Hydro Final

7/28/2019 Hydro Final

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ISSUES &

STRATEGIES FOR

ENHANCING BHEL

HYDRO BUSINESS


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Hydro Scenario in the World

++++ Hydro Scenario in IndiaBHEL Current Share in BusinessBusiness Potential Available

AGENDA FOR THE DAY

Customer Expectations & Priorities+ Present Issues- BHEL v/s Competitors+ Issues for Future Business+ Strategies to Increase Competitiveness

New Ways to Enhance Business


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HYDRO

WORLD SCENARIO

TRENDS SEEN AROUND THE GLOBE


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FUEL WISE GENERATION OVER THE YEARS

Used in 159 countries-provides 16% of worlds electricity

4.8%


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HYDRO GENERATION OVER THE YEARS

Slowdown due to local &

international controversies

over large dams

52%

High growth era ushered in

particularly by rapid growth

in China

Hydro Installed capacity worldwide reached 1000 GW by 2010 end

(Current annual growth rate of 2.5% owing to huge base)


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SKEWED DISTRIBUTION OF HYDRO POWER

India is sixth largest generator of hydro power3.7 % of world generation

11.5%

10.7%

9.3%

18.7%

30%

4 countries accountfor 50% of world

generation

10 countries account for 70% ofworld generation


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UNDEVELOPED POTENTIAL AVAILABLE


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HYDRO GENERATION FORECAST

India & China expected to take the lead in hydro generation GoI launched 50,000

MW initiative in 2003


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OVERVIEWOF HYDRO PLANTS

INTRODUCTION TO VARIOUS HYDRO SYSTEMS


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TYPES OF HYDRO POWER STATIONS

Sl.No Type of Plant Features

1Run of River

(RoR)

Harnesses energy from mainly the available flow of

the river

May include short term storage or pondage for flexibility in

adapting to load demand profile

Generation profile driven by natural river flow conditions

2 Reservoir

Water stored in artificially created reservoirs by makingdams or natural reservoirs

Water storage provides greater flexibility to match

generation with demand & reduce dependence on river flow

Small reservoir HPP can serve as base plant & large ones as

peaking plants

3Pumped

Storage

Water pumped from lower reservoir to upper reservoir

when supply exceeds demand

When demand increases, water released from upper

reservoir to flow back through turbines & generate power

Effective electricity storage


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TYPES OF HYDRO TURBINES

S.No Turbine Type Features

1 Pelton

Used for high head (300 m & above) & low discharge

Water passes through nozzles and strikes spoon-shaped

buckets arranged on the periphery of a wheel

2 Francis

Variety of heads (30 m to 600 m) & medium discharge

Guide vanes direct the water tangentially to the turbinewheel, water enters the wheel and exits it in the middle

Guide vanes can be adjusted to optimise output & efficiency

Most commonly used

3 Kaplan Used for low (10 m to 80 m) heads & high discharge

Turbine selection done based on operating head & discharge required

Other turbine types like Bulb turbines, tubular turbines & reversible Francis also used


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1

3

HYDRO SCENARIO IN INDIACURRENT ECOSYSTEM FOR HYDRO POWER IN INDIA


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INDIAS INSTALLED CAPACITY

S.No Fuel

Installed

Capacity

(MW)

%

ShareRemarks

1 Thermal - Coal 1,30,371 67%Fuel shortage, reluctance to import due to

power becoming costlier

2 Thermal - Gas 20,110 10% Dwindling gas supplies- no gas projectsplanned till 2015-16

3 Hydro 39,623 20%Huge potential exists- underdeveloped

Problems of clearances, R&R etc exist

4 Nuclear 4,780 3% Public perception negative regarding safety

TOTAL 1,94,884

Given the increased focus on renewables & impact on climate, imperative to

expeditiously develop hydro power & increase its share in nations generation

(contributes only 16% generation of nations generation)


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EVOLUTION OF HYDRO POWER OVER THE YEARS

S.

No Plan Period

Total Capacity at

the end of Plan(MW)

Hydro Capaci

ty at the end

of Plan

(MW)

% Share

1 4th Plan 1969-74 14988 7140 48

2 5th Plan 1974-79 23542 10672 45

3 Annual Plan 1979-80 25859 11269 44

4 6th Plan 1980-85 40950 14457 35

5 7th Plan 1985-90 62043 18125 29

6 Annual Plan 1990-92 67969 18808 28

7 8th Plan 1992-97 84783 21422 25

8 9th Plan 1997-02 104188 26186 25

9 10th Plan 2002-07 132330 34654 26

10 11th Plan 2007-12 187294 38990 21


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CAPACITY PLANNED FOR XIIIth PLAN

S.

No Fuel

Capacity

(MW) Remarks

1 Thermal - Coal63,400

Under question due to fuel constraints,

environmental impact2 Thermal - Gas

3 Hydro 12,000 Potential for increase exists problems of clearances, R&R etc. to be sorted

4 Nuclear 18,000Safety issue, slow progress of Nuclear parks p

utting the same under question

TOTAL 93,400

As per Working Group on Power report, Feasible hydro capacity addition of 12,000 MW and

nuclear capacity addition of 18,000 MW has been considered as must run during 13th Plan

With thermal fuel constraints & nuclear safety concerns, hydro remains only feasible avenue for

increase in capacity addition


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MARKET POTENTIAL AVAILABLE

S.

No Category

Capacity

(GW) Remarks

1 Installed 39

2 Under Construction 12

Projects in these categories to be acceleratedfor achievement of 12th & 13th Plan targets

3 DPR Approved 13

4 DPR Under Approval 13

5 Stand Awarded 37

6 Yet to be Awarded 39

TOTAL 153 GW

Issues of projects for benefit of 12th & 13th Plan to be resolved before addressing concerns

for balance projects


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MARKET POTENTIAL AVAILABLE- BASIN WISE

S.

NoRiver Basin

Capacity

(MW)

Potential at 60% PLF

(MW)

1 Indus 33832 19988

2 Ganga 20711 10715

3 Central Indian rivers 4152 2740

4 West flowing 9430 6149

5 East flowing 14511 9532

6 Brahmaputra 66065 34920

TOTAL 148701 84044

Only 16% of identified potential developed. Market potential of 71 GW still exists

(excluding Pump Storage)


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MAJOR PLAYERS ALONGWITH BHEL

INDIAN SUPERCRITICAL

POWER MARKET

BHEL

VOITH SIEMENS

ANDRITZ ALSTOMINDIANHYDRO POWER

MARKET(Rangit 120 MW,

Kashang 195 MW,

Pare 110 MW)

(Singoli Bhatwari 99 MW,

Rongnichu 96 MW,

Sainz 100 MW)

(Teesta VI 500 MW, Jorethang

Loop 96 MW, Bhasmey 55

MW, Tidong I 100 MW,

Phatabayang 76 MW, Tehri

1000 MW, Ratle 850 MW)

(Kishanganga 330 MW,

Lata Tapovan 171 MW)


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HYDRO MARKET SHARE (2009-12)

COMPANY 2009-10 2010-11 2011-12 2012-13 TOTAL

BHEL330 MW

(35%)

171 MW

(17%)

501 MW

(12%)

ANDRITZ120 MW

(12%)

305 MW

(33%)

425 MW

(10%)

ALSTOM500 MW

(53%)

523 MW

(56%)

1096 MW

(85%)

850 MW

(83%)

2969 MW

(71%)

VOITH

SIEMENS

99 MW

(11%)

196 MW

(15%)

295 MW

(7%)

TOTAL 950 MW 927 MW 1292 MW 1021 MW 4190 MW


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ISSUE STATUS

INCREASED

COMPETITION

Foreign suppliers set up manufacturing base in India (Andritz Hydro, Voith &

Alstom)

Preference for foreign manufacturers shown by private developers (BHEL share

only 26% in 11th Plan orders placed by IPPs)- ordering on firm basis

Chinese also started participating in tenders

MARKET SCENARIO - HYDRO

MARKET

POTENTIAL

Huge market potential with close to 1,00,000 MW potential assessed in thesegment

Segment in focus keeping in mind the fuel situation in non-renewable sources

Increased focus on EPC tenders (~2,000 MW tenders in the market)

BHEL share falling down from 40% in 11th Plan to 12% in 12th Plan


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ISSUE STATUS

REFERENCE

FOR MEETING

QR

(FRANCIS

TURBINES)

4 x 150 MW Ranjit Sagar: Cannot be used any more as machine commissioned

more than 10 yrs ago

3x135 MW Ranganadi, 8x125 MW Indira Sagar: Can be used for qualification of

projects upto 165 MW capacity

Qualification an issue for 4x194 MW Luhri, 7x307 MW Etalin as per present QR

issued

Qualification for 4x205 MW Ratle managed after relaxation by developer

Need to commission projects like Koldam, Parbati III & Kameng at the earliest

REFERENCE

FOR MEETING

QR

(PELTON

TURBINES &HYDRO

GENERATOR)

BHEL can qualify to quote upto 212.5 MW only on base of 6x170 MW Tala project

commissioned in Feb, 2007

For qualification in projects upto 250 MW capacity, Parbati II to be commissioned

at the earliest

QUALIFICATION A BIG HURDLE


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2

3

BUSINESS DRIVERS

CHOICES SHAPING BUSINESS FOR TODAY AND THE FUTURE


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KEY ISSUES-AFFECTING ORDERING OF HYDRO PROJECTS

InternationalWater treaties Longgestationperiod

Large financialcommitmentwith nobankability ofreturns

R&R IssuesEnvironmentalClearanceLaw & Ordersituation/Terrorist threat

Logistical/InfrastructureRoadblocks

Limited linksbetween NEGrid & NationalGrid

Poor Healthof SEBs


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STEPS TAKEN BY GOVERNMENT

STEP DESCRIPTION

50, 000 MW

Initiative

Govt. identified hydro scheme of 50,000 MW in may

2003.

PFRs of all 162 have been prepared.

Incentives to

DevelopersLower interest rates for financing offered to developers

Cabinet Committee

on Investment

Set up to fast track large investment projects

Many hydro projects cleared in meeting held in May

Basin wise EIA

studies

Changing basis of EIA studies from basin wise to sub-basin

wise in order to enhance potential

Standardization of

SpecsStandard specs for Hydro projects developed by CEA

Transmission

Systems

Transmission system planning by Power Grid to be done in

accordance with status of DPRs of hydro projects esp. in

North East India

CEA central

advisory body for

Hydro

CEA appointed central advisory body to cater to all issues

pertaining to development of hydro projects from concept

to commissioning

Agreement with

Bhutan

5,000 MW of hydro power from Bhutan by 2020 signed-

market potential further augmented

Govt. looking

to address

issues

concerning

Hydro

business


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BIDS ALREADY SUBMITTED - STATUS

S.

No Project

Scope /

Rating

Price Openi

ng / Bid Su

bmission D

ate

Results

Reasons for delay

in ordering

1 KSK Dibbin2x60 MW

(E&M)Nov, 2011

L1- BHEL

L2- Alstom

Forest Clearance,

Land acquisition,

Financial Closure

2SEW Infra

Nafra HEP

2x60 MW

(E&M)Sept, 2011 Bid not opened

Environment

clearance awaited

3Patel

Gongri

2x72 MW

(EPC)Jan, 2012 Bid not opened Financial Closure

4

CVPPPL

Pakaldul

4x250 MW

(EPC) April, 2012Technical evaluati

on in progress PIB Clearance

5CHPLLP

Gulu

2x 12 MW

(E&M)Aug, 2012 Bid not opened Project on hold


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BIDS ALREADY SUBMITTED - STATUS

S.

No Project

Scope /

Rating

Price Openi

ng / Bid Su

bmission D

ate

Results

Reasons for delay

in ordering

6UJVNL

Vyasi

2 x 60 MW

(E&M)Aug, 2012 Bid not opened

Environment

clearance, Financial

Closure

7

JKSPDC

New

Ganderbal

3 x 31 MW

(EPC)April, 2012 Bid not opened

Bids of 3154 MW already submitted & ordering not yet done


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KEY ISSUES-AFFECTING EXECUTION OF HYDRO PROJECTS

Inter StateDisputes

Huge financialcommitmentwith noguarantee ofrevenue

Long executioncycle resultingin cost overrun

R&R IssuesEnvironmentalClearanceEnvironmentalConditions

LogisticalRoadblocks Non availabilityof skilledmanpower

Revenue infixed termswhile costs inPVC


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EXECUTION PERIOD OF HYDRO PROJECTS

S.

NoProject Rating Zero Date

Commissioning

Schedule

(Unit 1)

Months Elapsed

1 Mukerian 2x9 MW June, 2004 21 months 108 months

2 Koldam 4x200 MW July, 2004 48 months 107 months

3 Kameng 3x150 MW Dec, 2004 46 months 102 months

4 TLDP 4 x 40 MW May, 2007 33 months 73 months

5Tapovan

Vishnugarh4 x 130 MW Jan, 2008 43 months 65 months


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KEY ISSUES-AFFECTING BHEL COMPETITIVENESS IN HYDRO

Non optimaldesigns/ Highturbineweights

Competitorshaving localmanufacturingbase

Price Estimatesnot aligned tomarket levels

Quality ofBHELsuppliesHigh E&C,BoP prices

Development ofRunner Profiles

QualifyingRequirements Civil/EPCPre-bid tie up

Loading dueto technicalparameters


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3

1

STRATEGIES TO BE ADOPTED

MOVES ENABLING US TO WIN THE GAME


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SIX PRIORITY AREAS IDENTIFIED

Tech Tie-up

on case to

case basis

Optimisation of

Design

QualityControl

Increasing RunnerProfile database

AligningEstimates to

Market levels

QualificationCriteria

1

2

34

56

Task force set up to look into best practices

available in market

Turbine weights reduced considerably

No dispatch without inspection

Attempt to minimize rework at site

Advance action being taken for

developing new runner profilesReview of estimates along with Units

/ Regions to meet market levels

Commissiong of Parbati II to

create reference for upto 250 MW


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1. Reduction of number of BOP agencies within BHEL.

2. Maximizing orders from Centre / State sectors by various

routes like orders on negotiated basis / JVs

3. Time bound program to improve quality-measurable

milestones

4. Timely, complete and Sequential supply of equipment

5. Take special measures to reduce cost of input material by

developing alternative vendors (including Chinese vendors).

6. Make or buy analysis for cost reduction.

Key ini t iat ives helping in achievement o f targets

KEY INITIATIVES TO BE TAKEN


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3

4

Thank you for your attention

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