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POWER
PERSPECTIVE PLANNING FOR THERMAL POWER DEVELOPMENT
Thermal power development made a beginning in India nearly a century ago. Till 1947, a mere 854 MW thermal capacity was installed . Shortly after Independence, the Electricity (Supply) Act, 1948 was enacted, which paved the way for the creation of State Electricity Boards (SEBs).The SEBs were assigned the sole responsibility of generation, transmission and distribution of electricity within the State. In mid-seventies it was realized that with the uneven distribution of coal and hydel resources within the country, power development solely by SEBs creates large inter-state imbalances, besides being unable to meet the increasing demand for power. Subsequently, the Government decided to create generating companies in the central sector to supplement the States’ efforts. Consequently, the National Thermal Power Corporation Ltd. (NTPC) was incorporated in November, 1975 to set up thermal stations along with the Associated Transmission System.
With rapid installation of large- size thermal stations, the share of thermal energy has been gradually increasing.Based on the 16
th Electric Power Survey (EPS) Report it has also been estimated that to ensure ‘Power on Demand’, additional generation capacity of over 1,00,000 MW needs to be added by 2012. Experts have estimated that the ideal energy mix for optimal utilization of the installed capacity in India is 60 per cent thermal stations and 40 per cent hydro stations. The present thermal hydro ratio in the country is about 75:25. To improve this ratio, the Government has accorded high priority to accelerating hydro power development in the country. Granting of permission to NTPC to diversify into the hydro sector is one of the steps in this direction.A peak demand of 1.15,705 MW at the end of the 10
th Plan has been forecast in the 16th EPS report. To meet the demand, as per the Working Group Report, a need- based capacity addition of 56,836 MW would be required during the 10th Plan period. As against need based capacity addition requirement of 56, 836 MW, the Working Group has reported that capacity addition of 46,939 MW (excluding non-conventional energy sources) is feasible during the 10th Plan. Out of the feasible 46,939 MW, the capacity addition of 28,328 MW (60 per cent) has been envisaged in thermal sector during the 10th Plan.The most crucial factor in perspective planning for the highly capital intensive power sector is its resource mobilisation capability. It is estimated that for building 1,00,000 MW of additional power capacity and associated transmission and distribution infrastructure, nearly Rs. 8,00,000 crore of investments would be needed in the next decade. The private sector projects are mostly based on ‘Project Financing’ or ‘Non-Resource Financing’ route wherein the stream of future returns from the projects are used for servicing the debt and equity. Poor financial health of the SEBs has made the investors wary of the safety of investments in the power sector. This has been the major bottleneck in the capacity addition in the private sector. NTPC is in a position to leverage its healthy balance sheet to add another 20,000 MW capacity by the year 2012 provided its huge outstanding dues are liquidated by SEBs and timely payments are made for current billings.
The Working Group has identified that 12,290 MW thermal capacity addition is feasible in the Central sector during the 10
th Plan. Out of this, 9,160 MW capacity addition has been allocated to NTPC, which constitutes about 74 per cent of thermal capacity addition in the Central sector. The feasible thermal capacity addition targets during the 10th Plan as assessed by the Working Group for other Central sector generating companies comprises 1920 MW by the Damodar Valley Corporation (DVC), 710 MW by Neveylli Lignite Corporation (LNC) and 500 MW by the North Eastern Power Corporation.The second important factor in planning for thermal power development is the choice of fuel so as to provide power at affordable tariff to the consumers and also insure overall energy security of the country on a long-term basis. India has abundant coal reserves which are expected to last nearly 200 years at the present consumption rates. However, the proven oil and gas reserves in India are not much to be excited about and as such not much fresh capacity addition based on domestic petroleum fuels is feasible in the near future. The price volatility of imported petroleum fuels and security concerns also do not make these fuels as preferred options for large capacity addition.
The fact that coal is the most preferred fuel by generating companies is also corroborated by the fact that out of the feasible thermal capacity addition target of 28,328 MW in the 10
th Plan, 22,291.6 MW is identified with coal as a fuel. Gas/LNG/Liquid Fuel-based stations constitute 5,951.8 MW . However, in case of availability of LNG/Piped Gas at competitive prices in the long run it may emerge as a preferred fuel in the 11th Plan.The third important factor in planning for thermal power development is the choice of location of sites for setting thermal stations. The coal resources in India are largely concentrated in the eastern region while the maximum power shortages exist in the northern and southern regions of the country. It has been assessed that transmission of power is economical as compared to transportation of high ash Indian coal over long distances. Further, there are bottlenecks in rail transportation of large quantities of coal. It is, therefore, imperative to set up a large size coal-based station on mine mouth and transmit power to load centers.
The economics also justifies setting up of few coastal stations based on imported coal/blended coal as a fuel. The use of imported coal will also help in reducing the projected gap between the domestic coal demand and its production till the 11
th Plan. The working Group has identified two coastal stations with benefits of 1500 MW capacity during the 10th Plan based on imported coal/blended coal.The environmental impact of thermal power gas plants needs to be minimised. The centre for power efficiency and environment protection set up by the NTPC in collaboration with USAID has made significant contributions towards reduction of green house gas emission from the power plants. While significant achievements have been made in the development of power sector in India, a lot more needs to be done to realize the vision of providing reliable, affordable and quality power supply to all users by 2012. In view of the availability of abundant coal reserves in the country, augmentation of thermal power generation capacity forms a major component of the National Perspective Plan of adding more than1,00,000 MW capacity in the coming decade.
The financially sound power sector can only provide huge resources required for its optimal development and for achieving this all members of society have to contribute through conservation of energy and by making full payments for the electricity consumed.
Inputs: Ministry of Power
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