India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
FOREWORD
The global energy sector is going through a number of major shifts driven by adoption of emerging technologies, declining cost curves, country policy frameworks and interdependence for fuel. Developing nations have embraced renewables with huge excitement but they need to be executed in tandem with fuel sources that can meet “round-the-clock (RTC)” needs. Consequently, the policy makers are thinking about transforming the conventional fuel-based electricity generation by adopting technologies that have the least environmental impact. However, technology transition has always been cost intensive, and for emerging nations, it is all the more difficult to pump funds into an investment heavy power sector that has not seen very good returns in the past. Therefore, generating sustainable, reliable and cost-effective power is among the top priorities of every developing nation.
Globally, there are many examples to suggest how transitioning to lower-carbon environment requires infrastructure upgrades and the competition for energy resources is rising due to the dependence on fossil fuels. India has high growth potential and a robust power generation infrastructure in place. The country is already power “neutral” (some call it a surplus) and the newly-elected incumbent government is expecting results from the mega-schemes launched over the last three years to weed out the inefficiencies in the power sector. However, going forward the policy makers have to move away from the lopsided approach and holistically assess the economics of using each fuel type for the long term.
This white paper sets out the framework that practically evaluates using gas-based power widely in India and suggests various tactics that can be implemented to unleash its full potential. Arriving at the right energy mix for the country strictly depends upon domestic economics, supply-demand balance, fuel availability and pricing, and likely environmental impact. In view of these factors, the white paper also gives a snapshot of various mechanisms that can be readily adopted by the states’ and federal government in India to revive the already existing infrastructure for gas-based power generation, thus complementing the addition of renewables into the grid, helping India to move towards energy security. India is committed to source 40% power from non-fossil-based generation capacities by 2030, which makes a strong case for using highly flexible gas-based power to support the intermittent renewables on the grid. By using the latest technology, India can certainly pave a way forward to become energy self-sufficient, establish a cleaner energy regime and generate sustainable power for all.
Amit Sinha Partner Bain & Company India
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
EXECUTIVE SUMMARY
India is at the forefront of the global economic stage. A new wave of economic reforms has positioned the country among the fastest growing of the world’s largest economies—a distinction the country is projected to maintain for at least the next several years.
To support its massive upsurge in economic growth and successfully transition to a green economy, India has set a target of 175 GW of renewables by 2022. At a time when the world is facing severe climate change, India has stepped up to support the global climate agenda. This is great news for India, and for the world.
How can India turn its latest renewables upswing into a sustainable, reliable, clean and affordable power supply for the people of India? The task is not trivial, and the challenges are substantial— from integration of renewables to inherent operational inefficiencies with coal-based power plants and the increasing financial burden of the power sector. Few countries have managed a successful transition to an energy mix that supports a green economy. Many European economies continue to struggle with finding the right energy mix to support their size, demographics, and profile.
The debate continues about the most optimal energy mix, and whether India can still rely on traditional sources of energy like coal and hydro now, while planning the transition to renewables, gas-based power, and nuclear, and the eventual adoption of newer technologies like hybrid solutions and energy storage.
Globally, India is the sixth largest economy, the third largest electricity producer, has the second largest population, and the fourth largest installed power capacity (third largest including genset capacity). Finding the right energy mix will require leveraging the country’s existing power plants, removing inadequacies, adding newer technologies, and using flexible power to increase system efficiencies. In these efforts, gas- based power plants have a critical role to play and could be a significant part of the country’s energy mix.
In Section 1 of this whitepaper, we take a brief look at the Indian economy, including the power sector and its challenges. In Section 2, we illustrate how the influx of renewables requires balancing power to enable the integration of flexible technologies. Section 3 outlines challenges inherent to coal-based power generation. Section 4 briefly summarizes the advantages of gas-based power plants. In Section 5, we finish with a discussion of the solutions GE can provide to help improve existing and future installed gas-based power capacity to integrate renewables, support base and peak loads and address climate change.
India is unique. No other country has the same combination of size, strengths, and challenges. Creating the right energy mix won’t be easy—but with the right strategy and the right technology, India can chart a unique path to a green economy with sustainable, reliable, clean, and affordable power for all. Streamlining India’s power sector would also ensure reversal of accumulating T&D losses and NPAs, ensuring attractive returns and cash to shareholders.
Deepesh Nanda and Kanika Tayal General Electric Company
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
1. INDIA IS AT AN ENERGY INFLECTION POINT
India’s performance over the past few decades has been significant. The country launched its first wave of economic liberalization in 1991, opening its doors to globalization and market forces, strengthening economic growth, increasing consumer choice and reducing poverty.
Since those efforts, India’s gross domestic product (GDP) has risen by more than USD $1 trillion led by growth in the services sector and favorable demographics. But the results were not as strong as they could have been. In 1990, India’s per capita income (in Purchasing Power Parity terms) was 20% higher than China’s; by 2010, it was less than half of China’s level.
Gross Domestic Product (GDP) growth rate Source IMF
Brazil China India Korea United States 15
10
5
0 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022
-5
With over seventy years of independence, India has set a very ambitious path of US $5 trillion economy by 2030 as per NITI Aayog. The Government launched a new wave of economic reforms to trigger a long- overdue revitalization of India’s economy which are already yielding results. India is now the one of the world’s fastest-growing large economies, and should maintain real GDP growth of over 7% over 2018 – 2020.
Urbanization, combined with a rapidly growing young working population, is fueling the rise of the Indian middle class—and the ensuing increase in spending is a key growth driver here. Urbanization proceeds at a steady pace, concentrating 420 million of India’s 860 million-strong workforce in urban areas and industrial hubs and boosting demand for the supporting infrastructure, notably in energy, health care and transportation.
This has already helped reshape India’s economy. Agriculture now accounts for only 15% of the economy, compared to 40% in the 1960s; the services sector has rapidly taken over the lion’s share, contributing 62% of GDP with Industry contributing only 23% to GDP.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Growth of Urban population Per capita electricity consumption Millions & percentage of total, Source: UN Source IEA 2017-2018
USA 11,634 33% 37% 27% 29% China 4,446
525 Vietnam 1,411 420 330 254 India 1,149
Indonesia 812
1995 2005 2015 2025 Bangladesh 433
To achieve sustained strong growth, infrastructure development across Energy, Healthcare and Transportation segments needs a major boost. Lack of sufficient and reliable electricity supply impairs health care delivery and is a major impediment for growth in the manufacturing sector.
India’s per capita electricity consumption has doubled since 2000 and is expected to more than double by 2040 driven by sustained economic growth. The electricity production in India grew at a CAGR India’s per of 5.7% over FY 2010 to FY 2018. However, per-capita electricity capita consumption in India is still less than that in Africa and one-tenth that of America, with millions of people still without access to electricity power. consumption Since 2014, the government has initiated significant steps to transform the energy sector. Renewable energy is fast emerging as a 1149 kwh major source of power increasing its share in the energy mix. The government has set an ambitious target of 175 GW by 2022 with wind and solar capacity addition expected to reach 60 GW and 100 GW respectively. The government has also set a vision to provide 24X7 power to all households and is well on track to achieve this goal by the end of 2019.
Currently, the Indian power system is one of the largest in the world and among the most complex. India became the world's third largest producer of electricity in the year 2013 with 4.8% global share in electricity generation, surpassing Japan and Russia.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
India 4th largest in installed capacity India 3rd largest electricity producer 2017 – 2018, Gigawatt (GW), Source World Bank 2016, terawatt hour (tWh), Source World Bank
China 1,800 China 6,015
USA 1,086 USA 4,327
EU 932 India 1,423
India 356 Russia 1,088
Japan 273 Japan 1,013
Russia 263 Germany 653
Germany 206 Canada 643
India had 356 GW of installed capacity as of April 2019, with coal contributing 54.6% to the installed capacity. The power generation capacity is dominated by private players with a 46% share, whereas the central and state governments contribute 25% and 30%, respectively.
356 GW of installed capacity Source CEA - April 2019 54.6% 194
21.8% 12.7% 78 7.0% 1.9% 1.9% 45 25 7 7
Coal Hydro Renewable Gas Nuclear Diesel/ Lignite
The power sector faces many challenges, including the low and of declining plant load factor (PLF) of generating assets. In $2.6 billion addition, low tariff realization is leading to financial losses for accumulated losses utilities, which is placing increased stress on lenders. The total cumulative losses by Discoms (Distribution Companies) still by Discoms stands at USD $2.6 billion as of October 2018, despite several efforts and projects in the past. In addition, India is still an energy deficit country with 0.7% of energy deficit and 2.0% of peaking shortage during 2017 - 2018. The government expects the trend to change to surplus in 2019.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Coal-fired power plant - Plant Load Factor Deficit (-)/ Surplus (+) percentage PLF %, Source CEA, NEP Peak Energy, Source CEA 65.6% 64.5% 4.6%
62.3% 2.5%
60.5% -0.7% 59.9%
-1.6% -3.6% -4.7% FY 2014 2015 2016 2017 2018 YTD FY 2015 2016 2017 2018 2019E
The per capita electricity consumption in 2016 – 2017 is 1122 kWh, below the world average 75% less than China, 88%% less that Australia and 91% less that of USA. Growth in industrial activities, population, economy, prosperity, and urbanization, along with increasing per capita energy consumption are leading to growth in power demand. This is set to continue in the coming years.
India is also the world’s third largest carbon emitter contributing 7% to total CO2, behind the U.S. and China. India 3rd largest India as per the Intended Nationally Determined Contributions (INDCs) is committed to reduce its carbon carbon emitter in world emissions relative to its GDP by 33% to 35% by 2030 from 2005 levels i.e. GHG Emission intensity (g CO2eq / INR GDP) from 45.2% in 2005 to 30.3% in 2030. India as a party to the United Nations Framework Convention on Climate Change’s Paris Agreement, has submitted a public declaration of its plan to mitigate the effects of climate change.
Per capita electricity consumption Top 5 carbon emitters Per capita kilo-watt hour (kWh), 2016, Source CIA CO2 contribution share, 2016, Source Edgar
USA 12,071 China 30%
Australia 9,741 USA 15%
China 4,446 India 7%
Vietnam 1,312 Russia 5%
India 1,122 Japan 4%
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Rising temperatures and climate changing patterns can erode 2.8% of India’s GDP by 2050 and negatively impact the living standards of the country s per recent World Bank report.
Climate change is expected to have a major health impact in India - increasing malnutrition and related Reduce GHG emissions health disorders such as child stunting - with the poor likely to be affected most severely. Child stunting is by 35% & 175 GW of projected to increase by 35% by 2050 compared to a renewables by 2022 scenario without climate change. Malaria and other vector-borne diseases, along with and diarrheal infections, which are a major cause of child mortality, are likely to spread into areas where colder temperatures had previously limited transmission. Heat waves are likely to result in a very substantial rise in mortality and death, and injuries from extreme weather events are likely to increase.
Climate change driven by the rising air pollution in India has become not just a health concern, but it has larger implications on the economy as well. Air pollution is a major and growing risk factor for ill health in India, contributing significantly to the country’s burden of disease. Rapid urbanization and industrial development have adversely affected urban air quality due to vehicular and industrial emissions. One of the biggest increases in such pollution-related deaths have been recorded in India. Although India has openly embraced sustainable development, there is an urgent need to fast-track the implementation of clean energy strategies. Healthcare fees and productivity losses from pollution cost India as much as 8.5% of GDP, or about USD $221 billion every year.
The energy sector is at the heart of climate change, contributing more than 45% of greenhouse gas (GHG) emissions since it is dominated by coal-based power—which accounts for 54.6% of India’s installed capacity of 194 GW. Center for Study of Science, Technology and Policy analysis shows that 68% of India’s emissions between 2005-2013 came in from the energy sector, more than three times the second-largest (the industry sector). Within the energy-sector, about 77% comes from electricity generation, mainly due to the current fuel-mix within domestic installed capacities.
India has set a target to achieve 40% of cumulative installed capacity from non-fossil fuel-based energy, by 2030 with an interim target of 60 GW of wind power and 100 GW of solar power installed capacity by 2022. The government has also set a target to improve the efficiency of the nation’s coal fleet. With these initiatives and others underway, India could be one of the very few countries to achieve its climate action targets under the Paris Agreement by 2030. The country needs to continue playing a proactive role in controlling GHG emissions over the next decade to create a positive impact on its environment.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
2. UNLOCK RENEWABLE INTEGRATION THROUGH FLEXIBLE POWER
In light of the increasing power demand and changing policy environment, India’s targeted energy-mix focuses on addressing climate change through clean energy. India pledged that more than 40% of the country’s electricity would come from non-fossil fuel-based sources by 2030. India has ambitious targets for renewable energy growth and aims to install 175 GW of renewable capacity by 2022. The government has also set a target of 63 GW of nuclear by 2032 and 62 GW of hydro by 2030.
Renewables 275 Capacity in GW, Source National Electricty Plan (NEP)
April 2019 2022 2027 175 150
100 100 78 60 28 36 17 9 10 5 5 8
Solar Wind Biomass Small Hydro Total
The targets set by the government of India for renewables are very aggressive and a shortfall in the same could pose major challenges for meeting the electricity demand and COP21 commitments. Over the last 5 years, India has added 11.3 GW of solar capacity, an annual average of 2.2 GW, and 15 GW of wind capacity, an annual average of 3.0 GW. For the next 4 years the annual average of capacity addition in solar and wind 18 GW of Solar & would be required at 18 GW and 6 GW respectively.
Solar and wind power pose some basic challenges like 6 GW of Wind unstable grid due to intermittency/ variability – to be added annually natural fluctuations, weak evacuation infrastructure with generators sometimes concentrated in areas until 2022 away from load centers or the grid and higher overall system costs for integrating the renewables. Renewables are the most environmentally friendly, but are not available all the time, as they are subject to natural fluctuations – i.e. solar and wind power are reliable energy sources so long as the sun is shining, and the wind is blowing. Adaption of new age technologies to match supply of power from renewables and demand would require significant cost and scale. The uncertainty and variability associated with renewables generation are creating operational and grid stability challenges. This will only get further accentuated as we add more of the targeted 175 GW of renewables. To fully utilize the power from these renewable sources, these need to be complemented with commensurate load balancing power.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
The successful operation of large quantities of variable renewable capacity can only be possible if its integration and interaction with the rest of the grid is smooth. Around the world, countries including India are adopting various techniques to ensure grid stability with evolving demand and supply sides. Such techniques include sophisticated grid modelling, upgrade of physical grid infrastructure, improving demand and supply forecasting, demand-side management, expansion of current grid balancing areas, holistic transmission planning and flexible operation of generation assets.
India is uniquely positioned to tackle the complexity of th the new power system, as demand is expected to grow … by 2022, every 5 at a faster rate compared with the developed economies. kilowatt hour generated Therefore, new and existing capacities will have to co- exist in the most environmentally and economically to be from solar & wind efficient ways. It is estimated that by 2022, renewables will emerge as a significant contributor in the generation mix with every fifth kilowatt hour unit generated coming from green sources of energy.
64.7% All India Energy Generation (TWh) - 2022 Source CEA, GE Simulation model 1,062
9.6% 11.4% 8.6% 2.6% 3.0% 158 187 142 43 50
Coal Hydro Wind Solar PV Gas Nuclear
About 95% of renewable capacity is concentrated in 11 states and by 2022, the same set of states will account for more than 80% of renewable additions. The extent of wind penetration in some of the resource- rich states like Karnataka and Tamil Nadu is about 47% and 38% in energy terms. Tamil Nadu, which has a high level of High renewable renewable generation, is already facing transmission capacity potential states (NEP) constraints, which prevent evacuation of renewable energy during the peak wind season resulting in curtailment of renewable energy and a drop-in capacity factor.
Typically, a grid can accommodate 20% - 30% of renewable energy with significant investment needed in the transmission infrastructure and peaking power plants including operation strategies.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
State wise Renewable Capacity Capacity in GW, Source CEA
Karnataka 13 15
Tamil Nadu 12 22
Rajasthan 7 15
Andhra Pradesh 7 19
Telangana 4 5 2018 2022 Gujarat 7 17
Himachal Pradesh 1 2
Maharashtra 9 22
Madhya Pradesh 4 12
Uttar Pradesh 3 13
Punjab 1 5
The increasing share of renewables will increase the level of variability in system operations. The key requirements for higher renewable integration include transmission system upgrades and the adequacy of load-following, regulating and fast-starting capability of the thermal generation fleet, and modifications to operation practices such as commitment based on wind forecasting and operating reserve requirements. System flexibility is key to accommodating increased renewable generation. Therefore, with the amount of renewables capacity addition being planned, a commensurate amount of load balancing flexible generation capacity is needed to absorb the variability. The integration of renewables through coal-fired power plants contributes to the cost of efficiency lost.
Demand growth increases pressure on critical coal plants to operate at around 60% PLF to meet system loads. Higher renewable penetration with relatively low flexibility levels of either the coal or hydro facilities make operations more difficult and increases the costs of integrating the renewable generation.
Flexibility of the power system can be described as the ability of a power system to respond to change in demand and supply. It’s a characteristic that every power system has with different fulfilment levels. All power systems have some inherent level of flexibility— designed to always balance supply and demand. Variability and uncertainty are not new to power systems because loads change over time, sometimes in unpredictable ways, with conventional resources failing unexpectedly due to forced outages/ system constraints. Variable renewable energy supply, however, can make this balance harder to achieve. Both wind and solar generation output vary significantly over the course of hours to days, sometimes in a predictable fashion, but often imperfectly forecasted.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Renewable penetration within the state Example: State of Andhra Pradesh State Capacity (Renewable of Total), Source CEA 19 GW by 2022: 66% Wind & 34% Solar Sep Karnataka 47% – Wind Low Tamil Nadu 38% Dec Jun Rajasthan 32% Wind High - 6300 MW Andhra Pradesh 30% Aug Telangana 25% Jan Solar High Wind Gujarat 24% - 3600 MW Moderate Himachal Pradesh 21% May Wind Low Morning Mid-Day Nights Maharashtra 20% Generation range 690 MW to 7200 MW Madhya Pradesh 20% Ramping of ~2000 MW per hour for few hours every day is required to balance variation Uttar Pradesh 11%
Flexibility is system specific. Systems with more fuel options (e.g. natural gas, wind, demand response, and pumped storage) will be more flexible than ones dominated by coal or nuclear. Flexibility in power systems is also inherently tied to the regulatory and market rules that help shape operations. As power systems evolve to incorporate more renewable energy and responsive demand, regulators and system operators are recognizing that flexibility across all elements of power systems must be addressed by ensuring • Flexible generation: Power plants that can ramp up and down quickly and efficiently and run at low output levels (i.e. deep turn-downs). • Flexible transmission: Transmission networks with limited bottlenecks and enough capacity to access a broad range of balancing resources, including sharing between neighboring power systems, and with smart network technologies that better optimize transmission usage. • Flexible demand-side resources: Incorporation of smart grids to enable … the demand response, storage, responsive distributed generation, and other means for customers to respond to market signals or direct load control. right • Flexible system operations: Practices that help extract flexibility out of the existing physical system, such as making decisions closer to real time and more frequently (e.g. reducing the 15 minutes schedule interval to 5 fuel mix minutes), improved use of wind and solar forecasting, better collaboration for system with neighbors. flexibility Without enough flexibility, system operators may need to frequently curtail (decrease the output) wind and solar generation. Significant amounts of curtailment can degrade project revenues and contract values, impact investor confidence in renewable energy revenues, and make it more difficult to meet emissions targets.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Below are some options available for system level integration of large renewables into the power grid, classified into supply … flexible and demand side flexibility options. From the supply side, the most cost-effective option is to provide flexible generation from generation from existing resources like gas and coal capacities. The next option is to utilize existing storage options like pump storage. Post gas & coal exhausting these two options, the system moves to other are most cost costly options of renewable curtailment, using concentrated solar for thermal storage and ultimately battery storage. effective Therefore, the system should try and have the maximum possible flexible generation from existing capacities - primarily gas and coal.
The flexibility of a power plant can be described as its ability to adjust the net power fed into the grid, its overall bandwidth of operation and the time required to attain stable operation when starting up from a standstill. Key basic parameters of flexible operation as seen from the power generating unit are minimum load, start-up time and ramp rates.
Minimum load The minimum load is the lowest possible net load a generating unit can deliver under stable operating conditions, measured as a percentage of the nominal load. The lower the minimum load, the larger is the range of the generation capability from that unit. A lower minimum load can avoid expensive start-ups and shutdowns.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
Typical Minimul load as percentage of nominal load GE Estimates ( 1 X CCGT 2 X CCGT)
50% <48% ~40% ~40% 33% <22% 15%
Nuclear Coal > 500MW Coal < 500MW GE 9HA GE 9F
Combined-cycle gas turbines (CCGT) are designed to operate at minimum load with minimal compromise on the efficiency level of the unit. Solutions to improve part load efficiencies may be adopted that will make the units fare better in merit order and have higher dispatch.
Start-up time The start-up time is defined as the period from starting plant operation until reaching minimum load. The start-up time of different generation technologies varies greatly. The other factors influencing the start-up time are, down time (period when the power plant is out of operation) and the cooling rate.
Start Ups type Time unit is out of operation Coal Power Plant GE 9HA CCGT Hot < 8 hours 1-3 hours < 0.5 hour Warm Between 8 to 48 hours 3-5 hours < 1.5 hours Cold > 48 hours ~ 6 hours ~2 hours
Generally, a cold start puts a larger strain on the unit/plant components than a hot/warm start due to the greater temperature differences that occur during start-ups. The shorter the start-up time, the quicker the unit can achieve minimum load and support additional power needs. For a fast start-up, gas units take the least time required for start-up and consume least energy per MW. Hence, these are best suited for quick starts to support load requirements faster.
Typical Start-up time (approximate minutes) GE Estimates for Hot start
2,400
180 30 40
Nuclear Coal GE 9HA GE 9F
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Ramp rate The ramp rate describes how fast a power plant can change its net power during operation. Higher ramp rates allow the operator to adjust the net power more rapidly to meet the changing demand. The gas turbines ramp the fastest followed by coal (>500MW), coal (<500MW) and nuclear. System must choose the option to support ramping up requirement and as per estimates (GE internal) the required ramp ups in 2022 are 217 MW per minute (down) and 220 MW per minute (Up).
Typical Ramp rate - percentage load per minute GE Estimates
10%
5% 3% 2% 2%
Nuclear Coal > 500MW Coal < 500MW GE 9HA GE 9F
Dispatch stack (generation) for all India reveals the high ramping requirements of the system. Due to increased penetration of variable renewables like wind and solar, it is expected that the net load requirements would have a high ramp up and ramp down rate primarily due to intermittency in renewable generation. The presence of 160 GW of wind and solar capacity increases ramping requirements for thermal units. Without the addition of wind and solar capacity, thermal units have lower ramping … by 2022, in 6 hours requirements due to reduced variation. In 2022, GE estimated that high renewable generation will lead to ramp up of ~70 GW ramping requirements of thermal units of ~10,500 MW per hour ramp up (~70,000 MW in 6 hours) and ramp down of ~60 GW 10,000 MW per hour ramp down (~60,000 MW in 6 hours). These results are for an all India level and may is required change when analyzed for individual regions/ states.
Even as efforts to harness power from cleaner energy sources continue to gain momentum both in India and globally, this simultaneously poses a serious challenge for grid managers. The availability of solar and wind energy is largely determined by weather conditions, and therefore characterized by strong variability. As a result, power generation from these sources cannot easily be matched to the electricity demand, like power generated from conventional plants such as coal-fired units and gas stations. Integration of fluctuating renewables in the grid is a serious technical challenge for grid managers to ensure smooth operations.
It is critical to take an integrated view for addressing peaking shortages, efficiency of thermal generation, grid management, overall balancing cost, and the other charges associated with renewable generation.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
From an operational point of view, the variability and relatively limited predictability of renewables (wind and solar) lead to challenges in maintaining the overall stability of power supply in terms of ensuring that actual, instantaneous power generated exactly matches actual, instantaneous power demand to avoid frequency deviations in the power system. While at modest levels of renewable penetration, the variability can usually be managed without significant investment requirements, a higher penetration of renewables may not be accommodated through operational adjustments. At very high shares of renewables (wind and solar), the automatic regulation reserves need to be able to respond faster, more frequently and within wider operation ranges to compensate for frequency deviations. In addition, with batteries and storage still being expensive, increasing the renewables share would require greater balancing with hydro or gas-based power to smoothen out the variability and peak demand. In other words, commensurate investment in hydro or gas would be needed to maximize renewables generation.
In addition to the stability issues linked to the short-term, unpredictable variations of renewables (wind and solar), there is also another indirect impact on stability at high penetration levels of renewables (wind and solar). A grid disturbance, such as the sudden loss of a large generator, may cause large frequency fluctuations. The rotating inertia of large rotating masses of conventional generators, such as in steam or gas turbines, helps to arrest fluctuations and stabilize system frequency following such a disturbance. Renewable (wind and solar) technologies, on the other hand, have limited capability to provide the system with such “frequency response” services. The displacement of conventional power generation with low- or no-inertia renewable (wind and solar) resources may raise stability issues as the renewables (wind and solar) share increases.
In the Indian power market, as our ambitious renewables target move from the drawing board to reality, it is important to ensure the stability of the Indian grid. To compound matters, renewables generation forecasting in the country is in its early days. Natural gas generation can contribute to addressing the issues associated with renewables (wind and solar) integration. Start-up and ramp up rates for gas generation systems are generally faster than for other thermal technologies.
The potential flexibility sources would be Hydro and CCGTs with inherently better flexible characteristics such as lower minimum loads, faster start-ups and higher ramp rates, as compared to coal and nuclear. India heavily depends on support from coal and interconnections. While coal or nuclear steam cycle … gas turbines = lower generators can take more than 12 hours to reach full minimum loads, faster load, some gas combustion technologies have start- up times measured in minutes. Part-load efficiency start-ups and higher ramp of gas-fired technologies is also higher than coal- fired power plants. Since natural gas resources are more flexible than nuclear and coal plantsrates and can ramp up and down to complement wind output without incurring huge costs, they are very well suited for smoothing out spikes and dips caused by the mismatch between renewable (wind and solar) power generation and demand.
Existing plants will have given levels of flexibility which can be modified (retrofitted) to increase their flexibility, requiring a variety of hardware modifications plus changes to operational practice. New plants can be designed at the outset for higher levels of flexibility. When employed to balance renewables on a
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grid, flexible natural gas plants may cycle on/off once or multiple times per day, frequently ramp their output up/down and lower their output to minimum limits. In addition, the capital cost and maintenance cost is relatively lower to coal fired power plants making it economical balancing the CAPEX, OPEX and fuel cost.
Globally best practices on integration of renewables with gas-fired power plants Globally, while coal plants are generally designed to run at constant output, as baseload, on the other hand, combined-cycle natural gas power plants are designed to run both as baseload plants and intermediate plants. Several gas turbines now on the market are explicitly designed and marketed as flexible, or fast- acting plants, with shorter start-up times and faster ramping rates. One example is the Sloe Centrale combined-cycle natural gas plant in the United Kingdom. Built in 2009 with flexibility factored into its design, it can ramp to full output in just 30 minutes. Continuous ramping of gas plants, however, can increase the emissions from power plants, and thus reduce the emission benefits generally associated with renewables. New gas plant combined cycle technology can mitigate this effect.
Countries like Australia (particularly in South Australia), Denmark, Germany, Ireland, Spain, and several states in the United States are successfully managing high levels of variable renewable energy (wind or solar) in their power system. Spain and California have successfully deployed gas-based power to address variability issues.
Wind and Solar share in electricity generation Source IEA 60% 50% 40% 30% 20% 10% 0% South Brazil India Canada Australia UK/ Italy Germany Spain Ireland Denmark Africa
In Spain, for example, renewables (wind and solar) and CCGT generation are the two largest sources of generation in terms of installed capacity. Spain faced difficulties in renewable integration since adjustments to the balancing area were not possible due to geographic dispersion, diversified ownership of generation facilities, and the very limited interconnections of Spain with other … forecasting accuracy countries. However, the flexibility of the system (provided mainly by the gas-based with gas turbines reduces generators) combined with advanced forecasting and advanced unit commitment variability in system has allowed wind and solar plants to frequently serve 50% to 60% of the demand without posing reliability issues for the system. Flexibility to manage the variability and forecast errors has been provided by moving CCGTs from primarily mid-merit
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operation to a more flexible load following operating regime to successfully integrate these high levels of wind and solar generation.
California, which currently gets ~20% of its electricity from renewables--not counting other renewable resources such as hydro, biomass or geothermal - has a plan of achieving 33% of renewables by 2020, a big part of which will be solar power. The inherent flexibility of many of California’s natural gas power … high flexibility with plants, which altogether provide about 60% of gas turbine, both for base California’s power, allows these plants to profit from selling into both the normal day-ahead wholesale load and balancing market, as well as the “balancing” markets designed to provide balancing power for short-term fluctuations in demand and generation. Most of the newer gas turbine power plants built in California have been designed with high levels of flexibility, which enables them to respond quickly to system conditions.
Denmark, which has one of the highest renewable penetration in the world (at times even reaching 105% of power demand in a day) is another exemplary case for the use of flexible gas turbines. In Denmark, gas turbines of recent vintage are able to quickly ramp output up and down between 50% and 100% of full output, at fast rates of up to 3% per minute.
Germany also relies on flexible operation of its conventional power plants to address the variability challenges posed by renewables which currently provide ~ 30% of Germany’s power.
The above examples illustrate the role of gas-fired generation, in combination with state-of-the-art … quick ramp up & forecasting, in providing flexibility. The case studies have important lessons for countries like India, which down with gas turbine also have limited interconnections with other countries and must depend on forecasting and 3% per minute flexibility in the system for load balancing.
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3. RESOLVE FOR INEFFICIENCIES IN COAL- BASED POWER SECTOR
Coal-based power accounts for about 54.6% of India’s installed capacity. To secure reliable, adequate, and affordable supply of electricity, coal will continue to dominate India’s power generation. Currently the coal- based power plants are challenged by high emissions, low PLFs and are run on aging subcritical technology. In addition, financial losses of utilities due to low tariff realization and coal shortages has further exacerbated the challenges in the segment.
Energy sector is at the heart of climate change contributing over … power generation 45% to the greenhouse gas emissions as it is dominated by coal- based power with installed capacity of 194 GW. Per CSE, of the sector contributes total pollution from the thermal power sector, the coal-based power sector currently accounts for approximately 60% of PM
45%, to India GHG (particulate matter), 45-50% SO2 (Sulphur Dioxide), 30% of NOx (Nitrogen Oxides) and more than 80% of Hg (mercury) emissions. The CO2 emission of coal-fired plants in India was 1.08 kg per kWh, which was 14% higher than China and 7% higher than the global average.
Coal-based power plants Source CEA, Centre for Science and Environment (CSE) CO2 emission kg per kWh India coal fired plant share Water consumption (m3/MWh)
China 0.95 Hg 80% China 2.5 Best PM 60% Mean Global 1.01 USA 2.0 45- SO2 50% Worst
India 1.08 NOx 30% India 2 4.0 9.8
The age profile of installed capacity of thermal plants indicates that 50% of the installed capacity is more than 10 years old and about 25% is more than 20 years old. In addition to this, 85% of coal installed capacity the coal plants are based on sub-critical technology till 2015. This adds on to the 85% sub-critical technology emission burden of the country. Emissions from Indian plants are high because most 25% over 20 years old plants still use subcritical technology with low efficiencies of 32% to 33%. A study carried out by the Centre for Science and Environment (CSE) selected coal-based thermal power plants across India, found that the average efficiency of the plants was 32.8%, one of the lowest among the major
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power producing countries. The average water consumption observed stood at 4 cubic meters per watt hour (m3/ MWh) as compared to 2.5 m3 per MWh that of China. Coal or Lignite have high content of Sulphur and Nitrogen, and hence equipment and processes would be needed for cleaning of SO2 and NOx respectively before they are released.
The Government of India has taken several initiatives to improve the efficiency of coal-fired power plants and to reduce … 85% thermal its carbon footprint. According to the new policy, 2017 onwards, plants not comply all new coal-fired power plants are to be based on supercritical technology with a target of 50% super-critical coal-fired power with emission norms plants by 2040 to boost average coal plant efficiency. In addition, the new emission norms introduced in December
2015 necessitates monitoring of NOx, SO2 and mercury in addition to PM, the only pollutant that was regulated prior to Dec 2015. The new norms also require restricted water consumption by power plants which will lead to a remarkable reduction in freshwater withdrawal by thermal power plants. The table explains the emission norms:
Thermal Power installed units Before 2003 2003 to 2016 2017 onwards Particulate Matter 100 mg/Nm3 50 mg/Nm3 30 mg/Nm3
Sulphur Dioxide (SO2) 600 (< 500 MW), 200 mg/Nm3 (>500 MW) 100 mg/Nm3 Oxides of Nitrogen (NOx) 600 mg/Nm3 300 mg/Nm3 100 mg/Nm3 Mercury (Hg) 0.03 mg/Nm3 0.03 mg/Nm3 0.03 mg/Nm3
The new norms also require all existing cooling tower-based plants to restrict water consumption to 3.5 m3/ MWh. Whereas, the new plants to be installed after 1st January 2017 shall have to meet specific water consumption up to maximum of 2.5 m3/MWh and achieve zero waste water discharged.
Initially, existing thermal power plant units were to meet the limits within two years from the date of publication of this notification. However, barring a few, none of the new plants or units meets the stricter thermal power plant emission standards and have now been granted extensions till 2022. It is important that power producers comply with new emission standards by 2022 for India to meet its emission targets. Currently over 85% of India’s entire thermal generation fleet does not fully comply with new emissions limits.
The norms call for need for Renovation and Modernization (R&M) and Life Extension (LE) of existing old power stations. About 135 thermal stations had been shortlisted for R&M/ LE accounting for 29 GW of capacity. R&M/LE works in respect of 37 thermal units with aggregate capacity of 7,202 MW has been completed till date. Additionally, to adhere to the norms, thermal power plants were required to install three pieces of technology: Electrostatic precipitators (ESPs) to curb particulate matter, flue gas desulphurization (FGD) to minimize SO2 and mercury, and selective catalytic converters (SCRs) and selective non-catalytic converters (SNCRs) to reduce NOx.
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The cost estimated for emission equipment to meet the SO2, NOx and water norms for a typical 210 MW would be around INR 0.3 – 0.7 crore (USD $40,000 – 90,000) per MW, amounting to INR 65 – 145 crores (USD $8.6 – 19.3 million). This would increase the cost of power production from coal-fired power plants. It is estimated that the implementation of emission technology would lead to a tariff increase of approximate INR 0. 35 per kWh (60% PLF & 15 years evaluation) for plants with commissioning between 2014 - 2016.
Example: 210 MW - tariff impact of emissions Fixed Charge Variable Charge GE Estimates (INR per kWh)
0.32 4.48 0.03 4.81
1.87 1.90
2.61 2.91
Current Tariff Impact on Fixed Impact on Variable Revised Tariff
In addition, in the merit order, renewables having the lowest impact on environment are given top priority of dispatches. However, when it comes to non-renewables, no such priority is followed. Currently, the merit order is decided … merit order based on only the variable cost of generation from the unit. doesn’t consider This does not necessarily guarantee that the unit, which is having low variable cost and is up in the merit order, is also environmental impact generating the power efficiently and polluting the environment the least. This contradicts and negates the objectives set out by India in reducing GHG emissions - CO2 emissions and reducing the ill effects of air pollution SO2, NOx and PM. The merit order should incorporate the efficiency and GHG emissions aspect. In the merit order, the renewables which are causing least harm to the environment are to be must run, followed by fossil units which are stacked as per respective efficiency levels (priority of dispatch highest to lowest). In addition, the current contracting through merit order leaves several low-cost generation capacities partially or sub-optimally utilized. Discoms do not have visibility of other cheaper options nor do they have the right to requisition/schedule power from the generating stations with which they do not have a contract. The scheduling in individual silos by each discom lead to sub-optimal utilization of lower cost generation while relatively expensive generation is used.
The capacity of 22.7 GW which cannot be retrofitted with emission control technology for various reasons are being considered for retirement during the 2017 – 2022 timeframe. Additionally, a capacity of 25.5 GW, has been considered for retirement during 2022 - 2027, which will be completing 25 years of operation by March 2027. From retiring coal-based power completely, according to CEA, India would need 6.4 GW thermal power during 2017 - 2022. However, coal-based power projects of ~44 GW are under construction and likely to yield benefits during the period 2017 - 2022. Additional 46.4 GW of thermal power is estimated to be required during the 2022 - 2027.
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The government is planning to retire approx. 50 GW of coal-fired power plant till 2027 and compensate with 90 GW of additional capacity in the country. The capacity additions in coal should be carefully evaluated against holistic environment impact (emissions, resources, cost) and integration of renewables with respect to evacuation infrastructure and variability in generation.
Coal-fired power plants installed capacity Source CEA - NEP, GW 46 26 44 23 217 238 196
August 2018 Under To be 2022 Additional To be 2027 Actual construction retired Estimate Required retired Estimate
Thermal units are designed to operate on a base load condition and all components are accordingly designed for operation for certain creep life hours and certain fatigue life in terms of number of starts. As the operation regime changes and moves away from base load operation to cycling operation, the component life gets consumed at a faster rate. When the number of starts increases the fatigue life of the components decrease faster. Two shift operation hampers the reliability of such components and increases the Operation and Maintenance (O&M) cost towards maintaining healthy reliable operation of the unit. The loss of efficiency for operating the unit at part load would translate into relatively higher variable cost of generation. Apart from the impact on the additional variable cost of generation, flexible operation of the unit has impact on the O&M cost as well as the component life gets consumed faster with reduced reliability.
Typically, units only operating at part load are not likely to have any impact on the cost of the O&M as the cost of O&M is found to be more related to the shutdown or start-up of the unit rather than operating the unit at part load. The O&M cost is found to have a strong correlation with the number of starts and stops. If the turning down of the units to their minimum load is not sufficient to absorb higher generation from renewables, the units need to be shut down to accommodate this and once again restarted when the renewables generation reduces drastically. This start and stop of the unit implies that the life of the unit is consumed faster and there is a need to spend higher O&M expenses to continue to run these units with similar levels of reliability.
The coal-based power units are also handicapped by the worsening asset quality and rising non-performing assets (NPAs). Around 54.8 GW of coal-based power (44 assets) is stressed because of non-availability of coal, lack of assured offtake, and huge under-recoveries due to disallowance because of various factors. In addition, around 23 GW of capacity under construction is also potentially stressed. That’s tantamount to around INR 4 trillion (approx. USD $53 billion) of debt under stress—and potential NPAs. According to RBI,
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the total outstanding loans of scheduled commercial banks to the power sector (including renewables) stood at INR 5.65 trillion (approx. USD $75 billion) as on March 2018.
Discoms have shied off power purchase agreements (PPAs) and prefer to buy power through short-term contracts or the open market, given subdued offtake and prices, and significant capacity addition in the past five years. Consequently, many generators have been selling electricity at subsidized prices or have switched off plants, leading to defaults on financial covenants. Increasing thrust on renewable energy and clean energy have also impacted the procurement of thermal power plants. Discoms are also opting for load shedding and not buying enough because of poor financials. Coal shortage and absence of fresh coal linkages (none since 2010), restrictions on the use of linkage fuel, and cancellation of coal mines without alternative arrangements have hit thermal plants. Of the 72 coal blocks auctioned and allotted so far, only a handful have started operations. It is estimated that Coal India Limited will not be able to meet this requirement till at least 2020 even if thermal power plants run at 55% plant load factor. Currently, the government is evaluating reviving a total of 34 coal-fired power projects, with an estimated debt of INR 1.77 trillion (approx. USD $23.6 billion), under various financial schemes. These plants are facing issues related to paucity of funds, lack of power purchase agreements (PPA’s), and absence of fuel security.
In addition, as the coal-fired power plants being relatively considered a drain on environment and resources, have challenges in attracting low cost sources of funds especially from Multilaterals, Export Credit Agencies, International Financial Institutions, and others. Considering such challenges faced and the changing policy environment, India needs to juggle its energy mix with a focus on climate change through clean energy and improved plant efficiency.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
4. CHARTING THE FUTURE OF ENERGY WITH GAS BASED POWER
Usage of gas to build smart cities, industrial corridors, and power plants ultimate would lead to a gas-based economy to address climate change. Increasing the quantum of gas- based power generation, a cleaner fuel in the energy mix which will add … <0.35 tCO2/ to the nation’s list of actions to address climate change. Renewables alone cannot solve the problem of climate change given the challenges in MWh gas - locational feasibility with respect to evacuation infrastructure and based power variability in generation. Nuclear energy has high potential in the long term but faces challenges in the near term with respect to the liability issue, fuel availability and cost. Hence, it would be imperative to include an alternate source of clean energy like gas-based power to meet net load requirements. Increase in gas-based power generation would also help replace more expensive liquid fuels across a wide variety of power applications.
Gas based power generation has many inherent benefits and is an important option in the energy mix to be considered for sustainable power for tomorrow.
(1) Gas to drive climate change: India is the one of the top contributors to the outdoor air pollution burden. Gas will help in reducing the carbon foot print with significantly lower CO2 emission levels vs. coal i.e. tCO2/ MWh levels for coal is 1.2 to 1 (67.5 MW to 600 MW), whereas gas is in the range of 0.42 (for > 100 MW) as per CEA, December 2014.
CO2 emissions tCO2/ MWh Gas emission as percentage of coal emission Source CEA 2014-15, GE Estimates Source CEA Estimates
1 - 1.2 <35% 0.87 0.85
<0.35 <10% 0% 0% 0%
Coal Coal Coal Gas CO2 NOx PM HG SOx < 600 MW > 660 MW > 800 MW H class
(2) Gas to help integrate influx of Renewables: With India setting ambition targets of 175 GW renewable energy, gas-based power generation will help balance the renewable energy in the grid. In addition, it would help meet peak demand which lasts from mid-June until October for majority of states. Flexible gas-based power generation having quick start up, deeper turn down and faster ramp rates are key enablers to integrate higher renewables into the system and meet seasonal power and peak demand. Gas-
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based power plants could be designed to meet specific start stops and ramp up to meet state specific demands. The advanced class of gas turbines like 9HA class gas turbines has capability to ramp output at approximately 88 MW per minute in combined cycle plant set up for single block. Similarly, hot … 80 MW per starts can be achieved in less than 30 minutes for 9HA plants. The combination of fast ramp, quick startup time, robust grid response minute ramp up features in 9HA plants along with best in class digital friendly controls and software provide best operational flexibility for integrating with gas - based various sources of power including renewables.
(3) Gas adds to improved efficiency in system: Currently the state’s thermal power plants units are operating at low PLFs, adding to the cost of efficiency lost. The generation cost per unit in thermal power plants units has also been increasing year on year. Also, as discussed in the earlier section, the use of coal- based power plants for renewable balancing would add to operational inefficiencies and O&M cost. Gas- fired power plants are more efficient as compared to coal fired plants making them more cost optimal. Gas- fired power plants operate at efficiencies as high as 60% vs. sub 35% efficiency levels of coal-fired power plants.
(4) Gas ensures optimal use of resources: Gas based power generation has lesser construction time with gas based combined cycle power plants being commissioned in a span of 36 months as compared to coal- based power plants which have an average construction time of 60 months. In addition, gas-based power plants have lower land and water requirements as compared to coal-based power plants. The footprint area requirement for a typical 400 MW combined cycle block is about 8 acres. The low level of land requirements and emissions, enables gas-based power plants to be placed near load centers, significantly reducing the cost of transmission and distribution investments. The water requirement of the gas-based power plant is also much lower than that required in a coal-based power plant. Gas based power generation, being environmentally friendly, attract low cost and long-term funding options from various Export Credit Agencies or Multilaterals and International Financial Institutions. Over 80% of the project cost could be financed through international funds and balance through local commercial loans. Power plants resource utilization and efficiency Gas based as a percentage of coal based, Source GE Estimates 65% of Coal base power plant
25% of Coal base 25% of Coal base power plant power plant
Land Water Capital Expenditure
Despite all the benefits, the country has not been able to ramp up gas-based power generation. Gas turbine plants have been employed as peaking plants for decades to provide flexibility. However, successful operation of gas-fired power plants depends on the availability of fuel, its economics and gas infrastructure, including pipelines and storage.
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India Power Vision: Building for Tomorrow, Strengthening Today Gas Based Power Generation
… 117 MMSCMD gas required to unleash full
potential of gas - based installed capacity power
The current installed gas-based capacity in the country is at 24.8 GW. Most of this capacity is stranded and is operating at PLFs of under 30%. The main issue that needs to be addressed is fuel supply. Normative gas requirement to operate the existing power plants of capacity at 90% PLF is about 117 MMSCMD. However, average gas supplied to these gas-based power plants during the year 2016 - 2017 was only ~ 30 MMSCMD.
Widening gap with domestic supply Gas is ~5% of generation … low PLF Gas MMSCMD Demand Supply, Source NEP Capacity GW PLF %, Source NEP
117 66.9% 23 24 20 22 18 81 17 17
22.8% 59
30
'11 '12 '13 '14 '15 '16 '17 '11 '12 '13 '14 '15 '16 '17
A gas-based capacity of 14,305 MW, comprising 5,194 MW of gas-based power plants having predominantly allocation from KGD6 fields, 3,762 MW of gas-based capacity commissioned without any gas allocation and 5,349 MW of new gas-based capacity which are ready for commissioning (if gas is made available) were considered as stranded. To optimally utilize gas-based generation capacity and to meet the gas requirement of grid connected gas-based capacity, India needs to secure economical fuel supply. Below table shows the current gas allocation per NEP and CEA sources.
State MW (Existing + New) Gas Allotted (MMSCMD) Gas Consumed (MMSCMD) Gujarat 7480 21 13 Andhra Pradesh 5028 + 3000 26 16 Maharashtra 3207 19 4 Delhi 2208 7 4 Uttar Pradesh 1493 8 2 Tripura 1132 5 5 Rajasthan 1023 5 3 Tamil Nadu 896 + 65 4 6 Assam 654 3 4 Uttarakhand 450 + 450 1 2 Haryana 432 2 1 Puducherry 33 0 1 Grand Total 24037 + 3515 102 61
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The domestic gas supply has not improved since FY 2014, with production declining to 87.4 MMSCMD in FY 2017 from 97 MMSCMD in FY 2014 and from the peak level production of 143 MMSCMD in FY 2011. This scenario is expected to change with the fast track development of 10-15 TCF of discovered resources in next 4 to 7 years will give a boost the domestic gas market. Development of these gas fields will lead to an additional potential production of around 100 MMSCMD. Further, there is potential of enhanced recovery from matured fields through the use of technology. This is likely to additionally increase production by an equal amount by improving the recovery factor.
Natural Gas Production Imports of LNG BCM % Growth, Source MoPNG MMT % Growth, Source MoPNG
41 10.5% 20 19 35 34 35 32 32 16 14 15.4% 13 14.6% -1.1% 13 -4.9% -4.2% 8.5% -13.0% 5.5% -14.5%
-0.6% -1.1% '13 '14 '15 '16 '17 '18 '13 '14 '15 '16 '17 '18
Currently, India is the fourth largest importer of LNG, sourcing approx. 20 MMTPA. With new upcoming terminals and with the Government of India targeting to increase the share of natural gas in the energy mix from the current 6.5 per cent to 15 per cent by 2022.
To support the growth of LNG in India the total import capacity is expected to reach more than 70 MMTPA in the coming years. Currently India has 25 MMTPA total import capacity with additional 12.5MMTPA under construction. Another 30 MMTPA is in planning and proposal stage.
Terminals Developers Status Capacity MMTPA Dahej Petronet LNG Limited Existing 15 Hazira Shell, Total Gaz Electricite Existing 5 Dabhol GAIL, NTPC Existing 5 Kochi Petronet LNG Limited Existing 5 Ennore India Oil Corp, TIDCO Commissioned July 2019 5 Dahej Expansion Petronet LNG Limited Under Construction 2.5 Mundra GSPC, Adani Under Construction 5 Dhamra Adani Planned 5
Grand Total 47.5
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Terminals Developers Status Capacity MMTPA Kakinada APGDC Planned 2.5 Dhamra Adani Planned 5 Jafrabad (FSRU) Swan Energy Planned 5 Jaigarh H Energy Planned 2.5 Gangavaram Petronet LNG Limited Proposed 5 Kolkata Port H Energy Proposed 2.5 Chhara HPCL, Shapoorji Palonji Proposed 5 Krishnapatnam LNG Bharat Proposed 2.5
Grand Total 25
Moreover, the Government has envisaged developing additional 15,000 km of gas pipeline network. At present, about 16,200 km long gas pipeline network is under operation and it has formed a partial gas grid by inter-connecting western, northern and south-eastern gas markets in the country with a capacity of 430 MMSCMD and another 8000 km is under construction.
Gas is also becoming economical with international trade in LNG continuing to be one of the most vibrant segments of the world’s natural gas value chain. Global trade increased sharply again in 2018, following a strong performance in 2017, rising by 28.2 MT to reach 316.5 MT. This marks the fifth consecutive year of incremental growth, and the third-largest annual increase ever (behind only 2010 and 2017). The increase was driven by higher production at new liquefaction plants in Australia, the United States, and Russia. As new upcoming projects in Australia and the United States bring new capacity on line, markets are expected to continue to grow in future years. Till recently, only a handful of suppliers dominated the LNG import market, but things are changing now.
LNG Supply MMTPA by Top 7 countries 2017 2018 Market share 2018, Source IHS/ IGU
24.9% 21.7%
7.7% 81.078.7 6.7% 6.5% 6.0% 4.8% 68.6 56.2
26.424.5 21.1 21.320.5 18.9 13.1 11.1 16.215.2
Qatar Australia Malasyia USA Nigeria Russia Indonesia
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Qatar continued to be the world’s leading exporter of LNG, with 2018 liquefaction reaching 78.7 million tonnes per annum (MTPA), followed by Australia, Malaysia, and the United States. Approximately 80% of incremental growth in export 2018 came from Australia, the United States and Russia. There are 101 MTPA of liquefaction capacity under construction world-wide.
Thus far, the global market is absorbing new supply with minimal distortion, as new buyers and existing markets alike demonstrate a high need for natural gas to meet growing energy demand. The need for cleaner fuels that are available on-demand is a key part of this trend. Non-long-term trade (which includes “spot market” activity) increased yet again, reaching over 31% of total trade in 2018. U.S. shale gas continues to moderate North American natural gas prices through technology and efficiency improvements, which translate into lower U.S. feedstock costs.
Global LNG prices had diverged from its long-term tandem movement with crude. Since the 2014 drop in oil prices, LNG prices around the world have moved closer to convergence. Buyers have increasingly sought to diversify the pricing structures of their LNG portfolios, shifting away from the traditional fixed-destination, long-term, oil-linked LNG contract. The sustained growth of shale gas production in North America has seen Henry Hub trade at a discount to other major gas benchmarks in the Pacific Basin and Europe, prompting others to sign several offtake agreements based on Henry Hub linkage. It is expected that as new liquefaction capacity is added prices could fall further. Moreover, gas price movements in North America are driven more by overall gas supply-demand market fundamentals than by changes in the oil price. Henry Hub may further fall with removal of infrastructure constraints in the Marcellus and Utica shales, opening supply to the market. In addition, end-market fuel competition with coal and renewables in the power sector will provide an upside limit.
The following chart shows the trends in LNG-related prices influenced by drivers of volatility, particularly in spot- or hub-based prices.
Natural Gas Prices $ per mmbtu 20 US (Henry Hub)
16 UK (NBP)
Average German Import Price 12 Japan LNG CIF
8 OECD Crude Oil CIF
4
0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Apr-19
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Lower oil prices may have decreased the spread between oil-linked and US LNG contracts in the near-term, but the lower starting point of US prices and abundant resource mean that US LNG contracts may offer buyers reduced price volatility over the next few years.
As India diversifies its gas supply, this will not only lead to increased supply but will also help the country negotiate better prices for LNG which may then make it possible for the economics to work and LNG could be used to run the stranded gas-based power plants. Though, the Indian Rupee devaluation could have an adverse impact.
The variable cost of power generated from imported RLNG remains higher than the variable cost of generation from fuels such as domestic and imported coal. A combined outlook with the environmental impact and efficiency gains needs to be relooked to consider the economic viability of gas for power generation.
Currently, domestic gas is allocated by the Indian government as per ‘Gas Utilization Policy’ in order of priority: • City gas for households (Piped Natural Gas - PNG) and transport (Compressed Natural Gas – CNG) • Fertilizer manufacturing plants using gas as an input • LPG plants using gas as an input • Gas-based power plants that supply gas to grid-connected power distribution utilities
The government is keen to move to market-based mechanisms like Gas Trading Hub and is likely to eventually phase out the Gas … right policies Utilization Policy. Long term LNG has a bigger play in the Indian required to make market even as we may witness domestic production coming in in the 2022 - 2024 timeframe. gas feasible in India To ensure that the 24 GW of stranded gas capacity can be utilized towards addressing the balancing requirements with increasing renewable penetration and contribute to climate change, the revival of these gas-based power projects is critical. The upcoming infrastructure in terms of LNG import terminals, gas pipeline and domestic gas exploration would help ensure that gas is available with viable economics. To complement the fuel supply, it is important for the government to have the right policies and procedures in place to meet the gas requirement of grid connected gas-based capacity for its optimal utilization.
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5. GE PROVIDING WORLD-CLASS SOLUTIONS FOR SUSTAINABLE POWER
With the growth of renewable power generation in the grid, additional tasks need to be taken by conventional power plants such as coal and gas-based power plants to secure an economic and reliable power supply for the country. New operating requirements have emerged and there is a need for flexibility to stay viable. The critical factors to consider for evaluating the tariff order includes lower load of operation (reduced turndown), faster ramp-up, faster start-up time and increased fuel efficiency as the demand for ancillary services is increasing to support grid requirements. GE has many advanced technologies that help meet the above objectives
(1) GE Aeroderivative gas turbines are a superior alternative in complementing the growing renewable landscape and creating benefits for grid operators. The following attributes and impacts of GE aeroderivative technology offer a wide range of features to address the grid pain points and support our customers with proven capabilities to counter the renewable resources’ intermittency and shortfalls:
Attributes for Grid Firming Aero Capabilities Value to the Grid Fast ramp rate ~50 MW/min Balance (regulation), load following Fast-start ~5 min starts to full power Contingency / Replacement Reserve Cycling capability with multi Multiple starts/day Spinning/non-spinning reserves daily starts/ stops High part load efficiency ~40+% efficient at 50% of full load Load following Low minimum load ideal for load Deeper turndown Load following following Pro-boost (Power boost short duration) and synch condensing Frequency response Added frequency support capabilities where in some cases, Primary, Secondary, Tertiary the synch condensing is offered in a clutch less configuration Fuel Flexibility (Gas, LNG, LPG, Viable thermal solution in many Operational considerations Diesel, Naphtha, Propane & Ethane environments capability) Fast Installation (3-6 months for Quick solutions for emergency Operational considerations simple cycle) situations Operational considerations Power Density and Transportability Viable thermal solution in many Dry Low Emissions Combustor for Operational considerations environments regions with water scarcity Modular maintenance philosophy Operational considerations reducing downtime and allowing Higher Reliability and availability Engine exchanges in 2 days
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Following are few current examples of GE aeroderivatives in operation complementing renewable resources • 4 X LM6000s, 180 MW for peak power across the Kansas plains. • 2xLMS100s in Combined Cycle in Turkey • 3 X LM6000s, Indigo Generation Facility to balance generation from Wind Turbines in Palm Springs, CA. • 1 X LMS100 provides Synchronous Condensing support in Groton, SD. • 9 X TM2500s, a trailer mounted power generator, provide critical backup generation in South Australia. • 2xLMS100s in Australia and New Zealand complementing renewables.
(2) Hybrid Aeroderivatives Gas Turbine with Energy Storage: Energy Storage is becoming very popular in the grid firming industry due to declining cost, low-carbon emissions and fast response time. Nonetheless, the limitations of batteries in terms of time, duration, and total discharge to fully meet the gap when renewable power is not available requires aeroderivative gas turbine backup to address the shortfall.
One solution recently developed by GE and its partners utilizes a hybrid electric gas turbine (Hybrid EGTTM). With the increasing proportion of intermittent resources supplying power to the grid, battery storage holds significant promise in coming years. Bulk storage will provide backup power, peak shaving and ancillary services. Transmission and distribution investments may be deferred as batteries provide congestion relief during times of peak demand.
GE hybrid electric gas turbine (Hybrid EGTTM), is the world’s first gas turbine and battery storage hybrid, coupling a 10 MW battery with a 50 MW GE LM6000, operated by an integrated digital turbine control system. Key benefits include: • “Spinning reserve” without firing gas turbine, utilizing near instantaneous battery power through inverters. • Higher asset utilization. • Reduced greenhouse gas emissions. • Smooth transient response with less turbine thermal stress, thereby lowering maintenance costs.
The EGTTM Hybrid Application is the combination that offers the best of both worlds, as it provides the environmental and cost benefits of battery storage, along with flexibility and other ancillary services of aeroderivatives needed to balance renewables, with an unlimited capacity.
As an example, LM6000 PC Hybrid EGT jointly developed by GE and Wellhead Power Solutions, combines a combustion gas turbine with an integrated battery storage component operated by a proprietary software system. This would help provide needed generation for local reliability to the grid.
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(3) OpFlex Advanced Solutions for enhanced performance, insights and control of power assets: OpFlex Advanced Controls Solutions suite is GE’s advanced controls platform designed to improve operational performance and provide insights and control of new or existing power assets.
Start-Up Combustion Load System
Agility Versatility Flexibility Reliability Load
Time Start-Up Agility Combustion Load Flexibility System Reliability Versatility Fast, reliable, Robust operation Load range expansion, Enhancement for repeatable starts during weather, efficiency, reliable, with fuel, and responsiveness & cost effective low emissions grid variations customization operations Reliable, Repeatable Fuel flexibility Higher output Liquid reliability Low fuel Fewer trips Deeper turnaround Fewer system trips Low emissions Longer intervals More efficient Less downtime
Advanced controls technology for all modes of power plant operations
• Start-Up Agility reduces start-up time and fuel consumption to lower operating costs at part-load conditions. It enables faster start-up of the gas-based power plants, up to 2-3 times higher than typical allowable limits. • Combustion Versatility - Improves reliability by maintaining availability during changes in fuel composition, weather, and grid frequency. • Load Flexibility - allows the Gas Turbine to boost the output by up to 8% to capture high peak demand revenue. Also enables extended turndown capabilities (up to 30% plant load) while maintaining emissions compliance to improve availability and efficiency at part load. • System Reliability includes Start-up Reliability, Diagnostics Productivity, Trip Prevention and Liquid Fuel Reliability that gathers critical information for improving diagnostics and features new performance capabilities to more effectively troubleshoot and operate the gas turbine.
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(4) GE’s flexible 9F class gas turbine helps meet fluctuating power demands: The 9F gas turbines are designed to offer one of the most flexible operational capabilities and dedicated services as per the grid requirements. India has a significant installed base of 9F gas turbines amounting to over 9 GW, which through GE solutions could be upgraded to complement renewables generation very well and play a vital role in balancing and ancillary services.
Factors Current 9F Upgraded 9F Coal Limitations • DLN2+ limits Upgrade the GT with: • Operational turndown & fast start • DLN2.6+ inflexibility capability (ramp rate) • Mark VIe • High capital cost • Auto tune • Increase O&M cost • OpFlex Agility • Increase emissions • No additional with cycling maintenance Higher ramp rate Impact Lower start up time Lower Minimum Load
The DLN2.6+ combustor on 9FA gas turbines shall broaden the operational flexibility and lower NOx emissions to sub 15ppm NOx (30 mg/ Nm3). Per GE Estimate, the following list of nonoperational gas power plants, with the upgradation of the combustion system, will have the best in class capability to provide the balancing and ancillary services as per the grid requirements.
Power Station State Region Sector Frame Type MW
PPCL Bawana Delhi North Private 9F 1500
GMR Rajahmundry Energy Andhra Pradesh South Private 9F 740
GMR Vemagiri Andhra Pradesh South Private 9F 389
Lanco I Andhra Pradesh South Private 9F 366
Lanco II Andhra Pradesh South Private 9F 732
Pioneer Power Maharashtra West Private 9F 370
GSECL Hazira Gujarat West State 9F 370
GSPC Pipavav Gujarat West State 9F 720
RGPPL Dhabol Maharashtra West Central 9F 1467
Reliance Samalkot Andhra Pradesh South Private 9F 2205 GVK Gautami & Jegurupadu Andhra Pradesh South Private GT13E2 690
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(5) GE Digital Solutions for building power plants for the future: The electricity industry is undergoing a transformation. Old approaches and techniques are no longer viable, triggering the need for widespread change in the electricity value network which transcends from generation to consumption including transmission & distribution. Power producers are facing growing pressure to drive their plants’ performance to new levels to enhance reliability, efficiency, output, and flexibility while lowering life cycle costs. The inability of power producers to predict and analyze issues early including operator errors results in a shortfall of nearly UDS $10 billion annually to the power industry.
Energy Customer – Digital Outcomes
3% 2% 5% 25% 20% Unplanned Less fuel on Fuel Efficiency Output O&M Costs downtime starts
Business Deeper Insights Profitability Optimization Operational Better, Faster Productivity Optimization Decisions APM - Asset Real-time Actions Reliability Performance
IOT Cloud Platform Advanced Controls/ Cyber Edge Computing
By embracing digitalization, power plants can apply new insights, capabilities, and innovative business models to improve performance across the entire electricity value network. Digital Transformation can enable power plant producers make better decisions by leveraging analytics, monitoring the performance/health of assets, analyzing the root causes for effective problem resolution, predicting to avoid issues before they occur and optimizing their performance and profitability. Highlighted below are digital solutions which have created a positive impact to the power industry: • Asset Performance Management: Helps power plants leverage machine sensor data into actionable intelligence by combining with robust analytics and domain expertise to provide predictive maintenance towards no unplanned downtime. Also, power plants can create an optimal maintenance schedule for increased asset life and use, by moving to a condition-based program for machine repairs. • Operations Optimization: Helps power producers gain enterprise visibility across power plant and fleet- wide footprints, providing a holistic understanding of operational decisions that can improve efficiencies, reduce emissions, expand capabilities and lower production costs.
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• Cyber Security: Designed to assess system gaps, detect vulnerabilities, and protect power plants critical infrastructure and controls in compliance with cyber security regulations. • Edge Computing: Power plants can leverage data and analytics to manage grid stability, fuel variability, emissions, compliance, and other challenges that impact machine performance.
Power producers globally have benefited by implementing digital solutions and highlighted below are few customer references:
Plant GE Solution Impact BordGais Energy, APM, Advanced USD $0.9 million Cost savings Ireland Controls, Predix USD $2.6 million Cost reduction & avoidance over 1st year
60% Turndown to 40% load Mainova AG, OpFlex Solutions 110% Emission complaint Germany 2% Fuel savings during part load operations
Eon, 40% Faster starts Edge Computing UK 50% Less costly starts
Top Heat rate & low production cost quartile Operational PSEG, Minimized Fuel start cost Optimization USA 1% Improved reliability Solutions Automated Notification on operation anomalies
To meet India’s increasing demand for electricity, power generators and utilities would need to transform how to operate the new and existing fleet–leveraging digital technologies to gain more reliability, productivity, and profitability. India is home to 18% of the world’s population, uses 6% of the world’s primary energy and has the 5th largest power generation capacity. With an intention to reduce carbon footprint, India has set an ambitious plan to add renewable energy generation capacity.
While India is addressing growing demand for electricity today with capacity fueled by coal, it must consider longer term challenges in grid stability due to intermittent power, plant efficiency, environmental impact, and economic factors. Gas-fired plants is an alternative India should consider as a critical part of India’s evolving energy mix. GE technology and digital solutions can help plant owners and operators realize savings and make plants affordable by delivering improvement in plant efficiency, flexibility, and reliability. With GE digital technologies, a 3% improvement in heat rate is estimated to provide an equivalent amount of reduction in tariff with fuel savings, amounting to approx. INR 0.15 (US 0.2 cents) per kilowatt hour reduction in tariff. Over the next decade, it is estimated that there would be a likely impact of over USD $1 trillion in value to be captured in digital transformation. New digitally-enhanced power generation enhanced software and data analytics, combined with advanced hardware, will deliver greater reliability, affordability, and sustainability.
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AUTHORS’ BIO’s
Kanika Tayal is a part of GE’s highly coveted Deepesh Nanda is the Chief Executive Officer Accelerated Leadership Program and is leading for GE Gas Power Systems and GE Gas Power Marketing and Special Projects COE for GE Services in South Asia, responsible for GE’s Power - Gas Power Systems in the South Asia business in countries such as India, region. She joined GE in 2006 and has worked Bangladesh, Sri Lanka, Mauritius, and Nepal. in multiple GE business portfolio including GE He has more than two decades of experience Capital, GE Global Growth Organization, and in the Energy sector. Before starting his stint now GE Power. She is responsible for driving with GE, he served as Tyco Sanmar’s Vice strategic initiatives including market President & Business Manager from 2005 to segmentation, customer outreach, and 2010 and headed Flowserve’s regional office business development activities. She is in- from 2000 to 2005. Deepesh continues to play charge of developing and positioning a significant role in developing growth sustainable power generation solutions in strategies and finding solutions to bring South Asia including Bangladesh, India, and Sri electricity to the far-flung geographies of Lanka by decoding and tapping into demand South Asia. His experience in building through innovative solutions and connecting infrastructure projects impacts everyday lives interested parties in the energy value chain. of people and helps in the next phase of energy transformation for the region.
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Acknowledgments
The development of this whitepaper benefited significantly from the input and support provided by our outstanding group of sponsors and reviewers representing a balance of Technical & Industry Experts, Sales, Government Affairs and Marketing. The reviewers provided invaluable insights and served as a sounding board. We would like to give special thanks to each of them for sharing their time and expertise with us. While the white paper has benefited greatly from their guidance, the views it contains are solely those of the authors and may not necessarily reflect the views of our sponsors and reviewers.
Special Thanks to: (in alphabetical order) • Arun Unni - Senior Engagement Manager, GE Energy Consulting Group • Balachandar Naidu - Global Product Manager, GE Gas Power Systems (Aeroderivatives) • Ihab Chaaban – Global Commercial Development Director, GE Gas Power Systems Aeroderivatives • Khushboo Bhatia – Sales Leader, GE Power Services South Asia • Mariasundaram Antony - Technology Leader, GE Gas Power Systems South Asia • Raghu Viswanathan – Regional Strategic Marketing Leader, GE South Asia • Rasika Chandihok - Senior Counsel Government Affairs, GE Global Growth Organizations South Asia • Roshan Navin - VP&I Business Partner, Healthcare South Asia
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ABBREVIATIONS
APM Asset Performance Management BCM Billion cubic meters CAGR Compound Annual Growth Rate CCGT Combined Cycle Gas Turbine CEA Central Electricity Authority of India CIA Central Intelligence Agency CNG Compressed natural gas CO Carbon monoxide CO2 Carbon dioxide CSE Centre for Science and Environment Discoms Distribution Companies DLN Dry Low NOx ESP Electrostatic precipitators FGD Flue Gas Desulfurization FY Financial Year gCO2eq Grams of carbon dioxide equivalent gCO2eq/ INR Ratio of GHG produced to GDP GDP Gross Domestic Product GE General Electric GHG Greenhouse gas GT Gas Turbine GW Gigawatt H2O Water HG Mercury IEA International Energy Agency IGU International Gas Union IMF International Monetary Fund INDC Intended Nationally Determined Contributions INR Indian Rupee IOT Internet of Things Kg Kilogram KGD6 Krishna Godavari Dhirubhai 6 - Offshore gas field Km Kilometer KW Kilowatt kWh Kilowatt Hour LE Life Extension LNG Liquefied natural gas m3 per MWH Cubic meters per megawatt hour mg/Nm3 Milligrams per cubic meter
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MMSCMD Million Metric Standard Cubic Meter Per Day MMTPA Million Metric Tonne Per Annum MoPNG Ministry of Petroleum and Natural Gas MT Million Tonne MTPA Million Tonne Per Annum MW Megawatt MWH Megawatt Hour NEP National Electricity Plan of India NOx Nitrogen Oxides NPA Non-Performing Assets O&M Operation & Maintenance OCGT Open Cycle Gas Turbine PLF Plant Load Factor PM Particulate Matter PNG Piped natural gas PPM Parts per million PV Photovoltaic R&M Renovation and Modernization RBI Reserve Bank of India RLNG Re-gasified Liquefied Natural Gas SCR Selective Catalytic Reduction SNCR Selective Non-Catalytic Converters
SO2 Sulphur Dioxide TCF Trillion cubic feet tCO2 Total carbon dioxide TWH Terawatt Hour UK United Kingdom UN United Nations US United States USD United States Dollar VOC Volatile organic compounds
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