Large fuel imports a threat to Indian Energy Security

A country must be able to reliably meet the energy demands of all sectors for different needs with safe, convenient and competitive energy in a sustainable manner to have an energy secure future. Nearly 85% of the primary energy comes from non-renewable and fossil fuels which are continuously diminishing.

Adversity on the Energy front:

The Indian economy has been facing great adversity on the energy front. India’s dependence on imported fossil fuels reached to 38% in 2012, despite of the fact that we have sizeable domestic fossil fuel resources. We were ranked as the fourth largest energy consumer in the world in 2011, following China, the United States and Russia. Our country imports more than 75% of the oil demand. The import bill for crude has been rising steadily and was 160 billion $ in the year 2012-13. Even with a significant coal deposits, we are importing nearly 25% of our total coal usage. The import is mainly from Australia, Indonesia and South Africa. The increasing coal shortage is because of a lack of competition among producers, insufficient investments, and other problems in its mining industry.

Country’s major share of electricity generation is from coal based power plants. Currently coal fired thermal power plants (TPP) contribute over 60% of India’s installed capacity and 66% of the electricity generation. In the last decade, coal based power plant generation capacity was doubled and substantial capacity addition is in the pipeline. Coal shortages are a major contributor to shortfalls in electricity generation and the consequent blackouts in the country.

Future of Coal based Power Plants:

Although, the Coal fired power plants are discouraged due to increasing pressure to reduce carbon emission, import dependence and increasing fuel price, reducing price of Renewable Energy etc., it is expected that the installed capacity of these plants will be about 270 GW by 2032. India’s existing coal fired thermal power plants are currently based on sub-critical technology which is inefficient. Super-critical boiler technology is being adopted at a significant scale in the 12^th FYP program. A properly integrated and automated coal management system is also required to ensure uninterrupted power generation and unnecessary piling up of inventory.

However, the development and deployment of these efficient technologies is sluggish due to Indian coal having ash content and low calorific value (CV). Government of India (GoI) plans to stop sub-critical power plants addition after 2017. It is expected that ultra-super-critical technology will be commercialized after 2017 and IGCC based power plants after 2017. Some speculations say that ultra-supercritical technology will be commercialized only by 2022, anyway time will tell what is the future of coal based power plants.

Outcome of large dependence on Imported Fuels:

The large dependence on fuel imports and the inability to reverse this trend has impacted the development of Indian economy. The unpleasant effects include depleting foreign exchange reserves, price jolts because of volatility of global energy markets etc. With a large share of imported energy sources, domestic prices of not only energy, but the entire value chain get affected by the volatile international prices. We are also acknowledged for subsidizing energy sources. Therefore, the term “energy security” has a large sense for the country including economic stability and ensuring the well being of the people.

                                        

Ways to achieve Sustainable Energy development:

The country should consider all forms of available and emerging energy sources and technologies to achieve Sustainable Energy Development. A greater investment in R & D in alternate and renewable energy sources can make their price competitive with that of conventional energy. We should focus on Energy Efficiency and lower energy intensive routes for the development. 

The cost of protecting the environment and un-doing the environmental damage caused by the energy supply and use should also be included in the energy cost. Elimination of subsidies and other special treatments, to certain segments of the society and consumer, are necessary. Manufacturers should be encouraged to accelerate R & D efforts for bringing out more energy efficient equipments. Minimum efficiency standards for all equipments must be fixed. The government should provide incentives and enhance other market development strategies, for promoting energy efficiency. However these approaches require large upfront funding and a robust policy framework to ensure adequate success over long periods of time.

Demand Side Management (DSM) is also a very successful tool to reduce the overall energy demand. Although we are lagging far behind in a DSM and I personally feel that we must have a strong framework in implementing DSM. Efficient public transport system, electric vehicles and fuel substitution will also play a crucial role. Therefore, India’s energy strategy would necessarily comprise of action on both demand and supply sides with due consideration to policy, finance and technology.

Ultra Mega Power Projects: For the desired GDP growth in India

Last updated: January 20, 2017

Formidable Challenges in Indian Power Sector:

India has achieved significant generation capacity addition in the last 50 years. Despite of this it continues to face formidable challenges in bridging the gap between demand and supply. It needs to add another 170 GW of installed generation capacity in the next decade to get the desired 9% growth in GDP and this can be achieved only through large capacity power projects. 

Ultra Mega Power Project:

In view of this, the Government of India has come up with the concept of Ultra Mega Power Project (UMPP). These coal powered, super-critical technology based power projects, each with a capacity of 4 GW or more and each unit of 660 MW or 800 MW is a series of ambitious power projects planned by the Indian Government. So far 16 UMPPs have been envisaged in various states including Gujarat, Andhra Pradesh, Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa and Tamil Nadu. Estimated investment in each UMPP is approximately Rs 20,000 to 30,000 crores.

Super-critical Thermal power plants:

The term “super-critical” is used for power plants operating at pressure above critical pressure; i.e. plants operating above 225.56 kg/cm² and 374.15 ^oC are called super-critical thermal power plants. Central Electricity Authority (CEA) has evaluated super-critical technology from the technical and economical point of view and has recommended the same for Indian thermal power plants. Super-critical thermal generating units of 660 MW (steam pressure of 247 kg/cm² and temperature of 535/563 ^oC) and 800 MW (temperature of 565/593 ^oC) is proposed for all future thermal power plants.

Super-critical Technology:

Power plants based on super-critical technology has the advantage of lower CO₂, NO_X, and SO_X emission per kWh of electricity produced in comparison to sub-critical power plants. As per the Government decision, in the 13^th FYP only super-critical technology based thermal power plants would be set up in India.

The average tariff for these projects is in the range of  Rs 2-3 per unit which is much lower than the recent tariffs. The projects are awarded to developers on tariff-based International Competitive Bidding (ICB) on a Build-Own-Operate (BOO) basis. CEA is the technical partner and Power Finance Corporation (PFC) is the nodal agency for getting the basic infrastructure like land, water supply, environment clearances, etc. In order to enhance investors’ confidence, and reduce risk perception, PFC incorporates Special Purpose Vehicles (SPVs) for each UMPP to undertake the bidding process on behalf of the beneficiary states. Apart from bid process, the purpose of the SPVs is to obtain various clearances for the projects.

Significant UMPP:

The first UMPP, developed by Tata Power at Mundra, Gujarat has been commissioned and contributes 4,000 MW (8 x 800 MW) of power to the Western grid. Sasan UMPP, a 3,960 MW (6 x 660 MW) pit-head power plant is located in Madhya Pradesh. The project has been allocated three captive coal mine blocks; with an envisaged production of 25 million tonnes of coal per annum. When completed, this UMPP become the largest integrated coal-cum-power plant in the country involving almost 10,000 acres of land of which almost 7,000 acres would be coal mines.

The project was awarded to Reliance Power through ICB process in August 2007. The estimated project cost is over Rs. 27,000 crores (US$ 4.2 billion). Sasan is the first ever integrated-power cum coal mine project with current operational capacity of 2640 MW. First unit of 660 MW was commissioned in March 2013, second unit in January 2014, third unit in April 2014 and fourth unit in May 2014. 5th Unit is synchronized with grid and commissioning to be declared shortly. 6th and last unit is in advanced stage of commissioning and expected to be commissioned in the next couple of months. 

Power generated from the plant would be sold in Madhya Pradesh, Punjab, Uttar Pradesh, Delhi, Haryana, Rajasthan and Uttarakhand states of India at a levelized tariff of 1.196 INR/ kWh. The low tariff of the project is primarily because of the low cost of generation due to its pit head location and captive mines. Because of the advanced 'super-critical' boiler technology, the operating efficiency is higher and emissions are reduced, thereby making it a less polluting thermal power plant.


The Tilaiya UMPP also by Reliance Power, is another integrated pit

pit-head power plant with an aggregate capacity of 4 GW located at  
Jharkhand.

As on March 2014, India had 13.9 GW of installed generation capacity based on super-critical technology; of which Adani Power has commissioned the maximum of 6.6 GW (10 units of 660 MW) with plant location at Mundra, Tiroda (Maharashtra) and Kawai (Rajasthan) . The 3 x 660 MW Sipat-I is the only UMPP in the public sector owned by NTPC, the rest have been commissioned by private sector.

Ref:

www.pfcindia.com

wikipedia.org/wiki/Ultra_Mega_Power_Projects

www.reliancepower.co.in

electricalmonitor news bureau