Leveraging Gas for the Development of Leveraging Gas for the Development of Power IndustryPower Industry

ByBy

B.H.RavindraB.H.RavindraVice President - LANCO Power, HyderabadVice President - LANCO Power, Hyderabad

1212thth October 2006 October 2006

Leveraging Gas for the Development of Leveraging Gas for the Development of Power IndustryPower Industry

ByBy

B.H.RavindraB.H.RavindraVice President - LANCO Power, HyderabadVice President - LANCO Power, Hyderabad

1212thth October 2006 October 2006

Since I am not allowed to sprinkle the water on the honorable

audience, May I take the liberty of requesting my audience to be kindly awake through out the

lecture??

Since I am not allowed to sprinkle the water on the honorable

audience, May I take the liberty of requesting my audience to be kindly awake through out the

lecture??

Introduction

Natural Gas as vital fuel

Fuel Alternatives

Natural gas production and utilization

Natural Gas Resources

Agenda

Why should gas based power projects be encouraged?

Present Generation Mix & emission standards in India

Environmental issues with coal as fuel

Market for Natural Gas

This lecture is the last in the series of the lectures you have heard today. Any lecture more than 45 minutes will become a bore. You have already heard

over 6 lectures.

So pl. bear with my bore!

This lecture is the last in the series of the lectures you have heard today. Any lecture more than 45 minutes will become a bore. You have already heard

over 6 lectures.

So pl. bear with my bore!

Introduction

Demand for power is ever increasing

Generation of power at cheaper tariffs to consumers is a challenging task

Availability of cheaper sources of fuel & efficient generation are key to un-interrupted economic supply of power

Green Revolution and clean technologies will become the order of the day

Continued research and commercialization of cleaner generation needs emphasis to mitigate pollution

Demand for power is ever increasing

Generation of power at cheaper tariffs to consumers is a challenging task

Availability of cheaper sources of fuel & efficient generation are key to un-interrupted economic supply of power

Green Revolution and clean technologies will become the order of the day

Continued research and commercialization of cleaner generation needs emphasis to mitigate pollution

Which Fuel ?????Which Fuel ?????

Fuel Alternatives

In-exhaustible

Exhaustible

Coal

Natural Gas

Oil

Nuclear Fissile Materials

Coal

Natural Gas

Oil

Nuclear Fissile Materials

Water (Hydel)

Wind

Sun (Solar)

Water (Hydel)

Wind

Sun (Solar)

FUELS

Bio-ethanol, Fuel Cells, Hydrogen as fuels are still in the R&D stage for generating power for commercial purposes

Bio-ethanol, Fuel Cells, Hydrogen as fuels are still in the R&D stage for generating power for commercial purposes

Fossil Fuels

Eco-friendly,Abundantly available, but no control on availability

Eco-friendly,Abundantly available, but no control on availability

Statistics of Generation Mix in India

Installed Capacity = 1,27,057 MWs

Hydro26%

Gas11%

Diesel1%

Renewable5%

Nuclear3%

Coal54% Generation skewed towards coal

Statistics is always looked at with lot of skepticism: Once one hundred men went to the forest to cut the woods. They took two women with them for cooking food. Before the onset of the winter two men married the two women.

The statistician wrote: 2% of the men married 100% of the women!

Statistics is always looked at with lot of skepticism: Once one hundred men went to the forest to cut the woods. They took two women with them for cooking food. Before the onset of the winter two men married the two women.

The statistician wrote: 2% of the men married 100% of the women!

Emission Standards for Power Plants

Particulate Matter SOx NOx

150 for 210MW capacity and above

No specific limits but stack of 275m for 200 to 500MW for better dispersion of SOx

Gas based plants need to meet certain standards:50 for 400MW & above

75 for 100 to 400MW

100 for less than 100MW

350 for less than 210MW capacity

(Values in mg/Nm3)

These are recommended standards.

Our aim should be to achieve lesser emission of these quantities.

These are recommended standards.

Our aim should be to achieve lesser emission of these quantities.

Environmental Issues with coal as fuel

Burning coal without increasing global carbon dioxide

levels is a major technological challenge

Coal when burnt gives rise to a variety of wastes which

must be accounted and controlled

Mercury, NOx, SOx and Solid Particulate Matters in the form

of ash are the main pollutants

Solid and fly ash quantify as high as 50% of Indian Coal

Global warming associated with emission of CO2, NOx is a

major issue with world community

Burning coal without increasing global carbon dioxide

levels is a major technological challenge

Coal when burnt gives rise to a variety of wastes which

must be accounted and controlled

Mercury, NOx, SOx and Solid Particulate Matters in the form

of ash are the main pollutants

Solid and fly ash quantify as high as 50% of Indian Coal

Global warming associated with emission of CO2, NOx is a

major issue with world community

CoalCoal

SOxNOx

SPM Ash

By ProductsBy Products

Stop and then Think??

Natural Gas Production & Utilization

Natural Gas as vital fuel

Natural Gas

Proven methods of power generation at

high efficiencies

• Mixture of hydrocarbons, mainly methane,

• Produced either from gas wells or in conjunction with crude oil production.

Proven production techniques can ensure continuous supply

Power Generation with no ash, least

particulate emission, lesser hazard to

environment

Natural Gas Reserves

India's natural gas reserves are currently estimated at about 29-32 trillion cubic feet (tcf), or about 0.5% of the world total. This will go up as and

when we strike oil/gas in the unexplored river basins

Why should Gas based power projects be encouraged? ………..1• Coal based thermal power projects are suitable for base load continuous

operation due to their inherent drawback of slow ramp up and slow cool down. • In India, coal based thermal power projects are being used as peaking stations

also, which is not a good practice of economic dispatch; thanks to the reduced quantity of generation using hydro and gas based power projects.

• Poor performance of India's generating units has been a principal cause of power storages and unreliable quality of power supply. The primary culprits are the coal-fired thermal power stations which accounts for over 50% of total installed capacity. The average plant load factor (PLF) of thermal power stations in India is less than 60%, even though they vary across regions.

• Most of these units are old and have already logged more than 100,000 running hours and their performance can only be improve through a long-term rehabilitation or modernization with life extension program.

Why should Gas based power projects be encouraged?.......................2• Gas may last for another 60 years at the current rate of consumption

• Increased find of natural gas and oil in KG basin and other parts of India likely to ease out the rising oil and

natural gas prices in the near term

• Un-explored river basins likely to boost the availability of gas by another 10 to 20 years

• Natural gas combined cycle generators can reach 60% efficiency for converting heat energy into electricity.

• Fixed cost of generation for gas based power is less. (30% less than coal based generation)

• Construction time required for natural gas based power projects is far lower compared to coal based power

projects. Coal projects require more than 48 months where as gas based ones require less than 30 months

• Owing to the requirement of lesser space, lesser water and lower emissions, the natural gas based projects

can be located very near to the load centers, which is not possible in case of coal based power plants.

• Natural gas also produces 40 -50 % lesser CO2 emissions for the same amount of electricity generated by

Coal. Nuisance of Ash disposal is totally absent in gas based power projects.

• Gas may last for another 60 years at the current rate of consumption

• Increased find of natural gas and oil in KG basin and other parts of India likely to ease out the rising oil and

natural gas prices in the near term

• Un-explored river basins likely to boost the availability of gas by another 10 to 20 years

• Natural gas combined cycle generators can reach 60% efficiency for converting heat energy into electricity.

• Fixed cost of generation for gas based power is less. (30% less than coal based generation)

• Construction time required for natural gas based power projects is far lower compared to coal based power

projects. Coal projects require more than 48 months where as gas based ones require less than 30 months

• Owing to the requirement of lesser space, lesser water and lower emissions, the natural gas based projects

can be located very near to the load centers, which is not possible in case of coal based power plants.

• Natural gas also produces 40 -50 % lesser CO2 emissions for the same amount of electricity generated by

Coal. Nuisance of Ash disposal is totally absent in gas based power projects.

Natural Gas Usage

Gas Consumption

Power, 40%

Fertilizer, 29%

Petrochemical, 9%

Steel, 3%

Industrial, 15%Retail, 4% Power

Fertilizer

Petrochemical

Steel

Industrial

Retail

Market for Natural Gas

• To monetize the natural gas out of the wells of KG basin, the oil companies should have large, long term

anchor consumption contracts

• Only Power and to some extent fertilizer, metallurgical plants can provide such anchor contracts

• Retail, transportation sector or city distribution cannot provide adequate market for such anchor

consumptions

• Power projects in AP and other states require gas and utilities are suffering due to reduced availability of gas

• All the naphtha and diesel based power projects can be converted to fire natural gas to make the projects

economically viable and to produce power

• The gas should be made available to power sector at rates affordable for consumption say at less than 4 to 5

$/MMBTU so that the gas based power projects can compete with imported coal fired power projects

• Price of the Natural gas should not be compared to that of Naphtha for pricing purposes. It would be like

comparing Idlis of 5 star hotel with Udupi darshini Idlis.

0

0.5

1

1.5

2

2.5

3

3.5

USD/MMBTU 5 7 9

Variable Cost (Rs/kWH)

Cost of Generation using Natural Gas

Levelized fixed cost would be about Rs. 0.8 / kWH, cheaper than that of coal based generation

Summary

Energy production and environmental protection are not mutually exclusive

Global warming and greenhouse effects can be mitigated by using clean fuel as much as

possible

Natural Gas needs to be given the importance for generation of electricity; Gas is used to

generate 24% electricity world over. (India uses only 7%)

There is an overwhelming market for natural gas in power sector (approx 120MMSCMD);

Availability is 66 MMSCMD – Assured market for the next 15 years at least.

All other sectors put together will not come to half of requirement of power sector

Research on better combustion techniques and metallurgy is increasing the efficiency of

the natural gas fired power plants.

Preferential pricing should be given to the natural gas used for power generation

Energy production and environmental protection are not mutually exclusive

Global warming and greenhouse effects can be mitigated by using clean fuel as much as

possible

Natural Gas needs to be given the importance for generation of electricity; Gas is used to

generate 24% electricity world over. (India uses only 7%)

There is an overwhelming market for natural gas in power sector (approx 120MMSCMD);

Availability is 66 MMSCMD – Assured market for the next 15 years at least.

All other sectors put together will not come to half of requirement of power sector

Research on better combustion techniques and metallurgy is increasing the efficiency of

the natural gas fired power plants.

Preferential pricing should be given to the natural gas used for power generation

Conferences are many times called the meeting of the bored!!

Conferences are many times called the meeting of the bored!!

Hopefully I did not contribute to this !!!!