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Interaction | November 2014

R&M is a complex process

Abhijit Lohakarey, Senior Manager - Energy, Utilities & Mining, PwC India shares his view on the renovation and maintenance of power plants in India.

How important is Renovation & Maintenance (R&M) for power plants in India today and what are the advantages ?
R&M is very important for power plants in India as a number of units have exhausted their design life and their generation capacities have been derated. The advantages include faster increase in the generation capacity as compared to setting up of new power plants, life extension of units by 10 years or more, improved plant efficiency and consequent reduction in the fuel consumption, better compliance with safety and emission norms.

Why is maximising the power generation in existing plants an effective option than setting up new plants?
Maximising the power generation in existing plants is an effective option than setting up new plants for following reasons: R&M could be undertaken in a shorter time span as compared to setting up of new plants; per MW capital expenditure would be much lesser compared to per MW capital expenditure for setting up of new plants; R&M does not have to face typical issues faced by new plants such as land acquisition, fuel linkage, etc.

However, there is limitation in maximising the power generation from existing plants. It cannot really be compared with setting up of new plants. Hence, the overall approach needs to be a combination of R&M of existing plants as well as setting up of new plants.

Do Indian power companies, both in the public and private sector, follow a comprehensive integrated R&M?
Most of the Indian power companies in the public and private sector do not follow a comprehensive and integrated R&M because most of the times R&M is perceived as a complex process with uncertain results. Hence utilities are happy undertaking need-based piecemeal R&M work than an integrated R&M programme. Most utilities do not have dedicated cells, competent resources and adequate finances to fund and manage such R&M programmes.

What are the challenges in implementing effective R&M in the power sector?
Some of the challenges are implementation in piecemeal manner, poor project management, shortage of competent agencies who could undertake R&M works and lack of guaranteed results. Further utilities cannot afford long shutdown of units/stations.

What measures are required to be taken for the implementation of R&M in an integrated manner?
Following measures may need to be thought of by the government, power plants and other stakeholders for implementation of integrated R&M: increased participation of various agencies such as consultants, OEMs, R&M agencies, funding agencies before the units reach the end of their design life; setting up a dedicated R&M cell should be made mandatory (with required number of competent resources) at utilities & finalising the integrated R&M plan well in advance; funding by financial institutions at concessional interest rates, tax incentives, adopting PPP model for implementation and providing incentives for meeting R&M related performance guarantees and penalties for non-performance, etc.

- Janaki Krishnamoorthi

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