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Good times for power sector

EM News Bureau ,  Wednesday, November 12, 2014, 14:40 Hrs  [IST]

Across a variety of parameters ranging from generation to capacity addition, the power sector appears to have performed very well during the first half of the current fiscal year. As power is the all-important enabler of socio-economic growth, this good show could well be the forerunner of the much awaited Acchhe Din ahead, notes Dr M.S. Kapadia.

The power sector appears to be enjoying Acchhe Din under the Modi government during the first half of the ongoing fiscal 2014-15. Ex-bus power availability, broadly generation net of normative in-house auxiliary consumption, increased 8.6 per cent over the period, reversing the slide in the preceding two fiscals that had seen Nov-tab1.jpgthe growth rate go down from 8.8 per cent in 2011-12 to 5.9 per cent in the following year and a low of 5.6 per cent in 2013-14.

Reflecting revival in the economy, power requirement, which had stagnated during the preceding fiscal, bounced back with 7.8 per cent increase during H1. The marked increase in power requirement notwithstanding, the deficit eased to 4 per cent, from 4.8 per cent in H1 of 2013-14 because of stepped up pace in power generation. In another pointer of better times, the period saw a decent 23 per cent increase in conventional power capacity addition.

Cumulative power deficit over H1 is the lowest over past six-seven years, and the feat is remarkable as it has been achieved in spite of a decent increase in power requirement, a proxy indicator for economy expansion.

The power sector’s feat is also distinctly better than that projected in Load Generation Balance Report: 2014-15 released in May last. Whereas power requiremeNov1.jog.jpgnt has turned out to be 4.6 per cent higher than projection, power availability has surpassed projection by 5.3 per cent; which culminated in a lower average deficit of 4 per cent, as compared with 4.6 per cent projected in LGBR.

The peak power demand-supply deficit was assessed at 4.7 per cent during H1, against 6.3 per cent in the similar period in the preceding fiscal, 9 per cent in the period two years back and double-digits in H1 of the previous four-five fiscals. Intra-period, the acceleration in the rate in power requirement was marked visibly after May; June-July recorded an average increase of around 11 per cent and August-September 10 per cent, against 2 per cent during April-May. The growth rate in power availability was lifted from a low of 2 per cent in May to 12 per cent average in June-July and around 9 per cent during August- September. The govNov-tab2.jpgf.jpgernment, focused on step-up in thermal generation, in view of fall in hydropower potential due to erratic and deficient southwest monsoon. By the way, the new government took reins in late May. The power deficit declined steadily from 4.4 per cent in April to 3.8 per cent in May, 3.7 per cent in June and 3.6 per cent in July, but increased to 4.6 per cent in August with the provisional estimate for deficit placing it at 4.1 per cent in September.

Western region which accounts for 29 per cent of the country’s power needs escaped with only 1.1 per cent shortfall; all states falling in the region rendered them equitably well. In H1 of 2013- 14 also, the region had suffered just 1 per cent power shortfall. Northern region with one-third share in the country’s power needs suffered 6.5 per cent cumulative deficit in H1; Uttar Pradesh and Jammu & Kashmir accounted for most of this deficit. Southern region with 26 per cent share had to bear with 4.9 per cent deficit; Andhra Pradesh (post bifurcation), Telengana and Karnataka were among the major deficit states. Eastern region encountered 1.6 per cent. North eastern region comprising relatively small states suffered 9.6 per cent shortfall.

There were five states, which escaped power deficit during H1; the major one in this category was Gujarat whose power availability of 47,642 million kwh fell only marginally short of its requirement of 47,665 million kwh during the period. In fact, the state had remained self-sufficient in its power needs in the preceding fiscal also. The major states with a shortfall exceeding the national average included Jammu & Kashmir (20 per cent), Uttar Pradesh (16.4 per cent), recently-formed Telangana (8.4 per cent), Andhra Pradesh (7.1 per cent) and Karnataka (5.5 per cent).

Power requirement in the seven top states in terms of power demand increased 7.9 per cent, whereas its availability went up by 9.1 per cent over H1 on a y-o-y basis. Power requirement in Karnataka increased only nominally by 121 million kwh annually during H1, but power availability imNov2.jpgproved 2,139 million kwh, which resulted in sharp reduction in deficit to 5.5 per cent from 12.1 per cent a year ago. Likewise, deficit in Tamil Nadu also truncated from 6.6 per cent to 2.5 per cent due to subdued growth in power requirements, vis-à-vis power availability. Power deficit in Uttar Pradesh however worsened from 14.3 per cent to 16.4 per cent due to lower addition to generation.

POWER GENERATION
The total power generation in conventional public utilities increased 10.3 per cent in H1, speeding from 5.7 per cent during H1 of 2013-14 and 4.8 per cent in this period two years back. The performance also surpassed generation planned for the period by 4.6 per cent. Following deficient and erratic southwest monsoon leading to deficient hydro power, thermal power generation was stepped up; 13.2 per cent increase in this during H1 was three times 4 per cent in this period a year ago and nearly a half time better than 9.1 per cent in this period two yeas back. The pace was in fact a record high in recent years. Hydro power was one per cent lower, against 17 per cent strong growth during H1 of 2013- 14. Nuclear power was 5.2 per cent higher and power import from Bhutan 9 per cent lower. Intra-period, hydro power had declined during July-August which was compensated by stepped-up thermal power during these months. While thermal and hydro power generation exceeded planned generation for H1, nuclear power fell slightly short.

Overall, power generation was 4.6 per cent more than the target.

Among the fuel-based classification, power generation in coal-based thermal was up 14.8 per cent with IPP notching up 37.5 per cent rise. Central utilities expanded power generation by 6.2 per cent and state utilities, 11 per cent. PLF in coal-based Central utilities was the highest at 73 per cent against 63 per cent in IPP plants and 60 per cent in state utilities. Power generation in lignite-based plants increased 8.9 per cent. Overall, PLF was 64.9 per cent in coal-based plants and 76.4 per cent in lignite-based power, which, however, contributes only around 4-5 per cent in total thermal power.

At 21,435 million kwh, the power generation in gas-based thermal power declined 6 per cent during H1; even as there was wide variation in the performance of individual power stations. Faced with dire gas shortage, the aggregate PLF at these stations worked out to just around 22 per cent. Power generation at diesel-driven stations increased 4 per cent to 905 million kwh. PLF at nuclear power stations improved to 80 per cent from 76 during H1 of 2013-14.

Nov-tab3.jpgAmong the ownership categories, power generation at Central government-owned utilities increased 3.9 per cent during H1; that under state utilities 7.3 per cent and the same under private sector 27.2 per cent, bulk of it under IPP that shot up 31 per cent. In fact, private sector public utilities recorded 2.8 per cent decline in generation. Overall, Central utilities accounted for 38 per cent of power generation during H1, state utilities 35 per cent and private sector the balance 27 per cent.

Among the regions, generation in northern region increased 7.3 per cent during H1, the same in western region was up 18.2 per cent due to much better feat by thermal stations in the region. Power generation showed 6.3 per cent increase in southern region and eastern regions. Power generation in north-eastern region showed 14 per cent increase. At 74.9 per cent, PLF in thermal stations in the southern region was the highest among the regions; at 59.8 per cent, it was the lowest in eastern region.

CAPACITY ADDITION
The first half of the ongoing fiscal has seen addition of 8,978 mw under conventional power capacity, exceeding the 7,274 mw addition planned for the period. The feat was made possible because of private sector thermal capacity addition surpassing the target. Also, taking the first half of the ongoing plan period, the picture is reassuring. Thus, with an augmentation of 47,426 mw over the period, the period has seen achievement of 53.5 per cent of the target of 88,537 mw fixed for the five years plan period. Thermal power addition for the period was assessed at 45,600 mw and hydropower at 1,826 mw: nuclear power has drawn blank.

On a broader canvas, the country had aggregate generation facility of 254,050 mw at the end of September 2014; comprising 176,778 mw in thermal power, 40,799 mw in large hydro, 4,780 mw in nuclear power and 31,692 in rapidly increasing renewable energy sources (RES) like small hydro of less than 25 mw, biomass, solar energy, urban & industrial waste power, wind energy, etc. Captive generation capacity in Industries having demand of one mw and above, grid interactive added (as on March 31, 2012), another 39,375 mw. As a result of an accelerating RES, its share in total installed capacity has shot up to 12.5 per cent at the end of September, from 5.9 per cent in March 2007. Small hydro constitutes 3804 mw, wind power 21,136 mw, bio-power 4,120 mw and solar power 2,632 mw in RES. The share of coal based thermal power capacity in conventional power has gone up to 69 per cent from 57 per cent in 2006-07, while that of hydro power has gone down 28 per cent to 18 per cent, gas-based from 11 per cent to 10 per cent and nuclear from 3 per cent to one per cent. Diesel based capacity has stagnated at 1,200 mw.

Helped largely by non-conventional sources of energy the private sector accounted for 36 per cent of total grid interactive capacity, state sector 37 per cent and central sector the remaining 27 per cent, as of September 2014. Almost 90 per cent of RES falls in private sector, wherein it accounts for 30 per cent of capacity. Looking at recent trends, private sector would soon become the major ownership segment in power infrastructure facilities.

Western region led other regions in terms of power infrastructure. The region accounted for 35 per cent of total installed capacity in the country, as of September 2014, followed by northern region (27 per cent), southern region (24 per cent), eastern region 12 per cent and north eastern region and islands just around one-two per cent. Western region was ahead in thermal power capacity, northern region in hydro power and southern region in RES. Among the states, Maharashtra led with 35,827 mw of overall power generation capacity, followed by Gujarat 28,422 mw and Tamil Nadu 21,193 mw, as of September 2014.

RENEWABLE ENERGY SOURCES
According to Ministry of Renewable Energy, a total of over 53.22 billion kwh were produced during 2013-14 from renewable energy sources in the country, which included 31.26 billion kwh from wind, 3.35 billion kwh from solar, and 12.32 billion kwh from biomass and bagasse cogeneration. Small hydropower (with installed capacity less than 25 mw) contributed 6.06 billion kwh to the total power generation.

MNRE has set a target of capacity addition of 29,800 mw from various renewable energy sources during the 12th Plan period. The target comprises 15,000 mw from wind, 10,000 mw from solar, 2,100 mw from small hydropower and 2,700 mw from bio-power.
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