capacity addition planning in the power sector- india

8/8/2019 Capacity Addition Planning in the Power Sector- India

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Capacity Addition Planningin the Power Sector

Shantanu Dixitwww.prayaspune.org

[email protected]


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Prayas2

Interaction plan

Capacity addition plans e.g Konkan region

Climate friendly, economic options for meetingenergy services needs

Indias current capacity addition plans

Key shortcomings and implications for climate


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~7,600 MW of new

generation planned in

Shahapur Taluka, Dist.

Raigadh

~6,600 MW of new

generation planned

in Ratnagiri district

~19,000 MW of new

generation planned in

the Konkan strip ofMaharashtra

~4000 MW of

existing generation

in Konkan

Raigadh : 9,558 km

Ratnagiri : 8,208 km

Sindhudurg : 5207 km


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Prayas4

Interaction plan


Climate friendly, economic options formeeting energy services needs




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Prayas5

Integrated Resource Planning: Case

studies from India

DEFENDUS (Karnataka 1990)

Development Focused End Use oriented ScenarioAmulya Kumar N. Reddy et.al.

Least Cost Plan (Maharashtra 1994)

P

rayas Energy Group


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Prayas6

Typical Energy Saving Potential(based on Karnataka IRP by Reddy et. Al.)

End use efficiency savings

Industry modernisationefficient drives etc: 15-25%

CFL for lighting : 14-58%

Solar Water heaters: 28%

LPG instead of electric stoves: 18%

Frictionless foot-valves and HDP

E piping foragirculture pumps: 30%


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Prayas7

Conclusions of Integrated Plan for

Maharashtra (Prayas 1993)

0

5,000

10,000

15,000

20,000

0% 20% 40% 60% 80% 100%PLFn (at Bus-bar)

R

s/KW(

Bus-bar)/Yr

Ind.Co-gen

Gasifier

Small hydro

SugerCo-gen

CFL

Loadshift

CL-light

T&D impro.

SWH

IPS

Refri.

HT/LT industry


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Prayas8

Typical Benefits of IRP

Typically: efficiency can meet 25-40% andrenewable generation can meet 20-25% ofincremental needs at lower economic costs.

Maharashtra IRP while meeting same level ofenergy services

Financial saving - ~ 33% Reduction in incremental fossil fuel consumption - ~

55%


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Prayas9

Interaction plan


C

limate friendly, economic options for meetingenergy services needs




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Prayas10

Capacity Addition: 11th Plan targets

Projection to add ~ 600 GW in next 25 years

11

th P

lan (2007-12) - 68869 MW 48010 Coal & Lignite, 15585 Hydro, 3160 Nuclear, 2114Gas

53% Central, 33% State, 14 Private

+ 13,500 MW Renewable, Captive

Transmission & Distribution to carry this power


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Prayas11

Drivers

Growing economy GDP growth from ~ 5 - 6% to 8 - 9%

Continuing shortages Peak shortage - ~ 12% and energy shortage ~ 8%

Only 40-50% of targets met in 8,9,10th plans

Need for greater reliability

Target of 5% spinning reserves Need to electrify all houses

44% houses do not have electricity

About 12000 MW of capacity addition


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Prayas12

Approach towards meeting energy

needs

We do not enjoy the luxury of an either-or choice: Indianeeds energy from all known and likely sources. PrimeMinister of India (Speech at Tarapur Automic Station 31st August 2007, -http://www.rediff.com/news/2007/aug/31guest.htm)

Ambitious projections for 10 years 100,000 MW Thermal

50,000 MW Hydro

11,000 MW Nuclear

Expanding fuel supply and sources


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Prayas13

Policy changes to meet capacity

addition needs

De-licensing of generation projects

Merchant plants Captive power plants

Ultra mega power plants

Encourage capacity addition through all means


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Prayas14

Ultra Mega Power Projects

4000 MW super critical coal thermal plants (5 7plants expected)

Federal government lead Fiscal incentives, conducting competitive bidding, helped

evolve power purchase agreement and payment securitymechanism

Encouraging results for first two projects

Half a dozen bids for each project Highly competitive tariff

US cents 2.7 / kWh for pithead project and US cents 5 / kWh forimported coal based project (levalised tariff)

Both projects won by private sector


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Prayas15

Ultra Mega Power Projects

Key Features of UMPPCompetitive Bidding Process Transparent process

Well laid out procedures and timetable Anonymous comparison of all bids to be made public

All contracts signed with winning bidder (including PPA) will bepublic

No uncertainty and little scope for post bid negotiations

All required inputs and clearances to be provided by specialpurpose vehicle (govt. owned shell company)

Project contract formats finalized before bidding

Simple criteria for selection of winner


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Prayas16

Interaction plan


Climate friendly, economic options for meetingenergy services needs


Key shortcomings and implications for

climate


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Prayas17

Capacity addition planning Oblivious

of key challenges

Significant over projection

Even though capacity addition is 40 50% less,shortages have reduced or increased very moderately

Cap dd Pea Shortage %5 year pla Projected ctual Projected ctual

0540 4 0 % %

40 50 0 5 % %

0 4 0 0 0 % 4%


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Prayas18

Capacity addition planning Oblivious

of key challenges

Economic implications

11th five yr. plan

Projected investment need US $ 255 Billion

Fixed cost of US cents 15 / unit of incrementalsales!

(v/s current total tariff of around US cents 8 / unit)


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Prayas19

Social and Environmental issues -1

Electricity Policy Environment

Appropriate advance action through EIA and Environment Action Program

Streamline procedures including setting up of Land Bank and Forest Bank Coal washeries, full compliance with environmental norms

Demand Side Management, Energy Conservation

Hydro Policy Proper implementation of National Policy on Rehabilitation and

Resettlement to ensure that the concerns of project-affected families

are addressed adequately. Adequate safeguards for environmental protection with suitable

mechanism for monitoring of implementation of Environmental ActionPlan and R&R Schemes


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Prayas20

Environment issues -2

Plans have little details on environment & social impacts Emphasis on speeding up clearance of environmental obstacles No analysis on: How much land required? How many people

displaced? Livelihood impact? No focus on enhancing the effectiveness through democratisation

(participatory R&R mention in Transmission Chapter of11th Plan)


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Prayas21

Salient observations

Over projection of demand and poorimplementation performance

Shortage psychosis and exaggerated capacityaddition plans

Integrated resource planning is avoided

Climate friendly options, even thougheconomical, are ignored


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Prayas22

Lesson

To address climate change issues, improvementin national level planning process is critical.


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The vicious circle


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Prayas24

Indias Capacity Addition Plans

Year PeakDemand

GW

Inst.Cap

GW

Remarks

2007 104 132 14% peak shortage; Coal (54%),Hydro(26),Gas (11), Nuclear(3), Renewable(6)

2012 158 220

2022 323 425

2032 592 778 ~Coal (50%),Hydro (29),Gas (6),Nuclear(12), Renewable (5)

Source: Integrated Energy Policy, 8% GDP Growth Scenario

capacity addition planning in the power sector- india

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