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Cover Story | September 2015

Critically Acclaimed

Energy efficiency is key to delivering India´s climate change goals. Higher efficiency maximises output from coal, saving fuel and reinforcing energy security. As industry and consumers become more sensitive to the cost of energy, supply-side energy efficiency will become commercially important, as well as an environmental imperative.

Given the fact that a significant quantity of coal will continue to dominate India´s energy generation, energy efficiency becomes vital. As per the thumb rule: higher efficiency in the generation of electricity means, lower consumption of coal per unit of electricity generated. Meanwhile, efficient utilisation of existing capacity, implies that additional capacity is not required, leading to savings in capital costs. What is more striking that the optimisation of procedures within a plant also means savings in operational costs and increased profits. Thus, energy efficiency in coal power plants holds the key to achieving the global objective of keeping CO2 emissions in check, till the use of coal is phased out, which is unlikely in India.

Glancing through a fact check prepared by the Centre for Science and Environment, India is positioned No. 3 on the world energy generation map.

But, when it comes to efficiency, the average efficiency of Indian fleets are a mere 32.8 per cent.

In a recent study conducted by CSE, 21 of the 47 plants have poor energy efficiency in a narrow 32-36 per cent range, with an average age of 15 years. Ironically, state-owned plants were the worst performers.

So, India´s stature can be very well adjudged as minnows, if compared against Japan (40.5 per cent) and Nordic countries (40.4 per cent). So where does the buck stop? Blissfully, this business of ´power´-electricity in absolute terms-doesn´t depend on secularism and pluralism, leaving no one to ´blame´.

But, elements such as outdated design of age-old power plants, contribute immensely to the fleet´s poor efficiency. This fact can be well supported by low quality coal, often worse than what the boilers are designed for, which reduces efficiency. Fortunately, sanity has prevailed in India. By talking to the stakeholders of the sector, POWER TODAY found out that the key lies with utilisation of supercritical technology, in order to unlock energy efficiency and make good on India´s promise towards climate change. How? Let´s hear it from the horse´s mouth.

Critical opportunities
We request all the readers not to go by the word ´critical´as it suggests a medical terminology for a patient. But, rather take it in a positive way. Presently in India, approx.

16 per cent of coal-based installed capacity is from supercritical technology, with more than 60 per cent of coal-based capacity from supercritical under construction. Further, it is expected that almost all coal-based capacity additions in the 13th plan, will be only from supercritical or ultra-supercritical technologies.

Meanwhile, a pioneer in bringing this technology to India, NTPC introduced supercritical technology for its coal-based units from 2004. As of now, 83 per cent of new coal capacity under construction (21,935 MW), is of supercritical technology, and 7 per cent is of ultra-supercritical technology. As on date, five supercritical units of 660 MW are already in operation.

Speaking exclusively with POWER TODAY, AK Jha, Director - Technical, NTPC has expressed their intention to have almost all future installations in the higher MW range (660 MW/800 MW and beyond) with supercritical and ultra supercritical technology.

NTPC´s plants which have adopted supercritical parameters, and are already in operation are of 660 MW and are located at Sipat-I (3x660 MW) & Barh-II (2x660 MW). Further, 19 units of 660 MW each and nine units of 800 MW each having supercritical parameters, are under various stages of construction.

Bids have already been invited for 10 more supercritical units, which include four units of 660 MW each at Barethi, two units of 800 MW at Telengana, and four units of 1,000 MW at Pudimaddaka. ´Further, it may be noted that the costs for these projects vary as they are tendered and awarded on stiff international competitive bidding,´says Jha. However, hard cost of the project is around Rs 4 crore/MW.

With the new government proposing good investment for the coming years in power, there will be renewed interest from equipment manufacturers to set up their manufacturing units in India, to supply these equipment at a competitive rate with minimum foreign components. While technology transfer to Indian companies will result in the ´capability building´of Indian manufacturers, required investment in these companies will fetch ´capacity building´.

The new policy for supercritical technology has led to new Foreign Direct Investment (FDI) in India. As of today, India has four boiler, turbine generator (BTG) manufacturers who have set up ´Make in India´ facilities for this advanced technology. Thus, supercritical is now a mature industry in India.

In fact, private players like Alstom, Toshiba-JSW, L&T-Mitsibishi, GE and PSUs like BHEL are scaling up their manufacturing ability to cater to the future requirements of supercritical projects in India. In case of BHEL, the government will contribute an initial investment of about Rs 100 crore for the R&D project. BHEL may later need to invest between Rs 10,000 crore and Rs 12,000 crore to set up new lines to manufacture the equipment.

Yoshiaki Inayama, Managing Director, Toshiba JSW Power Systems Pvt. Ltd, says, ´Toshiba JSW is receiving inquiries for applying supercritical and ultra-supercritical technologies having unit capacity of up to 1,000 MW and we are able to provide it.´ Whereas, Alstom too is not far behind in grabbing the major share as a leading player. According to Rathin Basu, Country President, Alstom India & South Asia, the ´Make In India´movement as well as remaining power projects in the 12th plan have certainly given impetus to localisation of supercritical turbines in India.

While sharing his concerns, Laurence Dewitt, Director - Technical, CLP India, says, ´The real challenge will be to design the boiler, which can handle high ash content in Indian coal.´He added, ´It´s quite possible that the plants, which will come up on the coastal lines in the future, might actually consider ultra-supercritical as an option, as it not only offers commercial advantage, but also minimises carbon emission to a large extent.´

Commercial viability

So, is the inclusion of supercritical technology commercially viable? It is being applied to unit sizes of 660 MW or higher in India, as supercritical power plants are economical attractive over smaller size units. And certainly, experiences in the US indicate that this technology is not economically viable below 600 MW (they started building 850-1,300 MW units). The Chinese have started building 660 MW units and most of our IPPs started procuring this size units economically and for reduced project execution period.

´To make it commercially attractive, I suggest that higher steam pressure and higher station heart rate temperatures with 800 MW and above should be selected,´suggests Sundara Kavidass, Managing Partner, SP Energy Tek.

Ergo, the initial capital cost of the project with the inclusion of supercritical could be Rs 5 cr/MW, as compared to subcritical, which is Rs 4.5 cr/MW. But, the cost of generation per kWh is nearly half to Rs 2-2.5 of a supercritical plant, as compared to Rs 4 of a typical subcritical power plant. (Refer: The design and operating difference between subcritical and supercritical) Meanwhile, speaking about commercial viability and energy efficiency, Tata Power Ltd, who has brought the first 800 MW sized supercritical unit to the country (Mundra UMPP), feels that this technology and choice of unit sizes helps the project reduce greenhouse gas emissions, compared to regular coal-fired power stations.

Supercritical technology has helped the Mundra UMPP achieve higher efficiency, which saves fuel and reduces greenhouse gas emissions. The greenhouse gas emissions per kilowatt hour of energy generated is about 750 grams of carbon dioxide per kWh, as compared to India´s national average of 1,259 g CO2/kWh for coal-based power plants. The world average is 919 g CO2/kWh, while the average for OECD countries is 888 g CO2/kWh (figures for 2005).

´As compared to any other subcritical power plant in India, this project avoids burning 1.7 million tonnes of coal per year, thus averting carbon emissions of 3.6 million tonnes per year,´explains Anil Sardana, CEO & MD, Tata Power Ltd.

Nonetheless, as a thumb rule, the cost of coal forms a significant cost component of the total per kWh (say above 75 per cent), hence any improvement in technology, which minimises coal consumption even to some extent, will make up for the additional capital cost of technology. Although IPPs agree that the initial cost is marginally on the higher side, investment per MW is lesser, and investment in supercritical technology eventually becomes more viable considering the gestation period of a thermal power plant is generally high.

It is also worth noting, that as far as capital cost of supercritical units is concerned, market forces ultimately dictate the procurement cost to the power equipment. Thus, with increased competition and higher indigenous equipment manufacturing capacities, the capital cost has come down despite the fact that supercritical plants require costlier material to meet higher cycle parameters.

Currently 600/660/700/800/1,000 MW capacity units are available, presenting sufficient variety. The lower capacity 350 to 500 MW with supercritical technology will replace older units in an incremental manner.

´It is better to have economies of scale. As size increases, fixed cost reduces,´Dewitt feels. Jha too exclaimed, ´High economies of scale and indigenisation of manufacturing process cost are showing significant downtrend with respect to overall cost.´

At the end, the benchmarked prices established in India by CERC based on data collected from private, central and state utilities applying subcritical and supercritical technology, observed that for establishing these units, the total project costs, is in the range of 8 per cent. The advantage of lower fuel costs, reduction in carbon dioxide emission and additional flexibility in operation are the benefits that an investor considers globally.

´The impact of reduction in carbon dioxide emission and reduction in fuel costs outweighs the marginal (additional) costs of application of supercritical or ultra-supercritical technology spread over the asset life (25-30 years) of the plant,´clears Dean Oskvig, President and CEO, Black & Veatch Energy.

The investor´s initial project investment is adequately compensated by reduction in operation cost for the asset life of plant, besides decreasing carbon dioxide emissions. But, readers should know that unit size does not have an impact on efficiency. There is no material difference in the thermal efficiencies of two plants of different sizes, if they are technologically similar. Installing multiple small-size units, however, means higher capital costs. Multiple small units may also need more auxiliary equipments and higher operational and maintenance costs. ´Hence, economics is the driving factor in the decision to install higher units, not efficiency,´says a senior official from the Ministry of Power (MoP).

Retrofitting-a viable option?
When posed with this question, stakeholders praised POWER TODAY and appreciated that we touched upon this factor.

The contribution of subcritical units towards industrial growth is commendable, but the advantages of supercritical and ultra-supercritical technology, besides heavily contributing to rapid industrial growth also brings flexibility in operation, besides reducing fuel cost and reducing emission level of carbon dioxide. As provided above, the marginal costs addition on application of supercritical, ultra-supercritical technologies vis-a-vis subcritical technology, is adequately compensated by reduction in operation costs and gaseous emission. From the data published by CERC in regard to benchmarked costs, the benefits of enhanced efficiency will not only benefit the owner but also the consumer and society in general.

India has fleet of aging coal fired power plants, having an operating period more than 20 years. The efficiency and plant load factor (PLF) has been deteriorating, which has affected stable power supply capacity and coal consumption. The utilities, have been making efforts for improvement of performance of these power plants by LEP (life extension programme) and R&M (renovation and modernisation) programmes in the 11th and 12th plans.

In fact, the providers of supercritical technology are demanding that the government´s R&M plans should include the replacement of power plants with supercritical and ultra-supercritical as an alternative way to provide efficient and stable electric power for industrial growth with the reduction of carbon dioxide emissions.

But Rathin Basu, from Alstom India feels that it is not easy to convert subcritical power plants into supercritical power plants. Today, India has about 120 GW of subcritical power plants installed in the country, out of a total of 170 GW coal based power plants. In fact, NTPC´s views are also in line with Alstom. According to NTPC, there are technological limitations for converting such older design subcritical power plants to supercritical power plants. Although there is a view that We may phase out small-sized, non-reheat type power units (which are inherently inefficient) in times to come. Being a power deficient country, India may still have to continue operating older design subcritical units.

Even CLP India is of the opinion that it will be difficult for the technology to be phased out overnight, since power plants have signed long term power purchase agreements (PPAs) and have an obligation to repay their lenders and investors. The low hanging fruits to start this transition would lie with the existing subcritical power plants that have no obligation left towards lenders, are operating beyond designed lifespan and have been fully depreciated value. ´I am not sure about the cost and how much of it can be borne by the owners. All I can say is that investors and lenders shouldn´t bleed in the bargain,´Dewitt expresses his concern.

That said, Kavidass thinks that it is possible to replace the subcritical units (say 210 MW x 3 units) into a single supercritical technology based plant. It is unlikely to utilise the existing BTG equipment and potential for retaining 20-30 per cent of the BOP equipment, if the units are relatively newer and in reasonably good condition. And while it may be possible to implement supercritical technology with Rs 4 cr/MW by utilising most of the existing infrastructure, at the end, the scope is very limited.

Stakeholder´s suggestions
1. The government should not issue environmental clearance to any power plants that are subcritical.
2. Develop phase out plan for old subcritical units.
3. Introduction of any policy measure, including tax concessions that can promote the technology.
4. Work with UNFCC to see that those who use supercritical technology receive financial benefits either through carbon credit or something equivalent to that.
5. For rapid application of ultra-supercritical technology, the development of materials, skills for construction and operation need to be focused on.
6. Emphasis on experience and performance, including manufacture in India. 7. Government has introduced PAT scheme (Perfrom, Act, Trade) which is in fact the trading of CER.

To conclude, with focus on the need for clean air, it is anticipated that more interest will be in modernising old plants, bringing in efficient technologies and focus on steam parameters. The government has also given much importance to supercritical technology. Last year´s budget has allocated Rs 100 crore for preparatory work for a new scheme on Ultra-Modern Super Critical Coal Based Thermal Power Technology. This year´s budget too proposed to set up 5 UMPPs of 4,000 MW under ´plug and play´ model with total investments of Rs 1 lakh crore to be allocated via auction process. So, at policy level there is thrust, however, there is anticipated risk in the model.

Fact file - India

  • Coal-based thermal power plants in India are the least efficient and therefore the most polluting in the world.
  • The average efficiency of Indian plants was 32.8 per cent, one of the lowest among the major power producing countries.
  • Inefficient resource use and technological backwardness leads to high levels of pollution.
  • Plants are operating at 60-70 per cent capacity only. If capacity utilisation is improved, sector can meet additional power requirements without building new plants.
  • According to a recent report ´Green Ratings´, coal-based thermal power plants score poorly on all parameters, getting a mere 23 per cent score compared to 80 per cent that a plant following all best practices can get; 40 per cent of the plants rated received less than 20 per cent score.
  • At present, most of the power plants are based on subcritical technology.
Find the difference: subcritical vs supercritical

While the global average efficiency level of subcritical coal-fired plant is currently 28-35 per cent, state-of-the-art supercritical coal-fired power plants can achieve an efficiency of more than 42 per cent. They also require less coal, which additionally reduces emissions and fuel costs. As such, supercritical has become the norm for new plants in many industrialised countries.

In India, where most power is generated from coal, government and power utilities are focusing more on supercritical technologies to reduce emissions and enhance overall efficiency, while providing clean, secure and economical power. In this technological improvement, carbon dioxide emission can be reduced to the extent of 20 per cent.

Conventional or subcritical power plants operate at a steam pressures in the range of 170 bar and 540¦C giving an efficiency of around 28 to 29 per cent, whereas supercritical and ultra-supercritical power plants operate at temperatures above the critical point up to 620¦C and pressure up to 300 bar, resulting in a much higher efficiency than conventional coal fired plants, giving efficiency of about 43 to 45 per cent.

Secondly, supercritical and ultra-supercritical power plants require less coal per MWh, leading to lower emissions (including carbon dioxide and mercury), higher efficiency and lower fuel costs per megawatt whereas conventional power plants use more coal per MWh with higher emissions.

At present 16 per cent of coal-based installed capacity in India is from supercritical and it will be 90 per cent by 2032, when India envisage to have approx 400 GW coal-based installed capacity. Further, out of 84 per cent subcritical coal based unit, most will retire by 2032 and share of supercritical unit will be around 80-90 per cent of the total coal-based capacity. Hence, looking at overall prospective of reduction in CO2 emission by 2032, says Jha, ´we can say implementation of supercritical technology has been a major image booster for our nation´s commitment towords preserving our environment and arresting climate change.´

Parameters Unit Subcritical Supercritical
Size Limitation MW < 650 400 - 1,300
Design Pressure MPa < 18 >22
Design Temprature Deg C 545 560 - 600
Plant cycle efficiency % 34-38 40 - 42
Station Heat Rate Kcal/kWh >2,300 <2,200
CO2 Emission Unit 1 0.95
Capital cost (Typical) Rs/MW 4.5 5.0
Cost of generation (Typical) Rs/kWh 2.75 - 4.0 2.0 - 2.5
Source: SP Energy Tek
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