A policy assessment:
Import of Gas to Fuel starved
Power Stations

Farhan Beg
NIT Srinagar, India

G. Behari
Director (OM)...
India Country Profile:

Area: 3.29 million sq. km. (1.27 million sq. mi.)
Population:1.2208 billion
Climate: Desert, Mount...
Indian Power Sector

Department of
Atomic Energy

Ministry of
Power

Central Electricity
Authority

Central Electricity
Re...
Generation

Transmission

Centrally owned
Generation:

Power-Grid
Corporation

State owned
generators

National Power
Syst...
Acknowledging Supply and Demand:
Gap between demand and supply is wide and growing.
Demographics and Economics are the re...
Power supply position:
(MW)
All India (2011-12): Requirement
Availability
Shortage
(%)

1,000,000
900,000
800,000
700,000
...
Regional power supply position(2011-2012):
350,000

300,000
250,000
200,000
150,000
100,000
50,000
0

Requirement(
MU)

Av...
Population Growth/ Electricity Production/ Electricity
1400
Consumption
Population Growth:

Millions

1200
1000
800
600
40...
Power Generation Capacity:
Coal
Gas
Nuclear
2%

Diesel
Hydro
Non renewables

As on 31.03.2012

12%

19%
57%
9%

1%

•Coal ...
Indian Coal Scenario:

Million Tonnes

•Coal Mining started by Messrs Sumner & Heatly of the East India company way
back i...
Coal Scenario for 2011-12
All Figures in MT
S NO
1.1

Description
Coal requirement for plants designed on
indigenous coal
...
Energy Demands &Drivers for Alternate Sources of
Energy:
1. High Growth Rate in Overall Energy needs:

• Expansion of supp...
3. Need for a viable solution for rural electrification:
•A program of grid strengthening and extension was
initiated in 2...
Hydro: An Overview
Globally India ranks 5th in terms of total hydro-potential
Hydro electric potential in India is 84000...
Advantages of hydropower over thermal power:

 Renewable and Non Polluting
 Cost of generation, operation and maintenanc...
National Policy on Hydropower introduced in 1998
Main Points:
 To ensure targeted capacity addition during 9th plan (and ...
Issues Impeding Development of Hydro Power:
Difficult/In-accessible locations
Land acquisition problems
Resettlement an...
Limitations of Hydro Projects:
Away from load centers; evacuation of power is a big
problem
Lack of availability of long...
Natural Gas Scope:
•Petroleum and Gas emerging as the most dynamic energy sectors in
the country
•Clean and an efficient c...
India Renewable Scenario:
As on November 2012 12% of total installed capacity (210 GW) through
renewable sources
•WIND (18...
Installed capacity

Financial
requirement

Type

2012

2017

CAGR

Rupees(CR)

SHP

3395.31

4995.31

10%

8000

Biomass

...
Issues with large scale deployment of
Renewable Energy
Renewable energy’s are classified into three
generations each prese...
Capacity Addition in the 12th plan with 9% GDP GR
& 0.9 Elasticity (All Values in MW)
Type of
Capacity

Capacity Addition
...
Capacity Addition Requirement during 12th plan (MW) Base Case:
Figures in MW

Type of Capacity

Demand Corresponding to 9%...
Coal Demand and Availability:
Coal Requirement during the year 2016-17

842MT

Coal Availability from :
a: CIL

418 MT

b:...
Capacity Addition Hindrances:
Thermal:
Even though accounting for nearly 80% of India’s total generation, the
future seem...
Mitigating shortages: Options available
Renovation and modernization of existing thermal power plants
Capacity enhanceme...
Import of Gas to Fuel Starved Power
Stations: Methodology
Sample Area Selected: Western Region
Imported Gas supplied(In ...
Resultant Parameters
•Additional Generation = 1900 MU per day
(Enhanced Efficiency & auxiliary losses are not considered f...
Assumptions
•Efficiency of gas stations does not improve appreciably with higher
generation (could be worked out at a late...
Conclusion
•Import of gas is economically viable if the additional electricity generation is
sold under ABT

Issues to be ...
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Policy Assessment: Import of Gas to fuel starved power stations in the western region of India

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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.

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Policy Assessment: Import of Gas to fuel starved power stations in the western region of India

  1. 1. A policy assessment: Import of Gas to Fuel starved Power Stations Farhan Beg NIT Srinagar, India G. Behari Director (OM) CEA
  2. 2. 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)
  3. 3. Indian Power Sector Department of Atomic Energy Ministry of Power Central Electricity Authority Central Electricity Regularity Commission State Electricity Regularity Commission
  4. 4. Generation Transmission Centrally owned Generation: Power-Grid Corporation State owned generators National Power System Desk (POSOCO) National Load Dispatch Center (NLDC) Regional Power Committee-5 Regional Load Dispatch Centers-5 (RLDC) Private Generators State Owned TX State Load Dispatch Centers-34 Sub state- Load Dispatch Centers-51 Distribution State Electricity Boards State Owned Distribution Companies Private Distribution Companies
  5. 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. Actual Power Supply Position During 2011-12 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Energy(MU) Peak(MW) Requiremrnt Availability Shortage % 937,199 130,006 857,886 116,191 79,313 13,815 8.5 10.6 Source: CEA
  6. 6. Power supply position: (MW) All India (2011-12): Requirement Availability Shortage (%) 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Energy (MU) Peak Requirement 937,199 130,006 Energy (MU) 937,199 857,886 79,313 8.5% Availability 857,886 116,191 Peak 130,006 116,191 13,815 10.6% Shortage 79,313 13,815
  7. 7. Regional power supply position(2011-2012): 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Requirement( MU) Availability(M U) Requirement (MU) Energy Northern Western Southern Eastern 276,121 290,421 260,302 99,344 258,382 257,403 237,480 94,657 Availability (MU) Peak 40248 42,352 37,599 14707 37117 36,509 32,188 13,999
  8. 8. Population Growth/ Electricity Production/ Electricity 1400 Consumption Population Growth: Millions 1200 1000 800 600 400 200 0 1998 900 2000 2002 2004 2006 2000 2002 2004 2006 2000 2002 2004 2008 2010 2012 2014 800 700 600 MW Electricity Production 500 400 300 200 100 0 700 Electricity Consumption 1998 2008 2010 2012 2014 600 500 400 300 200 100 0 1998 2006 2008 2010 2012 2014
  9. 9. Power Generation Capacity: Coal Gas Nuclear 2% Diesel Hydro Non renewables As on 31.03.2012 12% 19% 57% 9% 1% •Coal accounts for nearly 57 % of the total power generation Abundant coal reserves Power 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.
  10. 10. Indian Coal Scenario: Million Tonnes •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 Projected demand-supply of coal by 2025 3000 2000 1000 0 Demand by power sector Supply to power sector Years Source: Observer Research Foundation
  11. 11. Coal Scenario for 2011-12 All Figures in MT S NO 1.1 Description Coal requirement for plants designed on indigenous coal 2011-12 455 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
  12. 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…
  13. 13. 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
  14. 14. Hydro: An Overview Globally India ranks 5th in terms of total hydro-potential Hydro electric potential in India is 84000 MW at 60 % load factor which is equivalent to 1,48,700 MW installed capacity Basin Wise Assessment: Basin/Rivers Indus Basin Ganga Basin Central Indian River system Western flowing Rivers of Southern India Eastern flowing rivers of Southern India Brahmaputra Basin Total Installed Capacity(MW) 33,832 20,711 4,152 9,430 14,511 66,065 1,48,701
  15. 15. 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.
  16. 16. National Policy on Hydropower introduced in 1998 Main 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 projects Increasing private investments for development of hydropower in India
  17. 17. Issues Impeding Development of Hydro Power: Difficult/In-accessible locations Land acquisition problems Resettlement and Rehabilitation issues Law And Order Situation Geological surprises Inter-State Disputes Cumbersome process for obtaining the clearances from various national bodies
  18. 18. Limitations of Hydro Projects: Away from load centers; evacuation of power is a big problem Lack of availability of long term finance Production risks since the project is planned based in the historical data which may not occur in future Difficulty in Investigations/Implementations due to remoteness of the area Long gestation period
  19. 19. 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. Cubic Trillion Feet Supply And Demand Scenario of Gas In the country: 6 5 4 3 2 1 0 Supply Demand 2003 2008 2013 2018 Year 2023 2028 2033
  20. 20. 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) Progressive Renewable Sector 2012 Small hydro, 3395.31 Solar, 941.28 Biomass, 1150 Wind, 17352. 65 Small Hydro, 4995.31 Solar, 4 741.28 Contd… 2017 Biomass, 3250 Wind, 2 8352.6 5
  21. 21. 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. Potential in India Present Installed Capacity Wind 60 GW 17.62 GW Solar 50 GW 941 MW Geothermal 10.6 GW 220 MW Biomass 34.9 GW 1150 MW Source (Nov‘12)
  22. 22. Issues with large scale deployment of Renewable Energy Renewable energy’s are classified into three generations each presenting their own issues: Mature Generation (Hydro power, Biomass, Solar thermal hot water, geothermal) • High up-front costs • Local Site Issues Developing Generation (Wind, Bio Energy, Solar PV) • Technological advancements needed. • Need substantial cost reduction through market experience (Need to be deployed) R&D Generation (Concentrating Solar power, Ocean Energy, Advanced forms of Bio energy) • Still require substantial RD&D to be deployed • Need to be deployed and tested in pilot projects
  23. 23. 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
  24. 24. Capacity Addition Requirement during 12th plan (MW) Base Case: Figures in MW 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 Source: CEA •Additionally, grid interactive renewable capacity addition of about 18500 MW has been projected.
  25. 25. 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 Shortfall 604 MT 238 MT Source: Working group on power-12th plan
  26. 26. 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.
  27. 27. Mitigating shortages: Options available Renovation and modernization of existing thermal power plants Capacity enhancement of existing hydro power stations Reduction of technical and commercial losses through the introduction of Smart Grid Import of Gas to Fuel Starved Power Stations to enhance their electricity generation to be sold through ABT
  28. 28. Import of Gas to Fuel Starved Power Stations: Methodology Sample Area Selected: Western Region Imported Gas supplied(In addition to gas already being supplied): Power Stations in Gujarat & Maharashtra (Gas Based) Study Month November 2012 Feasible additional generation from these stations. Cost of fuel for this additional generation Sale of this addition generation under ABT
  29. 29. 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 Million Cost of fuel =$19.6 Million Additional O&M expenses (to be worked out):would not be substantial Revenue Realization : additional electricity = Rs 162 crore (equivalent : $30.6 million ; 1$=53 INR)
  30. 30. 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.
  31. 31. Conclusion •Import of gas is economically viable if the additional electricity generation is sold under ABT Issues to be addressed: •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

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