policy assessment: import of gas to fuel starved power stations in the western region of india
DESCRIPTION
Natural gas is a clean fuel as compared to coal and can be efficiently used in power generation. As the domestic coal supply is generally of low quality with low calorific values, high degree of ash content and its adverse impacts in the environment, Government of India encourages Gas based power generation in India.TRANSCRIPT
A policy assessment: Import of Gas to Fuel starved Power
Stations
G. BehariDirector (OM) CEA
Farhan BegNIT Srinagar, India
India Country Profile:
Area: 3.29 million sq. km. (1.27 million sq. mi.)
Population:1.2208 billion
Climate: Desert, Mountain, Subtropical, Semi Arid steppe, Moist subtropical
Purchasing Power Parity: 4735 $Billion (2012 est.)
All India Installed Capacity: 211766.22 MW (As on 31.01.2013)
Per Capita Consumption: 879.22 kWh (2011-2012)
Department of Atomic Energy
Ministry of Power
Central Electricity Authority
Central Electricity Regularity
Commission
State Electricity Regularity
Commission
Indian Power Sector
Inside India’s Electrical Power System:
Generation Transmission Distribution
Centrally owned
Generation:
State owned generators
Private Generators
Power-Grid Corporation
State Owned TX
State Electricity Boards
National Power System Desk (POSOCO)
National Load Dispatch
Center (NLDC)
Regional Load Dispatch Centers-5 (RLDC)
State Load Dispatch
Centers-34
State Owned Distribution Companies
Private Distribution Companies
Sub state- Load Dispatch
Centers-51
Regional Power
Committee-5
Acknowledging Supply and Demand:
Gap between demand and supply is wide and growing. Demographics and Economics are the reason for it. Growing economy and Massive urbanization putting more stress on energy and the environment.
Requiremrnt Availability Shortage %
Energy(MU) 937199 857886 79313 8.5
Peak(MW) 130006 116191 13815 10.6
50,000
250,000
450,000
650,000
850,000
Actual Power Supply Position During 2011-12
Source: CEA
Power supply position:
All India (2011-12):
(MW) Energy (MU) Peak
Requirement 937,199 130,006Availability 857,886 116,191Shortage 79,313 13,815 (%) 8.5% 10.6%
Requirement Availability Shortage
Energy (MU) 937199 857886 79313
Peak 130006 116191 13815
50,000
250,000
450,000
650,000
850,000
Energy Re-
quirement(MU)
Energy Avail-ability(MU)
Peak Re-quirement
(MU)
Peak Avail-ability (MU)
Northern 276121 258382 40248 37117
Western 290421 257403 42352 36509
Southern 260302 237480 37599 32188
Eastern 99344 94657 14707 13999
25,000
75,000
125,000
175,000
225,000
275,000
325,000
Regional power supply position(2011-2012):
Population Growth/ Electricity Production/ Electricity Consumption
Population Growth:
Electricity Production
Electricity Consumption
1998 2000 2002 2004 2006 2008 2010 2012 20140
200
400
600
800
1000
1200
1400
Mil
lion
s
1998 2000 2002 2004 2006 2008 2010 2012 20140
100
200
300
400
500
600
700
800
900
MW
1998 2000 2002 2004 2006 2008 2010 2012 20140
100
200
300
400
500
600
700
Power Generation Capacity:
57%
1%
9%
19%
2%12%
Coal Diesel Gas
Hydro Nuclear Non renewables
•Coal accounts for nearly 57 % of the total power generationAbundant coal reservesPower Generation using coal is cheaper•Even though abundant coal reserves are a reason for the monopolistic power generation using coal, yet India is facing huge coal supply and production issues.
As on 31.03.2012
Indian Coal Scenario:•Coal Mining started by Messrs Sumner & Heatly of the East India company way back in 1774 • Mines were nationalized in the country with the inception of CIL in 1970 to increase the influx of investments•Indian power delivery chain is highly dependent on coal with nearly 70 % of its generation and is experiencing perpetual fuel shortages•Fuel shortages are dominant even when India has 10% of the worlds coal reserves
2000
-01
2004
-05
2008
-09
2014
-15
2018
-19
2022
-23
0
2000
Projected demand-supply of coal by 2025
Demand by power sectorSupply to power sector
Years
Mil
lio
n T
on
nes
Source: Observer Research Foundation
All Figures in MT
S NO Description 2011-121.1 Coal requirement for plants designed
on indigenous coal455
1.2 Coal requirements for plants designed on imported coal
20
1.3 Total 475
2. Coal availability from indigenous Sources
2.1 From CIL Sources 347
2.2 From SCCL 33
2.3 From Captive Mines 22
2.4 Total coal availability from indigenous sources
402
3. Shortfall of indigenous coal 53
Coal Scenario for 2011-12
Energy Demands &Drivers for Alternate Sources of Energy:
1. High Growth Rate in Overall Energy needs:• Expansion of supply demand gap is due to
increase• Presently Supply-Demand gap is nearly 12.9%
2. Increasing reliance on imports of fossil fuels:• Country imported nearly 80% of its crude oil
consumption in 2009-10• Over 48% of the country's total imports bill
typically goes towards oil imports
Contd…
3. Need for a viable solution for rural electrification: • A program of grid strengthening and extension
was initiated in 2005• Benefits the 400 million Indians who lack access
to electricity
4. Electricity peak demand-supply :• The electricity shortfall for the fiscal year
(2011-2012) was 10.3% with a peak shortage of 12.9%.
5. Pressure on industry and policy to abate GHG emissions:
• India’s strategy for tackling climate change is set out in its ‘National Action Plan on Climate Change’ (NAPCC), released in 2008
Hydro: An Overview
Globally India ranks 5th in terms of total hydro-potentialHydro electric potential in India is 84000 MW at 60 % load factor which is equivalent to 1,48,700 MW installed capacity
Basin/Rivers Installed Capacity(MW)
Indus Basin 33,832Ganga Basin 20,711Central Indian River system 4,152Western flowing Rivers of Southern India
9,430
Eastern flowing rivers of Southern India
14,511
Brahmaputra Basin 66,065Total 1,48,701
Basin Wise Assessment:
Advantages of hydropower over thermal power:
Renewable and Non Polluting Cost of generation, operation and maintenance is lower than the other sources of energy. Cost of generation is free of the inflationary effects after the final installation.
National Policy on Hydropower introduced in 1998Main Points:
To ensure targeted capacity addition during 9th plan (and the subsequent plans) Exploitation of vast Hydro Electric Potential at faster pace Promotion of small and mini hydro projects especially in remote and hilly areas where extension of the grid is comparatively uneconomical Strengthening the role of PSUs and SEBs in taking up new hydro projectsIncreasing private investments for development of hydropower in India
Issues Impeding Development of Hydro Power:
Difficult/In-accessible locationsLand acquisition problemsResettlement and Rehabilitation issuesLaw And Order SituationGeological surprisesInter-State DisputesCumbersome process for obtaining the clearances from various national bodies
Limitations of Hydro Projects: Away from load centers; evacuation of power is a big problemLack of availability of long term financeProduction risks since the project is planned based in the historical data which may not occur in futureDifficulty in Investigations/Implementations due to remoteness of the areaLong gestation period
Natural Gas Scope:
•Petroleum and Gas emerging as the most dynamic energy sectors in the country•Clean and an efficient choice for power generation.•Total Capacity of Gas Based power plants was 18,381 MW as on 31 March 2012.
2003 2008 2013 2018 2023 2028 20330123456
Supply
De-mand
Year
Cu
bic
Tri
llio
n F
eet
Supply And Demand Scenario of Gas In the country:
India Renewable Scenario:As on November 2012 12% of total installed capacity (210 GW) through renewable sources•WIND (18.3 GW)•Small hydro (3.4 GW) •Biomass (1.2 GW)•Solar (1 GW)
Wind, 17352.
65
Solar, 941.28
Small hydro,
3395.31
Biomass, 1150
Progressive Renewable Sector
Wind; 28352.649999999
9
Solar; 4741.28
Small Hydro; 4995.31
Biomass, 3250
2012 2017
Contd…
Installed capacity Financial requirement
Type 2012 2017 CAGR Rupees(CR)
SHP 3395.31 4995.31 10% 8000
Biomass 1150 3250 30% 10500
Solar 941.28 9941 80% 63000
Wind 17352.65 28352.65 13% 67200
•Large cash inflows required to bring about such change.•Financial Requirement of such a proposition very high.Source Potential in
IndiaPresent Installed Capacity (Nov‘12)
Wind 60 GW 17.62 GW
Solar 50 GW 941 MW
Geothermal 10.6 GW 220 MW
Biomass 34.9 GW 1150 MW
Issues with large scale deployment of Renewable Energy
•High up-front costs
•Local Site Issues
Mature Generation (Hydro power, Biomass,
Solar thermal hot water, geothermal)
•Technological advancements needed.
•Need substantial cost reduction through market experience (Need to be deployed)
Developing Generation (Wind, Bio Energy,
Solar PV)
•Still require substantial RD&D to be deployed
•Need to be deployed and tested in pilot projects
R&D Generation (Concentrating Solar power, Ocean Energy, Advanced
forms of Bio energy)
Renewable energy’s are classified into three generations each presenting their own issues:
Capacity Addition in the 12th plan with 9% GDP GR & 0.9 Elasticity (All Values in MW)
Type of Capacity
Capacity Addition
Base Case High Gas High Gas + high renewable Scenario
Thermal 63781 63886 60486
Coal 62695 50600 47400
Gas 1086 13086 13086
Hydro 9204 9204 9204
Nuclear 2800 2800 2800
Total 75785 75690 72490
Renewables 18500 18500 30000
Imports 1200 1200 1200
Coal Requirement(MT)
842 772 764
Source: CEA
Capacity Addition Requirement during 12th plan (MW) Base Case:
Type of Capacity Demand Corresponding to 9% GDP GR & .9 Elasticity
Thermal 63,781
Coal 62,695
Gas 1,086
Hydro 9,204
Nuclear 2,800
Total 75,785
Figures in MW
• Additionally, grid interactive renewable capacity addition of about 18500 MW has been projected.
Source: CEA
Coal Demand and Availability:
Coal Requirement during the year 2016-17
842MT
Coal Availability from :
a: CIL 418 MT
b: SCCl 35 MT
c:Captive blocks allocated to power utilities
100 MT
d: Coal to be imported by TPSs designed imported Coal
54 MT
Total Coal availability 604 MT
Shortfall 238 MT
Source: Working group on power-12th plan
Capacity Addition Hindrances:
Thermal: Even though accounting for nearly 80% of India’s total generation, the future seems grim. Fuel shortage is acute and supply demand gap of coal is increasing unabated.
Hydro: Nearly 9204 MW of power projected for hydro power in the 12th plan. Long gestation period and environmental ramifications continue to hold back the hydro power potential of the country to some extent . Renewables: Higher initial costs coupled with renewable technologies being in a developmental stage present issues for their large scale deployment. Renewable technologies need to be improved and cost effective deployments introduced to make renewable energy generation take over from the conventional fossil fuel generation.
Mitigating shortages: Options available
Renovation and modernization of existing thermal power plantsCapacity enhancement of existing hydro power stationsReduction of technical and commercial losses through the introduction of Smart GridImport of Gas to Fuel Starved Power Stations to enhance their electricity generation to be sold through ABT
Import of Gas to Fuel Starved Power Stations: Methodology
Sample Area Selected: Western RegionImported Gas supplied(In addition to gas already being supplied): Power Stations in Gujarat & Maharashtra (Gas Based) Study Month November 2012Feasible additional generation from these stations. Cost of fuel for this additional generationSale of this addition generation under ABT
Resultant Parameters
•Additional Generation = 1900 MU per day (Enhanced Efficiency & auxiliary losses are not considered for time being)•Cost of Imported gas= $13.627/MMSCMD(Report of the Committee on the production sharing contract mechanism in Petroleum industry- December 2012)Cost of Addition generation=$19.6 MillionCost of fuel =$19.6 MillionAdditional O&M expenses (to be worked out):would not be substantialRevenue Realization : additional electricity = Rs 162 crore(equivalent : $30.6 million ; 1$=53 INR)
Assumptions
•Efficiency of gas stations does not improve appreciably with higher generation (could be worked out at a later stage while carrying out detailed study) •O&M cost of gas station does not increase appreciably with enhanced generation (Need to be established, however the enhancement of O&M cost would not be substantial)•No backing down/Non scheduling of gas stations owing to higher cost of generation •Revenue realization is based on average cost of generation during the year 2010-11.
•Import of gas is economically viable if the additional electricity generation is sold under ABT
Issues to be addressed:
Conclusion
•Source of imported gas•Transportation of gas up to the Indian coast•Landing port of gas•Storage of gas at the port•Transportation of gas within India