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Driving efficiency in power sector: route to a sustainable future

Driving efficiency in power sector: route to a sustainable future
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First Published: Tue, Jul 26 2011. 12 34 AM IST
Updated: Tue, Jul 26 2011. 12 34 AM IST
Electricity is not merely a vehicle for prosperity, it also holds the key to quality of life. It touches the life of every citizen in any society, and its absence provides a huge political space to state as well as non-state players. Its future depends on the pursuit of sagacious policies by government at the central, state and local level, by the industry supporting it, the regulators, and the citizenry.
Little wonder that its availability and price are highly emotive issues. There is also an increasing tendency to take its continued availability, preferably free, or highly subsidized and totally insulated by cost inflation, as a fundamental right, and not as a business.
In the closing years of the last century, it could have been appropriately said that the power sector in India was on the horns of a “trilemma”, riding on the three powerful competing forces of economics, politics and technology.
The dawn of the new century and millennium has literally pushed the sector on to “all fours” with the serious onset of the climate and sustainability debate. Today the sector is being pulled in equal and opposite directions by the forces of economics, politics, technology and sustainability. The sustainability of the sector is deeply dependent on environment and climate issues, availability of fuel and land, assured flow of appropriate revenue and innovative technologies and practices.
Many utilities still treat it as a business and technology as Thomas Edison saw it a century ago, without integrating the latest technologies and practices, and not seriously seeking to reinvent better materials and processes. With depleting fossil fuel supplies, increasing costs and climate concerns, the answer and the key to sustainability is the relentless pursuit of efficiency. At the same time, the paradigm shift in the concept of the power sector is that the traditional focus on generation, transmission and distribution must now include the consumer, and in relation to governance the government has now been largely substituted by the regulator.
For the sector to be sustainable, the consumer and the regulator have to be hugely proactive in matters relating to efficiency. In fact, it is they who must demand greater efficiency. The consumer will demand it if he is compelled to pay the appropriate price for sustainable power. The regulator will have to make it a cardinal policy instrument to facilitate and ensure urgent and mandatory investments on efficiency.
India is heavily dependent on coal-based thermal generation and will continue to do so in the foreseeable future, in the absence of affordable natural gas supplies and the slow start of the ambitious nuclear power programme, particularly in the wake of the Fukushima incident in Japan and nuclear liability issues.
Coal prices, which would normally increase by 10% in two years are now showing indications of rising by 15-20% annually for two to three years, till they stabilize. If domestic coal production does not increase substantially this increase could persist longer on account of expensive imports.
The design efficiency of coal-based units in India ranges from 28.20% for 30-50 (megawatt) MW units to 38.3% for 250MW, 38.6% for 500MW and 40.5% for the 660MW supercritical units at higher pressure and temperature. India’s newly installed domestic generation manufacturing capacity is almost entirely based on supercritical technology, which will lower coal consumption and emissions per unit of power produced.
The actual thermal efficiency of coal-based power plants has been virtually stagnant from 32.16% in 2004-05 to 32.70% in 2008-09. The National Mission for Enhanced Energy Efficiency under the ministry of power has taken up thermal generation as a focus area for 98 coal lignite, 42 gas-fired and five diesel-fired generators above 11MW. The baseline specific energy consumption for 2009-10 has been worked out and the reduction target for percentage deviation in net Station Heat Rate from the Design Rate has been fixed, varying from 10% to 24% for each specific unit.
Under the Perform Achieve Trade Scheme the better achievers will be allowed to sell their energy saving certificates and the non-achievers will be penalized. For the best use of natural gas, combined generation and climate control can give efficiency of 80%.
One of India’s glaring inefficiencies is project management and the institutional resistance to go for online monitoring of project construction, design and supplies. The timely completed Dadri unit of NTPC Ltd for Commonwealth Games 2010 was one such successful monitoring effort.
There is need to adopt the proven Earned Value Management concept for any large project. India needs serious efforts in multiplying the number of certified project managers at various levels. We are way behind Germany, Austria, the Netherlands, the US and China. Swift project clearances, fuel extraction and transportation would also lead to more efficient construction and operation.
In the high-voltage transmission sector our efficiency standards compare well with global levels and losses are within 4-5%. More efficient use of Right of Way (RoW) and land in urban areas will be an issue. It is well settled that extra high voltages can deliver much bigger parcels of power for the same width of RoW. It varies from 3MW per metre for 132kV to 15MW per metre for 400kV, 45MW per metre for 800kV and 90MW per metre for 1200kV. We are increasingly adopting 800 kV transmission and also installing 1200kV. High-voltage DC delivers 90MW per metre at 800kV.
Land use for urban sub-stations can be reduced to one fifth by using gas-insulated switchgear as opposed to air-insulated switchgear. The cost is higher, but it also addresses security concerns. Semiconductor/thyristor DC technology can give much better grid control when compared to AC systems. Voltage source converters are particularly useful in city networks in cramped spaces. We could return to DC from AC in many areas of operation. The most significant long-term breakthrough in electricity conduction would be high temperature superconducting wires which can carry many times more amount of electricity. These are mega-buck projects and we have to wait for global breakthroughs.
The real devil of inefficiency in the Indian power sector lies in distribution. The overall AT&C (Aggregate Technical and Commercial) losses of the 73 distribution utilities stood at 28.44% in 2008-09. Though it is down from 33.02% in 2005-06, it is abominable.
The Restructured Accelerated Power Development and Reform Programme gives a robust platform for actual demonstrable and sustained loss reduction through a fully reimbursable IT control and command backbone and a 50-90% system improvement reimbursable component based on actual five-year performance. The target is an achievable 15% AT&C loss figure.
Andhra Pradesh and Tamil Nadu have already attained 13% and 14.39% in 2008-09. Delhi with 18%, Punjab with 18.5% and West Bengal with 21.36% are not far behind. The pack of non-performers is led by Manipur at 79% and Jammu and Kashmir at 69%. The technology and funds are available, only the will to do it is needed. Besides this, the tariff setting is at least Rs 0.5 per unit short of cost of supply and promised subsidies are not released in time. The electricity regulators in most states are remiss in not revising tariff for many years and setting wholly inadequate tariffs, leaving no scope for improvements. Cumulative losses of distribution utilities stood at Rs 75,000 crore on 31 March 2009 and could rise to Rs 116,000 crore by 2014-15 unless drastic and immediate action is taken on the tariff front by the regulators.
The highest potential for savings and efficiency in consumer use (demand side) is for agriculture pump sets at 30.09%. In respect of municipalities, the potential is 23.13%, in domestic appliances and large commercial establishments it is 20%. Buildings of the future have to be designed to be energy efficient. It is estimated that over 70% of the building stock needed by 2030 is yet to be built. The technologies for all consumer-use efficiencies are available. The time to act is now.
The smart grid is a concept of having all supply and demand resources dynamically managed and optimized in real time. Telematics and automated meter reading will be the hallmark of future utilities where objects and machines will communicate with each other without human intervention. The equipment will be able to diagnose its own problems and present simplified rectification solutions. The grid could be self-healing in many ways, where the consumer can also programme consumption at the lowest tariff and participate in grid management and economy. The vital pivot for these efficiencies to materialize will be effective, independent and purposeful regulators with a vision. They should seek standards of performance from independent experts, prescribe them for utilities, get them absorbed in the utility’s culture, see that they are exceeded by the best in the business, reward the performing utilities and cooperating consumers, and dismiss the non-performing utilities.
Having defined the four pillars of today’s power sector policy making as economics, politics, technology and sustainability, it is my firm conviction that any policy will be doomed to fail if it does not simultaneously consider all the four equal forces and strike an equilibrium. Cows may come and cows may go, but the lights must go on for ever.
Anil Razdan is a former power secretary.
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First Published: Tue, Jul 26 2011. 12 34 AM IST