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Capacity Addition Planning in the Power Sector . Shantanu Dixit www.prayaspune.org shantanu@prayaspune.org. Interaction plan. Capacity addition plans – e.g Konkan region Climate friendly, economic options for meeting energy services needs India’s current capacity addition plans

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capacity addition planning in the power sector

Capacity Addition Planningin the Power Sector

Shantanu Dixit

www.prayaspune.org

shantanu@prayaspune.org

interaction plan
Interaction plan
  • Capacity addition plans – e.g Konkan region
  • Climate friendly, economic options for meeting energy services needs
  • India’s current capacity addition plans
  • Key shortcomings and implications for climate

Prayas

slide3

~4000 MW of existing generation in Konkan

~19,000 MW of new generation planned in the Konkan strip of Maharashtra

~7,600 MW of new generation planned in Shahapur Taluka, Dist. Raigadh

~6,600 MW of new generation planned in Ratnagiri district

Raigadh : 9,558 km²

Ratnagiri : 8,208 km²

Sindhudurg : 5207 km²

interaction plan1
Interaction plan
  • Capacity addition plans – e.g Konkan region
  • Climate friendly, economic options for meeting energy services needs
  • India’s current capacity addition plans
  • Key shortcomings and implications for climate

Prayas

integrated resource planning case studies from india
Integrated Resource Planning: Case studies from India
  • DEFENDUS (Karnataka 1990)
    • Development Focused End Use oriented Scenario Amulya Kumar N. Reddy et.al.
  • Least Cost Plan (Maharashtra 1994)
    • Prayas Energy Group

Prayas

typical energy saving potential based on karnataka irp by reddy et al
Typical Energy Saving Potential (based on Karnataka IRP by Reddy et. Al.)
  • End use efficiency savings
    • Industry modernisation–efficient drives etc: 15-25%
    • CFL for lighting : 14-58%
    • Solar Water heaters: 28%
    • LPG instead of electric stoves: 18%
    • Frictionless foot-valves and HDPE piping for agirculture pumps: 30%

Prayas

typical benefits of irp
Typical Benefits of IRP
  • Typically: efficiency can meet 25-40% and renewable generation can meet 20-25% of incremental needs at lower economic costs.
  • Maharashtra IRP – while meeting same level of energy services
    • Financial saving - ~ 33%
    • Reduction in incremental fossil fuel consumption - ~ 55%

Prayas

interaction plan2
Interaction plan
  • Capacity addition plans – e.g Konkan region
  • Climate friendly, economic options for meeting energy services needs
  • India’s current capacity addition plans
  • Key shortcomings and implications for climate

Prayas

capacity addition 11 th plan targets
Capacity Addition: 11th Plan targets
  • Projection to add ~ 600 GW in next 25 years
  • 11th Plan (2007-12) - 68869 MW
      • 48010 Coal & Lignite, 15585 Hydro, 3160 Nuclear, 2114 Gas
      • 53% Central, 33% State, 14 Private
      • + 13,500 MW Renewable, Captive …
      • Transmission & Distribution to carry this power

Prayas

drivers
Drivers
  • Growing economy
    • GDP growth from ~ 5 - 6% to 8 - 9%
  • Continuing shortages
    • Peak shortage - ~ 12% and energy shortage ~ 8%
    • Only 40-50% of targets met in 8,9,10th plans
  • Need for greater reliability
    • Target of 5% spinning reserves
  • Need to electrify all houses
    • 44% houses do not have electricity

 About 12000 MW of capacity addition

Prayas

approach towards meeting energy needs
Approach towards meeting energy needs
  • “We do not enjoy the luxury of an either-or choice: India needs energy from all known and likely sources.” – Prime Minister of India (Speech at Tarapur Automic Station 31st August 2007, - http://www.rediff.com/news/2007/aug/31guest.htm)
  • Ambitious projections for 10 years
    • 100,000 MW Thermal
    • 50,000 MW Hydro
    • 11,000 MW Nuclear
  • Expanding fuel supply and sources

Prayas

policy changes to meet capacity addition needs
Policy changes to meet capacity addition needs
  • De-licensing of generation projects
  • Merchant plants
  • Captive power plants
  • Ultra mega power plants

 Encourage capacity addition through all means

Prayas

ultra mega power projects
Ultra Mega Power Projects
  • 4000 MW super critical coal thermal plants (5 – 7 plants expected)
  • Federal government lead
    • Fiscal incentives, conducting competitive bidding, helped evolve power purchase agreement and payment security mechanism
  • Encouraging results for first two projects
    • Half a dozen bids for each project
    • Highly competitive tariff
      • US cents 2.7 / kWh for pithead project and US cents 5 / kWh for imported coal based project (levalised tariff)
    • Both projects won by private sector

Prayas

ultra mega power projects1
Ultra Mega Power Projects
  • Key Features of UMPP Competitive Bidding Process
    • Transparent process
      • Well laid out procedures and timetable
      • Anonymous comparison of all bids to be made public
      • All contracts signed with winning bidder (including PPA) will be public
    • No uncertainty and little scope for post bid negotiations
      • All required inputs and clearances to be provided by special purpose vehicle (govt. owned shell company)
      • Project contract formats finalized before bidding
      • Simple criteria for selection of winner

Prayas

interaction plan3
Interaction plan
  • Capacity addition plans – e.g Konkan region
  • Climate friendly, economic options for meeting energy services needs
  • India’s current capacity addition plans
  • Key shortcomings and implications for climate

Prayas

capacity addition planning oblivious of key challenges
Capacity addition planning – Oblivious of key challenges
  • Significant over projection

 Even though capacity addition is 40 – 50% less, shortages have reduced or increased very moderately

Prayas

capacity addition planning oblivious of key challenges1
Capacity addition planning – Oblivious of key challenges
  • Economic implications
  • 11th five yr. plan
    • Projected investment need – US $ 255 Billion
    • Fixed cost of US cents 15 / unit of incremental sales!

(v/s current total tariff of around – US cents 8 / unit)

Prayas

social and environmental issues 1
Social and Environmental issues -1
  • Electricity Policy
    • Environment
      • Appropriate advance action through EIA and Environment Action Program
      • Streamline procedures including setting up of Land Bank and Forest Bank
      • Coal washeries, full compliance with environmental norms
    • Demand Side Management, Energy Conservation
  • Hydro Policy
    • Proper implementation of National Policy on Rehabilitation and Resettlement to ensure that the concerns of project-affected families are addressed adequately.
    • Adequate safeguards for environmental protection with suitable mechanism for monitoring of implementation of Environmental Action Plan and R&R Schemes

Prayas

environment issues 2
Environment issues -2
  • Plans have little details on environment & social impacts
    • Emphasis on ‘speeding up’ clearance of environmental ‘obstacles’
    • No analysis on: How much land required? How many people displaced? Livelihood impact?
    • No focus on enhancing the effectiveness through democratisation (participatory R&R mention in Transmission Chapter of11th Plan)

Prayas

salient observations
Salient observations
  • Over projection of demand and poor implementation performance
  • Shortage psychosis and exaggerated capacity addition plans
  • Integrated resource planning is avoided
  • Climate friendly options, even though economical, are ignored

Prayas

lesson
Lesson

To address climate change issues, improvement in national level planning process is critical.

Prayas

india s capacity addition plans
India’s Capacity Addition Plans

Source: Integrated Energy Policy, 8% GDP Growth Scenario

Prayas