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Opportunities & Obstacles in India   for   Distributed Energy Generation by Pinaki Bhadury Thermax Limited India 13 th  Se...
Prozdravit ze Indie  Greetings from India
Topics <ul><li>DE in India </li></ul><ul><li>DE Opportunities </li></ul><ul><li>Obstacles for DE </li></ul><ul><li>Way for...
Distributed Energy (DE) in India <ul><li>Indian DE was born 107 years back! </li></ul><ul><ul><li>1899 CESC installed the ...
DE in India <ul><li>Re-Emergence of DE </li></ul><ul><ul><li>Captive Power Plants </li></ul></ul><ul><ul><ul><li>Sugar Cog...
DE Opportunities <ul><li>Drivers for DE in India </li></ul><ul><ul><li>Increasing Demand-Supply Gap </li></ul></ul><ul><ul...
DE Opportunities <ul><li>Drivers for DE in India </li></ul><ul><ul><li>Poor & inadequate T&D network </li></ul></ul><ul><u...
DE Opportunities <ul><li>Business opportunities </li></ul><ul><ul><li>Captive Power Plants (On-site generation) </li></ul>...
DE Opportunities <ul><li>Business Opportunities </li></ul><ul><ul><li>Rural Electrification </li></ul></ul><ul><ul><ul><li...
DE Obstacles <ul><li>Energy Planner’s Mindset – “Bigger, the Better” </li></ul><ul><ul><li>“ Small & Medium sized plants a...
DE Obstacles <ul><li>Financial Restraints </li></ul><ul><ul><li>Imposition of unrealistic taxes & duties on DE generation ...
Way Forward for DE in India <ul><li>What needs to be done </li></ul><ul><ul><li>Need to influence policy makers about adva...
Indian DE Market Developments <ul><li>On-site Industrial Power Plants (Captive Power Plants) </li></ul><ul><ul><li>Encoura...
About Thermax <ul><li>Thermax Limited </li></ul><ul><ul><li>A major Energy & Environment Indian engineering company </li><...
Our Vision To be a globally respected high performance  organisation  offering sustainable solutions in energy & environment
Our Businesses Boilers & Heaters Vapour  Absorption Chillers Speciality Chemicals Turnkey Power Plants Air Pollution Contr...
Our Business Purpose Conversing Energy Preserving the Environment
Our Location Works : Chinchwad, Pune, 160 kms south of Mumbai (Bombay) H.O. : Thermax House, 4, Mumbai-Pune Road, Shivajin...
Overseas Locations Thermax Inc. Detroit, USA Thermax doBrazil Sau Paulo, Brazil Thermax Europe Ltd. Luton, UK Thermax Sang...
Thermax Group Thermax   Corporation Thermax Limited Wholly Owned Subsidiaries Boiler & Heater Products Water & Waster Wate...
Thermax & Indian Power Sector <ul><li>Offers unique solutions for Distributed Generation </li></ul><ul><ul><li>Biomass bas...
Děkuji Thank You For further information & clarifications, contact: Pinaki Bhadury,  Head – Business Analysis, Research & ...
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DE Opportunities & Obstacles In India

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Presentation of a Paper presented in the magazine COSSP on opportunities in Decentralised Energy in India

Published in: Technology, Business

DE Opportunities & Obstacles In India

  1. 1. Opportunities & Obstacles in India for Distributed Energy Generation by Pinaki Bhadury Thermax Limited India 13 th September 2007 New Energy Strategy of t he E U & C R within the frame work of the world power supply & development
  2. 2. Prozdravit ze Indie Greetings from India
  3. 3. Topics <ul><li>DE in India </li></ul><ul><li>DE Opportunities </li></ul><ul><li>Obstacles for DE </li></ul><ul><li>Way forward </li></ul>
  4. 4. Distributed Energy (DE) in India <ul><li>Indian DE was born 107 years back! </li></ul><ul><ul><li>1899 CESC installed the 1 st Power Plant of 1 MW for Calcutta (Kolkata) city </li></ul></ul><ul><ul><li>1905 BEST installed 4.3 MW Power Plant for Bombay (Mumbai) for supply to city & its tramways </li></ul></ul><ul><ul><li>Soon followed other cities </li></ul></ul><ul><ul><ul><li>Surat </li></ul></ul></ul><ul><ul><ul><li>Ahmedabad </li></ul></ul></ul><ul><li>With rapid increase in demand </li></ul><ul><ul><li>Larger capacity power plants took birth </li></ul></ul><ul><ul><ul><li>Lead to decline of DE in India </li></ul></ul></ul>Pics courtesy CESC & BEST CESC : Calcutta Electricity Supply Company BEST : Bombay Electricity Supply & Tramways Company
  5. 5. DE in India <ul><li>Re-Emergence of DE </li></ul><ul><ul><li>Captive Power Plants </li></ul></ul><ul><ul><ul><li>Sugar Cogen </li></ul></ul></ul><ul><ul><ul><li>Refineries </li></ul></ul></ul><ul><ul><ul><li>Cement </li></ul></ul></ul><ul><ul><ul><li>Textile </li></ul></ul></ul><ul><ul><li>Small hydro in the hilly regions </li></ul></ul><ul><li>Today, about 19% of India’s installed capacity is in DE </li></ul>Photograph courtesy : Arvind Mills Limited & Thermax Limited
  6. 6. DE Opportunities <ul><li>Drivers for DE in India </li></ul><ul><ul><li>Increasing Demand-Supply Gap </li></ul></ul><ul><ul><ul><li>Poor implementation of projects </li></ul></ul></ul><ul><ul><ul><li>Inadequate capacity addition </li></ul></ul></ul><ul><ul><li>Poor availability & reliability </li></ul></ul><ul><ul><ul><li>Most of small cities & towns get electricity only for 5-6 hrs/day! </li></ul></ul></ul><ul><ul><ul><li>Rural areas get electricity only for 3-4 hrs/day! </li></ul></ul></ul><ul><ul><ul><li>Industries have to live with </li></ul></ul></ul><ul><ul><ul><ul><li>Frequent interruptions </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Frequencies between 48.5 – 51.5 Hz! </li></ul></ul></ul></ul>Source : Ministry of Power, India, India Census,CIA Factbook, Xinhua New agency, Chinese State Regulatory Commission Presently in India the Peak Demand shortage is 20% average and Energy Supply shortage is 17%! 70 GW 6 GW Cap Addition/Yr 606 GW 172 GW Installed Capacity $ 2450 Billion $ 1000 Billion GDP 1.33 Billion 1.13 Billion Population China India
  7. 7. DE Opportunities <ul><li>Drivers for DE in India </li></ul><ul><ul><li>Poor & inadequate T&D network </li></ul></ul><ul><ul><ul><li>Many areas do not have access to any grid </li></ul></ul></ul><ul><ul><ul><li>In parts of India, grid can not reach due to terrain </li></ul></ul></ul><ul><ul><ul><li>High T&D (ATC) loss – 35% national average!! </li></ul></ul></ul><ul><ul><ul><li>India will need to invest in transmission as much as in generation in the next 20 years </li></ul></ul></ul><ul><ul><li>High cost of electricity for Industries </li></ul></ul><ul><ul><ul><li>Average cost is US 10 ¢/kWH </li></ul></ul></ul><ul><ul><li>Indian Electricity Act 2003 </li></ul></ul><ul><ul><ul><li>Captive Power Plants delicensed </li></ul></ul></ul><ul><ul><ul><ul><li>Excess capacity allowed to be sold to others </li></ul></ul></ul></ul><ul><ul><ul><li>For Rural Electrification, distributed generation has been planned for areas where grid can not reach </li></ul></ul></ul><ul><ul><ul><ul><li>Stand alone systems for supply to rural households </li></ul></ul></ul></ul>
  8. 8. DE Opportunities <ul><li>Business opportunities </li></ul><ul><ul><li>Captive Power Plants (On-site generation) </li></ul></ul><ul><ul><ul><li>Presently estimated to be at 40 GW </li></ul></ul></ul><ul><ul><ul><ul><li>Addition at 3000 MW per year </li></ul></ul></ul></ul><ul><ul><ul><li>Estimated addition 12 GW by 2012 (conservative) </li></ul></ul></ul><ul><ul><ul><li>Commercial Complexes (CHPC / Trigen) </li></ul></ul></ul><ul><ul><ul><ul><li>Multiplexes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Malls & Recreation Centres </li></ul></ul></ul></ul><ul><ul><ul><li>Industries (Cogen & Stand-alone systems) </li></ul></ul></ul><ul><ul><ul><ul><li>Cement Plants </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sugar Cogen Plants </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Textiles </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Chemical </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Industrial Parks </li></ul></ul></ul></ul><ul><ul><ul><ul><li>IT Parks </li></ul></ul></ul></ul>
  9. 9. DE Opportunities <ul><li>Business Opportunities </li></ul><ul><ul><li>Rural Electrification </li></ul></ul><ul><ul><ul><li>60% (600 million) of India’s population is Rural </li></ul></ul></ul><ul><ul><ul><ul><li>They reside in about 630,000 villages & towns </li></ul></ul></ul></ul><ul><ul><ul><li>44% (250 Million) of the Rural population have no access to electricity </li></ul></ul></ul><ul><ul><ul><ul><li>Target to electrify all villages </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Provide electricity to every household by 2012 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Remote villages will have DE, 18,000 villages to be electrified </li></ul></ul></ul></ul><ul><ul><li>Rural Business Hubs </li></ul></ul><ul><ul><ul><li>Increasing economic activity around a cluster of villages </li></ul></ul></ul><ul><ul><ul><li>Electricity generation using local resources </li></ul></ul></ul><ul><ul><ul><ul><li>Target to achieve 10000 MW in next 8 years </li></ul></ul></ul></ul>
  10. 10. DE Obstacles <ul><li>Energy Planner’s Mindset – “Bigger, the Better” </li></ul><ul><ul><li>“ Small & Medium sized plants are sub-optimal ” </li></ul></ul><ul><ul><li>Power should be generated at source </li></ul></ul><ul><ul><ul><li>Pit-heads </li></ul></ul></ul><ul><ul><ul><li>RLNG terminals </li></ul></ul></ul><ul><ul><ul><li>and distributed to consumers </li></ul></ul></ul><ul><li>Regulatory </li></ul><ul><ul><li>Though Electricity Act 2003 allows sale of excess power to 3 rd party </li></ul></ul><ul><ul><ul><li>It requires distribution license </li></ul></ul></ul><ul><ul><ul><li>State Regulators do not permit 3 rd party sale </li></ul></ul></ul><ul><ul><ul><ul><li>Supreme Court of India recently ruled in favour of a State Regulator </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Government has amended the Act so as to allow third party sale without a licence </li></ul></ul></ul></ul>
  11. 11. DE Obstacles <ul><li>Financial Restraints </li></ul><ul><ul><li>Imposition of unrealistic taxes & duties on DE generation </li></ul></ul><ul><ul><ul><li>10 – 37% of generation cost even if for own consumption </li></ul></ul></ul><ul><ul><ul><li>Cross subsidy charges on sale to third party as high as 50% of power price (as much as US 5 ¢/kWH) </li></ul></ul></ul><ul><ul><li>Higher duties on capital equipment </li></ul></ul><ul><ul><ul><li>DE plants are imposed 22% more duties than Mega Power Plants </li></ul></ul></ul><ul><ul><li>Sales Tax (VAT) on inputs like fuel, lubricants </li></ul></ul><ul><ul><ul><li>Not applicable on Utility Large & Mega Power Plants </li></ul></ul></ul><ul><li>Fuel Constraints </li></ul><ul><ul><li>Non-availability of fuels </li></ul></ul><ul><ul><ul><li>Natural Gas </li></ul></ul></ul><ul><ul><ul><li>Coal </li></ul></ul></ul><ul><ul><li>Poor Distribution system </li></ul></ul><ul><ul><ul><li>Absence of a National Gas Grid </li></ul></ul></ul><ul><ul><ul><li>High cost of coal transportation </li></ul></ul></ul>
  12. 12. Way Forward for DE in India <ul><li>What needs to be done </li></ul><ul><ul><li>Need to influence policy makers about advantages of DE for India in its generation mix </li></ul></ul><ul><ul><ul><li>Study India’s long term generation & distribution needs </li></ul></ul></ul><ul><ul><ul><li>Design the generation mix based on Central & Distributed Generation </li></ul></ul></ul><ul><ul><ul><li>Lobby through International agencies </li></ul></ul></ul><ul><ul><li>Create ‘Buy-in’ for DE at </li></ul></ul><ul><ul><ul><li>Central level </li></ul></ul></ul><ul><ul><ul><li>State level </li></ul></ul></ul><ul><ul><ul><li>Through seminars, conferences & references for DE </li></ul></ul></ul>India urgently needs to look at DE proactively as one of the options for meeting its burgeoning energy needs. Now is the time, or it will be too late
  13. 13. Indian DE Market Developments <ul><li>On-site Industrial Power Plants (Captive Power Plants) </li></ul><ul><ul><li>Encouragement from the government to sale extra capacity </li></ul></ul><ul><ul><ul><li>Grid / Transcos / Power Traders </li></ul></ul></ul><ul><ul><ul><li>Direct Users </li></ul></ul></ul><ul><ul><li>Capacity augmentation to National Generation capacity </li></ul></ul><ul><li>Distributed Generation in Rural markets </li></ul><ul><ul><li>Use of local resources </li></ul></ul><ul><ul><li>Hybrid systems of Solar / Biomass / Wind / Micro Hydro systems </li></ul></ul><ul><ul><li>Owned & operated by the village people </li></ul></ul><ul><ul><li>Quick to implement & start </li></ul></ul><ul><ul><li>No need of complicated and expensive distribution network </li></ul></ul>
  14. 14. About Thermax <ul><li>Thermax Limited </li></ul><ul><ul><li>A major Energy & Environment Indian engineering company </li></ul></ul><ul><ul><li>Turnover of Rs 23.62* Billion (US$ 583 Million) </li></ul></ul><ul><ul><li>Addresses all the Utility requirements of the Industry </li></ul></ul><ul><ul><li>Three Manufacturing locations in India </li></ul></ul><ul><ul><li>One Manufacturing location in China </li></ul></ul>*As of 31 st March 2007
  15. 15. Our Vision To be a globally respected high performance organisation offering sustainable solutions in energy & environment
  16. 16. Our Businesses Boilers & Heaters Vapour Absorption Chillers Speciality Chemicals Turnkey Power Plants Air Pollution Control Waste & Waste Water Solutions
  17. 17. Our Business Purpose Conversing Energy Preserving the Environment
  18. 18. Our Location Works : Chinchwad, Pune, 160 kms south of Mumbai (Bombay) H.O. : Thermax House, 4, Mumbai-Pune Road, Shivajinagar, Pune
  19. 19. Overseas Locations Thermax Inc. Detroit, USA Thermax doBrazil Sau Paulo, Brazil Thermax Europe Ltd. Luton, UK Thermax Sanghai Hong Kong Thermax Ltd. Nairobi, Kenya Thermax Ltd. Jebel Ali, UAE Thermax Ltd. Kuala Lumpur, Malaysia Thermax Ltd. Moscow, Russia
  20. 20. Thermax Group Thermax Corporation Thermax Limited Wholly Owned Subsidiaries Boiler & Heater Products Water & Waster Water Solutions Enviro Absorption Cooling Chemical Business Thermax Inc. , USA Thermax doBrazil, Brazil Boiler & Heater Projects Power Generation Business Thermax Europe Limited, UK Thermax Hong Kong Limited, Hong Kong Thermax Engineering Construction Company Thermax Instrumentation Limited Thermax (Zhejiang) Cooling & Heating Engineering Co. Limited, China
  21. 21. Thermax & Indian Power Sector <ul><li>Offers unique solutions for Distributed Generation </li></ul><ul><ul><li>Biomass based power generation </li></ul></ul><ul><ul><li>Waste Heat based power generation </li></ul></ul><ul><ul><li>Combined cycle plants </li></ul></ul><ul><li>Has a dedicated turnkey power plant design, manufacturing and commissioning business </li></ul><ul><ul><li>Have commissioned up to now 277 MW plants </li></ul></ul><ul><ul><li>Further 300 MW capacity under execution </li></ul></ul>
  22. 22. Děkuji Thank You For further information & clarifications, contact: Pinaki Bhadury, Head – Business Analysis, Research & Strategy Thermax Limited D-13, MIDC, R D Aga Road, Chinchwad Pune 411019 INDIA Phone : +91 20 27475941, 66122802 (Direct) Fax : +91 20 27470648 email : [email_address]

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