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8/8/2019 Capacity Addition Planning in the Power Sector- India
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Capacity Addition Planningin the Power Sector
Shantanu Dixitwww.prayaspune.org
shantanu@prayaspune.org
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Prayas2
Interaction plan
Capacity addition plans e.g Konkan region
Climate friendly, economic options for meetingenergy services needs
Indias current capacity addition plans
Key shortcomings and implications for climate
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~7,600 MW of new
generation planned in
Shahapur Taluka, Dist.
Raigadh
~6,600 MW of new
generation planned
in Ratnagiri district
~19,000 MW of new
generation planned in
the Konkan strip ofMaharashtra
~4000 MW of
existing generation
in Konkan
Raigadh : 9,558 km
Ratnagiri : 8,208 km
Sindhudurg : 5207 km
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Prayas4
Interaction plan
Capacity addition plans e.g Konkan region
Climate friendly, economic options formeeting energy services needs
Indias current capacity addition plans
Key shortcomings and implications for climate
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Prayas5
Integrated Resource Planning: Case
studies from India
DEFENDUS (Karnataka 1990)
Development Focused End Use oriented ScenarioAmulya Kumar N. Reddy et.al.
Least Cost Plan (Maharashtra 1994)
P
rayas Energy Group
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Prayas6
Typical Energy Saving Potential(based on Karnataka IRP by Reddy et. Al.)
End use efficiency savings
Industry modernisationefficient drives etc: 15-25%
CFL for lighting : 14-58%
Solar Water heaters: 28%
LPG instead of electric stoves: 18%
Frictionless foot-valves and HDP
E piping foragirculture pumps: 30%
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Prayas7
Conclusions of Integrated Plan for
Maharashtra (Prayas 1993)
0
5,000
10,000
15,000
20,000
0% 20% 40% 60% 80% 100%PLFn (at Bus-bar)
R
s/KW(
Bus-bar)/Yr
Ind.Co-gen
Gasifier
Small hydro
SugerCo-gen
CFL
Loadshift
CL-light
T&D impro.
SWH
IPS
Refri.
HT/LT industry
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Prayas8
Typical Benefits of IRP
Typically: efficiency can meet 25-40% andrenewable generation can meet 20-25% ofincremental needs at lower economic costs.
Maharashtra IRP while meeting same level ofenergy services
Financial saving - ~ 33% Reduction in incremental fossil fuel consumption - ~
55%
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Prayas9
Interaction plan
Capacity addition plans e.g Konkan region
C
limate friendly, economic options for meetingenergy services needs
Indias current capacity addition plans
Key shortcomings and implications for climate
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Prayas10
Capacity Addition: 11th Plan targets
Projection to add ~ 600 GW in next 25 years
11
th P
lan (2007-12) - 68869 MW 48010 Coal & Lignite, 15585 Hydro, 3160 Nuclear, 2114Gas
53% Central, 33% State, 14 Private
+ 13,500 MW Renewable, Captive
Transmission & Distribution to carry this power
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Prayas11
Drivers
Growing economy GDP growth from ~ 5 - 6% to 8 - 9%
Continuing shortages Peak shortage - ~ 12% and energy shortage ~ 8%
Only 40-50% of targets met in 8,9,10th plans
Need for greater reliability
Target of 5% spinning reserves Need to electrify all houses
44% houses do not have electricity
About 12000 MW of capacity addition
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Prayas12
Approach towards meeting energy
needs
We do not enjoy the luxury of an either-or choice: Indianeeds energy from all known and likely sources. PrimeMinister of India (Speech at Tarapur Automic Station 31st August 2007, -http://www.rediff.com/news/2007/aug/31guest.htm)
Ambitious projections for 10 years 100,000 MW Thermal
50,000 MW Hydro
11,000 MW Nuclear
Expanding fuel supply and sources
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Prayas13
Policy changes to meet capacity
addition needs
De-licensing of generation projects
Merchant plants Captive power plants
Ultra mega power plants
Encourage capacity addition through all means
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Prayas14
Ultra Mega Power Projects
4000 MW super critical coal thermal plants (5 7plants expected)
Federal government lead Fiscal incentives, conducting competitive bidding, helped
evolve power purchase agreement and payment securitymechanism
Encouraging results for first two projects
Half a dozen bids for each project Highly competitive tariff
US cents 2.7 / kWh for pithead project and US cents 5 / kWh forimported coal based project (levalised tariff)
Both projects won by private sector
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Prayas15
Ultra Mega Power Projects
Key Features of UMPPCompetitive Bidding Process Transparent process
Well laid out procedures and timetable Anonymous comparison of all bids to be made public
All contracts signed with winning bidder (including PPA) will bepublic
No uncertainty and little scope for post bid negotiations
All required inputs and clearances to be provided by specialpurpose vehicle (govt. owned shell company)
Project contract formats finalized before bidding
Simple criteria for selection of winner
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Prayas16
Interaction plan
Capacity addition plans e.g Konkan region
Climate friendly, economic options for meetingenergy services needs
Indias current capacity addition plans
Key shortcomings and implications for
climate
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Prayas17
Capacity addition planning Oblivious
of key challenges
Significant over projection
Even though capacity addition is 40 50% less,shortages have reduced or increased very moderately
Cap dd Pea Shortage %5 year pla Projected ctual Projected ctual
0540 4 0 % %
40 50 0 5 % %
0 4 0 0 0 % 4%
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Prayas18
Capacity addition planning Oblivious
of key challenges
Economic implications
11th five yr. plan
Projected investment need US $ 255 Billion
Fixed cost of US cents 15 / unit of incrementalsales!
(v/s current total tariff of around US cents 8 / unit)
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Social and Environmental issues -1
Electricity Policy Environment
Appropriate advance action through EIA and Environment Action Program
Streamline procedures including setting up of Land Bank and Forest Bank Coal washeries, full compliance with environmental norms
Demand Side Management, Energy Conservation
Hydro Policy Proper implementation of National Policy on Rehabilitation and
Resettlement to ensure that the concerns of project-affected families
are addressed adequately. Adequate safeguards for environmental protection with suitable
mechanism for monitoring of implementation of Environmental ActionPlan and R&R Schemes
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Prayas20
Environment issues -2
Plans have little details on environment & social impacts Emphasis on speeding up clearance of environmental obstacles No analysis on: How much land required? How many people
displaced? Livelihood impact? No focus on enhancing the effectiveness through democratisation
(participatory R&R mention in Transmission Chapter of11th Plan)
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Salient observations
Over projection of demand and poorimplementation performance
Shortage psychosis and exaggerated capacityaddition plans
Integrated resource planning is avoided
Climate friendly options, even thougheconomical, are ignored
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Lesson
To address climate change issues, improvementin national level planning process is critical.
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The vicious circle
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Indias Capacity Addition Plans
Year PeakDemand
GW
Inst.Cap
GW
Remarks
2007 104 132 14% peak shortage; Coal (54%),Hydro(26),Gas (11), Nuclear(3), Renewable(6)
2012 158 220
2022 323 425
2032 592 778 ~Coal (50%),Hydro (29),Gas (6),Nuclear(12), Renewable (5)
Source: Integrated Energy Policy, 8% GDP Growth Scenario