Best Viable Strategy for NTPC to sustain this VUCA world

1. Sustaining Performance in VUCA World -
NTPC Context
Shiva Prashanth Kasina
Ansha Naji

2. Contents
Climate Change
Global Energy Transition
Indian Scenario
Challenges in the Context of VUCA
NTPC- Challenges Ahead
Cycling vs Low load Operations
Opportunities ahead: Balancing power & Forward Integration
Conclusion

3. Climate Change
Lifecycle Greenhouse gas emissions
The world is getting warmer
Since 1900, sea levels have risen by on average about
19cm globally
Limiting the damage
• According to a UN report, submissions in their current form point to
a rise of 2.7°C above pre-industrial levels by 2100.
• Scientists have determined that if temperature rises surpass 2°C, this
will lead to substantial and dangerous climate impacts, which will hit
the world's poor in particular.
Average warming (°C) projected by 2100
• 4.5 deg- If countries do not act
• 3.6 deg -Following current policies
• 2.7 deg - As per recently submitted national climate plans on
curbing emissions
• 1 trillion tons of carbon that the world can emit while still having a likely chance of limiting global temperature
rise to 2°C above pre-industrial levels. Of this 515 billion tons had already been emitted by 2011.
• In order to remain within 2°C limit fossil-fuel power generation would have to be phased out almost entirely by
2100
5th
Intergovernmental
Panel on Climate
Change (IPCC)

4. 4
America
Renewable energy in the
United States accounted for
14.94 percent of the
domestically produced
electricity in 2016
Germany
• Leading the world
energy transition
• 48% of its energy mix is
from renewables
Planning to add 100
GW of Solar and
100GW of wind energy
by 2020
China
Brazil
Global Energy Transition
China
Australia
Achieved 20%
Renewable
penetration and
planning to reach 33%
by 2020

5. Indian Scenario
264
45.91
8.5
153.45 153.45
300
250
200
150
100
50
0
Non RE
Capacity
RE Capacity Solar PV
Capacity
Peak Demand Peak Demand
met
Total Installed Capacity : 310 GW
15% of total
installed capacity
2.74%
334*
175
100
235 235
400
350
300
250
200
150
100
50
0
Non RE
Capacity
RE Capacity Solar PV
Capacity
Peak Demand PeakDemand
met
Total Expected Installed Capacity :509 GW
2016 - 17 2021 - 22
20% of total
installed capacity
SOLARENERGY
100 GW
WIND ENERGY
60 GW
BIOMASSENERGY
10 GW
SMALL HYDROPOWER
5 GW
175 GW RE addition by 2022

6. 6
Ruler
Move
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NTPC Context - Challenges Ahead
• new environmental norms for power plants require these
utilities to retrofit machinery which adds up to huge
capital cost
• competitive tariff based bidding structure in Indian Power
Sector requires the utilities to bring down their costs
heavily in order to stay competitive
Changing Environment Policies
• technical minimum for running thermal based power
plants has been brought down from 70% to 55% load
• Maintenance costs for thermal plants can be quite
high, especially in the case of units that are old
Falling load schedules & Revenues
• transmission network infrastructure has not yet
reached many parts across the country, thanks to
the debt ridden ailing DISCOMs
Stagnant Power Demand
• An earlier target of installing 20,000 megawatts
(MW) of solar energy capacity by 2022 was raised
fivefold to 100,000MW
• target of generating 60,000MW in wind power
capacity
Govt’s push towards renewables
Falling Renewable energy prices
• Solar power tariffs have dropped to a
record low of Rs. 2.62 per unit in the
auction conducted for Bhadla Solar
Park.
• The price is even lower than NTPC’s
average coal-based power tariff
of Rs. 3.20 per unit.

7. Are we ready for cycling?
• Peak Hour Ramp rate 247 MW/Min
• Ramping down rate with sunrise 368 MW/min
• Duck belly demand to peak belly demand ratio is 61%
which will result in partial loading & frequent start stops
0
50
100
Load Follow
down to 180 MW
Cold Start Warm Start Hot Start
8.9
53.2 57.4
85.4
Typical Cycling Cost for a 500 MW Coal fired
Power Plant(USA) , Source: INTERTEK
Expected Cycling Cost (1000$)
Cycling
1X
7X
8.7X
13X

8. Detrimental effects of cycling operation
• Thermal stresses - Fatigue failures- High Maint. Cost
• Reduced efficiency and High APC
• Addition of a metal overlay to boiler water walls
• Replacement metal expansion joints with fabric joints
• Replacement of dissimilar metal welds
• Strategic replacement of corner tubes
• Better insulation of generator rotor
• Modification of vacuum pumps
• Variable Frequency Drive for Aux equipments
• Installation of pulverised coal hopper between the mill and
burner
• Sliding pressure operation
• Feed water heater bypass to save on extraction steam
• Thermal storage systems
• Predictive control systems

9. Low load Operation – Plasma Ignition Technology
Plasma Ignition Technology ReferencesResults of Cost-Benefit Analysis
Cost Head
Plasma Ignition
Technology
Total Savings in capital cost for a new
power plant
Rs. 15 Cr
Total savings on fuel cost during
commissioning
Rs. 28.01 Cr
Total savings on fuel cost per year for
a commercial unit
Rs. 1.61 Cr/yr
Savings on DM water and Heat Rate Rs 1.77 Cr/yr
In China
Total Installation 644 Units
Total Installed Capacity 273 GW
1,000 - 1,036 MW 29 Units
600 - 680 MW 244 Units
300 - 360 MW 246 Units
50 - 250 MW 125 Units
• Allows stable operation of unit at 10% load
• Ready to go alternative solution
• Eliminates need of supplementary fuel
• Potential solution to stringent environment norms

10. Tiny Oil Ignition Technology
Tiny Oil Ignition Technology References
Results of Cost-Benefit Analysis
Cost Head
Tiny Oil Ignition
Technology
Total Savings in capital cost for a new power
plant
Rs. 5 Cr
Total savings on fuel cost during
commissioning
Rs. 25.21 Cr
Total savings on fuel cost per year for a
commercial unit
Rs. 1.45 Cr/yr
Savings on DM water and Heat Rate Rs. 1.77 Cr/yr
Rise in profits in an year Rs. 2.41 Cr/yr
• Fuel savings can be as high as 95%.
• Low investment cost
• Minimal maintenance
• Utility boilers can achieve cold, hot start-up and
ultra-low load stable combustion (30%)
• The alteration is easy and does not affect the
normal operation of the original equipment
• Taizhou Power Plant, China
• Adani Mundra Power Plant

11. Opportunities- Balancing Power
• India’s ambitious renewable energy programme
poses a unique grid management challenge.
• Evening peak exactly matches with the time solar
generation goes out
• Country requires 100GW ramp up during evening
peak
• CEA expects thermal units to provide this critical grid
balancing facility as Indian energy mixture lacks
other fast acting sources like natural gas or hydel
power
• India also lacks investment on other grid balancing
facilities like pumped storage units.
• This fast ramp down and ramp up causes several
stability issues to thermal power plants

12. Balancing Power Market
• This unique ability to provide balancing
power to grid can be capitalized monetarily.
• Part of the losses incurred due to
renewable penetration can be offset by
revenue for providing balancing power
• Other countries have established balancing
power market where utilities can capitalize
on balancing power.
• NTPC may work on establishing a
balancing power market with other
stakeholders and regulatory agencies.

13. Forward Integration- Distribution
Power Value Chain
DISCOMs are the weakest link in providing 24X7
Power for All
Accumulated Losses
in last 6 years -Rs.
3.66 lakh crore
• DISCOM debt interest rate – Average ~ 12%, as high as 14-
15% for many DISCOMs while States borrow at ~ 8%
• Regulators don’t allow pass through of intereston past losses intariff
• Surgical intervention required to rationalize outstanding debt
• Multiple financial restructuring programs earlier have failed to turn
around Discoms
• Recent UDAY scheme though have reduced debt burden,
improvement in ACS-ARR gap is marginal
• This has lead to surplus electricity in generation side even though
20% Indians still don’t have access to electricity
DISCOMs
in a debt
trap

14. True Characteristic Of Electricity- Market Design
• With penetration of cheap renewable power, Electricity is worth different at different times of day.
• The electricity market needs to adapt to this new reality; it needs to fully integrate all market players – including flexible
demand, energy service providers and renewables.
• Current electricity market in India works in a monolithic structure. Discoms price energy with a flat rate tariff even though cost
of purchase is significantly different at different times.
• Time of the day metering where cost of generation is passed on to the customer in real time is the sustainable solution.
• Each customer adjusting their usage pattern with cost of generation will revolutionise energy sector which will bring down
reserve capacity for handling peak load
Indian Power Tariff Variation presently across the day
German Power Tariff across the day (40% renewable integration)

15. Foray to Distribution Business
• NTPC has limited presence in other aspects of
energy value chain
• In India, further growth in power sector depends on
growth in distribution side.
• NTPC Dependence on few financially stressed
discoms as only customers poses huge business risk.
• Similar size energy companies outside India has their
presence across the value chain. Eg- Duke Power
(USA)
DUKE Energy Value Chain

16. Distribution - Distribution Network Operator
• Presently handled by state government owned discoms in all states
• Operation & Maintenance of distribution network spread across vast geographic area need
specialized experience which NTPC lacks
• NTPC may consider takeover of small distribution circles like districts, industrial estates for entry
into distribution business
• Joint Ventures with discoms may be tried for gaining experience in this key part of Energy Value
Chain

17. Distribution Business – Supply Licensee
• Various amendments proposed to Electricity act , 2003 by Ministry of power mandates option of distribution
licensees to only operate and maintain the distribution system (wire business) with no concern for commercial
supply of electricity.
• Unique opportunity for NTPC to foray into distribution sector as supply licensee
• Strategic agreements may be reached with distribution network operators
• Introduction of smart energy meters for all connections with Time Of Day metering
• Customers will get opportunity to reduce energy expense by adjusting their usage pattern with varying cost of
electricity.
• Price per block can be determined by complex software analytic taking into consideration factors like cycling
losses, maintenance cost, cost of fuel, etc so as to generate overall profit for the company
• Government has a plan for 40 GW rooftop solar by 2022. NTPC may use the customer network to finance rooftop
solar installations & create a cheap and effective distributed renewable capacity
• NTPC EV charging points may be integrated with distribution network enabling customer to use the same account
for charging their car and home electricity.

18. Key Advantages – Entry to distribution business
• Presence across the energy value chain provides operational flexibility
• More Control Over business
• Own Customer base with better cash flow – Disassociating with state owned discoms
stressed finances
• Possibility of avoiding two shift operation of existing units because of own customer base.
Savings in maintenance cost may be passed on to customers encouraging them to use
electricity during day time
• Redefining ‘customer’ from discoms to end user will improve the brand image of NTPC
• Possibility Of creating a distributed rooftop solar capacity
• Integration with EV charging creating value for both the business.

19. Future Of Electricity

20. Thank You