (IB) Operational

Furnace Subject or h

heljl

Power Fan

as to

^uxiliary r replace (2 —

Flow Plant

B)

i for

4.4 of e^ulpjiient.

of outwearing

Current t/h 0.8Mpa

i Huta (3

B)

(* Sendzimira Power

Fan

2 j j

Oxygen )

steam to

Supply

Generation 4

1

Plant B 0.12 Hot

Air

Water MPa to

Steam

System Procuctkm 6B

for

j (7

B) (8 Rolling Converter Rolling

B)

R-2 B-l

B 291.Bt/h Steam for

Factories (2) Outline of the oxygen plant

1) Outline of the facility The oxygen plant of Huta Sendzimira comprises "the plants directly managed by the steel mill" and "the plant located on premises but operated by other enterprises." The steel mill's own oxygen plants were founded in 1968 and 1989 having fundamental technologies introduced by the old Soviet Union. The oxygen plant owned by other enterprise (ALPOL) is a new facility commenced its operation in 1995. This plant, located on the Huta Sendzimira premises, is operated by Airliquid Corp. of France sells the products to Huta Sendzimira. The major specifications of the plant equipment mentioned above are listed in Table 2.2.4-9. Both Huta Sendzimira's own and the other enterprise's oxygen plants are closely located having only a few hundred meters in between and also, very close to the basic oxygen furnaces, the largest oxygen gas consumer on the premises, and the distance from the furnaces is approximately 1.5 km. They are also located not so far from old and currently not operating open hearth furnaces.

(a) Oxygen plants owned by Huta Sendzimira The oxygen facility of Huta Sendzimira comprises a third block plant (built in 1968) and a fourth block plant (built in 1989) having low production levels are operated sporadically to supplement the newly built oxygen plant (founded in 1995) operated by the other company (ALPOL and called the fifth block) oxygen production and supply. The old facilities are activated when the oxygen balance becomes tight and in such cases, a substantial quantity of oxygen gas is emitted unutilized due to the oxygen balance. In fiscal 1998, 13.7 kNm3/h of oxygen was required by the steel mill and 14.6 kNm3/h or approximately the same quantity as needed was emitted and lost at the annual oxygen production level of 2,075,000 tons. Such a loss was caused by the ALPOL oxygen gas production of 15 kNm3/h which cannot cover the ups and downs of the oxygen demand within Huta Sendzimira and therefore, No. 4 block oxygen plant having 23 kNm3/h must be operated to supplement the short supply. Table 2.2.5-8 shows the major features of the oxygen plants. Within the Huta Sendzimira premises, there are six oxygen compressors, five nitrogen compressors, three oxygen holders, four nitrogen holders, two liquid oxygen storage tanks, three liquid nitrogen storage tanks and two liquid argon storage tanks, besides the oxygen production plants described above, to supply necessary gases to the facilities on the premises. In the future, it is desirable to have an improved operating routine of the basic oxygen furnaces, which consume considerable amount of oxygen gas, and to have more oxygen storage facilities. The demand for nitrogen gas supplied to heat treatment furnaces at the cold rolling plant is on increase. Figs. 2.2.4-7, 8 , 9, 10, and 11 illustrate facilities for supplying oxygen, nitrogen

and argon gases. The oxygen plants of Huta Sendzimira is an old chilled air separation type with refrigerator (made in old Soviet Union) while ALPOL plant seems a newest chilled air separation type.

106 (b) The oxygen plant of Airliquid Corp. (ALPOL) This is a new oxygen production plant built in 1995. This plant mainly supplies oxygen gas to the basic oxygen furnace supplemented by Huta Sendzimira owned oxygen plants, No. 3 and No. 4. The oxygen gas produced by this plant (having a 15 kNm3/h production capability) has 99.5 percent fineness, which is approximately the same purification of the oxygen gas produced by Huta Sendzimira oxygen plants. The nitrogen gas produced by the same ALPOL has though a purification of 99.995 percent (30 kNm3/h production rate), far surpassing the 95 percent purification of former gas supply and therefore, the nitrogen gas can be utilized at the continuous casting plants and the steel rolling plants which produce thin rolls for automobile industries. The low purity (95 %) nitrogen gas is now utilized for the purging of the blast furnace. The ALPOL plant can recover a greater quantity (0.6 t/h) of the high purity argon gas (99.9999 %) than before and supplies the argon gas to the basic oxygen furnace. Unfortunately, the plant was not open to the assessment for the reason that the plant did not belong to Huta Sendzimira.

2) Oxygen plant operating routine and energy utilization The operational record of the Huta Sendzimira oxygen plant in 1998 is exhibited on Table 2.2.4- 10. The figures on this Table are calculated based on the energy balance sheet submitted by Huta Sendzimira. The No. 4 block oxygen plant is operated at approximately 74 percent operating efficiency of the full production capacity of 23,000 Nm3/h. This means the plant is operated at reasonable efficiency But considering the aforementioned great loss, the most important measures to take is not the improvement of the operating efficiency of the plant but the improvement of operating routines and increasing the storage capacity. The electricity consumption per unit of oxygen production is 946 kwh/kNm3-02 (including electricity used for transporting compressed nitrogen) as far as estimated from the limited data listed on Table 2.2.4-10. This value is approximately 1.4 times as much as the electricity consumption of 658 kwh/kNm3-02 recorded at the Japanese integrated steel mill (to adjust the base of comparison, Japanese figures is added by the electricity consumption to transport compressed nitrogen). The difference mentioned above may be caused by the fact that the oxygen plant of Huta Sendzimira is operated as a supplemental facility and the low operational efficiency. Table 2.2.4-11 shows the oxygen consumption at Huta Sendzimira in comparison with the Japanese integrated steel mill and reveals that almost all the oxygen is supplied to the basic oxygen furnace without blowing into the blast furnaces and that means almost half of the oxygen gas is scattered into the atmosphere and lost.

— 107 Table 2.2.4-9 List of Oxygen and Nitrogen (Argon) Facilities

1.Oxygen plants krkilo No. Air Air comp. Oxygen Nitrogen Argon installed purity pressure purity pressure purity year kNm3/h KW kNm3/h % MPa kNm3/h % MPa t/h %

BLOK Nr3 168 22000 9.5 99.5 3kPa 60 98 3kpa 1968

20 96

BLOK Nr4 161 2*8000 23 99.5 4kPa 60 95 4kpa 0.29 99.9999 1989

* H2 production equipment for improving purity (incld. electrolysis equipment)

* N2 includes 5 % contamination —»Used only in BF.

"ALPOL" 80 9000 15 99.5 6kpa 30 99.995 4kpa 0.6 99.9999 1995

2-Oxygen compressors 3.Nitrogen Compressors

No. compressors motor installed No. compressors motor installed outlet outlet capacity oressure power year capacity oressure power year kNm3/h MPa. kw kNm3/h MPa. kw KTKrn-5 12.5 3.0 3500 1972 KTK nrl 10.5 2.7 3500 1966 KTK nr6 12.5 3.0 3500 1972 KTK nr2 10.5 2.7 3500 1966 KTKnr8 12.5 3.0 3200 1989 KTK nr4 10.5 2.7 3500 1968 KTK nr9 12.5 3.0 3200 1989 K-250 11.0 0.8 1600 1998 KTK nr 10 12.5 3.0 3200 1989 Centac 7.2 0.35 660 1991 KTK nrl 1 12.5 3.0 3200 1990

4,Gas holders( Oxygen) ______5.Gas holders(Nitrogen) No. capacity Operation (pressure) installed No. capacity Operation (pressure) installed m3 min. max. year m3 min. max. year szt.28 20 1.5Mpa 3.0Mpa 1966 szL24 29 O.SMpa 2.7Mpa 1978 szt.6 100 l.SMpa 3.0Mpa 1989 szt.l 1000 O.SMpa 1975 szt.6 100 l.SMpa 3.0Mpa 1997 sz.1 1000 O.SMpa 1992 sztl 250 O.SMpa 1994

6.Storage tanks(Liquefied Oxygen) 7-Storage tanks(Liquefied Nitrogen) 8-Storage tanks(Liquefied Argon) No. capacity Pressure No. capacity Pressure No. capacity Pressure t Pa t Pa t Pa

1 55 - 1 36 0.3Mpa 1 32 3Mpa 2 55 - 2 24 l.OMpa 2 32 3Mpa 3 8 l.OMpa

108 — Table 2.2.4-10 Operational Record of the Oxygen Plants of Huta Sendzimira (FY 1998)

Unit FY 1998 Record Remarks Oxygen Nm3/h 16,981 Plant Utilization Ratio: 73.8 % Production Nitrogen Nm3/h 0 Purchased from outside supplier. Electricity kw 16,067 Steam Gcal/h 2.2 Heating purposes Energy Steam Gcal/h 2.8 For driving material compressors Consumption Equivalent to 1,295 kw electricity based on 2162 kcal/kwh conv. Factor Industrial Water m3/h 3,638 Used for gaas chiller

Table 2.2.4-11 Oxygen Consuming Plants (incld. oxygen purchased from outside supplier)

Consumption per unit of crude steel Remarks a: Huta Snedzimira b: Japanese Integ.. Steel Mill a-b: Difference Blast Furnace 0(0 %) 41.3 (39.2 %) -41.3 Steel Manufact. 55.6 (46.4) 54.9 (52.1) 0.7 Other Plants 2.1 (1.8) 0.6 (0.6) 1.5 Sales 0.3 (0.2) 0.04 (0) 0.3 * Includes Observational 61.8(51.6) 8.5 (8.1)* 53.3 Loss deviation 119.8(100) 105.3 (100) 14.5 s p r e z a l nt i l a e n u NR. 7 @ No.

2

Oxygen Fig.

Compressor 2.2.4-7 High

&

Low

High No.

Pressure

5

Oxygen &

Low

Oxzygcn

Plant

Pressure

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Oxygen

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by Steel

Converter Manuf. L ,

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I ISP pLO 0

I I I

,

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, m>Fl MI MPa TI.KNU iiO*l

Pressure I 3 (ID 3 nessure ?! No. No.

High CISNIKMA High ry Uvtm tlvmi llum llviiv Sintereing

Oxygen Oxygen

Pressure Oxygen l^ressure Oxygen 0

iiwk.rkh nlxk.ckit wvx.risn wvs.viMt G /•..

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Plant Plant of 4

Duct Duct Oxygen Oxygen

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LZ' l»kiku Muku from from HPa

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V.P nr nr No.

Compressor S PR EZALNIA TLENU NR 2 komory Ml. (BLOK BLOK

2

Oxygen

[V 1 ALPOL

No. STACJA.OMU. Pressurizer

I!Oxygen

PL-uu Fig.

2.2A6

Oxygen (Shari Rolling

Steel Factory

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lor SPRE*AI.NIA-W^W-NR<£

Automobile) +»

SCHEMA! PMO 9)

(Refractory

& No. Old SROA

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Material

No.

SIECI

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AZOTU

Plant 3

SPRgZALNI ^

■^KC — ...... XTX ......

— .

—

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0,4 4o ezyity

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i

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& 1 by No.

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,2 CENTAC4

3,0 2

PVV

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of

(7) Cold Rolling Factory (Sheet Steel for Automobile) Nitrogen Supply to Continuous Casting Factory and Cold Rolling Factory (Sheet Steel) AVZB-2

*100 3.0 MPQ

Hiw»rwn WV3HPQ

No. 4 Oxygen Block FEROX V-50 m3 made in Russia

Liquid Nitrogen Holder KAR 30

BLOK TLENOWYUf 5 porewe ^

No. 4 Oxygen Plant No.l/No.2 Steam Vabolizer BLOK TLENOWY Nr A (3)

L'Air Liquide Oxygen Plant

SCHEMA? ZASILANIA ZH/CO.U IWZB-2 AZOTEM CZTSTTM

Fig. 2.2.4-10 Nitrogen Supply to Continuous Casting Factory and Cold Rolling Factory (Sheet Steel) XX GO AT

Argon Distribution * ”O^E) Steel Manuf. ^ by Converter

® Depressurizer

AlPQL* m)

L’Air Liqujde Oxygen Plant No. 4 Oxygen Block made in Russia Facility to Put Argon in Vessels

Fig. 2.2.4-11 Argon Distribution

SCHL.ifiT Ztish fiNW fiR&ONEM

p- 3Qaf (3) Outline of the Gas Distribution Facility

1) Outline and operating situation of the facility Three types of gases, the blast furnace by-product gas (BFG) and the coke oven by-product gas (COG) and the natural gas purchased from outside supplier are applied at Huta Sendzimira. The by ­ product gas from the basic oxygen furnaces is not currently recovered and not utilized. The distribution control of three types of fuel gases described above is centralized and controlled by single gas section under the energy department. The point of the BFG and COG distribution facility worth pay attention to is that the facility does not have a BFG gas holding equipment. The BFG emission rate is kept at approximately 2.1 percentage point even without a gas holder. The gas distribution without a gas holder is enabled by the gas switch over from BFG to the replacing natural gas within a very short time in addition to the powerful gas distribution control capability of Huta Sendzimira. In the Japanese integrated steel mill, having no replacement gas for the by-product gas, the gas distribution without BFG gas holder cannot be considered. Because, such gas distribution system definitely accompanies a substantial gas emission loss. The fuel gas emission loss at the Japanese integrated steel mill is around 0.07 percent and the difference including deviation is about 2.4 percent. BFG and natural gas, equal to 10 percent of total COG, are mixed in the equipment called blender and distributed as pseudo COG. Other than the BFG utilization described above, main portion of BFG is supplied as the mixed gas with COG. In this case the Wobbe index (WI = H [total heat generated] I p [specific gravity]) of the mixed gas is controlled in order to stabilize burning operation by equalizing the various gas mixtures. Table 2.2.4-12 displays the fuel consumption of each plant in 1998. According to Table 2.2.4-12, 52.5 percent of BFG, 29.0 percent of COG and 2.1 percent of natural gas are consumed by the pig iron manufacturing processes. This amount of gas equals to 34.8 percent of all fuel calories consumed at Huta Sendzimira. The fuel gas facilities of Huta Sandzimira are listed on Table 2,2.4-13. The plans of the various gas distribution pipe lines as many as obtained in the present assessment project are interpreted as exactly as possible and added to this report as a reference material.

(a) BFG distribution equipment BFG distribution equipment characteristics (a.l) BFG is utilized at the pig iron manufacturing processes, rolling processes as well as the power plant. Some 50 percent strong BFG supply is consumed by the pig iron manufacturing processes and followed by the pow er plant and rolling processes in that order. (a.2) The BFG gas is directly distributed to each plant through a cleansing process without further compression. (a.3) The pressure of the gas in the BFG generating pipe is controlled between 6 kpa (600 mmH20) to 8 kpa (800 mmH20) and when the pressure goes over 10 kpa ( 1,000 mmH20) threshold

— 115 — level, the gas is burnt and discharged. There are two burning discharge towers having a 140,000 m3 capacity each. Fig. 2.2.4-12 shows the BFG gas distribution system and the section in which BFG is generated.

(b) COG distribution equipment COG distribution equipment characteristics (b.l) COG is distributed to various plants having supply from two sections of the coke oven plant. (b.2) Similar to the BFG distribution system, COG is directly distributed by blowers to each plant through the cleansing process located at coke oven plant without further compression. (b.3) There are two COG holders having 100,000 m3 and 40,000 m3 capacity and one burning discharge tower having a 40,000 m3/h capability. (b.4) Various plants utilize COG because the gas has very high calories. Approximately 10 percent of total COG consumption are supplied in form of pseudo COG mixed with BFG and natural gas.

(c) Natural gas (NG) Natural gas distribution equipment characteristics (c.l) Natural gas is supplied by the outside supplier located in the neighborhood through a NG distribution pipeline. NG is then depressurized to four Mpa to 0.8 Mpa to be distributed to each consuming plant. There are various depressurizing stations to adjust the gas pressure to each consuming plant. (c.2) The calorie of NG is less than a half of BFG (41 %) and a little over half (51 %) of COG. NG is mainly used at the heating furnaces of the rolling plants, the basic oxygen furnace plants and various charging stations. A small amount of NG is utilized at the power plant as a fuel for the pilot burners. (c.3) Huta Sendzimira has a plant to increase the consumption of clean NG at the heating furnaces of the rolling mills and utilize the surplus by-product gases (BFG and COG) at the power plants. The NG distribution pipelines are displayed in Fig. 2.2.4-15.

— 116 Table 2.2.4-12 Fuel Consumption of Various Plants (FY 1998 performance)

Fuel Consumption Quantities BFG Consumption COG Consumption NG Consumption Remarks kNm3/h % kNm3/h % kNm3/h %

Sintering 1.1 0.3 0.7 1.3 - -- Pig Iron Coke 49.1 12.5 14.3 26.4 0.3 2.1

Manufacturing Blast Furnace 155.3 39.7 0.7 1.3 — — Total 205.5 52.5 15.7 29.0 0.3 2.1 Basic Oxygen 2.6 4.8 2.5 17.2 Burnt in Basic Oxygen Furnace Furnace Steel Manufacturing Continuous Casting - - 0.3 0.6 - —

Total — - ' 2.9 5.4 2.5 17.2

Dynamic Power Power Plant 94.3 24.1 5.1 9.4 — — Rolling Mills 52.0 13.3 27.9 51.7 6.3 43.4

Others 27.3 7.0 1.1 -2.0 3.2 22.1 Discharge Stations Incl. Pseudo COG Manuf. Plants Sales 4.0 1.0 3.5 6.5 2.2 15.2

Discharge, Loss 8.3 2.1 - - — — Total 391.4 100 54.0 100 14.5 100

(d) Gas compressors Various types gas compressors are listed on Table 2.2.4-13. Air compressors are centralized and driven by a steam turbine (22 MW, 160 kNm3/h) and supply compressed air to all the plants through pipe line networks, illustrated in Fig. 2.2.4- 16.

(e) Steam delivery 7 pipelines There are two pipe line systems to deliver steam for processing to various plants as illustrated in Figs. 2.2.4-17 and 18. (e-1) 1.6 Mpa steam pipe line system for processing The 1.6 Mpa steam is supplied by the power plant and the basic oxygen furnace. The steam is heat accelerated by an independent super heat charger that burns BFG and is located at the exit of the basic oxygen furnace boiler. The supplied steam is applied to the auxiliary water delivery turbine of the blast furnace water pump located at water treating plant and others. This pump is normally driven by an electric motor receiving a few tons per hour steam supply. (e-2) 0.8 Mpa steam pipe line system for processing

The 0.8 Mpa (250 deg. C) steam is evenly distributed to all sections of Huta Sendzimira from the power plant, the basic oxygen furnace boiler and two places of rolling plant heating furnaces.

117 Table 2.2.4-13 List of Fuel Gas Facilities

1.BFG (Blast Furnace Gas) Gas compressors______Gas hoders Flare stack No. capacity No. type capacity operating installed No. capacity flow pressure motor pressure year kNm3/h Nm3/h kpa. kw m3 kpa. 1 140 2 140

2.COG (Coke Oven Gas) Gas compressors______Gas hoders Flare stacks No. capacity No. type capacity operating installed No. capacity flow pressure motor pressure year kNm3/h Nm3/h kpa. kw m3 kpa. 1 40 1 MAN 100000 5 1962 2 Kloszowy 40000 2.4 1960

3.LDG (Blast Oxygen Furnace [Conveter] Gas) 4. NG Gas compressors______Gas hoders ______Presssure No. capacity No. type capacity operating installed receiving supplying flow pressure motor pressure year Mpa. Mpa. Nm3/h kpa. kw m3 kpa- 4 0.8

118 — Distribution of Blast Furnace Gas. Mixed Gas 0) Cold Rolling Factory m WALCOWNIA ZIMNA LECENDA ?

ROZDZIAL GAZU WIELKOPiECOWEGO I MIESZANEGO SCHEMA'!'TRCHNOf.OCilC7.NY

Fig. 2.2.4-12 Distribution of Blast Furnace Gas, Mixed Gas Fig. 2.2.4-13 Gas Duct and Washer of No. 5 Blast Furnace

Valve j^>— ZAWbF GRZYBOWY

DYSZA VENTUREGO

Ventilation Hole KOMINEK ODPOWIETRZAJACY

Instruments KRYZA POMIAROWA Expansion POk ACZENIE KOk NERZOWE Manual Valve ZASUWA RECZNA Atutomatic (Electric) Valve ZASUWA ELEKTRYCZNA Automatic (Electric) PRZEPUSTNICA ELEKTRYCZNA Throttle Valve WP-5 Blast Furnace okdlnica gazu wielkopjecowego Blast Furnace Gas Duct zasuwa termiczna ODPYLN1K

koisktor gazu czystego (7) Clean Gas Collector

kolektcfr gazu pdkczystago

Depressurize d .V2 Valve

Gas Washer

ODWADNIACZ (E) Mist Catcher Schemat sieti gazowej WP-5 i Oezyszczalni Gazu Nr 3

Rysunek nr 1

120 - Mechanic Coke

Gas

Works(?) ZAKUXJD LM

Distribution 6 '8:

Basic SMC novmiox, MAL6WMA

Oxygen STALOW1A (Currently 'IS

Furnace

Open ROZDZIAt

I

learth 6

not PMO/04 MARTENOWSKA SMC

operating)

WAUC0WN1A Fig. Furnace SLABENO SCHEMAT #

2.2.4-14

Iron

SMO

Frame

ZV

GAZU c Factory

Coke

TECHNOLOGrCZNY

Gas

KOKSOWNICZEGO

Distribution 17) WPS

Coke Mol

.

Rolling Plant WP4 mins mSTAWUW.W

7.K WP3 KOK.tOCItRMICZNY

t

wvmvt, 7

SMC/64 I l#

Sintering W-W/ZE W-ZE 8: REMIZA

Gas

Mixing STACJA

LEGENPA MASZ 1(2

Man

MESZANIA a )

at 1

Railway

OAZU Transport Natural Gas Distribution walcownia karosrrwna 4 Cold Rolling factory ZD/B2 WALCOWNIA ZIMNA 7.n/n< > (H) Security B2 piece 3) Cold Rolling Factory m i:s Hospital ' Reg. kw*w ZLZ TE/TA

(5) Hot Rolling Factory HUT-PUSS A 35; Maintenance Factory WALCOWNIA OORACA

31; Open Hearth Furnacew SttOWNIA STALOWNIA MARTENOWSKA

WPS WP4 WP3 ',6) Blast Furnace I Scrap Factory WIGLKIB PIECE

K3 IP. KI i.B) Sintering Factory l() Basic Oxygen Furnace STALOWN1A KONWF.RTOROWA

(D SR.l-7 Depressurlzer SRI STACJA REDUKCJI ClSNtENlA slabbing ]- UCZNIK © \j Instrument H KalfuAturt WALCOWNIA JSLAMNO SI! + SIS STAC1B INtEKTOROWE ROZDZfAi, CAZU ZIEMNEGO SCHEMA!' TECHNOLOGtCZNY

Fig. 2.2.4-15 Natural Gas Distribution Pressurized Air Distribution (S) Cold Roilin gFactory (Sheet Steel for Automobiles) ('ll) Rolling Factory ( Pipes) UMAWWIAIUMt MODEL ;; j # Cold Roilin gFactory (1$ Cold Roilin gFactory tWU(MIVW

* HZ M2AVKS ek«6 (il) Rolling Factory ( Steel) ZT/T9 Compressor

WYWROTNICA

WP5 WP4 WP.1 WIIM.KIH |*lKelt 2; Blast Furnace mom WYIU VKi. Factory ZKl (:i) ZAK1.AD KOKSOC1 UiMlCZNY ilALOWlAA: WKt (3)CDQ Coke Plant (WK1-CDQ) KOHWSKiOAOWA flAftttUA wielokomoudwa , LEGENDA WZ5*

STACJA SPR^ZAHEK ( PRODUKCJA) (.S) Compressor (Gas) 17 Slabbing i(3) Sintering ROZDZIAt SPRI^ZONEGO POWIETRZA

Fig. 2.2.4-16 Pressurised Air Distribution 1. 6 MPa Steam Distribution SCHEMAT SIEGI PARY 1.6MPa W-25/HTS S Cold Rolling Factory ?

SIARCZANOWNIA

® Water Treating Section

Power Plant

Reion District Sk 04. Re Jon f Rurogiog Pipe Line 3 WP Rurociag A 4*300

SI 034.

Independent Superheater Baxic Oxygen Boiler

(3) Coke Plant

Fig. 2.2.4-17 1. 6 MPa Steam Distribution Cold Rolling Factory EGL ;|ix: Rolling Factory (Pipes)

4 Cold Rolling i-'actory

8 Petrolium Storage ssr r-R mrr - I i 3 Hot Rolling wmrzrkT urun YUS. r,ou»vw Vessel

cnCO SiLOWNIA

0.8 MPa Steam Flow ■‘"Mwlmlm 112/

PMuj «-'< am Coal & Iron Ore Fig. 2.2.4-18 0.8 MPa Steam Flow Coke Plain SCHEMA? PAROWEJ 4- 40 ' G6 16: Water Purification Plant • r. •’"•-5 f f>~Sl # Sintering Factory r™ i Table 2.2.4-14 Facilities for Compressed Air

1.Compressors No. Blower installed maxAir flow maxPressure year Nm3/h Mpa.

2 160,000 0.61 1968

3 160,000 0.61 1972

2.Steam turbine or Motor Steam tur Dine or Motor installed Capacity. main steam type Vacuum Specific heat rate year kw pressure temp. mmHg kcal/kwh Mpa °C

22,000 9 535 WKW-22 720 2,400 1968

22,000 9 535 AKW-22 720 2.400 1972

126 — 2.3 Execution capability of the Project by Huta Sendzimira Steelworks

2.3.1 Technology capability

The most advanced technologies are not introduced to Huta Sandzimira mainly due to its financial problems. Yet, Huta Sendzimira as a whole well educated in the most advanced steel mill operations and facilities collecting various documented information actively joining the academic conferences held in Western Europe. In view of technologies in relation with facilities, there is no reason to believe Huta Sendzimira is not qualified to proceed with the project hereof, because the steel mill has been constructing new coke ovens or continuous casting equipment in recent years. Huta Sendzimira though may need some technical collaboration in an aspect of engineering in order to carry on the project efficiently.

2.3.2 Management capability

The overall energy control of Huta Sendzimira is controlled quite efficiently having special sections to control each gas, water, electricity and power generation and those sections work under the central energy department. There is no reason to believe Huta Sendzimira is not qualified in light of energy control capability. Huta Sendzimira though seems not to have an integrated real time energy control system which is popularly found in Japanese steel mills.

2.3.3 Management base and policy

Huta Sendzimira is one of the two largest steel mills in Poland which has been trying to modernize their facilities and technologies particularly in rolling products after the 1989 revolution aiming at establishing a sound managerial base as an independent enterprise. In July 1999, all the management staff was replaced by five new and young board members led by Jananacheck, the forty four years old new president, and putting the most effort to establish a sound business foundation. Currently, Huta Sendzimira management is trying to build its own financial foundation in order to privatize the business having collaboration with the Ministry of National Property. The management foundation of Huta Sendzimira is favorably evaluated as a Polish representing integrated steel mill. The management led by president Janacheck is actively working on the reforming the enterprise structure, having the "zero percent" tariff policy which will be practiced from the beginning of year 2000 well in its consideration, by the time when Poland joins EU. The labor force reduction policy has been the sustaining problem of Huta Sendzimira. The number of laborers has been reduced to 14,500 by the end of 1999 from 17,000 at the end of 1998. The plan spells that the labor force will be further cut down to 8,500 by the end of year 2000. At the same time, company structural reform is proceeding mightily. The management

— 127 — expects that simplifying the organizational structure and moving around personnel through various organizational barriers will make the company more flexible and versatile. The product making and sales strategies are also in reforming motion. The current aim is to raise the export share of its products to ten percent as well as to increase the domestic sales competing with other steel manufacturers by increasing the production efficiency, improving product quality through infrastructure improvement. Such an object of the facility improvement, of course, includes the improvement of the ecocide problems.

2.3.4 Capability of financial arrangement Huta Sendzimira is a joint stock company of The Ministry of National Property of Poland that holds 100 percent of the company's share. In other words, Huta Sendzimira cannot increase its share or raise fund in the investment market in order to independently raising its own fund. This means that there is a certain limitation to introduce more advanced facilities or technologies due to the difficulties in funding. The privatization of the enterprise, the largest undertaking of Huta Sendzimira since the reform project, had started in 1989. This privatization project is to have a collaboration of overseas strategic investors in order to introduce investment from outside fund sources.

Such a fund raising project itself, a fundamental term for the joint project proposed this time, is not an easy task. One helping hand expected, in accordance with the management who appreciate the environmental protection nature of the joint project, is to ask the Polish government to provide an aid for the project on the basis of the joint project will greatly contribute to the environmental protection and improvement of ecocide problems. Nevertheless, raising fund independently for the joint project is a heavy burden for Huta Sendzimira who has to rely on the Polish government support and the success of the privatization policy. Such a difficulty may be observed in a comment directed toward the Japanese members of the joint project assessment stated by the management staff saying that they were expecting some types of Japanese financial support such as a yen credit in favorable terms.

2.3.5 Capability of personnel arrengement

Well-qualified labor resources are plentiful to proceed with the project for the project this time proposed. The high qualification of the labor resources has been proved by the installments of the most modem new coke oven or new continuous casting equipment and the flawless modifications of three blast furnaces that took place most recently. Concerned personnel of Huta Sendzimira fully understood the technical aspect of the energy saving measure discussed at the table of assessment and study conferences at the couple of field studies.

2.3.6 Execution organization The proposed energy saving project items are strictly and singularly related to the technological

128 aspect of equipment of steel mills and therefore, there were no discussions taken place concerning the organizational structure to carry on the project in case the project proposals are authorized. However, Huta Sendzimira has a plentiful experience in constructing facilities as described above, once the similar organizational structure as taken place in the past is established for the energy saving joint project at Huta Sendzimira, there will be no problem on the Japanese side in joining the prepared organization. What the Japanese side is supposed to do in this joint project is to prepare a financial support in favorable terms and to give a technological support directly related to the equipment to be installed in accordance with the joint project.

2.4 Contents of the project and the specification of related facilities after modification at Huta Sendzimira Steel Works

2.4.1 Blast furnace TRT

(1) Plan Top pressure recovery turbines will be installed to No. 3 and No. 5 blast furnaces in order to recover otherwise wasted energy in form of electricity. The installed equipment will enable to utilize the top pressure gas of the blast furnaces currently wasted as the pressure loss in order to save energy and reduce the greenhouse effect gases. (2) Basic concept of the plan * The wet type coaxial static blade pressure controllable turbine system will be chosen for its high blast furnace top pressure electric generation efficiency. * The capacity of the TRT will be determined in accordance with the pig iron production level and the top pressure of the subjected blast furnace. * The energy saving efficiency of the equipment will be calculated based on the 1998 operational performance. * The TRT equipment will be installed to No. 3 and No. 5 blast furnaces. (3) Operational conditions and TRT output The operational conditions and TRT output is listed on Table 2.4.1-1 for the purpose of studying the equipment.

— 129 Table 2.4.1-1 Operating Conditions & TRT Output

No. 3 Blast Furnace No. 5 Blast Furnace Evaluation Basis Maximum Operation Evaluation Basis Maximum Operation Blast Furnace Operating Conditions Pig Iron Production t/day 2,497 2,760 3,130 3,450 Operational Rate % 88 96 93 98 Top Pressure kg/cm2 1.45 1.50 1.45 1.50 Top Temperature °C 140 140 145 145 BFG Amount Nm3-dry/h 190,000 210,000 233,100 256,900 TRT Equipment TRT Operational Rate % 87 95 92 97 TRT Entrance Gas Volume Nm3-dry/h 184,300 203,700 226,100 249,200 Gas Pressure kg/cm2 1.00 1.05 1.00 1.05 Gas Temperature °C 50 50 50 50 TRT Exit Gas Pressure kg/cm2 0.06 0.06 0.06 0.06 TRT Power Generation Output KW 3,000 3,400 3,700 4,200

The efficiency of the equipment is calculated based on the average performance between April 1998 and March 1999. The maximum operational capacity was set on the basis of the equipment capacity. Estimating a five-percent deviation with the power generation output value and considering the common factors of the equipment, the TRTs of both blast furnaces are designed to be 4.5 MW types.

(4) Operational flow of the equipment The operational flow of the TRT is illustrated in Fig. 2.4.1-1. The TRT will be installed in parallel with the currently working top pressure control valves. The gas cleanliness after the venturitoier is five mg/Nm3, which are well within the acceptable range, and the generated mist will be removed by the existing mist separator.

— 130 Fig. 2.4.1-1 TRT Equipment Flow

Fig. 2.4.1-1 TRT Equipment Flow

BF : Blast Furnace ESV : Emergency Stop Valve SV: Stopping Valve DC : Dust Collector TCV: Timing Control Valve CV : Top Pressure Control Valve VT: Venturi Toiler TRT : Top Recovery Turbine MS: Mist Separator GV : Goggle Valve G : Generator

(5) Equipment outline The major specifications of the equipment are listed on Table 2.4.1-2 below.

Major Facility Major Specifications Quantity Steam coaxial reaction turbine 2 Variable pressure control with still blades Output: 4.5MW RPM: 3000 I. Turbine Designed pressure: Entrance 1.5kg/cm2 Exit 0.1kg/cm2 Emergency cut-off valve, Velocity Control Valve added by lubrication system and others Alternate current synchronous generator 2 Capacity 5 MV A Power factor 0.9 2. Power generator & other Voltage 11KV electric equipment Electric controller Distributor 3. Instrumentation Turbine power generator instrument 2 BFG pipes at turbine entrance and exit 2 4. Piping Flexible pipes Utility pipes (TRT vicinity) 5. Purchased valves Goggle valve, TRT exit cut-off valve 2 Foundations, Buildings, Power control room 2 6. Civil engineering Water supply facilities.

— 131 (6) Estimated cost of equipment The estimated cost of the equipment in case the equipment is installed in Japan is mentioned on Table 2.4.1-3.

Table 2 .4.1-3 Estimated Cost of Equipment

Cost (100 Equipment, Works Quant. Remarks Million Yen)

Turbine purchase & Installment, Valves Mechanical System 2 10.0 purchase, TRT peripheral plumbing

Electrical System 2 3.6 Generator purchase & installment, Electric parts purchase, Electric works

Instruments 2 1.2 Instrument purchase & installment Construction, Plumbing 2 1.4 Foundation and plumbing works Total 16.2

132 2.4.2 Hot stove waste heat recovery

(1) Outline of the plan Waste heat recovery equipment will be installed to the hot blast stove of No. 3 and No. 5 blast furnaces. The apparent heat of the waste gas from the hot stove is recovered by heat converters and utilized to preheat the fuel gas and burning air of the hot stove in order to reduce the amount of the fuel gas and the greenhouse effect gases.

(2) Basic concept * A heat flux circulation type waste heat recovery system will be chosen. This type of heat recovery system is compactly made and capable of preheating the fuel gas. * The energy saving efficiency and other effects will be calculated based on the 1998 operational performance. * The waste heat recovery equipment will be installed to No. 3 and No. 5 blast furnaces.

(3) Operational conditions The operational conditions of the blast furnaces and the hot stoves are listed on Table 2.4.2-1.

Table 2.4.2-1 Operating Conditions

No.3 Blast Furnace No. 5 Blast Furnace Before Heat Recovery After Heat Recovery Before Heat Recovery After Heat Recovery Big Iron Production t/day 2.497 3.130 Operational Rate % 88 93 Air Temperature °C 930 850 Air Supply per Production Nm3/t-pig 1,498 1.353 Number of Hot Oven 4 4 Air Blow to Burning Switching Time 70- 195- 15 70- 195- 15 Blowing Pressure of Burning Air 200 200 Maximum Hot Oven Dome Temperature 1.350 1.350 Burner Frame Temperature “C 1,090 1,200 1,090 1,200 BFG Flow Rate Nm3/h 82,500 76,500 96,700 89,600 Temperature •c 26 135 26 135 Burning Air Flow Rate Nm3/b 47,500 44,000 55,600 51,500 Temperature “C 16 130 16 130 Waste Gas Flow Rate Nm3/h 120,500 111,700 141,200 130,900 Temperature ■t 214 214 214 214 Hot Oven Heat Energy per Production Mcal/t-pig 552 512 516 478

133 (4) Equipment configuration The configuration of the equipment is illustrated in Fig. 2.4.2-1 below. Main equipment components are as follows. * Install an exhaust gas heat converter, an air heat converter, and a BFG heat converter. * Install a pump and plumbing to circulate heat flux among the heat converters. * Install a pump and plumbing to compensate for heat load variation. * Install a pump and plumbing to replenish and drain heat flux.

Blasting Air Pipe

Blasting Gres Pipe

Stack- Hot Oven Hot Oven Hot Oven Hot Oven

Smoke| Channel

HE-1

^------Blasting Air

Fig. 2.4.2-1 Hot Oven Waste Heat Recovery Equipment Flow

HE-1 : Waste Heat Converter P-1 : Heat Flux Circulation Pump HE-2 : Air Heat Converter P-2 : Heat Flux Replenishing Pump HE-3 : BFG Heat Converter T-l : Expansion Tank T-2 : Heat Flux Tank

134 — (5) Equipment outline Major specifications of the hot stove waste heat recovery equipment are listed on Table 2.4.2- 2.

Table 2.4.2-2 Equipment Specifications

Main Equipment Specifications of Main Equipment Quant. 1. Mechanical Equipment Heat medium circulating type waste heat recovery equipment, comprising 2 3 Heat converters 2 Circulation pumps I Replenishing pump 1 Expansion tank 1 Heat medium tank Heat medium : Therm 800 2. Electrical Equipment Control panel, operational panel 2 3. Meters Detectors and others 2 4. Construction and water supply system Foundations, pump cooling water supply 2

(6) Estimated cost The estimated cost of the equipment in case the equipment is installed in Japan is shown on Table 2.42-3.

Table 2.4.2-3 Estimated Cost of Equipment Installment

Equipment & Constructions Quant. Expenses (100 Mil. Yen) Remarks Mechanical Equipment 2 5.9 Equipment purchase, installment & plumbing Electrical Equipment 2 0.3 Electrical instrument purchase, installment Instrument 2 0.3 Instrument purchase and Installment Construction and plumbing 2 0.2 Foundation, plumbing and drainage works Total 6.7

135- 2.4.3 Sinter cooler waste gas recovery

(1) Plan Installing waste heat recovery equipment will be installed to No. 2 and No. 4 sintering machine of the sintering plant in order to recover the apparent heat of the waste gas, not recovered currently, in form of steam.

(2) Basic concept of the plan * The apparent heat will be recovered by a waste heat boiler circulating the sinter cooler exhaust gas. * The capacity of the waste heat recovery equipment is determined in accordance with the sintering machine production capacity. * The energy saving efficiency will be calculated on the 1998 operational data basis. * A one set of waste heat recovery equipment is installed for both No. 2 and No. 4 sintering coolers.

(3) Operational conditions The operational conditions are listed on Table 2.4.3-1 below for the study of waste heat recovery equipment installment.

Table 2.4.3-1 Operating Conditions

Basic premise: Two sintering machines and their coolers have similar production capacities. Conditions per Each Unit Remarks Sintering Production t/h 90 Cooler Type Press-in type straight Cooler Sinter Cooler Capacitance 150t-s/h Nominal Cooler Space m2 152 2 m X 76 m Thickness of Ore Supplied to m 0.25 Max. Thickness 0.28 m Cooler Temperature of Ore Supplied °C 650 to Cooler

Grates + BC Post-Cooler Transfer System

Current Cooler Fans m3/min./unit 2600 Each five-segmented cooler portion cooled by a fan. mmAq 200 Units 5

Operating Rate % 95 Sintering machine operating rate: 97%

— 136 (4) Operational flow The operational flow of the waste heat recovery equipment of the sinter coolers is illustrated in Fig. 2.4.1-3.

1 Dust Collector

1 Cooler 1 ^ Steam

duster

Sintering Strainer Waste + BC Heat Q- fr Boiler

Freshwater

Cooler Working in Parallel

Fig. 2.4.31 Sinter Cooler Waste Heat Recovery Equipment Configuration

Note: The configuration and work flow of the equipment make cooling of current equipment possible.

Waste gas Volume 162,000 NmVh Temperature 310 °C at Boiler Entrance 180 °C at Boiler Exit 320 °C at Cooler Exit 170 °C at Cooler Entrance

Steam condition 12 kg/cm 2 x 260 °C x 9.9 t/h

137 (5) Equipment specifications The major specifications of the waste heat recovery equipment of the sinter coolers are shown on Table 2.4.3-2.

Table 2.4.3-2 Main Specifications of the Equipment

Major Equipment Main Specifications Quant. Boiler 1 unit 1 Steam: 12 kg/cm2 X 260 °C Steam Volume: Approx. 9.9 1. Mechanical System t/h (706 kcal/kg) ' IDF 800KW X 1 unit. Gas circulating plumbing, valves Utility plumbing (sintering machine only) Power Supply, wiring works, Control 1 2. Electrical Instruments panel, Instrument setup 3. Construction Foundation, Power substation, Water 1 purifying equipment Note: Drainage processing system not included in water purifying equipment.

(6) Estimated cost of equipment installment

The estimated cost of the equipment in case installed in Japan is listed on Table 2.4.3-3.

Table 2.4.3-3 Estimated Cost of Equipment

Equipment, Works Quant. Amount (in 100 Mill. Yen) Remarks

Mechanical Equipment 1 8.1 Waste heat recovery equipment purchase, installation and plumbing works Electrical instruments purchase and Electrical Instrument 1 0.8 installation works Foundation, electric substation, water Construction Works 1 1.6 purifying equipment installations Total 10.5

138- 2.4.4 Basic oxygen furnace waste gas recovery ;

The energy saving plan to be introduced to the steel manufacturing processes of Huta Sendzimira is a waste gas recovery equipment comprising a recovery system of the apparent heat of the waste gas and the electric energy saving of the induced draft fan system comprising the waste gas processing system of the basic oxygen furnace.

(1) Waste Gas Recovery Plan for the Basic Oxygen Furnace 1) Operating Conditions The operating conditions of the waste gas recovery system for the basic oxygen furnace as a preliminary condition of the plan is listed on Table 2.4.4-1.

Table2.4.4-1 Operating Conditions of Basic Oxygen Furnace as a Preliminary Condition

Specifications Articles Unit Remarks Current Plan 1 Yearly Production ton/y 2,209x1 03 2,209x1 03 1998 performance 2 Furnace Capacitance ton/heat 140 140 3 Working Furnaces set 2 2 3 equipment units 4 Steel Making Cycle min./heat 45 45 Charge to tap time 5 Blow-in Cycle min./heat 22 15.5 6 Yearly Production in Heats heats/y 15,771 15,771 1998 performance 7 Molten Iron Percentage % 76 76 8 Acceptable Product Rate % 88.3 88.3 9 Decarburize Rate % 4.41 4.41 Carbon/Molten Steel [C] :4.50% 10 Blow-in Oxygen Volume Nm3/h 19,200 30,000 11 Inside Furnace Burning Ral % 5 5 12 Furnace Mouth Burning Rz % 150 10 13 After Burning Gas Volume Nm3/h 143x103 67x103 14 Gas Recovery Cycle min./heat — 12.5 Natural Gas Supplementary burning during 15 Nm3.'t.s 10.9 - Supplementary Burning non-oxygen blowing in 16 Life of Converter Lining heats/rotation 1200 1200 17 Construction Work Period day/rotation 6 6 3 rotations per day works

2) Apparent Heat Recovery The high temperature waste gas generated in the basic oxygen furnace is cooled to a specific low temperature through the gas cooling equipment (a boiler) within the waste gas processing system of the basic oxygen furnace. Through the process described above, the apparent heat of the waste gas is recovered in form of steam. Corresponding to the waste gas recovery of the basic oxygen furnace, the perfect combustion rate in the boiler by the secondary burning air of the basic

-139 — oxygen furnace waste gas will be suppressed to X = 0.1 (perfect combustion X = 1.5) and therefore, the amount of the apparent heat recovery within the gas cooling equipment (the steam recovery amount) will be reduced. The current steam recovery amount and the estimated steam recovery amount when the waste gas is recovered from the basic oxygen furnace are listed in Table 2.4.4-2. The preliminary condition of the basic oxygen furnace heat recovery and the estimated figures are illustrated in Tables 2.4.4-3 and 2.4.4-4.

Table 2. 4.4-2 Estimated Steam Recovery Amount

Specifications Articles Unit Remarks Current Estimates Saturated Steam Generation per unit 1 kg/t. steel 680 68 Pressure at drum of steel exit Saturated Steam Recovery per unit kg/t. steel 246 59 of steel 2.5 MPa Based on 1998 ton/y 543x103 130xl03 Yearly Steam Recovery performance Natural Gas Supplementary Burning 2 10.87 — per unit of steel NmVt.steel Yearly Supplementary Fuel Based on 1998 2.4x103 — Consumption Nnf/y performance

140 Table 2.4.4-3 OG Heat Balance Calculation Basis

| O G HEAT BALANCE CALCULATION 2000/2/21 1 CALCULATION BASIS CASE SEKDZ SEKDZ SEKDZ SEKDZ SEKDZ 1) HEAT SIZE t/heat 140 140 140 140 140 2) PIG IRON RATIO 76 76 76 76 76 3) TAPPING STEEL YIELD % 88.3 88.3 88.3 88.3 88.3 4) DECARBURIZATION 4.41 4.41 4.41 4.41 4.41 5) OXYGEN BLOWING RATE Nm3/h 19200 30000 30000 30000 30000 6) FE-ORE CHARGED kg/ts 0 0 0 0 0 7) BLOWING TIME min 22 15 15 15 15.5 8) TAP-TO-TAP TIME 45 38 38 38 38.5

9) COMBUSTION IN CONVERTER % 5.0 5.0 5.0 5.0 5.0 RATE IN HOOD 10.0 10.0 10.0 10.0 10.0 10) GENERATING GAS TEMP. "C 1450 1450 1450 1450 1450

11) NON GAS BEGINNING min 3 2 2 2 2 1 RECOVERING ENDING 1 1 1 1 1 1 TIME 12) DUST GENERATION kg/ts 18 18 18 18 18

13) COOLING SKIRT 15 15 15 15 15 SURFACE HOOD 67 67 67 60 60 AREA 1ST RADIATION m2 450 450 300 250 250 CONVECTION 0.0 0.0 0.0 0.0 0.0 2ND RADIATION 0.0 0.0 0.0 0.0 0.0

13) COOLING SKIRT NON BOILER NON BOILER NON BOILER NON BOILER NON BOILER SYSTEM HOOD BOILER BOILER BOILER BOILER BOILER 1ST RADIATION BOILER BOILER BOILER BOILER BOILER CONVECTION NONE NONE NONE NONE NONE 2ND RADIATION NON BOILER NON BOILER NON BOILER NON BOILER NON BOILER 1 14) COOLING WATER TEMP. SKIRT INLET 102 102 102 102 102 I OUTLET 130 130 130 130 130 ! HOOD INLET 221 221 221 221 221 1 OUTLET 221 221 221 221 221 1 1ST INLET *C 221 221 221 221 221 RADIATION OUTLET 221 221 221 221 221 CONVECTION INLET 0 0 0 0 o OUTLET 0 0 0 0 o ! 2ND INLET 0 0 0 0 0 . 1 RADIATION OUTLET 0 0 0 0 0 1 1

— 141 — Table 2.4.4-4 OG Heat Balance Calculation Result

lOG HEAT BALANCE CALCULATION ______2000/2/21 2 CALCULATION RESULTS CASE SENDZ SENDZ SENDZ VI SENDZ 1 WASTE GAS FLOW AND TEMP. 1) WASTE GAS 02-BALANCE Nm3/h 43106 67354 67354 67354 67354 FLOW RATE CARBON-BALANCE

2) OUTLET HOOD 1083 1196 1196 1220 1213 GAS TEMP 1ST RADIATION *C 570 676 776 825 823 CONVECTION 570 ' 676 776 825 823 2ND RADIATION 570 676 776 825 823 2 LOG RECOVERY 1) RECOVERED LATENT HEAT BY IDG kcal/ts 182950 182950 182950 182950 182950 2) RECOVERED IDG VOLUME(2000kcaVNm3 VALUE) Nm3/ts 75 73 73 73 74 3) LATENT HEAT LOSS BY FLARING kcal/t s 3.33E+04 3.66E+04 3.66E+04 3.66E+04 3.541E+04 3 STEAM RECOVERY 1) SENSIBLE HEAT INPUT TO OG kcal/ts 7.75E+04 8.13E+04 8.13E+04 8.13E+04 8.329E+04 2) RECOVERED SENSIBLE HEAT BY STEAM RECOVERY kcal/ts 46488 45687 40700 38263 39026 .

3) STEAM GENERATION (Max)t/h 31. 45. 40. 38 37 AT DRUM OUTLET (LOSSBZU/h 29. 42. 37. 35 34 4) GENERATING STEAM RECOVERY (Max) BY BOILER AT DRUM OUTLET kg/ts 82.4 81.0 72.1 67.8 69.2

5) UTILISABLE STEAM FROM OG (Max) AT 20* C FEEDWATER TEMP. kg/ts 71.6 70.4 62.7 58.9 60.1

6) UTILISABLE STEAM FLOW FROM OG (Max) TAP TO TAP AT 20* C FEEDWATER t/h 13.4 15.6 13.9 13.0 13.1

7) SKIRT HEAT ABSORPTION (Max) 7,140.2 5,045.9 5045.9 5045.9 5141.4 kcal/ts 4 HEAT ABSORPTION 1) SKIRT 2.96E+06 3.07E+06 3.07E+06 3.07E+06 3.03E+06 2) HOOD 8.58E+06 1.10E+07 1.10E+07 1.04E+07 1.02E+07 3) 1ST RADIATION 9.17E+06 I.45E+07 1.17E+07 I.10E+07 I.09E+07 4) COVECTION kcal/h O.OOE+OO O.OOE+OO O.OOE+OO O.OOE+OO O.OOE+OO 5) 2ND RADIATION O.OOE+OO 0.00E+00 O.OOE+OO O.OOE+OO O.OOE+OO TOTAL 2.07E+07 2.87E+07 2.59E+07 2.45E+07 2.42E+07 6) 2ND RADIATION OUTLET HEAT 8.89E+06 1.69E+07 1.96E+07 2.10E+07 2.10E+07 7) TOTAL HEAT 5.GENERATING HEAT BEFORE COMBUSTION (SENSIBLE HEAT-fLATENT HEAT) kcal/ts 2.60E+05 2.64E+05 2.64E+05 2.64E+05 2.66E+05 (1)LATENT HEAT INPUT 78.0 76.9 76.9 76.9 76.4 (2)SENSIBLE HEAT INPUT (%) 22.0 23.1 23.1 23.1 23.6 TOATL INPUT ENERGY 100. 100. 100. 100. 100. (3)CONBUSTION HEAT RATIO AT MOUTH 7.8 7.7 7.7 7.7 7.6 (4)L0G FLARING RATIO 12.8 13.8 13.8 13.8 13.3 (5)LDG RECOVERED RATIO (%) 57.5 55.4 55.4 55.4 55.4 (B)SENSIBLE HEAT RECOVERED RATIO 17.8 17.3 15.4 14.5 14.7 (7)$ENS!BLE AND LATENT HEAT RECOVERED RATIO 75.3 72.7 70.8 69.9 70.1 (B)SENSIBLE HEAT LEAVING RATIO OF COOLER 11.9 13.5 15.4 16.3 16.6 (9)T0TAL HEAT LOSS 24.7 27.3 29.2 30.1 29.9 (lO)COOLER OUTLET GAS ENTHALPY kcal /m3N 206.2 250.2 291.7 311.9 311.2 (ll)GAS COMPOSITION CO 72.5 72.5 72.5 72.5 72.5 COj % 12.3 12.3 12.3 12.3 12.3 Nz 15.2 15.2 15.2 15.2 15.2 TOTAL

142 3) The Capacity of the Basic Oxygen Furnace Waste Gas Recovery Studying the operational conditions listed in Table 2.4.4-1, the amount of possibly recovered waste gas is estimated by the formula mentioned below. The estimated amount is written in Table 2.4.4-5.

Q = 22.4/12 x [C] x 1000/100 x PR/SY x (CO)/100 x (1-1) x a x 3020/2000

where, Q : Amount of gas possibly recovered (Heat energy 8400 kjoule/Nm3) (Nm3/t. steel) [C] : Amount of carbon included in pig iron subjected to decarburizing (%) PR : Pig iron ratio (%) SY : Molten steel rate (%) (CO) : CO ratio within the generated gas in basic oxygen furnace (unit: %) X : Excessive air ratio (%) a : Gas recovery rate per unit time (%)

Table 2.4.4-5 Estimate of Gas Recovery

Specifications Article Unit Remarks Current Estimate Amount of Gas Nm3/t. steel — 73 Based on heat energy of Recovered per unit 8400 kjoule/Nm 3 Yearly Amount of Gas Recovery Nm3/y — 1.6 x 10" Based on 1998 performance

4) Energy Balance The energy balance having the waste gas of the basic oxygen furnace is recovered is illustrated in Fig. 2.4.4-1. The drawing illustrate the recovery level of the basic oxygen furnace waste gas energy.

143 Entire Energy = 1.12 x 103 Mj/t.steel

Apparent Heat = Latent Heat 77 %

Partial y Burnt =7.7 %

Loss of Recovered Scattered Recovered Apparent = 13.3%

Total Energy Recovered = 0.79x 103Mj/t.steel

Fig. 2.4.4-1 OG Heat Balance of Basic Oxygen Furnace Waste Gas

Recovering energy in OG system, not only the apparent heat but also the latent heat (gas burning heat) can be recovered and the energy recovering rate increases to 70.1 percent which is as much as 1.6 times of current recovery rate.

5') Amount of Energy Saving of the Induced Draft Fan The energy consumed by the induced draft fan comprising the basic oxygen furnace waste gas processing equipment can be reduced by controlling the rotating speed. Such energy saving process is supported by the facts described below. * The induced draft fan is the most energy saving equipment within the steel manufacturing processes. * The operating cycle of the subjected basic oxygen furnace plant is 2/3 furnace system and therefore, the idle time (tap to charge time) of the operating furnace is considerably long. * Current induced draft fan is controlled by the Pole change type revolution control system to save energy which reduced the number of revolutions to 1/2 of constant operation in idle time. * In the OG system, a large amount of energy can be saved by increasing the oxygen blowing in volume into the basic oxygen furnace to shorten the blowing in time and extending the idle time (assuming the production rate is the same as current level), by replacing the inducted draft fans with smaller ones corresponding to changing the waste gas processing to non-burning process and by adopting a most advanced fan speed control system or VWF (Variable Voltage Variable Frequency Speed Control System) . * The induced draft fan revolution can be dropped during the idle time from the tapping to next charging without effecting the operation cycles and processes. The plan to save energy by reducing the operating seed of the inducted draft fan during the idle

144 time will be described below.

(a) Estimated Idle time (tap to charge time : T) 1. Operating conditions: Refer to Table 2.4.2-2. 2. Frequency of the normal maintenance works: Twelve hours/day, one/month 3. IDF operating time per year = (45 + T) min./heat x 15771 heats/year = [365 days/year x 2 sets - (15771 heats/year / 12000 heats/camp. x 6 days/camp + 0.5 days/day x 12 times/year)] x 1440 min./day where. Tap to tap time = 45 + T = 66.1 min./heat Tap to charge time (T) = 66.1 - 45 = 21.1 min./heat

(b) Break down of the tap to tap time and IDF operating status

Fig. Tap to Tap Time

(D Current Sludge Charge Blowing In Tapping Waiting (Idle time) to Drainage 5 22 1.5 5.5 3 29.1

Constant Speed (37) 1/2 Speed (29.1) M------►- —►

(D og Sludge Charge Blowing In Tapping Waiting (Idle time) u Drainage 5 15.5 1.5 5.5 3 35.6

Constant Speed (30.5) 3/10 Speed (35.6) ------►------►

(c) Load on the Motor of the Induced Draft Fan The calculated loads on the motor of the induced draft fan comparing both current and of the OG system in nominal and in the operation with the reduced number of revolution are shown in Table 2.4 4-6

— 145 Table 2.4.4-6 Calculated Load on Motor of Induced Draft Fan

Article Unit Current OG Remarks Amount of Air m3/min. 5300 2415 Actual Gas Volume Induction Fan Static Pressure mmAq 1650 2000 Capacitance kw 200 1200 Actual Load (La) kw 1320 1050 Nominal No. of rpm 1500 1500 Motor Revolutions (Rl) Reduced No. of rpm 750 450 Revolutions (R2) Load at Reduced kw 165 29 Lax (R2/R1)3 Revolutions

(d) Amount of Energy Saved The power consumption and the amounts of energy saved of both current and that of OG system are calculated based on above mentioned itemized steel manufacturing processes and the loads on the motor of the induction fan and shown on Table 2.4.4-7.

Table 2.4.4-7 Estimate of Energy Saving of the Induced Draft Fan

Efficiency (Energy Article Unit Current OG Saved)

Operating Hours of Normal Revolution min./heat 37 30.5 Induction Fan Reduced Revolution min./heat 29.1 35.6 Average Load kw/heat 811.5 500.1

Power Consumption per Unit of Steel Production kwh/t.steel 6.39 3.65 2.74

Yearly Power Consumption Gwh/year 14.1 8.06 6.04 Note 1 Energy saving effect is based on the 1998 yearly performance. Note 2 Example of calculations of the average load and the power consumption per unit amount of steel production. 1320 kw x 37/66.1 + 1320(750/0500)3 x 29.1/66.1 = 811.5 kw/heat 811.5 kw/heat x 66.1 min./60 min./h /140t.steel/heat 7) Specifications of the Equipment The main specifications of the non-burning ty pe basic oxygen furnace (OG sy stem) waste gas recovery equipment which is under consideration to replace the current perfect combustion type basic furnace processing equipment is shown on Table 2.4.4-8 and its structural arrangement is illustrated in Fig. SEND-D300011 to SEND-D300014.

146 — Table 2.44-8 Non-burning Type Basic Oxygen Furnace Waste Gas Recovery System (OG system) Specifications

Equipment Machine Specifications 1) Gas temperature at gas cooler exit: 825 oC Membrane-type structure, hot water circulation cooler, oil pressure 2) Skirt drive 1 Gas Cooler 3) Hood Combination membrane-type structure, booster circulation boiler 4) Radiator Membrane-type structure, booster circulation boiler Bylor drum, circulation pump, water supply pump, discharge valve, 5) Current machine applications steam accumulator, etc. 1) First Dust Collector Spray saturator type RSW (oil pressure drive) scrubber, Dust contained in waste gas 2 Gas Cleaning 1) Second Dust Collector (depressurized): 50 mg/Nnf or less 3) Water Processing of Dust Current equipment applied. Turbine 3 Induced Draft Fan 2450 m3/min. x 2000 mmAq x 1200KW Rotating speed control: VVVF

Current plate-steel made, 3-stack combination tower applied. (Needed 1) Flare Stack 4 Burning Flare Stack a remolding for a higher gas flow speed.)

2) Ignition Pilot flare burner type 1) Water-sealed Check Valve Rotary type driven by oil pressure 2) Switching Valve Butterfly type, oil pressure driven 5 Gas Recovery 3) By-pass Valve Butterfly type, oil pressure driven 4) Gas Recovery Duct 2100 in diameter 1) Gas Holder Ref. to "basic oxygen furnace applying equipment" article. Gas Storage & Utility 6 2) Gas Compressor 1) Motor Control Panel 2) Central Control Panel, Concentrated DCS Control system: Pressurized hood control, controlled by water 7 Electric & Instrument Conti Control Station level in drum. 3) Hydraulic, N2 Gas Meters 4) Waste Gas Meters 1) Foundations for IDF, Gas Recovery 8 Construction & Architecture Equipment 2) IDF Housing

— 147 — (a) Supplemental Description on the Plan 1) The conditions of the gas flow at major sections of the basic oxygen furnace waste gas non- burning recovery system (OG system) in Fig. SEND-D3 OGOO1. This gas flow chart will be the base of designing the gas treatment system proposed herein. 2) A high level gas recovery system can not be realized without the burning control with the air intake at the mouth of the furnace. Such a control is practiced by the pressure control techniques applied inside the skirt and hood of OG system. The skirt configuration, Skirt driving oil pressure system and the inside-hood pressure control mechanism are illustrated in Figs. SEND-D3OG013, SEND-D3OG015 and SEND-D3OG031 respectively. 3) The gas cleaning system of OG system applies a wet-type dust collector. Especially, for the secondary dust collector adapts a controllable throat type venturi scrubber. The volume of the waste gas generated by the basic oxygen furnace ceaselessly varies. Such ever varying gas is controlled to be a constant flow within the venturi scrubber by controlling the opening of the throat in order to keep the dust collecting capability. The configuration and the dust collection performance of the RSW (Ring Slit Washer) or a type of variable throat type venturi scrubber is shown in Fig. SEND-D30G009. 4) Gas utilizing equipment such as the gas holder or the booster fan and their energy processes will be described in the next article (b). The gas holder will be best installed at a location 300 meter west of the waste gas flare stack tower of the basic oxygen furnace. 5) In accordance with the OG system installation, some modification to the current secondary material (limestone) charging equipment of the furnace making it to be air tight structure and moving its location from current place. The basic configuration of the secondary material charging equipment applied to OG system is illustrated in Fig. SEND-D3 OGO14.

148 — i ioooea-aN3 u Fig.

SEND-D300011

LO

WI­ KI: TO 8E CONFIRMED

I | | LiiSJl , | i"«« ^ n*»» ^ mn ^ StHZOIMH I DON l SltEl von 5 rrt BOf SHOP

MUMIIIt* ♦ NIPPON STEEL CORPORATION-tec WANT ENO' 0 l TECHNOIOQY CENTER SEND-D300011 ztoooea-QN3s FIG

SEND-D300012

§

mt I *»00 6 ® © © WOT.E *1 : TO 9e CONFIRMED ukzoimir iron t steel *ous 8QF SHOP CROSS SECTION Of CONVERTER (AY 0 NIPPON STEEL CORPORATION-ttSC mi'imiii fiamt emo ‘ o t recHwotoor conrn >'»♦» ISEND-D30001 2 FIG SEND-D300013 OW-NOUVHOdMOO m

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miS

jo

Minis dOHS

1

HOP

JOB wnontmi 1331S I

OIMIOZN3S

NOddlN»

on

mod [DU SEND-D30001

3 FIG

SEND-D300014 inco 10090EQ-CIN3S

GAS COOLER OUTLET GU ruv wt (ten W MNCtuluit 111 T io*» mow ^O-© FIG

SEND-D30G001

cocn

NOVORI PE TSfV1 leor HOP 1 OP INLET 1 OF OUTLET HEAT SIZE Ton Ton STAGE GAS HCOtm GAS OlSCNAfCC STAGE gas itcovciv GAS OISCHAIGE ILOVIHO TIME II.1 Min Min (AS HOI (Al( mil M0000 m'/M mVH US HOI UK inn moeemVH m Vm TAP 10 TAR II. I Min ll Min GAS TEUPtOAIVOE 01 X t GAS HMPtUllllI to c t TOTAL OiIATE 30000 m'N/M m'N/H PRESSURE •II. TAPS PO poessWe )01J PS Pe

■1 AVERAGE TAR 10 TAR TIME (3SS>? *0. ilUIHKO " 15771 «6. 1 Mln/Heot (MINIMUM TAP to TAR TIME 37. 0 Mln/Kilt) OOOITOI TAN

OXYGEN CONVERTER GAS RECOVERY SYSTEM FLOV OF OG PROCESS (1/5) euc.i.uo. •o. MKHPTIM *r AP*D Oil! ___ lr 0 NIPPON STEEL CORPORATION-NSC 04110*10 SEN0-0300001 M.TAAAMASHI 01 OOP 00 PLANT ENO* 0 k TECHNOLOGY CENTER ***** M. SUZUKI 01 IIP 01 M.TAAAMASHI •l.fO.'M • II. TAAAMASHI oi. si*. * *t SEND-D30Q001 —r 1 Sl09OG0-aN3S LANCE CONE SUB-LANCE

OXYGEN LANCE

GAS COOLER LANCE SOCKET FIG FLUX CHARGING

CHUTE SEND-D30G013

in

UPPER HOOD

CONNECTING DEVICE BETWEEN HOOD AND GAS COOLER SKIRT LIFITINQ CYLINDER WATER SEAL

lit! I##ele* l| IM if**#; i* ««r mim; mi •• MMIMI • ••MM. Mti'MM 1* «*rl •**M*«i .. OUTLINE OF SKIRT AND HOOD ARRANGMENT ■a oesceiPiioN •r OATt DATE 0 NIPPON STEEL CORPORATION-NSC 1 etsidm SEND-0300013 M, TAKAHASHI IS, ADO,'ti PLANT DM * Q A TECHNOLOGY CENTER z M.SUZUKI IS.AUG,"II 3 M. TAKAHASHI IS. AUG.'ll * APMOUO M. TAKAHASHI IS. AUG. II SEND-D3OQ013 REMOTE 5 I GMAL Oil HYDRAULIC TO/FROM PULP I ! GUI MO E R FIG

DOWN

OIL HYDRAULIC CYLINDER S E N D - D 3 0 G 0 1 5

No. I SKIRT

SYNCHRONIZER AND LOCAL OPE RA I ION OOX ACCUMULATOR 0000 STAND

0 No. 3 PUMP UNIT SYNCHRONIZER AND SYSTEM CONFIGURATION LOCAL OPERA 1 ION BOX

ACCUMIATOR STAND

r) ii® Q»® Qn® | [PUMP UNIT OIL TANK

SEND -D3OC0I5 OIL HYDRAULIC SYSTEM OF SYSTEM FLOW OG SKIRT LIFTING DEVICE teoooea-sosN o

WASTE OAS FLOW ELECTRIC-HYDRAULIC OPEMINO TRANSMITTER CONTROLLER CONTROLLER (zt)------v-Sr ocs

& :-3!

9 Kl I ® IS ui§ FIG efflEItt/

SEND-D30G031

MANUALLY OPERATED U1 VALVE CT) .... SOLENOID OPERATED ACC VALVE 0 PRESSURE SVITCH

RELIEF 3> PRESSURE CONTROL VALVE0--

HYDRAULIC PUMP COOLING WATER B BS )MH0 v SUCTION —-- p* ' FILTER rW- TEMPERATlfl REOULATINI 6 6 0 VALVE

-(%>—0— j : i — ‘'.‘.Vm'l'.Vi'V.V'i

HYDRAULIC OIL UNIT HOOD PRESSURE CONTROL iiii'iv• !• t»f l tMlfMt SYSTEM WITH RSW DESCRIPTION ® NIPPON STEEL CORPORATION-NSC 1 NSCS-O3OG03I oestento Y.SMIGEYAMA 27. SEF. IS PLANT ENQ'Q & TECHNOLOGY CENTER l M.SUZUKI 2T.SEF. H 3 Y,SMIGEYAMA 2T.SEF/H 4 APPtOVtO Y.SMIGEYAMA ft. SEP.';; NSCS-D3OG031 5IZEIA3 J ______,_____ ?______,______J______T______•______5______,______. 6 FIG

SEND-D30G009

cn

• II Miwtei II III l«HlMl • < IIC. •til ie »*r •«•••» •••II n it •••HIM it It# lent M ill# lif • UUllUl WIIMtl ltd IIMttt. t Mill M III! Ml* II I ••••• It iliiiiii li mi HiiMit •» ft*##- OUSf COXTEM-REOVIREO PRESSURE DROP OCSCeiMio* Cwq ""---^ ^NIPPON STEEL CORPORATION-NSC 3 1 StNO-0306001 KSiavio M. TAIAHASHI t$.AV6,'ll z QIAVH IS.AV6.il PLANT ENQ’Q 4 TECHNOLOGY CENTER M.SUZUKI ICiU M. N. W"*'» 5 3 H.TAKAMASHI 11. Ml.'ll « M.TAKAMASHI is. Aue.'ii SEND-D30Q009 SIZE:A3 2 r 5 6 M0ooea-aN3S eee

CONTINUOUS CHARGING LINE BATCH CHARGING LINE FIG

SEND-D30G014

cn GO

II IM Mllll If |l lit. II Nit M HltMl |im« Ml o Mill 16 Mf IIMH Ml IMII II M MMIMIIM *1166*1 • It* 6 MMMI. It 66611 66 *666 661V 66 6 *6666 #1 NITROGEN PURGE POINTS IN f61616*66 16 66I& #6666*6 #, #«#*!• TO CONVERTER THE FLUX CHARGE SYSTEM OCICBIPtION 1 SEN0-030G0M oaimo M.TAAAHASHI IS. AUC.‘IS 0 NIPPON STEEL CORPORATION-fISC I 0»AV* H. KOJIMA IS. AUC.* IS PLANT ENQ’Q A TECHNOLOGY CENTER 3 CHfceiO U.TAAAHASHI IS. AUC.‘II VMOVIO M.TAAAHASHI IS. AUC.‘IS SEND-D3OG014 SIZE:AS (b) Utilization equipment of the basic oxygen furnace gas (LDG) 1) The preliminary condition for recovered LDG utilization The following conditions are important to utilize the recovered LDG since the LDG is not constantly generated. i) The equipment that uses LDG must have a means to replace LDG to continue the operation when LDG is not supplied. ii) The equipment that uses LDG must have a means to adjust supplied fuel calories corresponding to the LDG recovery variations. iii) The equipment that uses LDG must be a constantly operating system with a high operational efficiency through out the year. 2) Equipment that utilizes recovered LDG Considering the preliminary conditions described above, LDG is primarily used at the power generating plants (at its independent power plant or at its joint power plant) at Nippon Steel Corporation. In this project proposal, the power plant of Huta Sendzimira is primarily chosen as the LDG utilization facility. The most important reason behind this choice is that considering the energy configuration of Huta Sendzimira, this energy saving project can most effectively reduce the fuel coal or the primary energy source at this steel mill and by reducing the consumption of fuel coal, ecocide problem will be most effectively improved. 3) Fuel consuming ability of the power plant boiler and the consumption rate of BFG. The most economical method to apply LDG at a power plant is to connect LDG supply pipe to the existing BFG plumbing to supply LDG as a mixed gas. This method is widely applied in Japan as a LDG consumption system suitable to the increasing LDG recovery. However, before adopt this method, it is necessary to make sure that the currently used burner is capable of burning a higher calorie fuel mixed with LDG. At this point of time though the detailed specification of the burner of Huta Sendzimira power plant is not available and therefore, this part of study is put aside.

Table 2 4.4-9 Fuel Consumption Change with LDG Utilization (Example: Power Plant)

After LDG 1998 Remarks Performance Recovery Regular Coal 60.853 54,048 5,118 kcal/kg (Kg/h) BFG (Nm7h) 94.288 94,288 778 kcal/Nm3 COG (Nm3/h) 5064 5,061 4,195 kcal/Nm3 Natural Gas 3 3 8,605 kcal/Nm3 (Nm3/h) Calculated on 2,000 LDG (Nm3/h) 0 17,157 kcal/Nm3 basis

159 Note) 1. It is assumed that corresponding to the consumption of LDG at the power plant, as much as 6,705 Kg/h of coal would be replaced by LDG. 2. The average calories of the mixed BFG and LDG will amounts to approximately 966 kcal/Nm3 that is approximately 24.2 percent higher than the average calories of currently applied BFG. 3. However, the calories of BFG was about 1,000 kcal/Nm3 when the natural gas was blew into the blast furnace, and therefore, current facilities are well applicable level after the energy saving measure will be introduced. b) LDG recovery and application plan 1) Preliminary conditions of the plan * LDG recovery quantity: The average LDG quantity produced will be 17,157 Nm3/H on the 1998 crude steel production level of 2,075,000 tons/year at the basic oxygen furnace, having LDG recovery amount of 73 Nm3/Ts. * The area included in this plan is from LDG gas holder to the power plant building. * The facilities from the basic oxygen furnace to the gate of the LDG gas holder are included in the steel manufacturing process plan. * The modification of the BFG burner of the power plant will be handled by Huta Sendzimira. ii) The equipment specifications The major specifications of the equipment hereof are listed on Table 2.4.4-10.

Table 2.4.4-10 Major Specifications of Equipment

Equipment Quantity Models, Types & Specifications Gas Holder 1 ' Wiggins type, Capacity: 35,000 m3 20,000 m3/h x 2 Electric dust collector (exit density 5 Electric Dust Collector 2 mg/Nm3) 10,000 m3/h x 1,300 mmAq x 3 (Two out of three will be In Gas Compressor 3 operation and one remained will be an auxiliary equipment Plumbing for LDG 1 set 1,000 A x 2,000 m (from gas holder to power plant) Electric Instruments 1 set Calculated Electric supply will extend to 400 m. Machinery installment works and electric control room Construction Works 1 set construction. (*) Plan to build a gas bolder at 03 km distance from the basic oxygen furnace plant.

— 160 iii) Out line of equipment configuration

The equipment configuration of the LDG recovery and application

Gas Compressor Basic Oxygen 10,000 Nm3/H x 1,300 mmAq x 3 units Furnace Gas Holder ftxtQixhi 35,000 m3 20,000 Nm^Hx 2 Connected to —VHxhC)^kl" Electro Dust Power Plant's Collector MQ-CX Main Pipe Type: Wiggins 4XQ-MJ -4— Fig. 2.4.4-2 LDG Recovery and Application Equipment Configuration

— 161 — (2) Estimated cost of the equipment installment The estimated cost of the equipment described in the previous article is listed below on Table 2.4.4-11. However, this calculation of the equipment installation cost is a very rough estimate because the details of equipment purchasing and construction work charges at the installation site is not available. Therefore, cost analysis has been done with Japanese bases.

Table 2.4.4-11 Approximate Estimation of Equipment Installation Cost

Estimate of Investment (100 million Article Quant. yen) Remarks Purchase Works Total

1 Gas Cooler 3 12.5 4.3 16.8 Utilize current equipment such as boiler drum, circulation pump etc.

Gas Cleaning 2 3 3.5 1.3 4.8 Including oil pressure system for Equipment hood control. 3 Induced Draft Fan 3 1.3 0.7 2.0 Including silencer . 4 Gas Recovery System 3 2.0 1.2 3.2 Gas recovery duct 300 m Burning Radiation 5 3 0.3 0.1 0.4 Ignition of gas burning radiator Tower system Gas Storage & 6 1 4.5 2.5 7.0 Utilization Equipment Gas holder, gas compressor etc. 7 Electric System 3 2.3 0.7 3.0 8 Instrument 3 4.5 .1.5 6.0 9 Construction Works 1 — 2.4 2.4 Total 30.9 14.7 45.6

Secondary Material Charging conveyer renewal, 10 3 0.3 0.1 0.4 Charging Equipment charging hopper relocation, gas seal gate installment Grand Total 31.2 14.8 46.0

Note 1: Above listed estimates do not include the cost of disassembly and removal of existing facilities.

— 162 2.5 The scope of finance, machines and facilities, services to be rendered by both parties for the project execution

In order to materialize the project hereof, Huta Sendzimira is primarily requested to raise favorable fund, while we, Nisho Iwai Co. Ltd., will offer Huta Sendzimira necessary information related to the yen credit for special purposes or other public funds which may support the project in favorable terms. Also, we will supply technical information compiled by Nippon Steel Corporation-NSC which served in the investigation as our subsidiary to Huta Sendzimira for the purpose of applying for the public fund to Polish government or a Krakow City government in best mode.

2.6 Preconditions and Problems at the Project execution

The very important factor of this joint project aiming at a reduction of the greenhouse effect gas (C02), is how deeply Huta Sendzimira, where the project is actually practiced, does concerns with such a project and how much fund it can raise. We had a strong impression through the investigation conducted this time in two occasions that Huta Sendzimira was much enthusiastic in saving energy through their operations. However, This still mill is facing a greater problem of restructuring their production facilities by replacing their aged ones with more efficient modern equipment due to the severe competition introduced so dramatically after the 1989 Revolution. Such a situation give us an impression that Huta Sendzimira has to give its priority to the modernization of the production facilities than the reduction project of the greenhouse effect gas (C02). This adverse impression is enhanced by the extremely low energy price in Poland compared with that of EU nations or Japan. The project subjected by the investigation conducted this time is not so attractive in view of the investment efficiency.

This brings us to the following preliminary conditions and problems of the project practice.

(1) How will the future Polish energy price change through the economical development of Poland which is planning to join EU in short future?

(2) How will Huta Sendzimira raise funds for the greenhouse effect gas (C02) reduction project and put so much importance on the project in addition to the production facility modernization project?

(3) Can a corresponding fund be arranged in Poland when a special yen credit is arranged in Japan?

163 2.7 Implementation schedule of the project A practical energy saving project schedule after the authorization of the project by the Polish government is illustrated below.

Table 2.7 Project Schedule

Schedule (Month) Energy Saving Project Wrolcs

Ordering Design & Prep, Woles Blast Furnace TRT Installation Test Operations

Basic Plan Ordering Hot Oven Waste Heat Design & Prep. Woles Recovery

Test Operatic:

Basic Plan Ordering Sinter Cooler Waste Heat Design A Prep. Woks Recovery Installation Test Operations

Basic Plan Ordering Basic Oxygen Furnace Waste Design & Prep. Woks Gas Recovery Installation Test Operations

164 3. Reelization of financing schedule

3.1 Financing schedule at the Project execution (required fund, arrangement method, etc.)

The matter name based upon the basic survey for energy saving of this time are ©Installation of Blast furnace TRT equipment,©Waste Heat Recovery from Hot Blast Stove,©Waste Heat Recovery from Sinter Cooler,@LDG Recovery (Recovery Equipment),and the total necessary amount of investment is ¥7.94bilIion(Japanese yen base).The detail is shown in table 3.1-1.

Table3.1-1 Matter name and amount of investment money(based upon Japan yen) Process Name of the Matter Amount of Investment(¥100Mil.) Pig Iron Making Installation of Blast 16.2 Furnace TRT

Waste Heat Recovery 6.7 From Hot Blast Stove

Waste Heat Recovery 10.5 From Sinter Cooler Converter LDG Recovery 46.0 (Recovery Equipment) Total 79.4

Huta im.T.Sendzimira S.A. is Joint company all the stocks of which are owned by National Property Ministry, and now is intended to be privatized by the Polish Government. Although said Privatization is now being propelled, inviting participation to strategic investors of foreign countries for raising external funds, the prospect is still dim. If strategic investors give their name, there may be the way for raising fund in which said company is sold under the condition that investment in the present project is obligation, but it may be impossible under the present condition.

Fund raising of said company is under severe condition, depending upon the movement of the privatization, executive members of said company told us survey team the hope that they want to except attractive finance from Japan, as the way for raising the fund for executing the present project, We want to consider special yen loan, appealing to both the Japanese and Polish Governments. If 85% of the necessary fund is covered, remaining problem is raising 15%of the necessary money of the balance, as the solution to the problem, we want to consider following plan.

1) Financial support of the Polish Government:

This present project contributes to solution of environmental issue, we want to expect financial support of the Polish Government.

— 165 2) Fund raising by using escrow account: Our company sells the steel products of Huta im.T.Sendzimira S.A. and through escrow account, amount of the sells is assigned to the return for the fund of the present project.

3.2 Forecast of the finance arrangement

As a concrete method for raising fund, the combination of special yen loan from the Japanese Govemment(85 %), financial support of the Polish Government, and raised fund by using escrow account(15%) is assumed. As described in the preceding paragraphs. 1, about the special yen loan, it is unknown how the issue of the objective area and objective field will be cleared. About the financial support of the Polish Government, we have not talk with the person concerned of said Government over said support, accordingly it is unknown. Additionally about the fund raising using the escrow account, there is the assumption of steel products capable of stably being sold and of securing of customers, under the present product lineup, it is under the very difficult condition. From now on we are still continuing further talk with the executive members of Huta im.T.Sendzimira S.A., however, considering above mentioned analytical result, we can not help mentionning that fund raising by this way is difficult.

According, although it seems to take long time, we want to talk properly with Japanese ministries or agencies concerned beginning from NEDO and Huta im.T.Sendzimira S.A. and to proceed examination the fund raising for executing the present project on the following assumption.

(D From the viewpoint that the present project makes a contribution to improvement of environment, we will cause the priority looked from Huta im.T.Sendzimira S.A. to raise and get it to ask for the financial support of the Polish Government. (2) Although it seems to take further time to establish the rule of dealing of C02 discharge right, from the viewpoint of the dealings of CG2 discharge right, we will ask for the support of both the Japanese and Polish Governments for the present project. (3) At the point of time when above mentioned (Dand (2) become complete, or in the case only (2)is agreed, requesting the application of the environmental yen loan with the repayment in kind (CG2 discharge right). In this way applying for the establishing special framework in which reduced green effect gas during the term of loan is regarded as amount of reduced C02 emission, and an amount of the compensation is considered to be repaid. About the shortage in this repayment in kind system, we want to expect that export finance of Japan Bank of International Cooperation (JBIC) for Japanese enterprise can be extend strictly as package on project finance base taking long term contract on steel product export.

166 4. Related subjects for the joint implementation

4.1 Establishment of conditions for the project execution and the adjustment of scope of work with the partner country to concrete the joint implementation project in consideration of the actual conditions of the project site.

In order to materialise the Project, it is necessary for both parties to confirm in advance the scope of the related activities between Japan and Poland as well as distribution method of the discharged gasses.

4.2 Possibility of consent to the joint implementation project (the essential conditions of the partner country for the joint implementation project in consideration of the related governmental organizations and the partner enterprise)

In order for Poland to agree the present project as joint execution, it is necessary for the framework of the joint execution, and then it is necessary for the condition mentioned above in 4.1 to be decided. Then, there is great possibility for the present project to be agreed as joint execution, because there are not enough fund and technology for the present project in Huta im.T.Sendzimira S.A..

— 167 M. Effects of the Project

[summary] The energy saving effect and the green house gas reducing effect by executing the project is shown below.

M Amount of Energy Saving Effect Green house gas alter Name investment (Tj/y) (Tcal/y) reducing effect (¥100Mil.) [MiTTsl [Mcal/Ts] (lOOOT/y) 1.Blast furnace TRT 16.2 575 137 53.3 [260] [62] 2.Heat recovery 6.7 323 77 29.9 from Hot Blast [146] [35] Furnace 3.Heat recovery 10.5 259 62 24.0 from Sinter Cooler [117] [28] 4. Heat recovery 46.0 1,146 274 74.4 from Converter [519] [124] Total 79.4 2,303 550 181.6 [1.042] [249]

• Wherein the amount investment is based upon Japan. • Energy saving effect can be checked by monitoring. • There is no special effect upon productivity.

168 1. Effects of energy saving

1.1 Technical background to expect Energy Saving

1.1.1 Blast Furnace TRT

In Huta im.T.Sendzimira S.A. the third blast furnace and the fifth blast furnace are being operated, with the furnace top pressure being 1.5kg/cm 2. Now this pressure energy is consumed as the pressure drop of furnace top of furnace top-pressure control valve. By installing TRT, pressure energy is recovered as power. ______

TRT output is generally shown in following equations. The more the amount of generated gas is, the higher the gas temperature is and the higher the furnace temperature is, the more increased TRT output is obtained.

P=l/860 • G • C p * T • 1 - (P2/P1) (k-l/k)} - 77 P:TRT output PI :Gas pressure at Turbine Inlet G:Mass Flow Rate of BFG P2:Gas Pressure at Turbine Outlet Cp: Specific Heat K:Adiabatic constant at constant pressure

T:Gas temperature 77 Plant efficiency at turbine inlet

Wherein plant efficiency was calculated on the assumption that turbine efficiency and generator efficiency are 86%,97% respectively.

1.1.2 Hot stove waste heat recovery

In Huta im.T.Sendzimira S.A. ,the third blast furnace and the fifth blast furnace are being operated, and in each hot blast furnace stove, BFG is used as fuel gas. This combustion waste gas is emitted into the atmosphere at the temperature of 150 through 350°C. The fuel gas is reduced by recovering the sensible heat of this waste gas, using heat exchanger, and by using it for preheating the fuel gas and combustion gas of the hot blast stove. ______

Hot blast oven fuel gas is reduced , by recovering hot blast oven waste gas sensible heat using heat exchanger and utilizing it for preheating fuel gas and combustion air of hot blast stove. In calculating the efficiency, it was obtained by calculating heat balance of the hot blast oven on the basis of the actual operating result of Huta im.T.Sendzimira S.A’s blast furnace and hot blast oven and by compensating by the result. The result is shown in table 1.1.2-1.

169 Table 1.1.2-1 Calculation of Hot Blast Oven Waste Heat Recovery Effect 3BF 5BF Present After Present After condition recovery condition recovery 1 Assumption of examination Pig iron output(Pmax) THM/day 2497 2497 3130 3130 Pig iron output(P) THM/day 2191 2191 2905 2905 Blast furnace operating ratio % 88 88 93 93 Feeding wind temperature deg C 931 931 952 952 Wind blow rate Nm3/tHM 1498 1498 1353 1353 Moisture in wind g/Nm3 18 18 18 18 Cold wind temperature deg C 150 150 150 150 Number of HS Plant 4 4 4 4 HS switching mode single single single single HS combustion time min 195 195 195 195 HS switching time min 15 15 15 15 HS wind feeding time min 70 70 70 70 Waste gas temperature(min) deg C 150 150 150 150 Waste gas temperature(max) deg C 350 350 350 350 Waste gas temperature(ave) deg C 214 214 214 214 Combustion efficiency 0.8 0.8 0.8 0.8 Exess air coefficient 1.05 1.05 1.05 1.05 2.Result of heat balance calculation Cold wind sensible heat kcal/tHM 71,400 71,400 64,500 64,500 Fuel gas sensible heat kcal/tHM 9,400 45,500 6,900 33,000 Combustion air sensible heat kcal/tHM 3,200 23,800 2,300 17,300 Fuel combustion heat kcal/tHM 768,800 712,400 557,700 516,900 Total input heat kcal/tHM 852,900 853,100 631,400 631,700 Feeding wind sensible heat kcal/tHM 491,900 491,900 454,300 454,300 Waste gas sensible heat kcal/tHM 120,800 112,000 87,700 81,200 Radiating heat and others kcal/tHM 240,100 249,200 89,400 96,100 Total output heat kcal/tHM 852,900 853,100 631,400 631,700 Waste heat recovery(BFG) 36,000 26,100 Waste heat recovery (air) 20,600 15,000 Total waste heat recovery 56,700 41,100 BFG unit requirement Nm3/tHM 1,105 1,024 802 743 BFG heat quantity kcal/Nm3 696 696 696 696 BFG temperature °C 26 135 26 135 Combustion air unit requirement Nm3/tHM 635 589 461 427 Combustion air temperature °C 16 130 16 130 Waste gas unit requirement Nm3/tHM 1,613 1,495 1,170 1,085 Waste gas temperature °C 214 214 214 214 Dome temperature °C 1,091 1,199 1,091 1,199 3.Result of compensation by operating result BFG heat quantity kcal/Nm3 696 696 69 696 6 BFG unit requirement Nm3/tHM 793 735 74 687 2 BFG flow rate Nm3/hr 82,500 76,500 96,700 89,600 Combustion air unit requirement Nm3/tHM 456 423 42 395 6 Combustion air flow rate Nm3/h 47,500 44,000 55,600 51,500 Waste gas unit requirement Nm3/tHM 1,158 1,073 1,083 1,004 Waste gas flow rate Nm3/h 120,500 111,700 141,200 130,900 Heat quantity unit requirement kcal/tHM 552,000 511,500 516,000 478,200

1.1.3 Sinter cooler waste heat recovery

In Huta im.T.Sendzimira S.A. sintered ore coming out from sintering machine is under the condition of high temperature of about 800°C, it is air-cooled to under 100°C, so as to be able to convey on a belt conveyor. The air used tor this air-cooling having average temperature of 300°C is radiated into the atmosphere. By installing boiler, the sensible heat of the exhoust air from this sinter cooler is recovered as steam.

Calculation ground of the steam recovery' quantity is as the following. 1) In order to connect recovered steam to 8 atmosphere steam line,additionally considering pressure drop through conduite,the steam was decided to be recovered at 260°C, 12atmosuphere. 2) In order to secure thermal efficiency of boiler,waste gas having temperatures above 300°C is supplied to the boiler. Considering heat radiation from the conduits, objective waste gas temperature was set up within the range 310 through 320°C Heat converting efficiency from waste gas to the boiler was assumed to be 40%. 3) Waste gas temperature was estimated by heat transfer calculation of the sintering and the cold blow temperature. 4) About the cooler operating condition, thickness of the sintering layer was set to be as thick as possible. As compared with 285mm in the specification, considering falling of the ore, the thickness of the layer was set to be 250mm. 5) In order to raise the average temperature of the waste gas , only the waste gas of high temperature at the cooler inlet was decided to be supplied to the boiler accordingly ,co!d wind blow rate was decided to be minimized. 6) Consequently ,the quantity and temperature of the waste gas is as following. 45 ONm3/min X 3 machine X 2plant=2700Nm3/min Average waste gas temperature:320°C 7) On the other hand, temperature of the sintered ore at the cooler outlet was maintained at about 100°C, by passing the cold wind at the following step at the rate of 2600Nm3/min same as current condition.

1.1.4 Basic oxygen furnace waste gas recovery

Waste gas from the converter(LDG) generated in converter refining process in Huta im.T.Sendzimira S.A. is recovered as steam by burning it. Energy saving is attempted by effectively recovering it as LDG instead burning it. Further power saving is attempted by controlling the introducing blower revolution number of converter waste gas processor which consumes the largest quantity of power at the converter factory. ______

The nature and the sensible heat of the objective waste gas from the converter and the recovering Technique is mentioned below.

(1) In converter refining ,steel having predetermined composition is produced ,by blowing pure oxygen into scrap and molten pig iron ,melting scrap ,and removing impurity within the molten pig iron by oxidation, and one of the impurities is Carbon[C] ,which is generally included in the molten pig iron at about 4.5%. [C]in the molten pig iron reacts with pure oxygen (G2)blown into furnace to create carbon monoxide(CO), which is converter waste gas. As generated (CO) partially bums with floating oxygen in the furnace to form carbon oxide converter gas composition close to real condition comprises 90% of (CO) ,10% of (C02). Accordingly converter waste gas includes 100'"-'90% of (CO).

(2) Waste gas generated within the converter has the temperature of about 1450t3 due to the sensible heat of molten pig iron and oxidation-exothermic reaction with oxygen (combustion of CO).

(3) Converter waste gas includes the dust generated within the furnace and mainly composed of iron oxide at 120g/Nm3.

(4) In order to discharge the waste gas having said characteristics into the atmosphere ,it is indispensable to make it harmless, to cool down and to eliminate the dust under the standard value. In the first stage of real machine of pure oxygen upward blowing converter steel making method, capacity of the converter was small and under lOOt/heat, and the converter waste gas was generally dealt by being burned perfectly within waste heat boiler and cooling down it by making overheated steam, and electric dust collectors are generally used for eliminating the dust. Together with the establishment of advantage of pure oxygen upward blowing converter steel making method and pursuing increased productivity by enlarging of the converter capacity and increasing oxygen feeding rate, in conventional converter waste gas dealing system ,plant including factory building became so large that the converter capacity enlargement and improvement of productivity became limited from the aspect of equipment investment and installing tedhnique. Then converter waste gas combustion suppressing system(in the country called non-combustion system) newly appeared. In the system, by suppressing the contact between converter waste gas and air, by suppressing combustion as much as possible, by preventing increasing of sensible heat and volume of converter, and by recovering sensible heat included in gas in the form of saturated steam by radiant heat conductivity, cooling down the waste gas to about 1000°C at gas cooler inlet, then by eliminating dust through the means of two step type wet venturi scrubber, recovering clean gas containing high CO% into combustion emission or gas holder at emission tower ,making it possible to use as fuel for equipment in the steel making factory. As the representative of this system, OG system which was put to practical use by Nippon Steel Corporation was developed and put into practical use, and 175 machine have been operating up to now. The newest system-flow ,and functional organization is shown in appended Fig.NSCS-D30G025.

(5) The most important feature of converter waste gas combustion suppressing system is to prevent and control partial combustion of converter waste gas with the air entering through the gap between the opening of the converter and the inlet of the converter waste gas cooler as much as possible, and there are two following two main measures.

1) Mechanism capable of adjusting and sealing the gap between the opening of the converter and the inlet of the converter waste gas cooler, (called skirt in OG system):see Fig.NSCS- D3OG026 2) Control system of pressure within hood :see Fig.NSCS-D3OG025. With the progress of the converter refining ,reaction in the converter became active ,the pressure (static pressure) within the hood and generation of the converter waste gas change to a great extent ,and in the converter waste gas combustion suppressing system the very converter refining operation becomes unstable. In order to avoid this and to make converter operation stable ,system in which static pressure within the hood is automatically controlled ,with variable throat of venturi scrubber which is secondary dust collector being operating end, have been developed and improved ,and become indispensable technique now.

(6) About the quality of the gas recovered by the converter waste gas combustion suppressing system ,chemical composition ,heat quality and recovering quantity of the real result at Kimitsu works and Ohita works of Nippon Steel Cooporation are shown in Table 1.1.4-1. They are mainly composed of CO ,and being fine fuel having average heat quantity of 2000kcal/Nm3.

(7) About the use of the recovery gas , the result of the use at each steel works of Nippon Steel Cooperation are shown in Table 1.1.4-1. It is used not only as the fuel for boiler of the power station but also as the fuel for the boiler for heating furnace and hot blast oven , and widely used in steel making factory. (8) Technical ground of power saving by controlling the revolution number of the introducing blower are following 2point.

1) Engineering fact that the shaft power of introducing blower is proportional to the third power of the revolution number. 2) In converter steel making method , introducing blower have to be fully turned during introducing main raw material ,converter blowing and tapping the steel ,and during the other waiting time reducing the blower revolution number and lowering the introducing blowing capacity do not cause any problem in operation. szoooea-sosN

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CHEMICAL COMPOSITION! Is RECOVERED CALOn 1C VALUE RECOVERED CHEMICAL CAlOll 1C VALUE RECOVERED CHEMICAL CAL OH 1C VALUE compos moil \ GAS VOLUME U) OAS VOLUME m GAS VOLUME (llm'/tcc) °, 1 (kcal/Hm1) (kc» l/„m,)((KJ/H«l) CO CO, ", | ", (KJ/llm1) (llm’/ts) CO CO, °i ", ", (kcal/flm1) (KJ/llm1) (M.,.VU) CO CO, o, », ",

APR. 1997 92.7 64.4 >M_ 0.4 14.0 7.5 2009 j_ 04.10. 90.7 60.9 15.5 0 14.6 1.0 7117. 8862. 01,6 .6W. 15.3 0 . 1.5.1 1.0 2108. 6624.

(LAY 99.2 65.7 17.9 0.3 14.2 1.9 2033. 0510. 80.9 70,3 15.4 0 13.1 1.2 7164. 9059. 81.0 .66.7. 16,2 0 16,1 1.0 2050. 658 1 .

Ijuiie 104.2 67.4 18.5 0.3 11.2 2.6 2103. 0003. 82.6 60.0. 15.7 0 15.1 V? 2095. 8 7 70. 78.9 .66.5. 10.0 0 16.5 1.2 2049. 8577:

JULY 104.2 66.7 19.5 0.3 10.3 3.2 2097, 07 78 , 04.8 60. 1 15,6 0 _ 14.9 1.4 2103. 0003, . 26,4 - JSJ. ...L6J -0_ J6.5 1.5 2036. 9573.

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15.2 1.4 2100. 8191. SEP, 105.7 69,3 19. 1 0 3 8.3 3 0 2170. 9004. 89.9 67,8 15.4 0 15.3 1.5 2096. 8 7 7 4 . 79.6 68.0 . 15.4 0

8653. OCT,__ 101.0 69.4 10.4 0,3 9. 1 7 8 2160. 0075. 91.4 60.2 15.4 0 14.9 1.5 2100, 882 4. 82.9 68.6 15.6 0 . >4.5 1.3 2115.

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DEC. 105.0 66.8 18.7 0.3 12.1 2.1 2072. 8673, 91.2 66.6 15.8 0 I6J 1.4 7057. 8611. 77.0 64.2 16.3 0 18,5 1,1 1971. 67)6,

JAM.1998 101. 1 66.0 18.6 .0,3. .12.7..7.4 2055. 8602,. . 85.8 67.0 15.7 0 16 1,3 2067. 8653. 79.5 J4.7 16,0 0 18.2 1.1 _ 1992. 8339.

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HAR, 103,0 64.4 18.2 0.3 15,4 1.7 1909. 8326. 92, 4 67.8 15.1 0 15.6 1.5 2096. 8 7 7 4 . 85.4 66.0 14.9 0 17. 1 1.2 2058, 8615.

AY(Xm 101. 2 66. < 10.6 0.3 12.3 2. ( 206/. 0653. 00.0 63.0 15.5 0.0 75, J 1.3 2093. 0260. 00.5 66.5 16. 1 0.0 16. i 1.2 2051. 6506.

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(Mule) Qoiler ; ProceiJ boiler 01 boiler 5l»bbin(i ; Soaking pit lor slabbing mill lor power italion Cold ' Whale heid tie a ting plant US ; llot atovn (or Wait luirucu lot cold strip mill COP ; Coke oven pl.inl Ollier a ; Calcinin' plant, pellcliring kiln, etc,

Fig. 1.1.4-1 Recovered Gas Utilizing Situation at Each Steel Works of Nippon Steel Corporation(l979) 1.2 Base Line for the fundamental estimation of the energy saving effect (on the assumption of energy consumption in case of the project unrealized)

The operation of fiscal 1999 which is the latest result for one year is regarded as the base for calculating energy saving effect as base line. By using the result for one year influence depending on monthly or seasonal fluctuation for output can be eliminated. Incidentally, fiscal 1998, in which there was not stoppage of large equipment such as repair of blast furnace, was average fiscal year about operation condition.

1.2.1 Blast Furnace TRT As TRT is not installed in the third and the fifth blast furnace of Huta im.T.Sendzimira S.A.,the amount of the recovered power (amount of generated power) is zero. Incidentally, the amount of the power consumed in the furnaces is as the following. Pig Iron Output of the Blast Furnace : 1,861, 263t-pig/y(the result between Apr. 1998 —Mar. 1999) Power Unit Requirement of the Blast Furnace : 17.3kwh/t-pig (the result between Apr. 1998 —Mar.1999) Amount of Consumed Power in Blast Furnace : 330Tj/y

1.2.2 Hot stove waste heat recovery

Fuel gas of the hot blast stove of the third blast furnace and the fifth blast furnace in Huta im.T.Sendzimira S.A. is BFG, the result of the consumption amount is as the following. Pig Iron Output of the Blast Furnace : 1,861,263t-pig/y (the result between Apr. 1998 —Mar. 1999) BFG Heat Unit Requirement of the Blast Furnace : 568.2Mcal(2379M-J)/t-pig (the result between Apr. 1998 —Mar. 1999) Amount of consumed BFG in Blast Furnace : 4,428Tj/y

1.2.3 Sinter cooler waste heat recovery

As waste heat recovery equipment is not installed in the second and the fourth sinter cooler, the amount of the recovered steam is zero. Incidentally, the amount of the steam for sintering is as the following. Output of Sintering : 1,577,705t-sinter/y(the result between Apr. 1998 —Mar. 1999) Steam Unit Requirement for Sintering : 1.3kg/t-sinter(the result between Apr. 1998 — Mar. 1999) The Amount of Consumed Steam for Sintering : 21Tj/y

-179- 1.2.4 Basic oxygen furnace waste gas recovery

Base line for calculating the energy saving effect is the amount of energy consumption and recovery at the converter factory under the present condition which is the executing object of this time and without energy saving measures ,and they are regularly and quantitatively managed and grasped by f the energy section which totally manages the energy-balance of all the steel works .Accordingly, the base line of the energy saving effect at the present factory is easily set up. Incidentally, there are following matters as assumptions for setting up the base line. (DOutput of Crude Steel Output result in 1998 at the converter factory; 2,209kton/y ©Converter Operating Condition : Planned Converter Operating Condition shown in Table2.4.2-2 ©The Result of the Basic Survey about Energy saving Present Condition of Objective Energy Saving Equipment Shown in Table 2.4.2-1.

1.3 Expected amount, effective period and accumulated amount of the energy saving effect Energy saving effect is shown in table Table 1.3-1. Concrete amount of energy saving effect is 2,303Tj/y Generating period is 50 ys, and accumulated quantity is 115,150Tj.

180 Table 1.3.1 Expense to Project Effect Process Energy Classification of Energy Saving and Energy Saving Quantity Green House Amount Invest Energy Green House Gas Reducing of ment Saving Gas Reducing Saving Power Steam Natural BEG n 2 LDG Total Effect Investme Effect Effect Effect Measure Gas Quantity nt Mwh/y T/y 103Nm3/y 103Nm3/y 10W/y 103Nm3/y Tj/y TonC0 2/y ¥102mill ¥102m Tcal/y • TonC0 2/y • (Mj/Ts) (MjTTs) (MjTPs) (MjfTs) (Mj/Ts) (Mj/Ts) (MjfTs) ill./y ¥102mill. ¥102mill. Blast Furnace 56,082 575 53,332 16.2 2.34 35.5 3,292 TRT Pig 260 Iron 260 Making Waste Heat 99,100 323 29,926 6.7 0.74 48.2 4,467 Recovery 146 146 from Hot Blast Stove Waste Heat 96,753 259 24,035 10.5 1.06 24.7 2,289 recovery from 117 Sinter Cooler 117 Steel Waste Heat 6,040 -413,000 24,000 -11,000 160,000 1,146 74,340 46.0 5.90 24.9 1,616 Making Recovery from 28 -501 391 -6 606 519 Converter Total 62,122 -316,247 24,000 99,100 -11,000 160,000 2,303 181,633 79.4 10.04 29.0 2,288 288 -384 391 146 -6 606 1,042 Coke Steam 265,812 712 Oven Recovery 312 322 with CDQ Note 1.The numeral value within lower cell show the energy saving quantity per unit crude steel production quantity 2.Crude SteekCrude steel production quantity 2,209,400 in 1998 presented by Huta im.T.Sendzimira S.A. was adopted 3,Standard Calorie and unit price of each energy. Unit Standard Calorie Standard Calorie Unit Price Conversion into Yen Unit Price per Meal Meal/unit Mjoule/unit Zl/unit [30¥/zl]¥/unit Power zl/Mwh 2450 10258 140.16 4204.8 1.72 Recovered Steam(Sinter) zl/T 640 2680 38.27 1148.1 1.79 Recovered Steam(Converter) zl/T 640 2680 5.81 174.3 0.27 Natural Gas zl/kNm3 8605 36027 487.04 14611.2 1.70 Blast Furnace Gas(BFG) zl/kNm3 778 3257 25.06 751.8 0.97 NiGas zl/kNm3 300 1256 65.43 1962.9 6.54 Converter Gas(LDG) zl/kNm3 2000 8374 64.13 1923.8 0.96(Assumed to be equivalent to general coal) Genera Coal zl/T 5118 21428 164.10 4923.0 0.96 4.C02Emission Reducing Quantity (1 )In case of Coal (2) In case of natural gas Tjoule/yeal X 25.8Ton-C/TjouleX 44/12 X 0.98 Tjoule/yearX 15.3Ton-C/TjouleX 44/12X0.995 *lcal=4.1868joule 1.3.1 Blast Furnace TRT (1) Concrete Amount Energy Saving Effect 1) Reduced Amount of Purchased Electric Power Recovered power (300 x 0.87 + 3700 x 0.92) x 2,209,000/2,075,000 - 6,402 kvv Reduced Amount of Purchased Power = 6,402 x 24 x 365 = 56,082,000 kw/year - 2) Energy Saving Quantity Power Base Energy Quantity 2,450 kcal (10,258 kj)/kwh Energy Saving Quantity 56,082,000 x 2,540 (10,258) - 137.4 Teal (575.3 Tj)/year

(2) Energy Saving Effect Generating Period Being from the biginning of the TRT operation until being stopped for some reason, the effect can be given as long as the blast furnace is operated.

(3) Accumulated Quantity of Energy Saving Effect Accumulated quantity of Energy Saving Effect can be calculated out from concrete energy saving effect and that generating period. On the assumption that the energy saving effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of energy saving effect is about 28, 765 Tjoule.

1.3.2 Hot stove waste heat recovery (1) Concrete Amount Energy Saving Effect * 1) Reduced Amount of BEG {(82,500-76,500) x 0.88 + (96,700-89,600) x 0.93} x 24 x 365 x 696/778 x 2,209,000/2,075,000 = 99.1 x 106 NnP /year 2) Energy Saving Quantity BFG Base Energy Quantity 778 kcal (3,257) /Nm3 Energy Saving Quantity 99,100,000 x 778 (3,257) = 7.1 Teal (322.8 Tj)/year

(2) Energy Saving Effect Contrating Period Being from the beginning of the waste heat recovery equipment operation until being stopped for some reason the effect can be given as long as the hot blast stove is operated.

(3) Accumulated Quantity of Energy Saving Effect Accumulated quantity of energy saving effect can be calculated out from concrete energy saving effect and that generating period. On the assuraption that the energy saving effect of the

— 182 — fiscal 1998 will be generated and continue for 50 years, accumulated quantity of energy saving effect is about 16,140 Tjoule.

1.3.3 Sinter cooler waste heat recovery , (1) Concrete Amount of Energy Saving Effect 1) Steam Recovery Quantity 9.9 x 0.95 x 24 x 365 x 706/640 x 2,209,000/2,075,000 = 96,753 t/year 2) Energy Saving Quantity Steam Base Energy Quantity 640 kcal (2,680 kj)/kg Energy Saving Quantity 96,753 x 1000 x 640 (2,680) = 61.9 Teal (259.3 Tj)/year

(2) Energy Saving Generating Period Being from the beginning of the waste beat recovery equipment operation until being stopped for some reason, the effect can be given as long as the sintering machine is operated.

(3) Accumulated Quantity of Energy Saving Effect Accumulated quality of energy saving effect can be calculated out from concrete energy saving effect and that generating period. On the assumption that the energy saving effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of energy saving effect is about 12,965 Tjoule.

1.3.4 Basic oxygen furnace waste gas recovery (1) Concrete Amount of Energy Saving Effect Calculation about energy recovery quantity' and energy saving quantity by energy saving measures is described. Here, arranged result is shown in Table 1.3.4.1. Although the total energy saving quantity after executing the eenrgy saving measure is 1.16 x 103Tjoule/year (524 Mj/ts), the reason for redoction of the steam recovery quantity and heat recovery quantity is as herein before mentioned due to changing energy saving measure from the gas deeling system in which converter waste gas is perfectly burned to the gas dealing system (OG supporting system) in which waste gas combustion is suppressed as much as possible and waste gas having sensible heat is recovered.

183 — Table 13.4.1. Summary of Energy Saving Quantity Considering Quantity Item Unit Present (OG systemi- of energy Note zation) saving Crude Steel Product ton/y 2,209 xlO3 Production result in 1998 Energy Recovery Quantity Tj/y 434.9 1,593.3 1,158.4 Energy Recovery Unit Requirement Mj/y 262.5 758.6 496.1 1) Steam Recovery Unit kg/t.s. 246 59 -187 Requirement Recovery ton/y 543 x 130 x 103 -413 x 103 Quantity 103 Recovery heat 25 Mpa estimeted Quantity Tj/y 1,450 350 -1,100 enthalpy of saturated steam: 2688 kj/kg 2) Converter Recovery Nm3/ Gas Unit t.s. - 73 73 Requirement Recovery Nm3/ - 1.6 x 10" 1.6 x 10" Quantity y Recovery heat Heat quantity: Tj/y - 1,340 1,340 Quantity 8400 kj/Nm3 3) Natural Consumption Nm3/ gas unit require ­ t.s. -10.87 - -10.87 ment Consumption Nm3/ -2.4 x - 2.4 x Quantity y 10' 10" Consumption Heat quantity: Tj/y -870 - 870 Heat Quantity 36140 kj/Nm3 4) N2gas Consumption Nm3/ unit require ­ t.s. - -5 -5 ment Consumption Nm3/ For purging and - -1.1x10" -1.1x10" Quantity y sealing Consumption Heat quantity Heat Quantity Tj/y - -13.8 -13.8 necessary for producing N2gas: 1260 kj/Nm3 5) Power Consumption kwh/ Only for introducing unit require ­ t.s -6.38 -3.65 2.73 blower ment Consumption Gwh/y -14.1 -8.06 6.04 Quantity Consumption Considering Heat Quantity Tj/y -145.1 -82.9 62.2 generating efficiency, conver ­ ted at 10390 kj/kwh

— 184 — (2) Generating Period The concerter factory of Huta in T. Sendzimira S. A. have been operated for close to 35 years since 1966. Howere, converter waste gas processing equipment is that of perfect combustion system, about the waste gas dealing equipment of nonbumed gas recovery system planed to be introduced, the operation and maintainance have not been experienced. Accordingly, however there needs certain term for mastering, energy saving effect occures substantially after since the power saving by waste gas recovery and controlling of the introducing blower revolution number is started till the gas recovery and the controlling of the introduciton blower revolution number is stopped for some reason.

(3) Accumulation Quantity Accumulated Quantity of energy saving is calculated out by multiplying the crude steel production quantity (ton/period) during objective period by energy saving unit requirement (Mj/t.s.) On the assumption that the energy saving effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of energy saving effect is about 57,000 Tjoule.

185 — 1.4 Practical Method for Confirming Energy Saving Effect

1.4.1 Blast Furnace TRT

Confirmation will be carried out by measuring the output at the generation terminal end with the power meter which is to be installed this time.

Table 1.4.1-1 Method for Confirming the Energy Saving Effect Item Data Item Measuring Measuring Frequency Note Place Method • TRT • TRT Electric Integrating • Blast • power Generator Chamber Power Meter Once/Mon Furnace Plant Output • Energy Section

1.4.2 Hot stove waste heat recovery

BEG consumption rate will be measured with flow meter equipped within BEG conduit toward each hot blast stove. Heat quantity of BEG will be measured with caloric meter as in the present condition. Energy saving quantity will be calculated out by using both these data.

Table 1.4.2-1 Method for Confirming the Energy Saving Effect Item Data Item Measuring Measuring Frequency Note Place Method • Gas • Main • Gas analyzer • Routine • Energy • BEG composition Conduit operation Section • Consumed • Hot blast • Integrating • Blast Quantity Stove Inlet Flow Meter Once/Mon Furnace Section

1.4.3 Sinster cooler waste heat recovery

Steam recovery quantity will be measured with steam flow meter which will be equipped this time. And energy quantity of the steam will be calculated out by the temperature and the pressure of the recovered steam. And energy saving quantity will be calculated out by using both these data.

- 186 Table 1.4.3-1 Method for Confirming the Energy Saving Effect Item Data Item Measuring Measuring Frequency Note Place Method • Generated • Steam main • Integrating • Sintering • Steam Steam conduit Flow Meter Once/Mon Plant Quantity • Pressure • Energy • Steam Gauge • Section Pressure • thermometer Temperature

1.4.4 Basic oxygen furnace waste gas recovery

Effect confirming method of energy saving measure at steel making process is shown in Tablel.4.4-1.

Tablel.4.4-1 Effect Confirming Method of Energy Saving(Energy Alternating) Item Data Item Measuring Measuring Method Frequency Note Place • Gas • Gas Holder • Gas Analyzer • Routine • Energy LDG Composition outlet • Integrating Flow Operation Section • Consumed Meter Managing Quantity Level • Power • Consumed • IDF Electric • Integrating Once/Mon. • Converter Saving Power Quantity Chamber Electric Power Plant Meter

187 — 2. The reduction effect of the greenhouse effect gasses

2.1 Technical background to expect the reducion effect of the greenhouse effect gasses

2.1.1 Blast Furnace TRT

Purchased power at Huta im.T.Sendzimira S.A. can be reduced by recovering electric power. Consequently, power quantity generated at the power station providing Huta im.T.Sendzimira S.A.with the power can be reduced. Accordingly, coal used at the power station as fuel can be reduced. And green house gas quantity corresponding to the reduced coal quantity can be reduced. Green house gas is carbonic acid gas (C02).

2.1.2 Hot stove waste heat recovery

By reducing BFG consumption quantity, coal consumption quantity at the power station in at Huta im.T.Sendzimira S.A. can be reduced. Accordingly, the more the percentage of BFG raises, the more the percentage of the coal can be reduced, subsequently, coal is reduced as a whole. And green house gas quantity corresponding to the reduced coal quantity can be reduced. Green house gas is carbon dioxide(C02).

2.1.3 Sinster cooler waste heat recovery

By recovering steam, there occurs room in balance process steam used in Huta im.T.Sendzimira S.A. As the result steam quantity generated at the power station providing process steam can be reduced. Accordingly, coal used at the power station as fuel coal can be reduced, And green house gas quantity corresponding to the reduced coal quantity can be reduced. Green house gas is carbonic acid gas (C02).

2.1.4 Basic oxygen furnace waste gas recovery

Green house gas emission reducing effect means reduced emission quantity of green house gas corresponding to energy (fuel) quantity which is saved, reduced or alternated by energy saving effect mentioned in the last paragraph and is unitarily decided by the energy saving effect. Accordingly, the technical ground on which the green house gas emission reducing effect occurs can be understand to be the technical ground mentioned in the last paragraph 1.1.4 on which the energy saving effect occurs. In this project, the natural gas consumed at the independent power plant in Huta im.T.Sendzimira S.A. is considered to be the energy which is saved and substituted, and the green house gas is carbonic acid gas(C02).

— 188 2.2 Base line for the fundamental estimation of the reduction effect of the greenhouse effect gasses (on the assumption of exhaust amount in case of the project unrealized)

2.2.1 Blast Furnace TRT

As TRT is not installed in the third and the fifth blast furnace of Huta im.T.Sendzimira S.A.,the amount of the recovered power (amount of generated power) is zero. Incidentally, the amount of the power consumed in the furnaces is as the following. Pig Iron Output of the Blast Furnace : 1,861,263t-pig/y(the result between Apr. 1998 —Mar. 1999) Power Unit Requirement of the Blast Furnace: 17.3kwh/t-pig (the result between Apr. 1998 — Mar. 1999) Amount of Consumed Power in Blast Furnace :31,000Tj/y

2.2.2 Hot stove waste heat recovery

Fuel gas of the hot blast stove of the third blast furnace and the fifth blast furnace in Huta im.T.Sendzimira S.A. is BFG, the result of the consumption amount is as the following. Pig Iron Output of the Blast Furnace : l,861,263t-pig/y(the result between Apr. 1998 —Mar. 1999) BFG Heat Unit Requirement of the Blast Furnace: 568.2Mcal(2379M-J)/t-pig (the result between Apr.1998-Mar.1999) Amount of consumed BFG in Blast Furnace : 411,000Tj/y

2.2.3 Sinster cooler waste heat recovery As waste heat recovery equipment is not installed in the second and the fourth sinter cooler, the amount of the recovered steam is zero. Incidentally, the amount of the steam for sintering is as the following. Output of Sintering : l,577,705t-sinter/y(the result between Apr. 1998 —Mar. 1999) Steam Unit Requirement for Sintering : 1.3kg/t-sinter(the result between Apr. 1998- Mar. 1999) The Amount of Consumed Steam for Sintering :2,000t-CO2/y

2.2.4 Basic oxygen furnace waste gas recovery

(1) The energy quantity consumed and recovered at the converter factory is easily grasped as mentioned in the former paragraph 1.2.4. The green gas emission quantity corresponding to it can be easily estimated by calculation.

189 (2) When gas recovery measure is not executed, converter waste gas is perfectly burned within gas cooler(waste heat boiler), and combustion gas C02 is emitted into the atmosphere. C02 emission quantity in this case can be calculated and estimated from the converter operating condition.

(3) Estimated green house gas emission quantity at the converter factory without executing the project is the sum of (1) and (2) mentioned above.

190 2.3 Expected amount, effective period and an accumulated amount of the reduction effect on the greenhouse effect gasses

Energy saving effect is shown in table 1.3-1. Concrete amount of energy saving effect is 182,000t-CO 2/y, generating period is 50 ys, and accumulated quantity is 9,802,000t-CO2/y.

2.3.1 Blast Furnace TRT

(1) Concrete Quantity of Green House Gas 1) Energy Saving Quantity A 575.3Tj/y 2) Converting Coefficient toward Carbon Emission Unit Requirement B 25.8t-c/tj 3) Compensation Coefficient for Imperfect combustion C 0.98 4) Reduced CG2 Quantity AXBXCX44/12 =575.3 X 25.8 X 0.98 X 44/12 =53,300t/y

(2) Generating Period of Green House Gas Reducing Effect Being from the beginning of the TRT operation until being stopped for some reason, the effect can be given as long as the blast furnace is operated.

(3) Accumulated Quantity of Green House Gas Reducing Effect Accumulated quantity of green house gas reducing effect can be calculated out from concrete energy saving effect and that generating period. On the assumption that the green house gas reducing effect of the fiscal 1998 will be generated and continue for 50 ys, accumulated quantity of Green House Gas Reducing effect is about l,195,000tCO2.

2.3.2 Hot stove waste heat recovery

(1) Concrete Quantity of Green House Gas Reducing Effect 1) Energy Saving Quantity A : 322.8Tj/y 2) Converting Coefficient toward Carbon Emission Unit Requirement B: 25.8t-c/tj 3) Compensating Coefficient for Imperfect combustion C : 0.98 4) Reduced C02 Quantity : AXBXCX44/12 =322.8 X 25.8 X 0.98 X 44/12 =29,900t/y

191 (2) Generating Period of Green House Gas Reducing Effect Being from the beginning of the waste heat recovery equipment operation until being stopped for some reason, the effect can be given as long as the hot blast stove is operated.

(3) Accumulated Quantity of Green House Gas Reducing Effect Accumulated quantity of green house gas reducing effect can be calculated out from concrete energy saving effect and that generating period. On the assumption that the green house gas reducing effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of Green House Gas Reducing effect is about l,495,000t-CG2.

2.3.3 Sinter cooler waste heat recovery

(1) Concrete Quantity of Green House Gas Reducing Effect 1) Energy Saving Quantity A 259.3Tj/y 2) Converting Coefficient toward Carbon Emission Unit Requirement B 25.8t-c/tj 3) Compensating Coefficient for Imperfect combustion C 0.98 4) Reduced C02 Quantity AXBXCX44/12 =259.3 X 25.8 X 0.98 X 44/12 =24,000t/y

(2) Period Generating Green House Gas Reducing Effect Being from the beginning of the waste heat recovery equipment operation until being stopped for some reason, the effect can be given as long as the sintering machine is operated. 3

(3) Accumulated Quantity of Green House Gas Reducing Effect Accumulated quantity of green house gas reducing effect can be calculated out from concrete energy saving effect and that generating period. On the assumption that the green house gas reducing effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of Green House Gas Reducing effect is about l,200,000tCO2/y.

2.3.4 Basic oxygen furnace waste gas recovery

(1) Concrete Quantity of Green House Gas Reducing Effect Energy saving quantity by executing this present project is l,158.4Tjoule/y as shown in Tablel.3.4-1, the corresponding quantity of the coal out of those consumed at the power station boiler can be reduced, and corresponding quantity of emitting CQ2 can be supposedly reduced. However, the reducing quantity of C02 emission corresponding to saving or reducing quantity (870Tjoule/y) of natural gas for auxiliary combustion of the present waste heat boiler was calculated on the basis of natural gas, and the reducing quantity of C02 emission corresponding

192 to the rest (288.4Tjoule/y) was calculated on the basis of fuel coal. The reducing quantity of C02 emission by executing the present project is shown in Table2.3.4-1. Table Reducing Quantity of C02 emission Item Unit Data Note Energy Saving Quantity Tjoule/y 1,158.4X103 Natural Gas Reducing Quantity Nnf/y 2.4X10? Heat Quantity:33690/Nm 3 Coal Reducing Quantity Ton/y 1.34X10+ Heat Quantity :21430kj/kg C02 Emission ton-C0 2 7.5X10+ reducing Natural Gas ton-C0 2 4.8X10+ (CEF):15.3t-C/Tj Quantity (Oxidation coefficient):0.995 Coal ton-C0 2 2.7X10+ (CEF):25.8t-C/Tj (Oxidation coefficient):0.98

[Calculation of Reducing Quantity of CQ2 Emission] C02 Emission Reducing Quantity =(Natural Gas or Coal Reducing Quantity)*(CEF)*(Oxidation Coefficient)*44/12

(2) Generating Period The converter factory of Huta im.T.Sendzimira S.A.have been operated for close to 35years since 1966.However, converter waste gas processing equipment is that of perfect combustion system, about the waste gas processing equipment of nonburning gas recovery system planed to be introduced, the operation and maintenance have not been experienced. Accordingly ,however after clearing a series of test working including the gas recovering operation there needs certain term for mastering, energy saving effect occurs substantially after the power saving by waste gas recovery and controlling of the introducing blower revolution number of the measure is started till the gas recovery and the controlling of the introduction blower revolution number is stopped for some reason.

(3) Accumulated Quantity Accumulated quantity of green house gas (C02)emission reducing effect can be calculated out as following, on the basis of the accumulated energy saving quantity during the objective period. Accumulated Quantity of Green House Gas(C02) Emission Reducing Effect = Accumulated Quantity of Energy Saving * Carbon Emission Coefficient of Objective Energy(CEF) Oxidation Ratio Coefficient of Carbon(C)44/12

On the assumption that the green house gas reducing effect of the fiscal 1998 will be generated and continue for 50 years, accumulated quantity of green house gas reducing effect is about 3,700,000tCO2.

193 — 2.4 Practical method for confirming the reduction effect of the greenhouse effect gasses (the monitoring method)

2.4.1 Blast Furnace TRT

Energy saving effect will be grasped by measuring the output at the generation terminal end with the integral power meter which is to be installed this time. The green house gas reducing effect will be calculated on the basis of the energy saving quantity.

Table 2.4.1-1 Concrete Method for Confirming Green House Gas Emission Reducing Quantity Item Data Item Measuring Measuring Frequency Note Place Method • TRT • TRT Electric Integrating • Blast • power Generator Chamber Power Meter Once/Mon Furnace Plant Output • Energy Section

2.4.2 Hot stove waste heat recovery

BEG consumption rate will be measured with flow meter equipped to BEG conduit connected to each hot blast stove. Heat quantity of BEG will be measured with caloric meter as in the present condition. Energy saving quantity will be grasped by using both these data. The green house gas reducing effect will be calculated out on the basis of the energy saving quantity.

Table 2.4.2-1 Concrete Method for Confirming Green House Gas Emission Reducing Quantity Item Data Item Measuring Measuring Frequency Note Place Method • Gas • Gas Main • Gas Analyzer • Routine • Energy • BEG Composition Conduit Operation Section Managing Level

• Consumed • Hot Blast • Integrated • Blast Quantity Stove Inlet Flow Meter Once/Mon Furnace Plant

2.4.3 Sinter cooler waste heat recovery Steam recovery quantity will be measured with steam flow meter which will be equipped this time. And energy quantity of the steam will be calculated out by the temperature and the pressure of the recovered steam. And energy saving quantity will be grasped by using both these data. The green house gas reducing effect will be calculated on the basis of the energy saving

194 quantity. Table 2.4.3-1 Method for Confirming Green House Gas Emission Reducing Quantity Item Data Item Measuring Measuring Frequency Note Place Method • Generated • Steam main • Integrating • Sintering • Steam Steam conduit Flow Meter Once/Mon Plant Quantity • Pressure • Energy • Steam Gauge * Section Pressure * thermometer Temperature

2.4.4 Basic oxygen furnace waste gas recovery

Method for confirming the effect of energy saving measure in steel making process is shown in Table2.4.4-1.

Table2.4.4-1 Method for Confirming Green House Gas Emission Reducing Quantity Item Data Item Measuring Measuring Method Frequency Note Place • Gas • Gas Holder • Gas Analyzer • Routine • Energy LOG Composition outlet • Integrating Flow Operation Section • Consumed Meter Managing Quantity Level • Power • Consumed • IDF Electric * Integrating Once/Mon. • Converter Saving Power Quantity Chamber Electric Power Plant Meter

195 — 3. Influence on the Productivity

3.1 Blast Furnace TRT

In the present project, TRT equipment with which power can be recovered are additionally equipped to existing third and fifth blast furnaces, and it does not directly contribute to the productivity of those blast furnaces.

3.2 Hot stove waste heat recovery

In the present project, equipment with which waste can be recovered are additionally equipped to the hot blast stove of existing third and fifth blast furnaces, and it does not directly contribute to the productivity of those blast furnaces. However, although this time recovered waste gas heat is utilized for reducing hot blast furnace fuel or energy saving, there is completely other utilizing method in which the recovered waste gas is utilized for raising the temperature of the blow. In this case, entering heat quantity entering into the blast furnace was increased, although the effect varies according to operating condition of the blast furnace, the producing of the blast furnace was raised by lowered fuel ratio. Which way is to be selected depends upon the production plan or estimate of economical efficiency at that time. This time, the present project was estimated in case that recovered waste heat is utilized for energy saving.

3.3 Sinter cooler waste heat recovery

In the present project, equipment with which waste heat can be recovered is additionally equipped to existing sinter cooler, and it does not directly contribute to the productivity for sintering.

3.4 Basic oxygen furnace waste gas recovery

In this present project, existing perfect combustion type converter waste gas processing equipment is newly replaced(renewed) with nonbuming gas processor with which gas can be recovered, and it does not directly contribute to the productivity of the converter factory. However, under the present condition heat load capacity of waste heat boiler composing existing gas processor is small, and oxygen feeding rate is limited to 19200Nm3/h. On the other hand, in OG systemization (Gas Recovery), oxygen feeding rate can be fully raised up to existing conduit equipment capacity(3000Nm3/h),and to the corresponding extent steel making time can be shorten, comparing to the present condition having the limatation productivity can be raised.

196 — IV Profitability

[Summary]

Profitability of each plan is shown in the following Table. Energy Saving Amount of investment Investment Effect Investment recovery Measure (¥100Mil.) (¥100Mil./y) years (y) 1.Blast Furnace TRT 16.2 2.3 Recovery Impossible 2. Waste Heat 6.7 0.7 Recovery Impossible Recovery from Hot Blast Stove

3. Waste Heat 10.5 1.1 Recovery Impossible Recovery from Sinter Cooler 4. Waste 46.0 5.9 Recovery Impossible Gas Recovery from Converter Total 79.4 10.0 Recovery Impossible

Total amount of investment is ¥7.94bill., and investment effect is ¥1.00bill..On the assumption that the rate of interest is 10%, maintenance fee is 5%/y of investment, and the fixed property tax is 0.7%of the amount of investment, it is impossible to recover investment.

However, it is the result of calculation, in the case that the amount of investment is Japan base and the investment effect is calculated by using energy cost of Huta im.T.Sendzimira S.A

197 — 1. Recoverable economical effect of the investment

1.1 Blast Furnace

(1) Economical Effect 1) Recovered Power Quantity A: 56,082,000kwh/y 2) Power Unit Price B: 0.14zl/kwh 3) Exchange Rate C: 30¥/zl 4) Annual Amount of Effect A X B X C=56,082,000 X 0.14 X 30 = ¥236mill./y

(2) Investment Recovery Years 1) Assumption for Calculation Repairing Expense =Equipment Expense X 5% Fixed Property Tax = Equipment Expense X 0.7%(Equipment Depreciation Period:10years) Interest Rate =10%/y 2) Calculation Result Gross Profit =¥143mill./y Investment Recovery Years =Recovery Impossible

Relation between investment recovery year and energy unit price is shown in Table 1.1-1. It can be understood that because the present estimated energy (power) price of Huta im.T.Sendzimira S.A is cheap, investment can not be recovered.

198 — Investment Recovery Years(year) 0

Fig

1.1-1

Relation 0.2

between

Investment 0.4 Power (0.41)

Recovery

Energy Years 0.6 and

Unit

Energy

Price(¥/Mjoule)

Unit Price 0.8

(Blast

Furnace

TRT) 1

— "

Rate Rate 1.2

of of

Interest Interest

0.75% 10% 1.4 1.2 Hot stove waste heat recovery

(1) Economical Effect 1) BEG Reducing Quantity A :99,100,000Nm3/y 2) BEG Unit Price B:0.025zl/Nm3 3) Exchange Rate C:¥30/zl 4) Annual Amount of Effect A X B X C =99,100,000 X 0.025 X 30 = ¥74mill/y

(2) Investment Recovery Years 1) Assumption for Calculation Repairing Expense =Equipment Expense X 5% Fixed Property Tax = Equipment Expense X 0.7%(Equipment Depreciation Period:10years) Interest Rate =10%/y 2) Calculation Result Gross Profit = ¥36mill./y Investment Recovery Years =Recovery Impossible

Relation between investment recovery year and energy unit price is shown in Table 1.2-1. It can be understood that because the present estimated energy (BEG) price of Huta im.T.Sendzimira S.A is cheap, investment can not be recovered.

200 Investment Recovery Years(year) 0

Fig

1.2-1

Relation 0.2

between

Investment 0.4

Recovery Energy 0.6

Years

Unit and

Price(¥/Mjoule)

Energy 0.8

Unit

Price(Waste

Heat 1

Recovery — -

• Rate

from Rate 1.2

of

of Hot Interest

Interest

Blast

10%

Stove) 0.75% 1.4 1.3 Sinter cooler waste heat recovery

(1) Economical Effect 1) Recovered Steam Quantity A :96.753t/y 2) Steam Unit Price B:38.3zl/t 3) Exchange Rate C:¥30/zl 4) Annual Amount of Effect A X B X C=96,753 X 38.3 X 30 = ¥lllmill./y

(2) Investment Recovery Years 1) Assumption for Calculation Repairing Expense =Equipment Expense X 5% Fixed Property Tax = Equipment Expense X 0.7%(Equipment Depreciation Period:10years) Interest Rate =10%/y 2) Calculation Result Gross Profit =¥51mill./y Investment Recovery Years ^Recovery Impossible

Relation between investment recovery year and energy unit price is shown in Table 1.2-1. It can be understood that because the present estimated energy (Steam) price of Huta im.T.Sendzimira S.A is cheap, investment can not be recovered.

202 Rate of Interest 10% Rate of Interest 0.75%

Steam (0.41)

0 0.2 0.4 0.6 0.8 1 1.2 1.4 Energy Unit Pnce(¥/Mjoule)

Fig 1.3-1 Relation between Investment Recovery Years and Energy Unit Price(Waste Heat Recovery from Sinter Cooler) 1.4 Basic oxygen furnace waste gas recovery

1.4.1 Assumption for Estimating Economical Effect of Investment

(1) The estimated energy saving quantity shown in Table 2.4.2-10 was regarded as the consumption reducing effect of the fuel coal consumed by the power plant boiler at Huta im.T.Sendzimira S.A.

(2) The prices of steam, power, natural gas, and N2 gas at Huta im.T.Sendzimira S.A.in 1998 were used as those unit prices. About converter gas ,for lack of using result and unit price, it’s price was regarded to be equal to heat quantity unit price of fuel coal.

(3) As the variable cost increasing together with the gas recovery, there are power cost for pressure booster of gas utilizing equipment and consumed pure water reduction accompanied with great reduction of generated steam quantity. Further, about the number of worker as one of the fixed cost, reduction of the introducing blower watchmen of 1X3 person is counted.

(4) Summary of the investment cost shown in Table2.4.2-12 is regarded as the amount of the investment.

(5) Equipment investment effect was calculated by recovery period method, and recovery period was calculated by way of trial on the assumption that investment fund is all loan, annual interest rate is 10%, equipment depreciation period is lOyears, repairing expense is 5% of plant and equipment cost (Gas Holder is 1%), and fixed property tax rate is 0.7%.

1.4.2 Estimation of Energy Saving Quantity

As the assumption described in the last paragraph, when the energy saving effect of this project is shown as the reducing quantity of fuel coal consumption, it becomes 4000ton/year.However, because the energy saving quantity of the present project includes the reducing quantity of natural gas for auxiliary combustion of the converter waste boiler, when excluding this, the consumption saving quantity of the fuel coal is about 13000ton/y except for it. * Energy Saving Quantity : l,158.4Tjoule/y * Heat Quantity of Fuel Coal : 21,495kjoule/kg(5118kcal/kg*4.2kjoule/kcal) * Reducing Quantity of Consumed Fuel Coal : 1,158Tjoule/y/2 1495kjoule/kg =5.4 X 104ton/y

204 1.4.3 Energy Unit price

The energy unit prices at Huta im.T.Sendzimira S.A. in 1999 is shown in Tablel.4-1

Tablel.4-1 Energy Unit Prices at Huta im.T.Sendzimira S.A.(Exchange Rate ¥30/zl) Energy Name Standard Heat Unit Unit Price Note Quantity Zl/unit ¥/unit Converter Steam 640kcal/kg ton 5.81 174.3 Recovered saturated steam Fuel Coal 5118kcal/kg ton 164.10 4923 Natural Gas 8605kcla/Nm 3 Nm3 0.49 14.61 Converter 2000kcal/Nm3 Nm3 0.06 1.92 Assumed tobe equal valent to Recovery Gas coal unit price Power(GeneraI 2450kcal/kwh kwh 0.14 4.20 system) N2gas 300kcal/Nm3 Nm3 0.065 1.96 Process Water m3 3.33 99.9 Cooling water for boiler

1.4.4 Energy Saving Effect

The estimated amount of the energy saving effect by steam recovery, waste gas recovery, power saving, eliminating auxiliary combustion of natural gas, and N2gas consumption is shown in Table 1.4-2.

Table 1.4-2 Estimated Amount of the Energy Saving Effect Energy Name Energy Saving Quantity Energy Saving Note Unit Data Effect(¥mill./y) Steam ton/y -413 X103 -72.0 Reduction by Noncombustion Systemization Converter Gas Nm3/y 1.6X10* 307.2 Natural Gas Nm3/y 2.4X10" 350.4 Unnecessary with OG systemization Nzgas Nm3/y -1.1X10" -21.6 Unnecessary with OG systemization Power Kwh/y 6.04X10* 25.4 IDF Revolution Number Control Total 589.6

— 205 1.4.5 Variable Cost

Increase or decrease of cost with OG systemization is shown in Table 1.4-3

Tablel.4-3 Increase or Decrease of Cost Classification Item Cause Cost(¥mill./y) Variable Power Cost Recovery Gas Booster 5 Operation Variable Pure Water Reduction of Generated -70 Consumption Cost Steam Quantity by Noncombustion Systemization of Converter Waste Gas Fixed Personnel expence Abolition of introducing -2 blower operation watching work Total -67

1.4.6 Gross Profit

Gross profit by equipment investment to energy saving measures to steel making process is shown in Tablel.4-4.

Table 1.4-4 Gross Profit of the Project(Steel Making Process) Item Amount of Money Note (¥mill./y) Gas Recovery 307.2 Power Saving 25.4 Energy Saving Effect Steam Recovery -72 See Table 1.4-2 Natural Gas 350.4 N2 Gas -21.6 Subtotal 589.6 Process Water -70

Cost Power for Booster 5 See Tablel.4-3 Personnel Expense -2 Subtotal -67 Gas Recovering 190 Repairing expense Equipment See Paragraph 1.4-5)and Gas Utilizing 8 Table2.4.2-12 Equipment Subtotal 198 Tax Fixed Property 32 Tax Rate:0.7% Gross Profit 426.6

206 1.4.7 Investment Recovery Rate, Investment Recovery Years

Trial calculation result of investment recovery rate and investment recovery years on the basis of the aforementioned assumption of estimating the economical investment effect is shown below.

(1) Method for Trial Calculation of Investment Recovery Rate, Investment Recovery Years n=logI/(I-i)/log(l +i) n :Investment recovery period I investment Recovery Rate=R/P P:Necessary Repairmen! Amount=Equipment excess 4-Other expenses RrGross Profit=Annual Amount of Effect -Cost -Repairing Expense -Fixed Property Tax Repairing Expense ^Equipment Expence *5% Fixed property tax = Equipment Expence*0.7%(Equipment Depreciation Period:lOyears) i :Interest Rate

(2) Trial Calculation Result

Trial calculation result of economical investment effect is shown in Table 1.4-4, and relation between investment recovery years and energy unit price is shown Fig. 1.4-1. It can be understood that the present estimated price of the energy (natural gas, fuel coal) of Huta im.T.Sendzimira S.A. is so cheap that the investment can not recovered.

Table 1.4-4 Trial Calculation Result of Economical Investment Effect Item Unit Data Note Amount of Equipment Investment(P) ¥100mill. 46 Annual Gross Profit(R) ¥100mill./y 4.3 Investment Recovery Rate(ROI) % 9.3 R/P Investment Recovery Period Y - Calculation Impossible

207 Rate of Interest 10% Rate of Interest 0.75%

0 0.2 0.4 0.6 0.8 1 1.2 1.4 Energy Unit Price(¥/Mjoule)

Fig 1.4-1 Relation between Investment Recovery Years and Energy Unit Price(Waste Gas Recovery from Converter)

About four energy saving measures estimated this time, the relation between the investment recovery years and the energy unit price is shown in Gibl.4-2. The result of estimation that none on said four measures have good economical efficiency is obtained. However, this estimation will largely vary according to the trend of energy unit price. Although, this time as the investment effects only the energy saving effects of certain possibility was were estimated, actually in some cases secondary effects such as reduction of workers, reduction of repairing expense, and environmental improvement can be added. About the equipment expense, being calculated out on the basis of the interior of Japan this time, said equipment expense will be cheaper when being executed at Huta im.T.Sendzimira S.A. Including the possibility of more advantageous fund raising estimating of the economical efficiency will supposedly vary according to various conditions. In order to realize this present project, there become necessity for “advantageous financing ” such as yen-loan from the Japanese Government. With the reduction of equipment expense being investigated, it is necessary to raise the possibility of realization.

209 " Waste Heat Recover from Sinter Cooler(Steam) ■Waste Gas Recover from Converter(LDG) -Blast Furnace TRT(Power) "Waste Heat Recovery from Hot Blast Stove(BFG)

Power Steam (0.41)

Energy Unit Pnce(¥/Mjoule)

Fig 1.4-2 Relation between Investment Recovery Years and Energy Unit Price 2. Effective investment to the project (the effect on energy saving and the reduction effect on the greenhouse effect gasses)

Expense to project effect is shown in Tablel.3-1. Energy saving effect is 29.2Tcal/y * 100mill.yen(121Tj/y * lOOmill.yen) Green house gas reduction effect is 2,288t-C0 2/y * lOOmill.yen

2.1 Blast Furnace TRT

Energy Saving Effect : 35.5Tcal/yl00mill * yen(149Tj/y * lOOmill.yen) Green House Gas Reducing Effect : 3,292 t-C02/y * lOOmill.yen

2.2 Hot stove waste heat recovery

Energy Saving Effect : 48.2Tcal/yl00mill * yen(149Tj/y * lOOmill.yen) Green House Gas Reducing Effect : 4,467t-C02/y * lOOmill.yen .

2.3 Sinter cooler waste heat recovery

Energy Saving Effect 24.7Tcal/yl00mill * yen(149Tj/y * lOOmill.yen) Green House Gas Reducing Effect 2,289t-C02/y * lOOmill.yen.

2.4 Basic oxygen furnace waste gas recovery Energy Saving Effect : 24.9Tcal/yl00mill * yen(149Tj/y * lOOmill.yen) Green House Gas Reducing Effect : l,616t-C02/y * lOOmill.yen .

211 V. Confirmation of Spreading Effect

[Summary]

In steel making process, energy saving measures such as blast furnace TRT, waste heat recovery from hot blast stove, and waste heat recovery from sinter cooler are scarcely executed in Poland, there is no technical problem. If economical problem is cleared, there is enough possibility to spread. And the energy saving effect and green house gas effect will be surely attained.

However, about waste gas recovery from converter at steel making process, in Poland only Huta im.T.Sendzimira S.A. which is the object of the current basic survey, and Huta Katowice S.A. which was surveyed in 1998 have converter factories, and Katowice converter factory is under the condition in which converter waste gas can be recovered as mentioned in the report of the basic survey. Accordingly, there is no possibility for Waste gas recovery from converter technique to spread in Poland.

1. Possible wide application of the related technologies introduced for the project in the partner country

1.1 Blast Furnace TRT

There being no technical problem, if economical investment recovery effect is feasible, there is possibility to spread.

1.2 Hot stove waste heat recovery

There being no technical problem, if technical investment recovery effect is feasible, there is possibility to spread.

1.3 Sinter cooler waste heat recovery

There being no technical problem, if technical investment recovery effect is feasible, there is possibility to spread.

1.4 Basic oxygen furnace waste gas recovery

Waste gas recovery from converter have not been executed at any steel works in Poland until now. However, in Poland only Huta im.T.Sendzimira S.A. which is the object of the current basic survey, and Huta Katowice S.A. which was surveyed in 1998 have converter

212 factories and Katowice converter factory is under the condition in which converter waste gas can be recovered as mentioned in the report of the basic survey. Accordingly, there is no possibility for Waste gas recovery from converter technique which is proposed to be introduced as one of the energy saving measures in Huta im.T.Sendzimira S.A.to spread in Poland.

2. Effect in consideration of wide application

Effect was calculated on the assumption that blast furnace TRT, waste heat recovery from hot blast oven and waste heat recovery from sinter cooler are installed all steel works in Poland, and energy saving effect and green house gas reducing effect are equivalent to Huta im.T.Sendzimira S.A.(That is, they are propootional to product of crude steel)

2.1 Effect of Energy Saving

Energy saving effect considering about spreading is 5,186Tjoule/y (not including energy saving effect by waste gas recovery from converter at Huta im.T.Sendzimira S.A.)

2.1.1 Blast Furnace TRT

1) Product of Crude Steel in Poland : 9,916 thousand T/y (Result of 1998) 2) Energy Saving Effect : 260Mjoule/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading: 2,578Tjoule/y

2.1.2 Hot stove waste heat recovery

1) Product of Crude Steel in Poland : 9,916 thousand T/y (Result of 1998) 2) Energy Saving Effect : 146Mjoule/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading: l,448Tjoule/y

2.1.3 Sinter cooler waste heat recovery

1) Product of Crude Steel in Poland : 9,916 thousand T/y (Result of 1998) 2) Energy Saving Effect 117Mjoule/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading : l,160Tjoule/y

213 — 2.1.4 Basic oxygen furnace waste gas recovery

There is no spreading effect.

2.2 Reduction effect of the greenhouse effect gasses

Energy saving effect considering about spreading is 481,000t-CO 2/y (not including green house gas reducing effect by waste gas recovery from converter at Huta im.T.Sendzimira S.A.)

2.2.1 Blast Furnace TRT

1) Product of Crude Steel in Poland 9,916 thousand T/y (Result of 1998) 2) Green House Gas Reducing Effect 0.024t-C02/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading 239,000t-CQ2/y

2.2.2 Hot stove waste heat recovery

1) Product of Crude Steel in Poland 9,916 thousand T/y (Result of 1998) 2) Green House Gas Reducing Effect 0.014t-C02/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading 134,000t-CO2/y

2.2.3 Sinter cooler waste heat recovery

1) Product of Crude Steel in Poland 9,916 thousand T/y (Result of 1998) 2) Green House Gas Reducing Effect 0.011t-CO2/t-steel (correspond to the effect in Huta im.T.Sendzimira S.A.) 3) Effect Considering about Spreading 108,000t-CO2/y

2.2.4 Basic oxygen furnace waste gas recovery

There is no spreading effect.

214 VI. Iinfluence on Others

[Summary]

While energy saving effect and green house gas reducing effect can be attained by executing the project. On the other hand, influence on other environmental aspect economical aspect, and social aspect was estimated.

About the influence except green house gas investigated at each individual process, all measures results in reducing the quantity of consumption coal at power station, emission quantity of SOX caused by combustion of Sincluded in coal and others can be reduced. Additionally, reducing of the quantity of emitted pari tcul ate accompanied with installing electric dust collector at converter gas(LDG)recovery can be mentioned as one of the influences.

1. Blast Furnace TRT

By installing blast furnace TRT, purchased power can be reduced. Accordingly, power generating quantity at the power station selling the power can be reduced, effects of the environmental aspect such as green house gas reduction or SOx emission quantity reduction by reducing the consumed coal quantity at the area having power are exhibited.

2. Hot stove waste heat recovery

Quantity of consumed fuel coal can be reduced at the power station in Huta im.T.Sendzimira S.A. by reducing the quantity of the utilized BFG, and the SOX emission quantity can be expected to be reduced.

3. Sinter cooler waste heat recovery

Quantity of consumed fuel coal can be reduced at the power station in Huta im.T.Sendzimira S.A. by steam recovery, and the SOX emission quantity can be expected to be reduced.

4. Basic oxygen furnace waste gas recovery

4.1 Environmental Aspect

1) One of the features of converter waste gas is not including SOz, and SOz reducing quantity corresponding to reducing quantity of fuel coal(about 13X103Ton/y) which is substitutional energy of this time is about 134Ton/y. Here[S]content within the coal is assumed to be 0.5%.

215 2) By gas recovery, direct emission quantity of the converter waste gas into the atmosphere is largely reduced, and accompanying with it, amount of the falling suit and dust into the atmosphere is reduced to the great extent.

4.2 Other area

The energy saving effect of this present project is investigated as substitution for part of the fuel for the power station boiler within the premise of the steel works, and results in the reduction of consumed coal quantity at the power station, however, environmental improvement effect spreads only in the area having steel works.

216 Conclusion

The field survey team for the "Basic Survey for Joint Implementation, Basic Feasibility Study on Energy Conservation at Sendzimir Steelworks" stayed in Warsaw and Cracow for four weeks in total, three weeks from the end of September in 1999 and one week at the end of January in 2000, and carried out a basic feasibility study on energy conservation at Sendzimir Steelworks, a leading steelworks in Poland. Taking this opportunity, we wish to express thanks and appreciation to the persons concerned from the governmental organizations in both countries and the Steelworks for their great support during the period.

The current field survey was conducted within the limited short period of time and ranged widely from the basic energy structure of the Steelworks, to the operation of sintering and steel making process, the actual condition of utilizing energy, forming the plan of energy saving measures and economical effiency. Fortunately, as a result of having confirmed and verified the equipment specifications and operations of each process, we have herein introduced large-sized energy saving equipment such as CDBlast Furnace TRT,(2)Hot stove wasteheat recovery, (3)Sinter cooler waste heat recovery and (DBasic oxygen furnace waste gas recovery, with these four measures applicable, investment to effect (Japan yen base) was verified. Although energy saving effect will reach 2,303Tj/y and expected reduction of green house effect gasses will be 181,600T/y, an attractive result could not be obtained in the aspect of investment to effect, because estimated energy price is unfortunately low in Poland now. However, poland is on the way to economical development with her realization of being a member of EU in 2003, the estimated energy cost is supposed to rise, and improvement of the investment to effect can be expected.

As the result of the basic feasibility study on energy conservation of this time, it is confirmed that the four measures mentioned above are possiblly introduced as an reduction project of green house effect gasses (C02), and brings energy conservation and C02 reduction effect. Although an attractive result could not be obtained under the present situation, the executive members of Huta im.T.Sendzimira S.A. showed their keen interest in our survey results from the viewpoint of the environmental improvement as well. We are confident that the basic feasibility study on energy conservation will highly be evaluated, since Sendzimir Steelworks is a leading steelworks in Poland and therefore the application of the energy saving measures mentioned above to the Steelworks will largely be influential to other steelworks.

In order to realize the Joint Implementation project introduced, the important key point is to arrange an attractive financing facilities and therefore we, Nissho Iwai Corporation would like to have a close contact with the management of Huta Sendzimira in the future to provide good financing conditions, such as a special yen credit (or yen credit for environmental protection) as a possible attractive financing arrangement from Japan. Further, the said Joint Implementation project is, to much extent, depending upon how a scheme for Joint Implementation be agreed among the developed countries based on the Kyoto Protocol, and as such we will continue to keep carefully watching the movement of COP6 in The Hague at the end of 2000 and have further discussions with Huta Sendzimia to materialise the project.

— 217 — List of reference books

1. Large Country Poland in Europe- Secret of High Growth Pub: Printing Bureau, Ministry of Finance 2. East Europe • Central Asia countries Economic Pub: Japan Association for Trade with Reform Support Business • Conversia Russia & amp Central Privatization Adviser Dispatching Business (The Steel industry • Petrochemical Industry in Poland

3. Report of Survey Team about European Industry Pub: Japan Productivity Center for and Economy Investment Surv ey Team Socio-Economic Development

4. Economical Condition in Poland (Dec. 1999) Pub: Embassy of Japan in Warszawa, Poland JETRO Warsaw Office

5. Condition in Poland Pub: JETRO Warsaw Office

6. Warsaw Royal Palace Pub: Publishing Center of Warsaw Royal Palace

7. Statistical Year Book of The Republic of Poland Pub: Central Statistical Office of Poland

8. Chronological Table of Politics and Economy(1989~ 1998) Pub: Masahiro Taguchi Professor of Okayama University

9. Coal Information Pub: International Energy Agency (IEA)

We apology to have partially refer to or quoted from above bibliography, in making this report.

— 218 — Report of site survey

Report about the First Time Field Surv ey

(1) Schedule: Sep. ,25 ^Nov., 17 1999

Sep.,25(Sat.) Depart From Narita(13:00) Arrive at Frankfurt( 18:00) JL 407 Depart from Frankfurt(19:35) Arrive at Warsaw(21:15)L0380 Stay at Mariott Hotel(Warsaw) Sep.,26(Sun.) Warsaw—»Cracow(Move by Train) Stay at Continental Hotel(Cracow) Sep.,27(Mon.) Field Surv ey Begin I Oct.,15(Fri.) Cracow —» Warsaw(Move by Train) Stay at Mariott Hotel(Warsaw) Oct.,16(Sat.) Depart from Warsaw( 17:00) Arrive at Frankfurt( 18:45) LO 379 Depart from Frankfurt(20:50) Oct.,17(Sun.) Arrive at Narita(14:55) JL 408

(2) Survey Members

(member) (Business under Charge) Nissho Iwai Corporation Shigeo Takahashi General Control, Examination of condition inPoland (Politics/Steel Making Industry) Kazuo Arata (Warsaw Office) (Participate Properly) Nippon Steel Corporation Toshitaka Inatomi General Control, (Go home on Oct.l) Nariyuki Yadoumaru Survey Team Leader, Blast Furnace/ Sintering Masaaki Takahashi Converter/Steel Making Kouji Nisimura Energy

Interpreter (Japanese/Poland) Mr.Bartosz Multarzynski Mr. Krzy sztof Zabko-Potopowicz Ms. Agata Falkowska

— 219 (3) Persons Concerned of Huta im.T.Sendzimira S.A

• Board Member (5persons. New system started from Jul.,1,.1999)

Mr. Piotr Janeczek, President and CEO Mr.Jozef Ryszka, Vice President of theBoard Managing Director(Marketing) Mr. Tomasz Pyre, Member of the Board Executive Director Strategy & Development Ms, Gabriela Mazur, Member of the Board Mr. Stanislaw Olszoski Member of the Board(Technical)

• Persons Concerned with the Survey

Mr. Jacek Wolinski, Director Investment Mr. Tomasz Marcowski, Manager of Strategic Planning Department Mr. Robert Kozuch, Manager, President office Mr. Czeslaw Balak, Manager Utilities Mr. Artur Borgosz, Manager Power Plant Mr. Jacek Winiarczyk, Specialist Energy Mr. Wieslaw Kaszewsi, Chief Power Supply Engineer Mr. Ian Milosz, Manager Energy Supply Mr. Marian Kodura, Specialist Blast Furnace Mr. Marian Zimmer, Chief Water Treament Mrs. Anna Pabis, Export Office Chief

(4) Summary of the Field Survey

1) Survey at Huta im.T.Sendzimira S.A

Because the board members gave a careful top down instruction, the receptions of persons concerned of said steel works was very friendly, oral meetings, obtaining of data and the factory survey was smoothly carried out. Main themes of the field survey of this time CD Examination of the other country ’s (Poland) situation(Politics/Economy/Steel Making industry), (2) Blast Furnace/Sintering, (3) Converter/Steel Making, and © Basic Survey about Energy. In each field, with sufficient support of the persons concerned, exchanging views and collecting information could be well carried out. From now on based upon the information /data obtained in the survey of this time, after homecoming detailed examination will be carried out.

As the summary of the field survey, there being the desire of said steel works, (after obtaining

220 — understandings that formal report would done at the time of second field survey, after the report would further arranged in detail after homecoming), the interim report was done to them. At this interim report meeting, four board members (President Janaczek was absent on urgent business, report was done to him separately)was present. In this interim report, in order to be able to understand easily about the energy saving situation of said steel works, having made appended energy flow chart, summary about each field was explained, using said chart. After the interim report that the following equipment can be proposed for energy saving of said steel works, there was informal comment that if attractive finance from Japan could be expected, they wanted to consider to purchase the equipment.

• Blast Fumace/Sintering CD Furnace Top-Pressure Recovery Turbines(TRT) (D Waste Gas Sensible Heat Recovery from Hot Blast Stove (3) Waste Gas Sensible Heat Recovery from Sinter Cooler

• Converter (4) Gas Recovery from Converter(OG system)

(Note) about the coke oven, CDQ(Coke Dry Quench)having energy saving effect have been already installed, it is excluded from the object of the survey.

Incidentally, report was done to Mr. Yaneczek, president separately. He himself is very interested in the energy saving basic survey of this time by NEDO. He commented Positively that he expected Japan and Poland would became more intimate, taking the energy saving basic survey of this time as opportunity.

2) JETRO Warsaw Office

On Sept.29(Wed.) Takahashi (Nissho Iwai Corporation)visited JETRO Warsaw Office, talked with Mr.Akatsu, Director General, exchanged Views about general condition of Poland(Political and Economical Condition),and obtained related information.

3) Metallurgical Chamber of Industry and Commerce (Corresponding to The Japan Iron and Steel Federation)

On oct. 7(Thurs ), Takahashi (Nissho Iwai Corporation) visited Metallurgical Chamber in Katowice city, talked with Mr. Tadeusz Torz, President of the Board, and heard about the information concerned with general condition of Poland(Political and Economical Condition).

4) Huta Katowice S.A.

— 221 After visiting Metallurgical Chamber, Takahashi(Nissho Iwai Corporation) visited Huta Katowice S.A. about which energy saving basic survey was carried out by Nippon Steel Corporation and Sumitomo Steel Corporation (Nissho Iwai Corporation is a supporting Company) in fiscal 1998, and exchanged views about the condition after that. In the survey in last year installation of CDQ equipment in coke factory was proposed, although they were still interested, because the coke factory was separated into another company(Related Company), they said that the policy for installation of said equipment had not fixed.

5) The Japanese Embassy in Poland

On Oct. 15(Fri.) last day of the field survey in Warsaw all the members of the field survey team visited The Japanese Embassy in Poland, talked with Mr. Tobe, First Secretary and Mr. Takaira, Third Secretary, and reported the summary of the energy saving basic survey.

(5) Progress of the Field Survey

Sept. 27(Mon.) Kick off meeting

• Before the survey we held the general meeting, exchanged views about the meaning/object/ forwarding method. • After finishing the general meeting, in order to obtain the comprehensive understanding of whole factory, we surveyed the following each factories. CD CCM(Continuous Casting Machine) (2) Steel Making (3) Coke Factory (as the time is limited, looked only from outside) ® Blast Furnace (5) Sintering (6) Power Station (7) Rolling Mill • Incidentally, at the beginning of the general meeting Mr. Jacek Wollinski, director Huta im.T.Sendzimira S.A. paid following greeting to the survey team. “President Mr. Piotr Janeczek and board menber Mr. Tomasz Pyre would have been scheduled to meet the survey team of Nissho Iwai Corporation/Nippon steel Corporation, but because they are suddenly called and have made official trip to Warsaw, in place of them I welcome the survey team from the bottom our heart. We greatly expect, so we are ready to cooperate with you to the greatest extent. Further, about the offering data ordinary data can be offered according to the judgement of each persons in charge. And about the top-secret data, if you ask formally, we will obtain Mr.Tomasz Pyre's permission, and make the greatest effort to offer you those data. Additionally we want to make limousine buss ready as much as possible.

222 Sep.28(Tue.) General Meeting

• We held general meeting again, explained the summary of each objective process(BF/Sintering, Converter/Steel Making, and Energy)of the survey of this time, and exchanged views. • Board member Mr. Tomasz Pyre came back from Warsaw. And despite the limited time, we could talk with him, and he commented as below during exchanging views. • I except that the cooperative relationship between Poland and Japan is strengthened through energy saving basic survey, and I will cooperate completely. • New head of Warsaw office of Nissho Iwai Corporation Mr. Arata realized this matter, I am thankful to Nissho Iwai Corporation. • Huta im.T.Sendzimira S.A. also considered such an survey, the proposal for energy saving basic Survey is timely. • We obtained the information from Huta Katowice S.A. that the energy saving survey of NEDO was wonderful. • In Huta im.T.Sendzimira S.A. large scale personnel change was executed. From Jul. 1 1999 board menber of new system(5person above mentioned) started.

Sep. 29(Wed.) Survey started by individual groupes,

• From this day individual survey of each charge mentioned below was started. • Takahashi (Nissho Iwai Corporation) General Control politics, Economic/Steel making industry • Yadoumaru(Nippon Steel Corporation) Survey Team Leader Blast Furnace/Sintering • Takahashi(Nippon Steel Corporation) Converter/Steel Making • Nishimura(Nippon Steel Corporation) Energy • On Sep. 29(wed.) Takahashi(Nissho Iwai Corporation) visited JETRO Warsaw office, and heard about general condition of Poland(Politics Economic and others). • On Oct. 7(Thurs.) Takahashi moved to Katowice city, and visited Metallurgical Chamber of Industry and Commerce(The Iron and Steel Federation) and Huta Katowice S.A., and heard about Steel industry in Poland.

Oct. 11 (Mon.) Arranging the survey by individual group. Oct. 12(Tue.) Arranging the survey by individual group, and greeting for expressing thanks to President Mr. Piotr Janeczek , and interim report. Oct. 13 (Wed.) Internal meeting of the survey team, and interim report. Oct. 14(Thurs.) Final meeting by individual group. Oct. 15(Fri.) Report to Japanese Embassy in Poland(Warsaw).

(6) Future Plan • On the basis of information/data obtained in the field survey of this time, doing detail examination and whole arrangement, and we will make ourselves ready for the second field survey. In the next time field survey, after obtaining agreement of Huta im.T.Sendzimira S.A. we will complete the final report. • The second field survey (plan): J an. 22(Sat.)^-dan. 30(Sun.) 2000

224 — Report about the second Time Field Survey

(1) Schedule:Jan.22~Jan. 30 2000

Jan. 22(Sat.) Depart From Narita(14:00) Arrive at Frankfurt(18:10) JL 407 Depart from Frankfurt( 19:35) Arrive at Warsaw (21:20) LO380 Stay at Mariott Hotel(Warsaw) Jan. 23(Sun.) Warsaw—»Cracow(Move by Train) Stay at Franzufski Hotel(Cracow) Jan. 24(Mon.) Field Survey Begin i Jan.27(Thur.) AM: Final Meeting with Huta im.T.Sendzimira S.A.and complete the Field Survey Jan. 27(Thurs.) AMVisit The Japanese Embassy in Poland (Report of survey and hearing about politics, economy and others) PM:Visit JETRO Warsaw offce (hearing about general information such as politics economy and others) Stay at Mariott Hotel(Warsaw) Jan. 29(Sat.) Depart from Warsaw( 15:05) Arrive at Frankfurt(17:00) LH 3227 Depart from Frankfurt(20:50) Jan. 30(Sun.) Arrive at Narita(14:55) JL 408

(2) Survey Members (member) (Business under Charge) Nissho Iwai Corporation Shigeo Takahashi General Control, Examination of condition inPoland (politics Economy/Steel making industry ond others) Hidenobu nakajima (Vienna Office) Nippon Steel Corporation Toshitaka Inatomi General Control Nariyuki Yadoumaru Survey Team Leader, Blast Furnace/Steel Making Masaaki Takahashi Converter/Steel Making Kouji Nisimura Energy

Interpreter(JapaneseZPoland) Mr.Bartosz Multarzynski Mr. Krzysztof Zabko-Potopowicz Ms. Agata Falkowska

225 (3) Persons Concerned of Huta im.T.Sendzimira S.A

• Board Member (3persons beginning from President)

Mr. Piotr Janeczek, President and CEO Mr. Tomasz Pyre, Member of the Board Executive Director Strategy & Cevelopment Mr. Stanislaw Olszouski Member of the Board(Technical)

• Persons Concerned with the Survey

Blast Fumace/Sintering : Mr. Marian Kodura, Specialist Blast Furnace Mr. Ireneusz Marzuchowski, Chief Engineer Converter/Steel Making : Mr. Janusz Macias, Chief Engineer Energy : Mr. Tomasz Marcowski, Chief of Energetic Supervision Office Mr. Jacek Winiarczyk, Specialist Energy Mr. Marek Lebiedzki

(4) Content of the Field Survey

1) Survey at Huta im.T.Sendzimira S.A. Jan.24 (Mon.)~-27 (Thur.)

As in the first field survey of last time(Sep.25 ~ Oct. 17 1999) the reception of Huta im.T.Sendzimira S.A. from board members to the other persons concerned was good and very friendly. In the second field survey of this time, the principal objects are to obtain the confirmation and agreement from said steel works about the survey result of 3section comprising (1) Blast Fumace/Sintering,(2)Converter/Steel Making, and ©Energy based upon the last survey, and to execute additional survey if necessary . First we reported the summary of the first field survey to the persons concerned of said steel works, continuously executed the meetings of each section(including factory survey). The reception of the personel concerned of said steel works above mentioned was faithful, the meeting of the each section can be carried out smoothly.

In order to bring this present survey to a conclusion, we summarized the whole within the field survey team, and on Jun.26 reported finally to the board member (3 persons including president mentioned above) and persons concerned with the survey based upon the appended papers(abridged edition). President Mr. Piotr Janeczek himself discussed earnestly, after all persons concerned discussed, we could obtained the confirmation and the agreement of said steel works for the content of the report. Accordingly, as the result of the survey of this time we reported following four matter

226 as the proposable measures for every saving, and obtained the agreement of said steel works.

• Blast Furnace/Sintering CD Blast Furnace Top-Pressure Recovery Recovery Turbinec(TRT)Equipment (2) Waste Heat Recovery from Hot Blast Stove (3) Waste Heat Recovery from Sinter Cooler

• Converter CD Waste Gas Recovery from Converter(Recovery Equipment)

About the coke oven, CDQ(Coke Dry Quench: Steam Recovery) having energy saving effect has been already installed. Reducible quantity of C02 by installing said equipment (including CDQ) is about 280,000Ton/y.

Incidentally, President Mr. Piotr Janeczek made following positive comment to us the survey team.

• He is interested in the energy saving basic survey by NEDO, and deeply thankful for survey of this time. • In considering installing said equipment, although examination from the view of the investment effect is indespensible, examination from the viewpoint of the environment issue also should be considered. • We want expect attractive finance from Japan. • We want to expect that Japan and Poland become more intimate, taking the energy saving basic survey as opportunity.

2) Visited The Japanese Embassy in Poland : Jan. 28(Fri.)

In the morning, we visited the Japanese Embassy in Poland, and talked with Ambassador Mr. Sato, and Mr. Takaira, First Sectary. We reported the summary about the survey of this time to them, and additionally heard about the general condition of politics and economy in Poland.

3) Visited JETRO Warsaw Office: Jan. 28(Fri.)

In the afternoon, we visited JETRO Warsaw office and talked with The Head of The office Mr. Akatsu. We exchanged views about the general condition (Current condition of politics and economy), collect the related information.

(That is all)

227 Any part or a whole of the report shall not be disclosed without prior consent of " International Cooperation Center" of "The New Energy and Industrial Technology Development Organization" (NEDO)

Telephone: 81-3-3987-9466 Facsimile: 81-3-3987-5103