1

Renewable Integration and Sustainable Energy (RISE) Initiative

Greening the Grid (GTG) Program

A Joint Initiative by USAID and Ministry of Power

Commercial Impacts - Flexible Operations of

Thermal Power Stations

Date: February 27, 2020

Time: 11am – 12:30 pm

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2

Greening the Grid - U.S.-India Joint Partnership

Goal: Enhance efforts to manage large-scale RE grid integration

➢ Robust analysis of challenges and solutions

➢ Integration pilots to validate scalable reforms

➢ Sharing of knowledge and best practices

3

Greening the Grid – Key Highlights

44

Grid Integration Pilots

5

Renewable Integration and Sustainable Energy (RISE)

6

6

Coal Based Flexible Power Generation with NTPC and GSECL

7

Pilot supports technical interventions and operational changes at NTPC’s Ramagundam (200 MW unit), Jhajjar (500

MW unit) and GSECL Ukai TPS (200MW & 500 MW unit)

Stage 1: Techno

Economic Assessment

& Roadmap

• Technical due diligence

and detailed feasibility

assessment

• Establishing reliable costs

of flexibilisation – capex

as well as opex

Stage 2: Regulatory

Pathway and Fleet

Level Strategies

• Assistance in framing

Regulatory Mechanisms

for Flexibility

• Assistance in building

fleet level strategies for

NTPC / GSECL

Stage 3: Pilot

Implementation

• Technical Assistance in

pilot / fleet level

implementation to

NTPC

• Leverage private

partnerships and

contribution in

investments

Stage 4: Scale up

• Assist in fleet-wide

implementation and

national scale up

• Capacity building of

operators –

Procedures and

Operational Toolkits

2017 2018 2019

• Pilot Conceptualization

• On Boarding of Technical

Assistance (TA) Firm

• Stakeholder Discussions &

Data Collection

• TA Implementation Plan

• Technical Assessment

reports completed for

NTPC and GSECL units

• Executive Exchanges to US

• Knowledge Dissemination

Workshops

2020

• Facilitate fleet-wide

adoption and

National scale up

• Knowledge

Dissemination

Workshops

• Regulatory Frameworks for

flexibilization to CERC & GERC

• Pilot Test Runs & Fleet Wide Strategies

• Changes to Operating Procedures

• Executive Exchanges & Knowledge

Dissemination Workshops

8

Renewable Integration and Sustainable Energy (RISE) Initiative

Greening the Grid (GTG) Program

A Joint Initiative by USAID and Ministry of Power

Commercial Impacts - Flexible Operations of

Thermal Power Stations

Content

• The Indian Electricity Landscape

• Benchmarking

• Emerging Scenarios and Flexibility requirements

• Criteria and Selection of units for Flexibilisation

• Impact of Flexible Operation on Coal Units

• Overview of balancing costs from coal based units

• Options vs Costs for Coal Flexing in India

• Regulatory Interventions

• International Examples

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Evolution and Transition of the Indian Electricity market

10

The journey till today has been primarily towards ensuring Energy security. But the next journey will

be towards addressing the Energy Trilemma (Security, Affordability and sustainability)-It will be

disruptive in nature & Scale both technology & economic

The first demonstration of an electric light in

Calcutta was conducted in1879 by P.W.

Fleury & Co. In 1897, Kilburn & Co secured

the Calcutta electric lighting license as

agents of the Indian Electric Co, which was

registered in London on 15 January 1897. A

month later, the company was renamed

the Calcutta Electric Supply Corporation.

The control of the company was transferred

from London to Calcutta only in 1970.

Today’s Regulated

Market

Real Time Market..In 1stApril’20

Energy

Rapid Transition

Indian Electricity Landscape

11

Coal,55%

Lignite…Gas, 7%

Hydro, 13%

Nuclear, 2%

RES,23%

Energy Mix369 GW

State Sector,

24%

Central Sector,…

Private Sector,

47%

Ownership

SMALL HYDRO

6%

WIND44%

OTHERS

13%

SOLAR

37%

GenerationRE

86 GW

Energy Transactions & Indian Power Market

Emerging Scenario & Need for Flexibility

Increased thermal power

plant flexibility results in ..

-less Curtailment of VRE

-lower CO2 emissions and

reduced coal consumption

-higher achieved power prices

for both VRE and coal power

-lower power system costs

-Reduced O&M Costs

-Significant Economic benefit

to all stakeholders

Flexibilisation: Why should I get ready?…What to do?

Falling PLF for coal stations

Commercial Flexibilization: Benchmarking and Preparation…for what level?

• Defining different perspectivesDefining

• Metrics

• QuantifyingMeasuring

• Sources, options

• Preparedness for Coal based plants

Operational

-isation

• Regulatory framework & market structure and mechanisms

Compensation/

Incentivisation

Choosing which units to flex?

• Units on base load-sources

that will always have demand

and hence shall run on max.

• Flexible Units on low load &

evening peak- Daily in the

evening generation from Solar

would come to zero and this

energy need would be satisfied

by units on merit, who would

run on min. load and support

his evening need + portion of

the demand peak.

• Flexible Units-Daily start &

peaking- If the peak is not met

by the low load and peaking

units up in the merit order, then

new sources shall be started

daily till the balance peak need

ismet.

Merit order based on?•Variable Cost•Heat Rate•Emissions

Mechanisms for operationalizationAncillary service, DSM, AGC

EHS

EFOR, EOHReliability

Maintenance schedule …Retrofits/R&M..

Knowing the component-wise cycling costs is necessary for deciding maintenance schedules

Grid Integration Studies

Identification of Units for different modes of operation

ECR<< State M.O.

GCV < 2800,VM<15%Supercr. (except 14 Units)

Base Load140GW/299Units

ECR=> State M.O.(>Rs.2.5/KWH)

GCV >2800,VM > 15%

ECR>> State M.O.

(unlikely to get schedule in 2022)

HR>2500, GCV>3400

Flexible Daily Start

Units>25 YearsUnit size-200 and aboveHR> 2500

>25Years

HR>2600Unit sizes<200 MW

Retire/replace

Flex with Efficiency Retrofit

Flexible-Low Load

MetricsCategory

Identification of Units for different modes of operation

➢Difficulty in load frequency control

➢Difficulty in scheduling of tertiary reserves

➢Requirement of enhanced transmission

network and its under utilisation

➢Increase in requirement of ancillary services

and hence increased system operation cost

➢Increase in transmission cost due to all

above factors

➢ Lower PLF due to ducking of load curve

➢ High ramping requirement

➢ Two shifting and cycling of plants

➢ Increased forced outage and O&M cost

➢ Equipments life time reduction

➢ Poor heat rate and high Aux. Power

Increased share of RE will lead to a

fundamentally disruptive change in the

business model of fossil based

generation. The value of flexibilization

will override all other values of power

generation.

The Variability, Uncertainity,and the Geographically Confined VRE will be challenging for the grid operators as well as generators.

Impact on System Impact on existing Plant

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Harsh Realities of Cyclic Operation

• Flexible operation is a difficult mode of

operation and even the most conservative

approach will increase plant O&M costs along

with per MW variable costs

• However those plants that can operate flexibly

to meet market conditions while minimizing the

financial impact of operating in this

environment, will continue to be dispatched, at

least for the near future.

• Investments in retrofits can enhance the

flexibility to a large extent

• Revisiting the operational procedures, Training of

O&M manpower can enhance flexibilization

• Proactive participation of stakeholders in

enhancing latent system flexibility can be

driven by Policy and regulatory interventions

• Flexing with lack of

awareness, can be

disastrous

• Well known that cycling

causes damage and when

equipment degrades,

performance degrades.

• Damage not immediate but

accumulated and not easy

to quantify

• By the time symptoms of

damage is visible it may

have become very costly to

Correct

Flexible operation impact on TPPs life

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Imp

act

of

dai

ly c

yclin

g o

n li

fe

Critical Components likely to be affected by fatigue

Typical design Starts #No.

Economizer Inlet Header 1000

Turbine steam chest (Throttle valves) 1000

Economizer NRVs 1500

Economizer Inlet Header stubs 1500

Drum furniture cracking 1500

Primary SH outlet header 1500

Boiler stop valves 1500

Down comer attachment welds 2000

Circulating pump bodies 2000

Final SH outlet headers (2Cr) 2000

Final RH stubs 2000

Intermediate SH headers 3500

Drum shell (welds) 4000

Final SH outlet headers (P-91) 5000

Final RH outlet header 5000

Critical Components likely to be affected by creep

Typical design Hrs.

Primary SH outlet header 180000

Final SH elements (parts) 180000

Final SH outlet header 250000

Intermediate RH outlet header 180000

RH cross over pipes 180000

Final RH outlet header 180000

Steam pipework 250000

Average @40%/ year reduction in Fatigue life is

expected Source:GE

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Part Load EFOR

Key factors:

Source: NRECA, US

Source: EPRI

Overview of balancing costs from coal based units in

India

22

Cost of Flexibilisation- At generator’s level

• Based on Studies done at two NTPC Units and two Units of GSPCL

• Conducted by M/S Intertek under GTG-RISE Programme

• This is the only authentic cycling cost analysis available in the Indian

context and being used for regulatory intervention for ISGS and States

• Intertek has estimated of cycling costs by regression analysis ,based on

historical unit damages, historical costs and EFOR

• Component specific damage indicating the breakup of cycling costs

types of hot, cold and warm starts, load following and ramps

• One time Capital costs-Based on studies by VGB and test runs

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Typical Costs of Flexible OperationsC

ost

of

Fle

xib

le O

pera

tio

ns

Factors Parameters

Energy Charges

• Start-up cost increases due to

increase in

➢ Heat Rate

➢ APC

➢ Oil support

O&M Cost

• Increased EFOR

• Accelerated life consumption due to

➢ Start-ups

➢ Load Following

Fixed Cost

• Accelerated life consumption will

have impact over unit availability in

ling-term

• EFOR can impact unit availability in

short-term

Environmental

Impact

• Specific (Kg/MWh) NOx, SOx & CO

emissions will be somewhat higher at

unit level while flexing

• Overall emissions would reduce for

flexible units due to reduced coal

usage.

• Significant adverse impacts are very

unlikely due to installation of

emission control devices.

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Impact on Tariff for Typical 200/210MW Unit

IMPACT ON

TARIFF

( FC+ ECR)ECR-200P/Kwh

Typical 200/210MW Unit

Due to HR Add. O&M* Start up oil

Total

Impact(FC+VC)

Unit loading % Addl. Paisa/ Kwh

Minimum load with

significant load

following

90% 0 0 0 0

80% 0 0 0 0

70% 2.1 3.31 0 5.4

60% 7.5 3.31 0 10.8

50% 15 3.31 2.5 21.3

40% 23.2 3.31 2.5 29

30% 34.6 3.31 2.5 40.5

Weekly start 23.2 60.22 14.8 98.2

Daily start 7.5 257.39 65.2 330.1

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IMPACT ON

TARIFF

( FC+ ECR)

ECR-200P/Kwh

Typical 500 MW Unit

Due to HR Add. O&M* Start up oil

Total

Impact(FC+VC)

Unit loading % Addl. Paisa/ Kwh

Minimum load

with significant

load following

90% 1.1 0 0 1.1

80% 3.4 0 0 3.4

70% 6.7 7.15 0 13.8

60% 12.6 7.15 0 19.7

50% 20 7.15 0 27.2

40% 27.6 7.15 0 34.8

30% 38 7.15 0 45.2

Weekly start 27.6 69.18 10.7 107.5

Daily start 12.6 307.74 43.5 363.8

Impact on Tariff for Typical 500 MW Unit

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Assumptions

• Two significant load following for units with PLF <=70%

• Average PLF for load following=63%

• For daily starts

• 1 cold start/week

• 4 warm start/week

• 2 hot start/week

• PLF of daily start units=43%

• PLF of weekly start units=45%

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Understanding the Total Costs distribution

• Systematic records of all components

• Optimise maintenance expenditure

• Overhauling duration, timing and scope-Greater

OH frequency in later years of life and cycling

• Failure statistics

• Failure faults-independent of operation

– Due to construction, design, operating

errors etc.

• Predictable faults and dependent on

service time

– Wear and tear of ageing component

– Corrosion, erosion and distortion

– Creep and fatigue damage

– Cycling

It is necessary to tailor the overhauling and maintenance intervals for the particular unit on the basis of data available. The analysis of component-wise cost data is important

Metrics of equivalent operating hours, EHS is helpful. Predictive Tools: Estimated weekly damages,EFOR,Life management actions

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Cycling Damages in boiler components-Global Benchmark

Some available solutions for lifetime

monitoring

• COSTCOM(Intertek)

• EPRI (BLESS)

• PowerGEN Creep Fatigue

Monitoring

• ODAS(Australia)

• ERA Plus System

• PADO(STEAG)

• SIEMENS

• Flexsuite (GE)

Future maintenance strategy to address the increasing cycling damages will be based on:• Cycling frequency and age of unit• Boiler Component/Damage ranked on most affected

by cycling• Inspections schedules/Corrective Actions(anticipated

repairs, and Replacements)• Cost benefit analysis

• Identification of the damage mechanism by examination and monitoring.

• The state of knowledge of the underlying mechanism and root cause

• Self-calibrating incremental damage models that can be used to forecast the effect of

• frequency and severity of cycling, including failure rates

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Cost for preparing units for flexibilisation

• One time capital cost

• Varies between INR 20 Crores to 50 crores(based on Pilot studies by

VGB and test runs).

• May be higher for some units which require major R&M and efficiency

retrofits for viability

• Very short payback period

• NTPC has taken initiative –At Dadri & Simhadri

• GTG-RISE support on fleetwide strategy for NTPC & GSECL

• Investments to be based on the value proposed to be delivered by the

unit

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Options vs Costs for Coal Flexing in India

No

Intervention

(Business as

Usual)

Operational

AlterationsOperational

Alterations

and

Control &

Instrumentation

Operational Alterations

+ C&I+ Digitalisation/Fleet wide

Monitoring Operational

Alteration +

C&I +

Digitalisatio

n/Fleet wide

monitoring+

Technologic

al

Intervention

Load Following

Fast Ramp

High Turn

Down/MTL

Hot Start

Warm Start

Cold Start

Cost of Flexible

Operations

Operational

Changes /

Training

Control &

Instrumentatio

n (C&I)

Coal

Blending

Fleet

Monitoring/Maintenance

Practices

Digitalisation Technological

Interventions

Opera

tional

Cost

Increasing Investment

Technical Interventions for Flexible Operations

Does It Matter How Unit Flexibility is achieved? Trade-off between Investment and Return

required to be done

▪ Modify▪ Upgrade

Regulatory Interventions-India

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Compensation proposed in Report of Expert Group of review of IEGC

Against Heat Rate Loss

Against APC Loss

Minimum Turndown 55% mandatory. Below 55% optional, with provisions for compensation

33

Oil Compensation for every start(over and above 7th start/Year)

34

Oil Compensation for every start(over and above 7th start/Year)

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Compensation for Load Following:

Proviso (iii) to regulation 30(2) of Central Electricity Regulatory Commission (Terms

and Conditions of Tariff) Regulations, 2019 states that

“in case of thermal generating stations with effect from 1.4.2020:

a) Rate of return on equity shall be reduced by 0.25% in case of failure to achieve the

ramp rate of 1% per minute;

b) An additional rate of return in equity of 0.25% shall be allowed for every

incremental ramp rate of 1% per minute achieved over and above the ramp rate of

1% per minute, subject to ceiling of additional rate of return on equity of 1.00%

• Further….

• Load following is also being compensated through AGC as markup of

50P/KwH.

• Ramping as an Ancillary product ?

36

Opportunity cost Pricing: pricing in the value of co-produced products

Recent SECI Auction – RE + Storage with peak/offpeak tariff 6.12/2.88 Rs/Kwk competes

well with flex coal

SYSTEM

OPERATIONMARKETS LOAD

FLEXIBLE

GENERATION NETWORK STORAGE

Grid Codes

Expanding

balancing footprint

Improved Energy

Market Design

Strategic RE

Curtailment

Increasing Ancillary

Service Liquidity

Industrial &

commercial

Demand

Response

Residential

Demand

Response

Hydro Ramping

CCGT/Gas Ramping

Coal Ramping

Advanced Network

Management

Transmission

Reinforcement

Transmission

Expansion

Thermal Storage

Pumped Hydro

Storage

Battery Storage

Highest Priority

Lowest Priority

co

st

Market Based and properly priced: All resources must compete with each other

Intention to Improve system efficiency and bring down costs

Types of Intervention

International Experience

Global Experiences

United

States

Canada

• CAISO implemented two flexible ramping products in 2016, that procure and

compensate resources for providing additional flexible ramping capability to cover

the forecasted movement of net load in the 15-minute market & any uncertainty in

the forecasted net load in the 5-minute real-time dispatch market.

• Compensation: All RTOs offer “make-whole or uplift payment” to committed

resources when operating costs exceed market clearing price

• Value/Incentivisation: ESORTS(Electric reliability of Texas ) use “high scarcity

pricing” & Operating Reserve demand curve adder”

• New products like ramping(based on opportunity loss of not providing)

• In 2000, Alberta Government began to auction Alberta Power Purchase

Agreements (PPA). PPA holders, which included TransCanada, ENMAX, & Capital

Power, were responsible for buying electricity from legacy power plants at

predetermined rates and selling it into the grid.

• Buyer of the power was obligated to pay the plant owners their fixed and operating

costs.

• The PPAs also had specific definition on plant cycling damage to recover the

impacts of flexible generation as market competition would have led to increased

cycling on the older assets.

• Mothballing Outage of not more than 6 months-compensated

Global Experiences

Germany

China

• Low cost of renewable generation has disadvantaged coal in the day-ahead market.

• Coal plants have been designed or modified to achieve ramping hourly at a fraction

of their full output or daily cycling, giving them the flexibility to be competitive in

Germany’s balancing market.

• Introduction of committed capacity market(capacity payments and also covering

operating costs even when under s/d.

• Balancing Market along with Real time energy market

• China is having one the largest fleet of thermal coal based power generating plants

& aiming to transition to RE predominant generation portfolio.

• In 2016, roughly 17% of production from wind power, and 10% of production from

solar power was curtailed on a national level.

• Chine transitioning from long term PPA based contract mechanism to market

based transactions

• Under down market regulation, Power plants capable of going under the baseline

(for northeast region it is 50%) can bid in with a price and possible down-

regulation capability

• The regulatory framework incentivizing and deincentivising model has promoted

investments in flexibilization measures

Global Experiences

Denmark

• In year 2017, 43% of its total power consumption contributed by wind energy

sources, and targeting to 50% by year 2020.

• Coal & biomass Fleet is one of the important source of flexibility to power

systems .

• Grid code mandates 35% TML & 4% Ramp (in 50 to 90 % load range)

• Market driven incentive based on market pricing i. e. frequent ramping, minimum

generation during low market price to tap high value ancillary market

• Though, grid code specify technical minimum & higher ramp rate requirement, its

market based incentive mechanism that led power plant operators to enhance flex

capabilities

• Balancing services are technology agnostic and flexibility services rendered from

thermal power plants competes with hydro power plants, or flexibility from

demand response or energy storage system

In Summary….

• The transition of India Electricity is difficult and complex innovative and proactive

policy and regulatory interventions are needed.

• Market and operational rules would be the key enabler for efficient energy system

transformation

• Holistic interventions required

• We are in transitional phase, which a mix of market and regulatory mechanisms

• It is important to understand the value and economic cost of each services and

compensation mechanisms must be devised

• New market and Ancillary products

• Ramping as an Ancillary Product

• The Stakeholders engagement including International cooperation is critical at

every step

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• RISE Contracting Officer Representative: Monali Zeya Hazra, USAID India, mhazra@usaid.gov

• Chief of Party: Tushar Sud RISE, tsud@deloitte.com

Anjan Kumar SinhaSenior Advisor, USAID GTG-RISE sinha.anjan@gmail.com | Mob:+91 9650992971