Indian power producers using naphtha in the absence of their preferred fuel, gas, are increasingly having to cope with not just the higher operating costs involved in doing so but a reduction in the life of their plants, sometimes by as much as 75%.
“Using naphtha has increased our replacement and maintenance cost. It has affected the life cycle of our gas-based projects,” said a senior executive at India’s largest power generation company, NTPC Ltd.
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The executive, who did not wish to be identified, said the life of some plants may come down from 20 years to five years because of this. “While gas is homogeneous, naphtha has got small liquid particles. At the time of burning, it increases the temperature to more than 1,100 degrees Centigrade. This leads to heat spots which affect the life of the plant,” this executive added. The country’s gas-based power plants would rather use gas than naphtha. Only, there is no gas to be had. India has a gas-based generation capacity of 13,691MW. Of 78,577MW that the country aims to add by 2012, some 5.45%, or 4,290MW, will be gas-based.
Nearly one-fifth of NTPC’s power generation capacity of 27,404MW is fuelled by gas. The company has been facing a tough time securing gas in the spot markets and is burning naphtha to tide over the crisis.
That has significant fallout. At around $28 per million British thermal units (mBtu), naphtha is costlier than LNG, which costs around $21 per mBtu. It is also very corrosive in nature. As a result, a plant running on naphtha needs an annual overhauling as compared to those using gas that need to be overhauled every five years.
Scientists admit that naphtha is more corrosive than LNG, but some say the comparison is unfair because, given a choice, no power plant would prefer naphtha over LNG. “Naphtha is certainly more corrosive because it has a higher percentage of sulphur compounds because of which it wears down a power plant faster,” said S.N. Sharma, scientist at the Indian Institute of Petroleum, who did not put a number to the extent of this damage. “But what do you choose—a faster corroding plant, or a non-functioning plant?” he asked.
A senior scientist at Indian Institute of Technology Delhi who did not wish to be identified said a comparison of LNG and naphtha was unfair given the disparity in availability. “LNG is a massive source of greenhouse gases, more than that of a coal plant. So, do we stop using LNG? Similarly, the corrosive properties and the high cost of naphtha are secondary to ensuring that the power plants are at least working.”
Analysts say this problem will continue as estimates of the ministry of petroleum and natural gas project the country will need around 180 million standard cubic metre per day (mscmd) of gas in 2007-08, while supplies will be around 81mscmd. The ministry has projected that the supply-demand mismatch will persist till 2012.
As a result, companies which do not wish to shut down their power plants say they are left with no options. “What should we do as there is no long-term gas available?” the NTPC executive asked.
Jacob P. Koshy contributed to this story.