'Subsidies should be borne directly by state governments'
By Prof. B.P. Nansi
R. Srinivasan is Group General Manager at TCE Consulting Engineers Ltd, a leading consulting engineering firm in the power sector for over 40 years. He has 35 years of service with TCE. He has extensively worked on power plants, for Indian and foreign clients, including Tata's 500-mw power plant at Trombay. His expertise is in design and coordination of power projects. At present Srinivasan heads the Power Projects Group of TCE, including nuclear power projects.
Excerpts from the interview:
What is the state of the power sector in India today?
India is the 4th or 5th largest country in installed generation capacity in the world. Other large generating capacity countries are the US, China, Japan and Russia.
India's installed generating capacity is approximately 120,000 mw, including captive generation. Our per capita generating capacity is low. Generation and consumption of energy is an indication of a nation's economy. Viewed from this perspective, our economic development is not good.
The load factor (power generated compared to installed capacity) of Indian power plants was low for a long time: as low as less than 50 per cent. Now it has significantly improved due to greater awareness and monitoring of thermal power plants. We need to add 8,000 to 9,000 mw capacity per year to meet the growing needs of energy and peak power. At present, we are not adding even 50 per cent of that.
Why add capacity? Improve the load factor.
True. Improving load factor will give more power. But for rapid economic growth, we still need to add capacity.
There should be a higher demand.
Yes. But there is such a thing as suppressed demand. If there is inadequate supply, the demand tends to go down. Give quality power and you will see that demand is there. That happened in many sectors in India: Automobiles, TVs, refrigerators, phones.
What is the quality of power supply?
Poor. There are two indicators, one, variation in voltage and frequency and two, interruption in supply. Variation in voltage and frequency is high compared to international standards. Electrical and mechanical equipment are to be designed for such variations. This adds to the cost. Interruptions lead to loss of production and can endanger safety of continuous process plants. Captive power generation is provided for two purposes: (1) for emergency back-up or (2) for routine operations. Either way, the cost of power goes up. In the first case you lock up capital and in the second, the generating cost per unit in captive power plant is higher than the cost of utility power generation.
Captive power generation by industry, special design of electrical equipment and voltage stabilisers in consumers' homes indicate poor quality of grid power.
What should we do?
Improve the quality. Have punitive measures. Presently we have no recourse. State Electricity Boards enforce quality standards while buying power from private generators, but same standards are not maintained while retailing power.
What about ash produced in a coal-fired power plant?
Ash content of Indian coal is very high, could be as high as 50 per cent. So ash disposal presents solid waste handling problem. The ESP (electro static precipitator) efficiency is good and settlement of ash in surrounding areas is not an issue any more. One caution: Do not operate the plant if ESPs are out.
The immediate imperative is to find practical solutions for ash utilisation. For example, ash is being used in larger quantities today for blending with cement but this is limited to certain regions. Other uses for ash have to be identified and pursued such as brick making, road construction etc.
What is the state of nuclear power?
Nuclear power contribution is small: only 3 per cent of India's installed capacity. Compare this with France where over 70 per cent is nuclear. Nuclear power generation in India has immense scope.
But is not a nuclear power plant hazardous?
No. Nuclear power is very safe due to advanced technology. Nuclear power is environmentally safe, cost competitive and suitable for regions away from coal mines, e.g. western and peninsular India.
What are the difficulties facing the power sector?
Two difficulties: One, transmission and distribution losses and two, subsidies SEBs have to sustain. Transmission losses are technical and non-technical. Power loss means loss in revenue. Subsidies are a decrease in revenue. There are differences in the tariff structure across different sections of society. Industrial consumers subsidise energy provided to the farm sector.
What is the solution?
Subsidies will henceforth be borne directly by state governments. This will give relief to the SEBs. SEBs must meter all installations. There are numerous installations without meters. And recover all bills. Also, innovative measures should be taken for collection. For example: Have a 'prepaid card' for electricity use; like we have for mobile phones. In some countries this system has been adopted. Then SEB will collect money in advance and the consumer will be careful to conserve energy.
(16-29 Feb 04)