Roundtable - The Question of 34 GW

July 18, 2016: Centre for Science and Environment organized a roundtable to discuss the technical parameters to be considered to retire plants which has exceeded their design life and performing inefficiently. 

It was unanimously agreed by the stakeholders that retirement of inefficient units must be expedited. Few power station stakeholders suggested performance should be considered than age as a factor to retire power stations. However it was explained that when design efficiency of current turbine equipments in the market is 10-20% higher than those designed 25+ years ago then it might not be attractive to operate inefficient units. The following suggestions were made by the stakeholders,

Technical parameters to be considered in decision on shuttering

1. Station Heat Rate/Gross plant efficiency

2. Plant availability 

3. Tariff after incorporating retrofits for improving environmental performance

4. Design turbine cycle efficiency

5. Unit Size and make

Incentives packages which can incentivize retiring old capacity 

1. Waiver of all statutory clearances  for coal procurement, water procurement, environmental clearances etc. to install energy efficient supercritical new units  - State Electricity Boards should auction such packages along with their power purchase agreements which can be taken over by private players

2. Packages be designed to compensate employees like voluntary retirement funds (VRFs), etc. for old inefficient coal fire power plant which plans no expansion or renovation and complete closure

3. Modify tariff of coal power stations incentivizing energy efficiency and clean power. Laying inefficiency tax on old coal power stations

Other broad policy suggestions which emerged 

1. Energy demand: Central Electricity Authority’s data on power demand only partially captures the actual demand opined the stakeholders. CEA was requested to release data on the capacity of captive power station and diesel generator sets in India to reflect actual demand of electricity in India. CEA was urged to look into other methods of procuring data than self disclosure by power stations to improve reliability of the statistics. 

2. Discom reforms: The actual demand of electricity couldn’t be catered by DISCOMs due to losses accumulated over years and its inability to pay for electricity purchase. UJWAL discom scheme which was announced to restructure the discoms are expected to fail as prices of electricity are hardly getting revised as envisaged by the scheme. Hence the meeting urged better reform policy for the DISCOMs

3. Transmission network: Various bottle necks exist in transmission and distribution systems which forces even costly power generations very essential to a particular area as it cannot be catered by other transmission/distribution systems. Such nodes have to be identified and transmission and distribution network must be strengthened.

4. Location criteria: New power plants projects must be constructed taking into consideration – water availability, energy demand in the area, etc.