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Falling capacity utilization forces India’s coal fuelled projects to rethink strategy

LiveMint logoLiveMint 08-08-2017 Utpal Bhaskar

New Delhi: Given the technical limitations of operating below the threshold level, India’s coal fuelled power projects that are facing low capacity utilization due to muted demand are trying to prevent damage to the equipment while running them.

With these plants not designed to operate below the plant load factor (PLF) of 55%, they are now evaluating radical measures such as being retrofitted, which may require an investment of around Rs1 crore per mega watt (MW).

With India’s plan of adding 175 gigawatts (GW) of clean energy by 2022 as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in December 2015, the PLF of these stations will further get impacted.

PLF is a measure of the output of a power plant, with a higher PLF indicating more output at a lower cost of electricity generation. Of India’s installed capacity of 329,231MW, 59% or 194,553MW is fuelled by coal as it is the mainstay of the country’s electricity mix.

Such a plan assumes importance as the PLF of India’s thermal projects has been consistently falling. It decreased from 78.9 % in 2007-08 to 62% in 2015-16.

“It’s an exciting transition happening in the power industry... Now with increased renewable to the grid, it will be very interesting to see how we are able to manage the grid balance going forward. Especially with the climate accord it’s interesting to see how we maintain the efficiency of the power plants, upgrade the existing power plants and make them flexible to operate with the renewable regime,” said Prashant Jain, head, power generation services at Siemens Ltd.

India, the world’s third largest energy consumer after the US and China, has announced its intent to stay the course even as the US has announced its withdrawal from the Paris climate deal.

“The power plants usually are designed for base load. And when you design a base load power plant the moment you start operating it in a flexible regime it has an impact on its performance immediately. So if you start and stop your turbine more often, then it’s going to have a direct impact on its life,” said Jain.

According to the Central Electricity Authority (CEA), India’s apex power sector planning body, the PLF for 2012-13, 2013-14, 2014-15 and 2015-16 was 69.93% ,65.55%, 64.46% and 62.28%, respectively.

“I believe that it is (falling PLFs impacting plant’s health) is a serious problem. A lot of power plant owners are considering either to upgrade, modernize or go to the government because it needs policy support,” Jain said.

Analysts expect the PLF to fall further.

“Ind-Ra expects domestic coal consumption growth in India to remain tepid on account of an expectation of a 2% fall in the FY18 plant load factor (PLF) of coal-based plants,” India Ratings and Research wrote in a 13 July report.

Aware of the impending crisis, the draft National Electricity Plan prepared by the CEA has recommended, “Retrofitting of the existing thermal plants for increased ramping capacity and backing down capacity must be explored in view of integration of RES (renewable energy sources).”

This comes at a time when the National Democratic Alliance (NDA) government is trying to generate fresh demand for electricity in the country—the lack of which is weighing down the entire power sector—by improving energy access.

“To accommodate high quantum of RES into the grid, thermal plants are likely to run at low PLF in future. Many plants may get partial/nil schedule of generation. The market mechanism through regulatory intervention needs to be evolved so that the owners of thermal plants are able to recoup the investment and, at the same time, customers are not unnecessarily burdened with high tariff,” the draft National Electricity Plan added

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