Home / Industry / Energy /  Falling capacity utilization forces India’s coal fuelled projects to rethink strategy

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.

As these plants are not designed to operate below a plant load factor (PLF) of 55%, power producers such as NTPC Ltd are evaluating measures such as retrofitting, requiring an investment of around Rs1 crore per mega watt (MW). This in turn will increase electricity costs from those projects.

A Rs1 crore per MW investment may result in a tariff increase of around 25 paise per unit.

PLF is a measure of output of a power plant, with a higher PLF indicating more output at a lower cost.

Of India’s installed capacity of 329,231MW, 59% or 194,553MW is coal-fuelled.

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.

“A lot of power plant owners are considering either to upgrade, modernize or go to the government because they need policy support," said Prashant Jain, head, power generation services at Siemens Ltd.

With India planning to add 175 gigawatts (GW) of clean energy by 2022, the PLF of these stations will get impacted further.

Aware of the impending crisis, the draft National Electricity Plan prepared by the Central Electricity Authority (CEA), India’s apex power sector planning body, has recommended that “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)."

State-run NTPC, on its part, has an internal task force working on the issue.

“Our plants are designed to operate at a plant load factor of 55%. We can’t operate below that. In order to do so, the plant has to be modified," said a senior executive at India’s largest power generation utility.

“We will go for some plants to make them ready for flexible operations. That means I can ramp up or ramp down faster," added the NTPC executive cited above.

Queries emailed to an NTPC spokesperson remained unanswered.

Of NTPC’s installed capacity of 51,671MW through 48 power projects, 75% or 38,755MW is fuelled by coal. For the first three months of FY2018, its coal-based projects posted a PLF of 79.05%.

Experts say that such retrofitting will help in grid balancing and help the consumers avail the benefits of low energy tariff.

“If we don’t do it, system reliability will fall further. To maintain system reliability, there is a consequential impact on tariffs of particular generation plants. However, this will be carried out for only a select set of plants and as long as it helps the ingress of cheaper renewable energy in the grid, the overall cost for the consumer can be contained," said Anish De, partner, infrastructure and government practice, at consulting firm KPMG in India.

According to CEA, PLF for 2012-13, 2013-14, 2014-15 and 2015-16 was 69.93% ,65.55%, 64.46% and 62.28%, respectively.

“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," added Jain.

Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout