Feature

Decentralised Generation: Effective Solution to Energy Demand

Posted on 09 February, 2010 | Tags: Captive Power

Captive Power Plants are the recent trend that the industry is switching over to meet with the growing power demand. Tapping excess power from captive generators can help tide over the huge demand supply gap in short term.

-Vivek Taneja

Decentralized power generation can be defined as power generated near the point of use of power and avoids large investments in transmission corridors in terms of capital and more importantly time. In India one of the most prevailing distributed generation is captive power. Captive Power Plant is a generation unit setup by the industry for its exclusive consumption of electricity. Most Industries are highly energy intensive and are largest consumers of electrical energy produced. Though, industrial growth in India has been on a fast track during the past years with India emerging as one of the fastest growing economies power sector has not grown at similar pace. The overall lifestyle improvement is another phenomenon that has further widened the demand supply gap that our country is facing right now.

Typically industries draw power from local distribution utility, which are generally state-owned. Recent trend has been an increase in number of industries relying on their own captive and cogeneration power rather than on grid supply. This stems from the facts such as non-availability of adequate supply, poor quality, reliability and higher tariff which results from heavy cross subsidization.

Tapping excess power from captive generators has been identified as one of the immediate solutions by central agencies that can help tide over the huge demand supply gap in short term. However, there are various concerns that the industry is still grappling with like availability of fuel and other challenges in terms of tariff structure for surplus power produced by them, sharing of risks, high level of duties and taxes on sale of power, open access issues and lack of long term formal policy to help them predict the returns.
 
Current Power Scenario
In India, the total installed capacity of power plants during 2008 was 186000 MW, out of which Captive Power Plants (CPP) accounted for 42000 MW of power. Though Government has been taking adequate measures to meet the needs of increasing demand but has not been able to bridge the gap. Shortfall of 8 to 9 percent in power demand that is observed at base time increases to 13 percent during the peak time. Power demand in India has increased year on year with the increasing number of industries. Other countries in the South East Asia too are facing the similar situation as a result of increased industrial growth.

Statistics reveal that the demand of power in India almost doubled in 2006-07 as compared to the demand during 1992-93. By 2012, India would require total installed capacity of around 212000 MW of electric power and additional 10000 MW per year. Table 1 gives an idea about the difference between the demand and the achieved power supplies under the Five Year Plans from 1992 to 2008.

Capacity Scenario
It may be difficult for the Government alone to match the supplies with the growing demand during the next five to ten years. Increased private participation in all facets of power including generation, transmission and distribution is the only way to help us tide over the problem. Similarly, apart from public private participation a mix of centralized and decentralized generation, which is planned is just as essential. Since centralized large generation units alone cannot help us tide over the current problem in mid term time period. Most of the large utility power plants are generally located away from the load centers, the transmission, distribution and other losses result in inefficiency in the overall system, while necessitating huge investments to get the required power to all consumers.
 
Apart from large investments, concentrated pollution, availability of water resources, land acquisition, rehabilitation etc are some of the issues that result in long gestation periods for setting up of such utility scale power projects.

A good example of forward thinking in planning has been demonstrated by most European nations and Denmark is a very good example. Until the mid 80s Denmark's power demand was met only with Centralized System. Decentralization of power generation helped the country to meet with the increasing energy demand while investing only optimal capital in transmission corridors. Currently most of the power demand of the country is met by decentralized power generation for industrial as well as domestic applications. 

Decentralized generation utilizing captive power effectively offers many benefits and can be an immediate solution to meet the energy demand because of lower gestation period as compared with the utility scale power plants. Smaller capacities of 20 - 100 MW unit size plants can be set up in a time span of within two to three years. Multiple units of say 50 - 100 MW capacity can easily add about 1000 MW to the grid in just 2-3 years. If this is done on a planned manner substantial reductions can be observed in the overall costs of the power network with avoided cost of transmission corridors. These planned decentralized generation units can be set up to ensure strengthening of the fag ends of distribution network. Small capacity units by industry would also encourage private investment while considerably reducing concentrated load on the environment at a same place.

Such small scale power plants are not very demanding on water and thus do not have a large water footprint, utilization of Air Cooled (dry) Condenser Technology the water utilization can be brought down substantially, which is an important factor to be considered given the fact that water is one of the most sought after commodity is years to come. These projects have faster financial closures because of lesser costs and if a planned approach is adopted, smaller island grids can be created that may be integrated into the national grid at any stage. Setting up of smaller power plants will also encourage private players to invest in such projects even if their core business is not power pertaining to increasing demand of power.

Cogeneration: Efficient Technology for Distributed Generation
Cogeneration has been considered one of the most efficient ways to utilize fuel source for distributed generation. Cogeneration/ Tri generation is sequential generation of two/ three forms of useful energy from single primary energy source. This methodology is recognized world over as cleaner alternative to traditional centralized generation. This has a long-term future in the global energy markets for its ability to provide operational, financial and environmental benefits from single fuel unit. Unfortunately the policies to push Cogeneration and Tri generation have not been re looked by most state governments to provide a much-needed push to encourage this efficient form of power generation. 

Studies have revealed that in conventional power plants more than 65 percent of energy is lost to the surroundings whereas only 35 percent actually is utilized as power. However cogeneration plants can exhibit extremely high efficiency as the heat gets utilized for cooling , heating or process applications and the power generated from the power plant is utilized locally rather than being transmitted over long distances.

Cogeneration has become practical and attractive proposition because of greater availability and wider choice of suitable technologies. Cogeneration systems are classified into two main categories.  One which is based on the Working Cycle i.e. Topping or Bottoming cycle and the other, based on the Prime Mover that includes Gas Turbine, Steam Turbine and Reciprocating Cogeneration system.

Topping Cycle based cogeneration system is combined cycle system that can have either of the three, i.e. Gas Turbine, Steam Turbine or Reciprocating Engine cogeneration systems as prime movers. Whereas, Bottoming Cycle based cogeneration systems are process driven and are mostly used by highly energy intensive industries like, Metallurgy, Cement , Caustic, textiles,  Glass etc.

Advantages & Applications
Cogeneration systems generate power at lower cost and have efficiencies greater than 75 percent.
These result in fuel savings of the order greater than 40 -50 percent and also reduction in the cost of fuel storage. Cogeneration systems are reliable in terms of quality of power and ensure longer equipment life. These systems can be used diversely for Utility, Industrial, Commercial and Institutional applications.

Cogeneration utilizing waste heat and process waste gases has become very popular in industries where waste gases and heat are available. Utilization of waste heat from sponge iron kilns is a very popular way to generate power at almost no fuel cost while ensuring that environment is kept clean by avoiding hot gas to escape in the atmosphere and burning the char in a FBC boiler. Similarly utilization of lean gases from steel manufacturing like the Blast Furnace Gas or the Coke Oven Gases to produce power has also taken a new dimension with some very large and successful installations.

The latest technology to be proven in India is that of utilization of waste heat from cement kilns and pre heaters to produce power, the success of the horizontal boiler design to produce power on long term with no outages at a smaller premium over the conventional vertical boiler design far outweighs the benefits in terms of the returns on investment.

Incineration of spent wash, a waste from distilleries, to produce power has been another success  to help distilleries meet the zero liquid discharge requirements for environment benefits while starting a revenue stream by having power generated from the waste that was difficult to be rid of without environment hazards. 

Issues and Challenges
l Fuels - Cogeneration systems are installed close to the load center to meet the local demand of power.  These are largely designed around the most readily available fuels. In India, most of the cogeneration systems use Lignite, Biomass and Coal as fuel to derive power  because of their availability. Gas is a preferred fuel, unfortunately its availability at  comparable costs with long term reliability of supply is still to be proven.

Lignite is the preferred option for fuel in areas specific to Gujarat, Rajasthan and  Tamilnadu. India has close to 36 billion tonnes of lignite reserves with close to 90 percent present in the state of Tamilnadu with small quantities present in Rajasthan, Gujarat, J&K  and Kerala. Biomass is also used to fuel cogeneration plants depending on its availability.

Biomass cogeneration systems are carbon neutral as compared with the systems that derive power from fossil fuels. These are one of the most viable fuel options that are usually locally available and the cost of transportation and storage is reduced. The only constraint in such cases is seasonal availability of fuel, e.g. as in case of sugar industry where bagasse is available readily but during the off season alternative fuels are required to keep the plant in running condition. But there are issues related to transportation and  storage of alternative fuels that must be taken care of very well before hand.

Water availability
Industry is already grappling with the increasing scarcity of water and over the years to  come, the quality will further deteriorate because of increasing demand and inadequate  infrastructure investment. This will create hurdles for the industry as a whole and  innovative solutions are required to handle the crisis. Utilization of Air Cooled Condensers can reduce water requirement by almost 85 percent.

Man Power Crunch
Lack of skilled manpower affects all parts of the value chain equipment suppliers, consultants, contractors and the end users. This affects completion of most of projects on schedule and efficient operations of constructed assets.

Handling the Challenge
Experience is critical to selection of partner to set up power plant. Outsourcing of setting up as well as operations and maintenance with an EPC contractor ensures timely completion and performance of the plant. A responsible and experienced contractor guarantees efficient and smooth plant performance on all parameters availability, gross power and auxiliary consumption.

Vivek Taneja is Head of Business Development (Power) Thermax Limited
E mail :  vtaneja@thermaxindia.com