The coal-based power generation sector has seen a capacity addition of more than 75 GW in the past five years. The plant load factor (PLF) has, however, shown a downward trend, having declined by more than 10 percentage points between 2011-12 and 2015-16. PLFs will remain subdued, especially given the expected increase in the share of renewable-based generation. Further, the government has revised the existing water consumption norms and emission standards, and introduced new emission standards in order to reduce the impact of coal-based power generation on the environment. Going forward, improving plant efficiency will continue to be vital for generating companies to remain profitable.
A look at the recent key developments for efficiency improvement in thermal power plants (TPPs)…
The PAT initiative
One of the most important policy efforts to enhance efficiency in the coal-based power generation segment has been the Bureau of Energy Efficiency’s (BEE) flagship Perform, Achieve and Trade (PAT) scheme that seeks to enhance the energy efficiency of energy-intensive industries through market-based mechanisms. In the first round of PAT, designated consumers (DCs) were selected from eight industrial sectors. The thermal power sector had the greatest number of DCs, with 132 consumers identified. When the first round came to a close in March 2015, energy savings of 3.06 million tonnes of oil equipment (mtoe) had been achieved by TPPs against a target of 3.21 mtoe.
Currently, the second round of PAT is under implementation. It now covers 22 additional DCs from the thermal power sector, taking the number of identified consumers in the sector to 154. The second round will be assessed in 2018-19.
Replacement of old and inefficient subcritical plants
In August 2015, the Ministry of Power (MoP) advised the Central Electricity Authority (CEA) to explore the possibility of replacing old and inefficient thermal generating units with new supercritical units.
In July 2016, the CEA in consultation with various power utilities identified about 9,000 MW of coal-based TPPs in the public sector, that are more than 25 years old, for retirement or replacement with new supercritical units on the basis of “uneconomic operation”. Out of this, between September 2015 and January 2017, a capacity of 3,530 MW has been retired. Apart from these units, an additional 5,228 MW will be retired and replaced with supercritical units totalling 10,180 MW of capacity. Twelve of these units are state sector projects and the remaining two are central sector projects. The state sector projects are located in Haryana (440 MW to be replaced with 800 MW), Uttar Pradesh (938 MW to be replaced with 2,640 MW), Madhya Pradesh (592.5 MW, to be replaced with 1,320 MW), Maharashtra (375 MW to be replaced with 1,320 MW, Gujarat (240 MW to be replaced with 660 MW), Telangana (782.5 MW to be replaced with 800 MW), Tamil Nadu (450 MW to be replaced with 660 MW) and West Bengal (280 MW to be replaced with 660 MW). The two centrally owned projects are in West Bengal (350 MW to be replaced with 660 MW) and Jharkhand (780 MW to be replaced with 1,320 MW).
Besides these projects, NTPC Limited, the country’s largest power generator, has announced its plans of replacing around 11,000 MW of its older, inefficient plants. These plants will be replaced over the next five years at an investment of around Rs 500 billion.
Renovation and modernisation
Renovation and modernisation (R&M) has been identified as one of the key methods of improving the energy efficiency and viability of existing old TPPs. In the Eleventh Plan Period, R&M and life extension works have been completed for 16,146 MW of capacity. In the Twelfth Plan Period, R&M and life extension works have been taken up for implementation in more than 60 units with an aggregate capacity of over 15,000 MW. Of these, works have been completed in 23 units with a total capacity of 4,780 MW. Around 44 units with an aggregate capacity of 10,599 MW are currently undergoing life extension and R&M works. Of these 44 units, five units (730 MW) were shut down (as of September 2016) for R&M or life extension. In the Thirteenth Plan Period, a significant emphasis is expected to be made on R&M, with nearly 32,020 MW of capacity being considered for the purpose.
In sum, while the government programmes outlined above are driving the thermal power industry to become more energy efficient, there are many units that are still underperforming. One of the key issues in this regard is ensuring that sufficient financial returns are achievable when utilities implement plant improvements. Further, low PLFs result in low revenues from electricity generation. Efforts need to be made to address these issues and ensure that there is greater uptake of R&M and operations and maintenance by generators to improve plant efficiency.