HPGCL

Making operational changes as thermal business loses relevance

Haryana’s power sector has made significant progress on the back of reforms in the past two decades. Like many other Indian states, Haryana meets its baseload power requirement through thermal-based capacity. The state-owned Haryana Power Generation Corporation Limited (HPGCL), incorporated in 1998 after the unbundling of the Haryana State Electricity Board, is largely a thermal power generator. It has been facing issues related to scheduling, capacity utilisation, coal availability, flexibility in coal allotment, etc. It is not able to run its thermal plants to their full capability as thermal-based capacity has lost relevance in the current market scenario. To overcome these issues, the company is investing in flue gas desulphurisation (FGD) equipment and diversifying its footprint with renewable energy.

In order to reduce its impact on the environment and meet the future demand growth, the utility has planned a solar capacity addition of 77 MW on its land and a 16 MW solar plant on panchayat land in Haryana. Further, it plans to close its Panipat thermal power plant (TPP) Unit 6 (210 MW) as it has not been scheduled for the past two years and therefore running at a very low plant load factor (PLF). Going forward, to meet the new environmental norms of sulphur oxides (SOx), it plans to install FGD at its TPPs at a huge investment of around Rs 11.9 billion.

Installed capacity and operational performance

HPGCL’s total installed capacity stood at 2,582 MW. Thermal capacity dominates the installed capacity at 2,510 MW or 97.2 per cent of the installed base, followed by hydro at 62.4 MW (2.4 per cent) and solar at 10 MW (0.4 per cent).

The company’s TPPs include the 710 MW Panipat TPP (Units 6, 7 and 8), the 600 MW Deenbandhu Chhotu Ram TPP, Yamunanagar, Units 1 and 2, and the 1,200 MW Rajiv Gandhi TPP (Units 1 and 2) at Khedar, Hisar. Apart from thermal projects, HPGCL owns and operates the 62.4 MW Western Yamuna Canal hydroelectric station at Yamunanagar. This hydroelectric plant is built at a canal since the state does not have rivers. HPGCL also operates the 10 MW Panipat solar power plant.

The overall thermal power generation of HPGCL decreased by around 33 per cent, from 10,526 MUs in 2018-19 to 7,030 MUs in 2019-20. The power generated from the Deenbandhu Chhotu Ram TPP, the Rajiv Gandhi TPP and the Panipat TPP stood at 2,741 MUs, 2,316 MUs and 1,973 MUs, respectively, in 2019-20. During 2020-21 (up to December 2020), thermal power generation from the Deenbandhu Chhotu Ram TPP, the Rajiv Gandhi TPP and the Panipat TPP stood at 1,584 MUs, 1,023 MUs and 631 MUs respectively, aggregating 3,238 MUs.

According to the Central Electricity Authority (CEA), the PLF of HPGCL’s TPPs reduced from 44.29 per cent in 2018-19 to 29.42 per cent in 2019-20. This is mainly due to the frequent ramp-up and ramp-down of the power plant. Being the oldest operating power plant in the state, the PLF of the Panipat TPP declined significantly from 41.93 per cent to 24.41 per cent during this period. Meanwhile, the PLF of the Rajiv Gandhi TPP declined from 36.65 per cent to 21.97 per cent, and the PLF of the Deenbandhu Chhotu Ram TPP from 63.2 per cent to 52.01 per cent. During 2020-21 (up to December 2020), the PLFs of the Deenbandhu Chhotu Ram TPP, the Rajiv Gandhi TPP and the Panipat TPP further declined to 39.99 per cent, 12.92 per cent and 13.47 per cent respectively.

A study of 197 TPPs (101 power utilities) by the CEA reveals that 91 TPPs (47 power utilities) have achieved 100 per cent or more utilisation and 27 TPPs (14 power utilities) have achieved 90-100 per cent utilisation. Among these, HPGCL’s Panipat TPP was the best performing TPP in terms of fly ash utilisation during 2019-20 with 240.85 per cent utilisation.

Financial performance

The overall decline in the company’s operational performance has impacted its financials as well. HPGCL’s total revenue declined to 42.16 billion in 2019-20 from Rs 54.95 billion in 2018-19. Its profit after tax also decreased to Rs 2.43 billion from Rs 6.57 billion. Meanwhile, its total expenditure declined to Rs 37.43 billion from Rs 47.44 billion.

The company’s capital expenditure stood at Rs 6.16 billion in 2018-19. Further, it is estimated to be Rs 9.51 billion and Rs 9.16 billion in 2019-20 and 2020-21, respectively. The capital expenditure is for the installation of FGD for meeting the emission norms and for adding the planned solar capacity in the state. The company’s average cost of supply stood at Rs 5.47 per kWh in 2018-19.

Issues and challenges

HPGCL is facing various challenges such as less scheduling of state generators on account of the prevalent merit order despatch (MoD); frequent ramp-up/ down of operation at power plants; challenges related to the maintenance of Chinese equipment; increase in fixed and variable costs after the installation of FGD; and ash disposal; coal availability; and flexibility in coal allotment. Some of them are discussed below.

Scheduling: The scheduling of coal-based power generation is highly uncertain with gencos getting scheduled only during peak demand periods. Less scheduling of state generators on account of the prevalent MoD, frequent ramp-up/ down of operation at power plants is the key challenge for the genco. However, improper planning in the generation schedule may pose a negative impact on power system stability. Therefore, a proper scheduling model can reduce the unit start-up times and hence significantly lower the operational cost of power systems.

Ash disposal: Another major challenge faced by the company is the disposal of ash being generated by its coal-based TPPs. As per the draft Central Pollution Control Board norms, the legacy ash has to be disposed of in a time-bound manner. Since the Panipat TPP is an old plant, the company could be penalised for failure to meet the norms for an amount of around Rs 7.5 billion. To address this, HPGCL has come up with a unique project for developing a forest spread across 900 acres in the legacy of ash dykes at the Panipat TPP. It will provide breathing space for Panipat as it is near the Delhi-NCR region.

Chinese equipment: For the installation of FGD systems at HPGCL’s power plant, the company opted for the international bidding process, in which all the participants were from China. However, as per the Aatmanirbhar Bharat Abhiyan initiative by the Government of India, the ongoing bidding process was scrapped, and the process has been reinitiated through domestic bidding, which has led to time delays.

Coal availability: HPGCL also faces the issues of coal availability and flexibility in coal allotment. For the Rajiv Gandhi TPP, coal is provided by four companies – Northern Coalfields Limited, Mahanadi Coalfields Limited, Central Coalfields Limited (CCL) and Eastern Coalfields Limited. For the Panipat TPP, coal is provided by CCL, Bharat Coking Coal Limited and Western Coalfields Limited. Meanwhilwe, the Deenbandhu Chhotu Ram TPP gets coal only from CCL, resulting in the lack of flexibility in coal allotment. Since coal is the raw material based on which the power plant gets scheduled, proper flexibility in coal allotment and coal linkages should be in place.

Notwithstanding these challenges, the company is investing in retrofitting its existing projects with emission control equipment to comply with the environmental regulations as well as in new renewable capacity to diversify its generation portfolio.

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