Showing posts with label Indian Power sector. Show all posts
Power Sector Budget Outlay for the Year 2014-15
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Budget
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Indian Power sector
A detailed outlay of budget
planned for the year 2014-15 for Indian Power Sector by the much hyped
Union Government was released recently. Every sector of the Indian
economy has enormous expectations from the government and is keen
watching its very move and every initiative. Lets have a look at the
proposed union budget for power sector for the year 2014-15 that is
expected to bring momentum to the renewable energy generation in the
country. Conventional Power Source: The total outlay for the power sector is Rs.60,384.02 crore, out of which Rs.9,642.00 crore is budgetary support for Schemes/projects –
Scheme/ Project
|
Allocation(Rs.
Crore)
|
North Eastern Electric Power Corporation - Rs.142.10 crore
|
142.10
|
Tehri Hydro Development Corporation India Limited (THDCIL) - Rs.62.92
crore
|
62.92
|
Central Electricity Authority - Rs.46.29 crore
|
46.29
|
Rajiv Gandhi Grameen Vidyutikaran
Yojana
|
5144.09
|
Restructured Accelerated Power Development Resource Programme
|
1261.04
|
Central Power Research Institute - Rs.295.53 crore
|
295.53
|
National Power Training Institute - Rs.60.52 crore
|
60.52
|
Energy Conservation Rs.107.65
crore, Bureau of Energy Efficiency - Rs.139.55 crore
|
139.55
|
National Hydro Electric Power Corporation Limited NHPC) - Rs.478.80 crore
|
478.80
|
Interest Subsidy - National Electricity Fund - Rs.50.69 crore
|
50.69
|
Strengthening of Transmission System in the States of Arunachal
Pradesh and Sikkim - Rs.175.18 crore
|
175.18
|
220 KV transmission line from Srinagar to Leh via kargil - Rs.268.14
crore
|
268.14
|
Financial Support for Debt Restructuring of Discoms - Rs.1,200.00
crore
|
1200
|
Power System Improvement
Project in NER (except Sikkim and Arunachal Pradesh) - Rs.200.00 crore
|
200
|
Deen Dayal padhyaya Feeder
Separation Scheme - Rs.500 crore
|
500
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Power Sector Support to NCT of Delhi - Rs.200 crore
|
200
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Integrated Power Development Scheme - Rs.100 crore.
|
100
|
IEBR of Rs.50,742.02
crore is for schemes/projects –
Scheme/ Project
|
Allocation(Rs.
Crore)
|
National Thermal Power Corporation Ltd.
|
22400.00
|
NHPC
|
2745.46
|
Damodar Valley Corporation
|
2764.99
|
EEPCO
|
945.88
|
Satluj Jal Vidyut Nigam Ltd.
|
1091.93
|
THDCIL
|
793.79
|
Power Grid Corporation of India Ltd.
|
20000
|
Nuclear Power:
The total outlay under Power Sector for 2014-15 is Rs.8213.42 crore. The plan
Outlay consists of Rs.970.00 crore by way of budgetary support and Rs.7243.42
crore by way of Internal and Extra Budgetary Resources (IEBR). The budgetary
support includes equity investment in Bharatiya Nabhikiya Vidyut Nigam Ltd.
(BHAVINI), externally Aided Project at Kudankulam, being executed by the
Nuclear Power Corporation of India Ltd. with the assistance of Russian
Federation. Neighbourhood Development Projects (in Kundankulam), Projects of
Bhabha Atomic Research Centre and of Indira Gandhi Centre for Atomic Research
to provide R&D support for the power programme are also included.
New and Renewable
Energy: The Plan outlay for the Ministry of New and Renewable Energy (MNRE)
is Rs.5,519.00 crore (inclusive of Rs.3,000.00 crore as IEBR and Rs.1578.00
crore from National Clean Energy Fund) for the year 2014- 15. The following
physical targets/activities have been set under the various programmes during
the financial year:
·
Grid-Interactive
and Distributed Renewable Power: Provision of Central Financial Assistance
for about 3770 MW grid-interactive Power capacity addition from Wind, Small
Hydro, Biomass Power/Cogeneration, Urban & Industrial waste to Energy and
Solar Power and deployment of about 150 MW equivalent Off Grid/Distributed
Renewable Power Systems. These figures include 1000 MW grid power and 60 MW
equivalent off-grid/distributed solar power systems to be installed under Solar
Mission. It is also proposed to launch new schemes on Solar Pumps, Solar Energy
Parks and Schemes on Solar Parks near irrigation canals. It also includes
provision of Central Financial Assistance for Scheduled Castes beneficiaries.
·
Renewable
Energy for Rural Applications: The provision will be used for construction
of 1.10 lakh family type biogas plants and start of a new programme on cook
stoves. It also includes provision for Scheduled Castes beneficiaries.
·
Renewable
Energy for Urban, Industrial and Commercial Applications: Deployment of
Solar Thermal Systems and Promotion of Energy-efficient buildings and master
plans for Solar Cities.
·
Research,
Design & Development in Renewable Energy: R&D activities on
different aspects of new and renewable energy technologies, support to MNRE
Centres/Institutions (SEC, C-WET and NIRE); Standards & Testing; Renewable Energy Assessment
(including Research Design & Development activities to be undertaken under
Solar Mission).
·
Supporting
Programmes: Information, Publicity and Extension (IPE) of Renewable Energy
Systems; International Relations; Administration and Monitoring including HRD
& Training; Support to States (including HRD & Training activities to
be undertaken under Solar Mission).
Source: Union Budget 2014-15
Quick Review of Major Initiatives Taken With a View to Improve Power Sector in 2013-14
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Coal
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Fuel Supply
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Indian Power sector
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Regulations
Indian Power Sector has seen quite a good number of
initiatives that are expected to yield fruitful results in improving the operational
statistics. It included initiatives from foreign direct investments, fuel supply agreements, power purchase agreemtns, coal block allocations, etc. A quick overview of the initiatives taken in the power sector
during the year 2013-14 is presented below.Automatic approval for foreign direct investment
- Automatic approval (Reserve Bank of India [RBI] route) for 100 per cent foreign equity is permitted in generation, transmission and distribution, and trading in the power sector without any upper ceiling on the quantum of investment. The government on 22.08.2013 notified its revised position on foreign direct investment (FDI) cap for power exchanges registered under Central Electricity Regulatory Commission (CERC) Regulations 2010 as 49 per cent (26 per cent FDI+23 per cent foreign institutional investment [FII]) through automatic route.
Signing of fuel
supply agreements
- The Cabinet Committee on Economic Affairs (CCEA) in a meeting held on 21 June 2013 issued a directive to the Ministry of Coal/Coal India Limited to sign fuel supply agreements (FSAs) for a total capacity of 78,000 MW, including tapering linkage, which are likely to be commissioned by March 2015. With concerted efforts made in this regard, FSAs have been signed for 160 units totaling capacity around 74,000 MW.
Allocation of new
coal blocks to the NTPC
- The National Thermal Power Corporation (NTPC) has been allocated four coal blocks (Banai, Bhalumuda, Chandrabila, and Kudanali-Laburi) in August 2013 for power projects of 8460 MW.
Pass-through
mechanism
- Pass-through mechanism for the concluded PPAs has been approved by the CCEA (14,000 MW-Case I and Case II post 2009 plants) in June 2013.
- The CERC/State Electricity Regulatory Commissions (SERC) have been advised to consider the request of individual power producers in this regard as per due process on a case-by-case basis in public interest. The appropriate commission has been requested to take immediate steps for the implementation of this decision of the government.
Incorporation of PPA
condition for coal block allocation
- The Ministry of Coal has issued letters to independent power producers (IPP) and state governments for incorporating the PPA condition at the time of executing mining lease with IPPs for coal block allocation so that the benefits of low cost coal can be passed on to the consumers.
Independent Coal
Regulatory Bill
- The Independent Coal Regulatory Bill has been approved by the Cabinet on 27 June 2013. The Ministry of Coal introduced the Bill in Parliament in December 2013. An executive order for setting of coal regulation has been issued by the Ministry of Coal.
Third-party sampling
and quality control mechanism
- The Ministry of Coal/ Coal India Limited agreed to third-party sampling at loading points to address the issue of coal quality in October 2013. A Coal India Limited (CIL)-appointed agency for third-party sampling has been operational w.e.f. 1.10.2013.
Source: Economic Survey 2013-14
An Incident that Demands for a Quicker Smart Grid Implementation
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Distribution
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Indian Power sector
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Smart Grid
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Transmission
This incident is reportedly occurred as a result of bad weather (rain, dust storm/thunder storm). The incident led to a massive reduction in the demand that in turn led to widespread increase in voltage levels throughout the grid system. As a result about 68 nos. AC transmission lines along with one HVDC line has tripped. This effected a load crash of about 8000MW in Northern Region, including 3500 MW in Delhi.
As a result of this incident the demand in the northern region grid started decreasing at a rate of ~200MW/min and reached 32780 MW which is considerably a very low value compared to the demand of the previous day during the same time. The consequence was grid frequency shot up to as high as 50.65 HZ and an increase in the grid voltage level.
Actions Delivered during and after the incident occurred have been reported recently in a document published on ministry of power website. These actions probably have mitigated the adverse effects that could have happened in the event of negligence to weather report information.
- Backing down of generation to control the high frequencies besides over voltages at Inter-State Generating Stations (ISGS)/Regional entity generators was attempted. This action achieved a backing down of around 2700 MW generation in Northern Region. Similar step was taken in other parts of the country to meet exigencies.
- More than 75% of the tripped lines including one HVDC line were restored at the earliest possible time.
- Regions like Delhi are given priority in the restoration process and importance was given to restoring power to hospitals, Delhi metro, water treatment plants and NMDC area.
- Help was sought from POWERGRID where towers got damaged and alternate line are used to supply power.
You may comment your thoughts in the comment section below for better ways to respond to such situations and smart grid’s response to such situations.
Deloitte's View on CMPDI as Sectoral Planner and Coal Scenario in India
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Coal Mining
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Indian Power sector
CMPDI as sectoral planner: In the wake of changing dynamics in the
coal sector, Deloitte, in its draft report, has called for elevating the role
of Central Mine Planning & Design Institute Limited (CMPDl). CMPDI is a
fully owned subsidiary of Coal India Limited having its headquarters at Ranchi.
It provides technical functions in each stage of the mining life cycle.
Considering the technical expertise of CMPDl, Deloitte has suggested that CMPDI
should be elevated as a sector planner. The consultant has recommended three
restructuring options for CMPDl. Under this first option CMPDl may be made an independent organization reporting directly to the Ministry of Coal. The role of CMPDl would be principally similar to that of CEA for the energy sector with the exclusion of the Drilling and exploration activities. As a technical excellence entity for the sector it can work for CIL as well as other private parties.
Another option which can be considered is to retain CMPDI as a subsidiary for CIL along with the additional responsibilities of the national coal sector planning. This needs to be designed such that it functions and services provided to CIL and its subsidiaries producing more than 80% of the coal as a technical excellence arm continues in current shape. Thus it is imperative that CMPDI acts as a part of CIL yet takes up more responsibilities of that of a sector planner
Under the third model, CMPDI as an existing subsidiary of CIL would continue to stay in its current role. It would continue to act as a technical excellence arm for CIL and other private players. A separate organization should be carved out / created from the employees of CMPDI which would act as sector planner. This organization would report directly to the Ministry of Coal. The function of this organization would be effective planning of the mining industry. The employees of this organization should have rich experience and knowledge of the mining industry for addressing the issues and challenges faced by the mining sector and effectively plan the mining activities.
In its final analysis, Deloitte feels that the objectives of creating a sector planning agency and providing technical services to CIL and captive players is best met through the third option.
Also Read: Coal India Limited (CIL) Restructuring Plan - A Concise view of Deloitte's Draft Report
Coal market scenario in India: According to Deloitte, India's overwhelming dependence on coal is likely to stay. The following are the views of the consultant in this regard:
It is reasonably sure that in the next two decades India will be overwhelmingly depend up on coal for fulfilling its primary energy needs. 2013 BP Energy Outlook predicts the same. It mentions that although Coal consumption in OECD countries will decline by 2030, it will continue to grow in non-OECD countries such as India and China. Interestingly the report predicts that China will remain the largest coal consumer (52% of the global consumption now), while India (12% of global consumption) will overtake US to become the second largest in 2024. China and India will account for 63% and 29% or a combined 92% of overall global coal growth till 2030. For India's energy security, adequate domestic coal production is extremely critical.
However, there is a mismatch between CIL Coal Production and demand for coal from power and other sectors. In the last decade, Coal Production by CIL has grown by 4.5%, with dispatches to the Power sector growing by 4.6%, while the installed capacity base of coal fired power plants in India has grown by 7.4% in the same period. This mismatch has led to imports of coal. Imports have grown significantly over the last 2-3 years and are estimated to reach around 200-250 MT by the terminal year FY17 of the 12th Plan period. This level of imports is not good for India - as it drains our foreign exchange, exposes the country to the volatility of international coal prices, and puts pressure on the allied infrastructure such as ports. Thus, there is increasing impetus from Government of India to improve the domestic coal production.
The introduction of the Coal Regulatory Authority Bill will impact on Coal India Limited's operations. The advent of the Coal Regulator would also create a need for an independent technical body which could offer its services to the Regulator. The Regulator would need technical inputs to facilitate its functioning. Also with the increasing production envisaged in the 12th plan period from captive coal blocks and blocks allocated to the private utilities, there is a requirement for a sector planning agency which would work in tandem with CIL, Captive Block developers and others in order to increase the production and productivity for the entire sector. Comprehensive Integrated Planning (Mine Planning, etc.) would also become a necessity for these captive block developers leading to the requirement of an independent organization who can these provide services. Currently CMPDIL within CIL does these functions and any future structure will have to take into consideration these new requirements.
Based on a consumer complaint, recently Competition Commission of India (CCI) imposed a heavy fine on CIL accusing it for exploiting its monopoly position. . Although CIL is going to appeal against this order, it does brings home the facts that there will be increasing scrutiny of its market power in the coming days by different agencies and CIL should gear to mitigate these incoming challenges.
As part of the restructuring study a customer survey was conducted covering clients of CIL from all regions in the country. One common complain of consumers was regarding Quality of coal. They have mentioned that CIL is not able to supply the grade of coal for which they charge the consumer. The calorific values are much lower than what the consumer is supposed to get. Customers also felt that the organization is not very responsive in its customer service in terms of resolving disputes invoices etc.
There are issues plaguing the sector some due to inherent Ownership and Regulatory structure defined by the Coal Mines (Nationalization) Act 1973 and some due to issues related to Coal India. The consumer choices and competition as envisaged by induction different players is severely impacted by this law. In our study we have explored options that are feasible within the overall framework of this Act without any further comprehensive amendment to induct private sector participation. The legacy arrangements of fuel linkages, Fuel Supply agreement and their longer term nature also act as a constraint to make any significant overhaul of the system. However we understand there is need to critically look at areas of improvement in CIL, including need for structural changes, which will bring in efficiency in operation and higher production for the country.
Source: Praveen Patlolla, BHEL Executive, RCPuram.
Also Read: Coal India Limited (CIL) Restructuring Plan - A Concise view of Deloitte's Draft Report
JNNSM Phase-II : Assessment of Domestic manufacturing capability to meet Domestic Content Requirement
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Green Power
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Indian Power sector
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JNNSM
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Renewable Energy
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Solar Power
"Domestic Content Requirement" was emphasized in Phase II of JNNSM so as to encourage domestic manufactuirng capabilities for solar energy. Solar Energy Corporation of India on 10th January 2014 has called upon for a meeting to assess preparedness of manufacturing to meet demand created for indigenous manufactured solar PV cells and modules for Projects under JNNSM Phase-II Batch-I, 750 MW scheme. The meeting was atteneded by major Solar PV Cells and module manufactures in the country, solar project developers and some lending institutions. As per the guidelines issued by MNRE dated 25th October 2013 for implementation of the above scheme, 375 MW capacity is reserved for “Domestic content required” (DCR) category which stipulates use of Solar PV cells and Modules manufactured in India. The discussions revolved around issues related to overall manufacturing capacity, capacity available on their assembly lines, delivery schedule to meet the timelines stipulated in the guidelines, bankability of the product, cost difference, etc. Manufacturing Capacity: Approximately 550 MW of cell manufacturing capacity and approx. 1.1 GW of Solar PV modules manufacturing capacity is available which is much more than the requirement under “DCR” category. In fact, availability of solar cells and modules produced in India was reported to meet the balance requirements of the scheme also.
PV Modules Performance: It was emphasized that Indian manufacturers have been supplying indigenously manufactured PV modules to many other countries meeting global performance requirements. It was mentioned that the apprehensions, if any, regarding performance are without any basis. The performance of Indian modules is comparable to best available in the global market.
Guaranties and Warranties: Domestic PV module manufactures have indicated that they are extending one of best guaranties and warranties (e.g. Nominal Power Output) as available globally to the PV module purchasers.
Bankability: PV module manufactures have indicated that Solar PV Projects using their PV modules have got funded by most of the leading banks / financial institutions. Bankability Report of Solar PV modules can also be made available to the Solar PV module purchasers.
Cost difference: It was agreed by the manufacturers that there is a difference in the cost of PV modules which are manufactured indigenously and the ones which are imported due various reasons beyond their controls, such as, higher cost of financing, higher electricity tariff. It was mentioned that this difference could be of the order of Rs. 50-60 lakh per MW capacity of the project.
Delivery Period: It was emphatically indicated by the PV manufactures that are in absolute readiness to meet timelines of project commissioning as per requirements of the scheme.
Conclusion: It was felt that there is enough available capacity of indigenously manufactured PV Cells and Modules to meet DCR requirement under 750 MW VGF scheme under JNNSM Phase-II Batch-I.
All the above conclude the country's ability to fulfill the Mission's aim for DCR, but the actual results are expected only when te financial closures are made by the participitating companies for setting up solar power plants using DCR scheme. The participants are expected to undergo many challenges in terms of cost and availability before complete execution of the projects.
JNNSM Phase II-Batch I Bids Reveal Non-DCR Projects Highly Preferred over DCR Projects
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Climate change
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Green Power
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Indian Power sector
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Installed capacity
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JNNSM
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Renewable Energy
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Solar Power
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VGF
Solar Energy Corporation of India (SECI) after extension of bid submission date from 28th December 2013 to 20th January 2014 has opened bids for the allocation under batch I of phase II of the National Solar Mission (NSM). It was observed that a capacity totaling to 2,170MW was bidded by various companies. This total capacity comprises of 68 bids submitted by 58 developers and covering 122 projects. The bids opened revealed some notable facts that the Domestic Content Requirement (DCR) bids were twice oversubscribed than actual allotment while the Non-Domestic Content Requirement (Non-DCR) accounted for almost four times over subscription than the actual allotment. It is however understood that both will have an equal distribution in the end.
It was aimed through the mission in this phase, that a capacity amounting to 375MW will enforce Domestic content requirement (DCR) and favouring this a total of 36 projects with a capacity equivalent to 700 MW was bidded under DCR and the rest 86 projects with a capacity equivalent to 1,470 MW opted for the open bids. The results of the financial bid are to be announced by 20th February 2014.
Some of the prominent bids by capacity have been from developers such as Azure Power (200 MW), ACME (200 MW), Welspun (160 MW), IL&FS (150 MW), SunEdison (150 MW), ReNew Power (100 MW) and Essel Infra Projects (100 MW). Each developer can only be allocated a maximum capacity of 100 MW. Some of the prominent companies that have opted for the DCR part of the bids are TATA Power, Waaree, Moser Baer, SolaireDirect, SunEdison, ACME, Azure, IL&FS and Welspun. State owned power companies from Gujarat, Karnataka, Odisha and West Bengal have also bid for projects. SECI is expected to announce the second round of bidding for 1,000 MW under phase two by May 2014.
It is a known fact that the Mission's phase-I was predominantly focused on Bundling and Generation Based Incentive (GBI) mechanism and the second phase unlikely focuses on Viability Gap Funding (VGF) mechanism.
Details of Implementation of 750 MW Grid-connected solar PV power projects with Viability Gap Funding under Batch-1 Phase-II of JNNSM.
The main objectives of the VGF Scheme and these Guidelines are:
The main objectives of the VGF Scheme and these Guidelines are:
- To enable scaling up of size of projects thereby leading to economies of scale of projects under JNNSM
- To facilitate speedier implementation of the solar power projects to be selected to meet the Phase-II target of JNNSM
- To enhance confidence in the Project Developers
- To promote manufacturing in the Solar PV sector in India
- To create good business model and systems for various State Governments and DISCOMs to take forward and
- To facilitate fulfillment of RPO requirement of the obligated entities.
- The tariff to be paid to the developer is fixed at Rs.5.45 per kWh. This tariff will remain firm for 25 years project period. In case benefit of accelerated depreciation is availed for a project, the tariff will get reduced to Rs.4.75 per kWh.
- The developer will be provided a viability gap fund based on his bid. The upper limit for VGF is 30% of the project cost or Rs.2.5 Cr/MW, whichever is lower. The developer will be required to indicate his preliminary estimate of project cost as per format in Annexure-A. The project cost will be as per developer’s own estimation & declaration at the time of bidding, which will be finally confirmed by his own declaration at the time of financial closure and will be considered for provision of VGF as per the above specified upper limit.
- The developer has to put his own equity of at least Rs.1.5 Cr/MW.
- The remaining amount can be raised as loan from any source by the developer.
- The VGF when paid by the SECI may be used to return part of the loan or developer contribution (in excess of Rs.1.5 Cr./MW) or a combination thereof as the case may be, in case investments have already been made. SECI will issue a letter confirming sanction/ grant of VGF so that bidder is able to achieve financial closure for full amount if required at the time of signing of Power Purchase Agreement (PPA).
- The VGF will be released in six tranches as follows:
- 50% on successful commissioning of the full capacity of the project (COD);
- Balance 50% progressively over next 5 years subject to the project meeting generation requirements (CUF within specified range as per Clause 2.13.1) as under:
- End of 1st Year from COD – 10%
- End of 2nd Year from COD – 10%
- End of 3rd Year from COD – 10%
- End of 4th Year from COD – 10%
- End of 5th Year from COD – 10%
- If the project fails to generate any power continuously for any 1 year within 25 years or its major assets (components) are sold or the project is dismantled during this tenure, SECI will have a right to refund of VGF on pro-rata basis and if not paid by the developer then a claim on assets equal to the value of VGF released, on pro-rata basis.
- If the project is transferred or sold to a third party during its tenure (after initial lock-in period of 1 year as per provision under Clause 2.10, SECI will retain full rights to operationalize the PPA with the third party, which will be under full obligation to honour all the obligations and terms & conditions of the PPA.
- Solar Power Developers (SPDs) and SECI shall enter into suitable VGF Securitization Agreement creating a charge over the Project assets in favour of SECI as specified under sub-clause (7) above along with signing of PPA.
- In case of projects financed through loan, the charge created on the project assets shall be shared with the Lending Institutions.
- In case the lending institution exercises its right to step in or take over the project, SECI will also have right to step in along with the lending institution to reclaim or handover the project to another party for operation.
- What is instore for Jawaharlal Nehru National Solar Mission (JNNSM) - Phase II
- Can JNNSM-Phase I Achievements Fuel Phase-II?
Coal Plan for Power Sector During Thirteenth Five Year Plan
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Coal
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Coal Consumption
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Coal Import
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Coal India
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Domestic Coal
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Indian Power sector
Coal is considered as an indispensable fuel source for the Indian Power sector to grow in parallel to the Economy. Coal availability and requirement have always been a major concern for thermal power plants. The domestic coal production in the country is insufficient to fully meet the requirement of the sector and this necessitates for imported coal to meet the additional demand. 12th Five Year Plan is expected to end with a shortage of 190MT of shortage in domestic and needs to be imported. Keeping this in view the 13th Five Year Plan projects the following statements regarding the availability and requirement of coal. - A planned capacity of 66,000 MW additional coal based capacity proposed to be added in the XIII Plan. Coal for 20,000 MW capacity will be met from the additional production of 100 million tonnes from captive blocks, coal linkages already exist for 20,000 MW and coal for the balance 26,000 MW would need to be met from both the incremental production from CIL as well as imports.
- Out of the envisaged incremental coal production of 180 million tonnes from CIL in the XIII Plan, 80% or 144 million tonnes is earmarked for power sector which would support about 32,000 MW additional capacity at the rate of 4.5 million tonnes per 1000 MW capacity. The existing linkages for the 20,000 MW capacity, include this additional availability and thus coal for about 14,000 MW capacities (46,000 MW - 32,000 MW) would need to be tied up.
- As per the recent allocation of fourteen coal blocks to Government Companies/ Corporation for power generation, four large blocks namely Balumuda, Banai, Chandrabila and Kuda Nali Luburi have been allocated to NTPC for meeting the requirement of a capacity of 9,780 MW and exploration is ongoing in three of these blocks i.e. Balumuda, Banai and Chandrabila and the geological reports are expected to be available by January, 2016, June, 2015 and April, 2014 respectively for these three blocks. The exploration in Kuda Nali Luburi Block is yet to be commenced. Thus, NTPC should aim at expediting the exploration in these blocks such that these blocks can be brought into production latest by middle of XIII Plan and this would help in realising some 5000 MW to 8000 MW capacity.
- Ministry of Coal is considering offering of four explored blocks for tariff based power plants through bidding and these four blocks can support an additional generation capacity of about 10,000 MW. With concerted efforts, these four blocks could be brought into production by the beginning of the XIII Plan as they are the explored blocks. In addition, there are couple of State utilities which have been allocated coal blocks in the recent past (Ten blocks) and there is scope for them to advance the production schedules such that some additional capacity is feasible to be added in the XIII Plan. This would also add up in meeting the gap of 26,000 MW as mentioned above.
- Ten blocks allocated to state government companies are unexplored. Coal production from these blocks could support 20,000 MW capacity. Considering the process of exploration and obtaining forest & environment clearance and land acquisition, none of the above mines are expected to commence production in XIII Plan period. Efforts must be made to get necessary clearances for at least few of the blocks to have additional coal production to support 5000 MW capacity from these blocks. Ministry of Power and Ministry of Coal agreed to the suggestion
Analysed outcome on Design and Performance of Chinese Equipment by CEA
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Coal
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Equipment
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Fuel Supply
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Indian Power sector
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Plant Load Factor
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thermal capacity
Central Electricity Authority has done two studies on Design and Performance of Chinese Equipments. The two studies made were, the first one included Design Features of Boilers and Auxiliaries being sourced from Chinese Manufacturers in year 2008. The second one was to Analyze the performance of Chinese equipment vis-a-vis Indian equipment in year 2013
Details of Study on Design Features of Boilers and Auxiliaries from Chinese sources.
- The Study Covered 5 stations with 300/330 MW and 2 stations with 600 MW . units (All Sub-critical)
- 300/330 MW Units - Yamunanagar- HPGCL, Durgapur- DPL, Sagardighi- WBPDCL, Lanco-Amarkantak, Mundra-Adani Power.
- 600 MW Units- Lanco Anapara C, Hissar HPGCL.
- Only 3 Commissioned Stations - Yamunanagar, Durgapur & Sagardighi.
- Main Findings in this study.
- The technical particulars relating to major design features of boiler and their auxiliaries found to be in line with good engineering practices- any generic design issues could be best known after these units operate for an initial period of about one to two years.
- Initial 1-2 years of operation of any plant are critical and will bring out inherent generic deficiencies, if any.
- Operational feed back then available indicated milling Constraints in some units
- Secondary fuel oil consumption has been found to be high in all the three operational projects.
- Layout constraints Found in some of the plants which may result in difficulties in attending to the equipment during maintenance.
- Data Gaps- No information from Chinese manufacturers on design features, operational performance, Standards followed during manufacturing & testing procedures. Lack of Sufficient data with plant owners.
- Some of the utilities did not have complete information about important technical particulars -During interaction with the project authorities of the three operating stations, it has emerged that there has been substantial lack of participation by the utilities in the areas of technical specifications, detailed engineering, quality inspection at works, erection supervision, training of O&M personnel, etc.
- Important equipment drawings/ technical data/ documents were not available with the projects. Design data was also not available with some IPPs sourcing the equipment from Chinese manufacturers.
- Recommendations - Need for due diligence
- Due diligence required by the utilities during stage of specification finalization and detailed engineering, inspections/testing etc. to minimize O&M problems
- Detailed comprehensive quality plans for ensuring quality at works and at site identifying customer hold points and test procedures and Standards needs to be defined and implemented for each major equipment/system. Some of the utilities were found lacking in this regard
- A study to Analyse the performance of Chinese equipment vis-a-vis Indian equipment was taken up by CEA in 2011 - through a Committee of CEA and NTPC.
- The Objective of the study was to analyse the performance of Chinese equipment vis-avis Indian equipment (BHEL) including coal consumption patterns, heat rate and efficiency achieved.
- Areas Covered
- Operating Load Factor (OLF), Outages/Downtime
- Design Parameters- Turbine cycle Heat rate & Boiler Efficiency Flow Margins
- Operating Efficiency - Heat Rate and Specific Fuel Oil Consumption
- Problems in Erection & Commissioning
- Units Considered in Study 2
- The Study covered Chinese Subcritical units of 300 and 600 MW and BHEL Sub-critical units of 250 and 500 MW units commissioned in 11th Plan (2007-08 to 2010-11)
- Chinese capacity covered - 8200 MW
- 22 Units across 11 stations
- BHEL capacity Covered -12480 MW
- 36 Units across 22 Stations
| Chinese Make Units. | Indigenous (BHEL) Units | ||||
| Unit Size | Units | Stations | Unit Size | Units | Stations |
| 300 MW | 13 | 7 | 250 MW | 22 | 12 |
| 330 MW | 4 | 1 | 500 MW | 14 | 10 |
| 600 MW | 5 | 3 | |||
- Study-2: Details of Manufacturers
- Manufacturers Wise Break up of Capacity
| Supplier | Boiler Supplied | TG Supplied | ||
| Nos. | Capacity | Nos. | Capacity | |
| Dongfang China | 6 | 2100 | 8 | 3300 |
| SEC China | 10 | 3600 | 10 | 3600 |
| Babcock Wilcox China | 4 | 1320 | 0 | 0 |
| Beijing Beizhong STG China | 0 | 0 | 4 | !320 |
| Harbin China | 2 | 1200 | 0 | 0 |
| BHEL India | 36 | 12480 | 36 | 12480 |
- Thus Most Chinese Supplies from Dongfang and Shanghai (SEC).
- Main Finding - Steam Parameters & Heat Rate
- Steam parameters and Design Turbine cycle heat rate
| S. No | Stations /Unit Size | MS Pressure | Temperature MST/RHT | Turbine cycle heat rate | Remarks |
| 1 | Chinese 300 MW units | 1701 | 537/537 | 1910 | The Design Heat rate for Chinese units do not correlate well with the steam flows indicated and large variations in design steam flows are seen for similar |
| 2 | Chinese 600 MW units | 170 | 537/537 | 1954 | |
| 3 | BHEL 250 MW Units | 150 | 537/537 | 1945 | |
| 4 | BHEL 500 MW Units | 170 | 537/537
537/565 |
1945
1936 |
Expected THR of BHEL machine with similar configuration - 1890 (250 MW) and 1932/1920 (500 MW)
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Main Findings - Flow Margins
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Main Findings -Outages and Load Factors
Operating Load factors and Outages
| S. No | Stations | Operating Load Factor (%) | Total Outages (%) | Remarks |
| 1 | Chinese units -Domestic Coal | 512 | 23.5 | Chinese units based on domestic coal have higher outages and lower load factors than imported coal based units as well as BHEL units |
| 2 | Chinese units -Imported Coal | 80.4 | 14.1 | |
| 3 | BHEL Units Domestic Coal | 71.6 | 18.7 |
PLF - 2011-12 (units in Study) - Chinese (D) -66.19, (I) 75.46, BHEL- 76.68
PLF - 2012-13 (units in Study) - Chinese (D) -52.27, (I) 81.57, BHEL- 78.13
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Main Findings - Operating Heat Rate
| S. No | Stations | Operations Heat Rate | Remarks | |
| kcal/kWh | Dev. from Design (%) | |||
| 1 | Chinese units Domestic Coal | 2719 | 23.29 | Chinese units based on domestic coal. Have higher Operating Heat Rate than Chinese imported coal based units as well as BHEL units. |
| 2 | Chinese units Imported Coal | 2275 | 4.71 | |
| 3 | BHEL Units Domestic Coal | 2520 | 12.77 | |
Variations in Operating Heat Rate of BHEL units are seen. Six stations show operating deviation (below 5%, four stations show deviation of around 10-11 %. Rest of the stations show very high deviations of 15-25 % and even higher.
Chinese indigenous coal based units generally show high operating deviations.
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Main Finding - Specific Secondary Fuel Oil Consumption (SFC)
| S. No | Stations | SFC | Remarks |
| 1 | Chinese units Domestic Coal | 6.13 | BHEL Units show remarkably better SFC than Chinese indigenous coal based units |
| 2 | Chinese units Imported Coal | 1.34 | |
| 3 | BHEL Units Domestic Coal | 3.06 |
Large number of BHEL supplied stations show very low SFC of below one ml/kWh. The lowest overall (2007-11) SFC is 0.27 ml/kWh followed by 0.47, 0.52, 0.54 and 0.81 ml/kWh.
The yearly SFC for individual BHEL stations are even lower. The best yearly SFC is 0.16 ml/kWh followed by several instances of yearly SFCs in the range of 0.20 to 0.50 ml/kWh.
- Station Visits
- Visits to Stations
- BHEL stations - Generally satisfied
- Chinese Stations - Mixed Bag. Widely different feedback from two stations visited.
- Main Finding - Turbine Control Systems
Thus the control systems of Chinese turbines are not in line with the prevailing modern turbine design/technology. Manual intervention during critical operations gives rise to subjectivity with the possibility of mal-operation and accidents.
Super Critical Technology in Power Sector a Long Way to Go
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Labels:
Climate change
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Coal
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Fuel Supply
,
Generation
,
Indian Power sector
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Plant Load Factor
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Super Critical
,
thermal capacity
For a country like India where major generation is based on thermal units and where coal is being used as a fuel source, the need to control the emissions is a necessary for future generations to sustain on the same technology. The control over emissions from burning coal can only be improved with use of better technologically sophisticated equipment that can improve operational efficiencies of power plants. In this view a brief of the supercritical technology implementation in India is detailed below.
The critical point of water is defined as 220.6 bar & 374°C. The power plants operating above this point are called Super Critical Power Plants and the power plants operating below this point are called Sub Critical Power Plants. At super critical parameters, the Latent heat of Vaporization is Zero, hence, water directly becomes steam without boiling.
Power Plants operating at Super Critical parameters have higher efficiency compared to that of Sub Critical plants and therefore have lower Emissions and lower specific Fuel consumption.Conventional sub critical steam power plants operate at a steam pressures in the range of 170 bar or below. The new generation Super Critical power plants of NTPC operate in the pressure range of 247 kg/cm2 and temperature of 565 to 593°C.
World Scenario in Implementaion of Super Critical Technology: Supercritical power plants first came into commercial operation in the US and they employed very ambitious steam parameters. (110 MW Philo 6 came online in 1957, retired in 1975 and had main steam turbine inlet pressure of 316.4 kg/cm2 (4500 psi) and Temperature of 621°C (1150°F). Eddystone 1 (in 1960), a 325 MW unit with main steam turbine inlet pressure of 352 kg/cm2 (5000 psi) , temperature of 649°C (1200° F). About 160 plus supercritical units came in the US during 1960s and 1970s. Commercially best available technology today employs temperature in the range of 600°C to 620°C with highest parameters for modern plant being used in Japan and Europe. Japan and Europe are the clear leaders in the material technology commercially available in the market. World leaders in adoption of super critical units are the US, Japan, China, Germany, countries of former USSR, South Korea and Italy. Former USSR constructed several units of 300 MW capacity with Supercritical parameters and had maximum total installed capacity of Supercritical units. Europe was developing materials suitable for 700°C class under AD 700 program - which has not been abandoned. US launched its own program (DOE, EPRI and Ohio Coal development office) to develop materials suitable up to 1400°F (760°C) class. Today majority of coal fired plants in the world are sub-critical, however by a rough estimate more than 500 units representing an estimated 300 GW (22% of total capacity) utilised super critical and Ultra Supercritical steam conditions by the end of 2007.
Power Plant Technology in India so far:
Power generation in India is dominated by thermal power generation, which is predominantly based on sub-critical coal fired technology. Efficiency of a coal based unit strongly depends upon the steam parameters being used. With sufficient operating experience gained through operation of 500 MW sub-critical units in the country, newer units based on super critical parameters were commissioned in India during the XI plan.
Advantages of Super Critical Technology:
Capital cost of a super critical plant is higher than that of sub-critical plant due to its higher operating pressure and also because of use of superior materials in boiler and turbine. This additional capital cost may be offset by saving in fuel cost. If the fuel cost is high, then saving due to efficiency improvement is more. This saving in operational expenses may compensate the increased capital expenditure of supercritical units. Further techno-economy for supercritical units may be achieved by increasing the unit size. Further, modern super-critical plants are also known tohavebetter load following capabilities as once-through design of these boilers have fewer thick section components than the conventional drum type boilers used for sub-critical plants. The cost of a super critical plant is approximately 2-3% higher than the cost of a conventional plant.
Supercritical Units in NTPC:
Looking at the global concerns on CO2 emissions, NTPC took initiative to introduce supercritical technology for power plants in India. Under this effort NTPC ordered 660 MW super critical units for Sipat-I and Barh-I in 2003-04. The steam parameters adopted for these plants were 247 Kg/cm2 / 537°C / 565°C - as against 170 kg/cm2 / 537°C / 537°C. This resulted in turbine heat rate improvement of about 10% over that of Singrauli-I (5x200 MW).
NTPC has further raised the steam parameters for Barh-ll units and the upcoming supercritical units under 660 MW and 800 MW bulk tender to 247 Kg/cm2 / 565°C / 593 °C. This will result in turbine heat rate improvement by about 12% with reference to that of Singrauli-I (5x200 MW).
So far, NTPC has commissioned three super critical units of 660 MW at Sipat-I and synchronized first super critical unit of NTPC with higher steam parameters of 660 MW at Barh-ll (2x660 MW).
With abundant coal reserves, coal has been and is likely to remain mainstay fuel in India for power generation for many more years to come. Therefore, in order to further address the challenge of Global warming and fast capacity addition at affordable price, it is essential to install coal based plants with further elevated steam parameters leading to adoption of advanced and ultra supercritical units in the country.
Material Development for Ultra Supercritical:
The main barrier or enabler for Supercritical and Ultra Supercritical plants has been development of high temperature materials. World wide research has resulted in numerous high strength steels and alloys for heavy section piping, boiler tubes, and steam turbine rotors.
Low alloy carbon steels have proved their worth for sub critical units with temperatures upto 540°C. Newly developed high creep strength martensitic 9% to 12% chromium steels such as P91, P92 (NF-616) and P122 (HCM 12A) used for thick section boiler components and steam pipes - are the key new materials that have enabled supercritical units to operate at temperatures approaching 1100°F (593°C). Research, development and demonstration programs underway in Europe and Japan aimed to produce materials capable of withstanding 1300°F (700°C).
Government of India also launched Mission 2017, a program to develop Advance Ultra Super Critical (Adv-USC) technology for power plants operating at 310 kg/cm2 and 700°C steam parameters with indigenously developed materials and equipment. Mission intends to utilize core strengths of organizations such as IGCAR (Indira Gandhi Centre for Atomic Research), NTPC and BHEL. Co-operation from other national/international consultants/institutions/laboratories will be sought, as required. After development of Adv-USC technology, mission proposes to establish an 800 MW Adv-USC Demo plant based on indigenous technology. Mission has a time frame of seven years (2.5 years for R&D and 4.5 years for setting up of Demo plant) from the time the funding for the project is cleared by the Government of India.
Indigenous Supercritical Manufacturing Capacity Building:
Government of India envisaged Bulk Tendering of Steam Generator and Steam Turbine Generator of various projects with an objective to develop indigenous capability and capacity for manufacturing of supercritical units in the country. In this regard Ministry of Power conveyed to NTPC the approval of Government of India for induction of supercritical technology through bulk ordering of supercritical units.
The Gol directive outlines important eligibility criteria for the boiler and turbine bidders. As per the directive, setting up of manufacturing facility of supercritical units in India is a mandatory condition for the bidders desirous of participating in the tender. The directive puts great emphasis on creation of manufacturing facilities in India by the technology providers/Original Equipment Manufacturers (OEM), either through a Subsidiary/JV Company incorporated in India or through an Indian licensee. These efforts resulted in establishment of multiple players each in manufacturing of supercritical boiler and turbines in India based on above initiative of Gol, NTPC has so far issued tenders for 11 units of 660 MW and 9 units of 800 MW, out of this orders have been placed for 11 units of 660 MW (9 for NTPC and 2 for DVC) and 7 units of 800 MW (all for NTPC).
Issues relating to super critical technology:
The challenge is not to install the super critical power plant but to operate and maintain it with high availability. About 160 plus supercritical units came in the US during 1960s and 1970s. After that the supercritical technology suffered the setback due to problems associated with material suitability for such high steam parameters.
With increase in coal cost and emphasis on climate issues, Super Critical technology is attracting renewed interest and adoption of super critical technology in India is also gaining momentum. Nearly 50% of the total capacity to be installed during XII plan and nearly 90% of the capacity addition during XIII plan is expected to be from supercritical. Bulk tendering of super critical units with an aim to develop indigenous manufacturing capacity for super critical units and Mission 2017 to develop indigenous advanced Ultra Supercritical technology are the steps taken towards the challenge of faster capacity addition and mitigating global warming concerns.
Pooling of Gas Prices - An Optimistic approach to Keep Gas Based Power Plants under Optimal PLF
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Labels:
Fuel Supply
,
Gas
,
Generation
,
Indian Power sector
,
Pool Pricing
,
thermal capacity
Power sector is facing acute shortage of gas and many plants are either stranded or operating at very low PLF, whereas Fertilizer sector is getting almost its complete requirement of gas. Therefore, Ministry of Power had proposed the Empowered Group of Ministers (EGoM) on pricing & commercial utilization on NELP gas for allocation/ supply of gas to Power sector on equal priority with Fertilizer sector or if not equal priority, then it was proposed to cap allocation/ supply to Fertilizer at 31.5 MMSCMD and allocate entire additional domestic gas coming into the system to (after meeting shrinkage requirements) power sector till its full requirements are met.
EGoM have decided that the total domestic gas supply to fertilizer sector be capped at their present level of 31.5 MMSCMD as their full demand is being met. The EGoM further decided that all additional domestic gas from the year 2013-14, 2014-15 and 2015-16 will be allotted to power sector to help improve generation. EGoM will review the gas production scenario thereafter for deciding supply of additional domestic gas that would be available from 2016-17 onwards to Fertilizer and Power sectors.
Additional Domestic Gas that can be made available to Power Sector for the years 2013-14, 2014-15 and 2015-16, if Allocation/ Supply to Fertilizer capped at 31.5 MMSCMD is 1.125, 3.980 and 6.895 mmscmd respectively. This entails a net shortfall of 70.515, 66.54, 59.64 mmscmd during the same same period respectively and this is calculated based on the PLF of 70/75.
Analysis on Pooling of Domestic gas with RLNG for Power sector
Even after considering capping of allocation/ supply to Fertilizer at 31.5 MMSCMD and allocating the entire additional domestic gas to Power sector, there will be a net shortfall for Power sector. This shortfall can only be met by importing RLNG and pooling this with the price of the domestic gas and providing subsidy to Power sector to make gas based generation viable at operating the plants at technically sustainable PLF. At present, 12,561 MW of APM based plants (i.e. plants that have been getting domestic gas other than KG D6 gas) are getting 17.26 MMSCMD domestic gas and are operating at average PLF of 27.7 percent (29 percent if Spot RLNG is included). 4,842.5 MW predominantly dependent on KG D6 (2,478 MW fully dependent) but are badly affected due to nil supply of gas from KG-D6. Further, 1334 MW newly commissioned gas based capacities are lying idle without any gas allocation. The present price level of Domestic gas is around US$ 4.2 / MMBtu, which shall almost double in April, 2014 as per the recent CCEA approval of the new gas price formula.
Analysis for the balance period 2013-14
For the balance period of 2013-14, it is proposed to allocate the additionally available 1.125 MMSCMD gas (as indicated by MoP&NG) to the 4,842.5 MW predominantly dependent on KG D6 (2,478 MW fully dependent/ substantially dependent) & 1334 MW newly commissioned gas based capacities which are without any gas allocation. Further, by adding 6 MMSCMD of RLNG to these plants, the weighted average price of gas would be US$ 11.43/ MMBtu and the average PLF of around 25.54 percent can be achieved. However, the indicative total cost of Generation would increase to INR 10.47/ unit, which would be extremely high. Considering a viable level of maximum Total tariff of INR 5.50/ unit that may be despatchable, the indicative Subsidy to be borne by Government would be INR 3788 Crore for the balance 6 months period of 2013-14.
From April, 2014, the domestic gas prices will be revised as per the CCEA approved new gas price formula. The new gas price will be computed every quarter and will be dependent on international LNG prices and the trading hubs like Henery Hub and NBP, thus will be quite high and volatile. For analysis purpose, an indicative price of US$ 8.0/ MMBtu has been considered.
For 2014-15 and 2015-16, it is proposed not to change the allocation/ supply of domestic gas to APM based plants. However, additional RLNG may be added into the pool to increase their average PLF. It is proposed to allocate the additionally available domestic gas to the plants which are fully & substantially dependent on KG D6 gas, newly commissioned plants without gas allocation and some plants which can be commissioned. For 2014-15, it is proposed to allocate the additionally available domestic gas 5.11 MMSCMD (1.125 + 3.98, as indicated by MoP&NG) to 4,842.5 MW predominantly dependent on KG D6 (2,478 MW fully dependent/ substantially dependent) & 1334 MW newly commissioned gas based capacities that are without any gas allocation and 3000 MW of new power plants that are ready for commissioning. Further, by pooling with around 7 MMSCMD RLNG to these plants, the pooled price of gas would be US$ 10.32/ MMBtu and the average PLF can be achieved around 25.82 percent. However, the indicative total cost of Generation would increase to INR 10.32/ unit, which would be extremely high. Considering a Total tariff of INR 7.0/ unit, the indicative Subsidy to be borne by Government would be INR 7379 Crore.
For the APM based plants, the present supplies under their existing agreements will continue. Along with the supplies of existing Long term RLNG quantities of 1.98 MMSCMD, additional 8 MMSCMD of RLNG may be pooled in this group. Thus, the Pooled price becomes US$ 10.14/ MMBtu and the PLF levels can be improved to 40.03 percent. However, the Total cost of generation would increase to INR 8.46/ unit, which is quite high. Considering a Total tariff of INR 7.0/ unit, the indicative Subsidy to be borne by Government would be INR 6435 Crore. Thus, the Total subsidy in the Year 2014-15 to be borne by Government would be INR 11098 Crore.
For 2015-16, it is proposed to allocate the additional available domestic gas of 12 MMSCMD (1.125 + 3.98 + 6.895, as indicated by MoP&NG) to 4,842.5 MW predominantly dependent on KG D6 (2,478 MW fully dependent/ substantially dependent) and 1,334 MW newly commissioned gas based capacities that are without any gas allocation and all 7,815 MW of new power plants that will get commissioned. Further, by pooling it with around 12 MMSCMD of RLNG for these plants, the Pooled price of gas would be US$ 10.96/ MMBtu and the average PLF of around 31.79 percent can be achieved. However, the indicative Total cost of Generation would increase to INR 9.53/ unit, which would be extremely high. Considering a Total tariff of INR 7.50/ unit, the indicative Subsidy to be borne by Government would be INR 8265 Crore.
For the APM based plants, the present supplies under their existing agreements will continue. Along with the supplies of existing Long term RLNG quantities of 1.98 MMCSMD, additional 8 MMSCMD of RLNG may be pooled in this group. Thus, the Pooled price becomes US$ 10.24/ MMBtu and the PLF levels can be improved to 48.3 percent. However, the Total cost of generation would increase to INR 8.52/ unit, which is quite high. Considering a Total tariff of INR 7.5/ unit, the indicative Subsidy to be borne by Government would be INR 2658 Crore. Thus, the Total subsidy in the Year 2015-16 to be borne by Government would be INR 10924 Crore.
Justification for the Proposal
In view of the severe gas shortages and resulting techno-commercially unviable PLF, EGoM has approved allocation of additional domestic gas to Power sector for the years 2013-14, 2014-15 and 2015-16 by capping supplies to Fertilizer sector. However, even with this additional gas, there will be significant shortfall in power sector. This shortfall can only be met by importing RLNG and pooling this with the price of the domestic gas and providing subsidy to Power sector to make gas based generation viable and achieve technically sustainable level PLF. However, the Total cost of generation will increase significantly because of the Pooling of domestic gas with RLNG. This will make Gas based generation totally unviable in the merit order dispatch. In Power sector, there are hardly any takers of electricity at more than INR 4.50- 5.00/ Kwh in recent times. To bail out the financially sick Discoms, Government of India has recently approved financial restructuring plan. Hence, the gas based power stations would need to be supported by Government through appropriate Subsidy mechanism in the gas pool.
This will prevent the stranded Gas based capacities and the new Gas based projects to become NPAs. The investment sentiments in the Power sector and the confidence of the bankers will be restored. The PLF of 12,561 MW of APM based plants would increase from present avg. PLF of 27.7 percent to 42.53 percent in the year 2014-15 and beyond. This will help increase power generation from present level of 27 BUs to ...BUs. It will also enable RGPPL to be functional so that the assets restructured in 2009 under the aegis of Gol may avoid being classified as NPA. The power requirement of the country can be immediately met by utilizing the already created 24,189 MW gas based assets. Moreover, the demand of Southern region, which is yet to be connected to the National grid, can be met immediately. Gas based power generation is a preferred mode worldwide because of various benefits mainly its environmental friendliness.
Pool Operation Mechanism:
Regarding the pool operation mechanism, it is proposed to appoint GAIL as 'Pool Operator' in view of the following reasons:
- GAIL is a public sector company and is well established in global market as a LNG Buyer and has already finalised LNG Contracts of about 7-8 MMTPA based on JCC / Brent and Henry Hub indexation.
- Being a Central PSU, Government guidelines can be implemented.
- Government nominee from MoPNG/ MoP can also be made a part of the Empowered Committee that approves procurement of LNG from international sources.
GAIL can act as the aggregator wherein, monthly pooled price for the proposed pools during the years 2014-15 and 2015-16 shall be declared by GAIL (as per guidelines of MoPNG/ MoP) in its capacity as the pool operator. The existing domestic gas suppliers may continue to sell gas to the contracted power plants. However, the payment to all such sellers shall be made as per contracted price by GAIL as the pool operator and the existing contracts of power plants will need to be modified only to this extent. The subsidy of the Government will also be channelised through the Pool operator. In turn, GAIL shall make the RLNG available to the power plants at competitive prices so as to limit the Total cost of power generation within the proposed reference limits. All gas based power plants shall make payments to the pool operator to enable it to make payment to individual gas suppliers. However, the legal implications of appointing GAIL as 'Pool Operator' in view of the existing Gas/ RLNG Sale & Purchase Agreement (GSPAs) and Gas Transportation Agreement (GTAs) amongst various entities will need to be examined and settled.
Financial Implication
In case Pooling of gas/ RLNG is implemented, there will be an out go of Government subsidy. If we consider limiting the Total tariff of power to INR 5.50/ unit in 2013-14, INR 7.0/ unit in 2014-15 and INR 7.50/ unit in 2015-16, the amount of Subsidy to be borne by the Government shall be INR 3788 Crore (for balance 6 month period of 2013-14), INR 11045 Crore and INR 10924 Crore, respectively during these years. These Subsidy calculations are estimates only based on projections and the actual Subsidy in a year will depend upon the actual supply of gas/ RLNG at prevailing level of prices during that year. The actual Subsidy may be even less depending upon the consumption of costlier RLNG. However, Government, if so desires, may limit the subsidy in the respective years to the proposed subsidy levels in this proposal.
During the years of 2013-14, 2014-15 and 2015-16, by pooling with the additionally available domestic gas with RLNG, gradually all the power plants can be run, thus avoiding their present stranded situation. However, the average PLF levels are still not technically viable for individual power plants. Hence, it will be important to optimize the operation of the power plants by clubbing/diversion of gas and rostering the gas, as is being done till the time the domestic gas availability is sufficient enough.
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