Indian Heat Rate Alliance (IHRA)
Working Groups MeetingAugust 12, 2014
Background
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Savings• Annual coal
costs: Rs. 5 bn
• Annual GHG emission reduction: 3 mmt+ CO2e
Sustained heat rate improvement • 10 kcal/kWh
at 145 GW coal generation capacity at a PLF of 70%
Heat Rate Business Case
• In 2011-12, CEA found an average 11.49% deviation between operating heat rate with designed heat rate (ranging largely from 2-20%).
• PAT regulations under NMEEE expects144 thermal power plants (97 are coal-fired) designated consumers to save 3.1 mtoe (2.9 mtoe from coal-fired plants) during 2012-15
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Barriers to Heat Rate Improvement
Ecosystem Barriers
• No long term plan and absence of technology road-map
• Lack of financial incentives through policies and regulations to reduce fuel costs and CO2 emissions
• Lack of awareness about off-the-shelf services & solutions
• Absence of competitively priced solutions adapted to Indian context and skilled service providers
• Lack of financing mechanisms for capital investments to improve plant efficiency
• Insignificant research, training and knowledge sharing framework
Corporate Level Barriers
• Need for board level commitment for efficiency improvements
• Lack of dedicated outlays for efficiency improvements in annual O&M budgets
• Utilities irrespective of their size are not willing to afford costs and risks associated with solution development
Plant Level Barriers
• Absence of knowledge, skill-sets and dedicated teams to analyze and interpret the performance gaps
• Need for guidelines and tools to address performance gaps
Indian utilities are aware of heat rate opportunities and are now beginning to appreciate the role of solution developers, service
providers and skill/knowledge building
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Approaches to Address Barriers
• Pursue policy prescriptions and regulatory directives to incentivize efficiency improvements
• Facilitate market driven collaborative R&D to adapt & develop cost effective Heat Rate solutions
• Foster partnerships and establish an operative network between stakeholders
• Enlarge the support services market to meet the demand of an expanding sector through non-OEMs
By establishing an industry organization to address the above barriers on an exclusive basis, a
platform can be provided for a collective voice to all stakeholders
Indian Heat Rate Alliance
• Encourage the idea and cause of improved heat rate of thermal power plants on a continual basis & help in achieving heat rate at par with global standards
• Offer an autonomous, independent platform for reflecting on policies, regulations and salient topics concerning heat rate improvement in utilities
• Provide technical assistance to utilities for acquiring appropriate technologies and solutions for their problems through collaborative research & development
• Act as a clearing-house of information and data bank • Facilitate technical and business partnerships between stakeholders • Engender a services sector to support the utilities and encourage tie-ups
between international companies and Indian entrepreneurs
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Proposed Aims/Objectives of IHRA
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Stakeholder/Members
Utilities
Central utilities like NTPC, Damodar Valley
Corporation (DVC), Neyveli Lignite Corporation and
new entrants like National Hydro Power Corporation
(NHPC)
State utilities/ generation companies
Independent Power Producers like Tata Power,
Reliance Energy, Adani Power, Jindal Power,
CESC
Original Equipment
Manufacturers
Boiler-Turbine-Generator (BTG) manufacturers like
BHEL, L&T Power, Toshiba-JSW Turbine &
Generators, BGR Energy Systems, Thermax
Babcock & Wilcox Energy Solutions, Ansaldo Caldaie
Boilers India, Bharat Forge, Alstom, GE Power, Power Machines, China Power & Lighting and
Doosan Power Systems India. , Siemens
Plant Auxiliaries (Balance of Plant)
Service Providers
Asset management service providers like SKF, Bentley, Emerson, Alstom, Black &
Veatch, Lloyd Register
Process monitoring, analytics & optimization
providers like BHEL, Honeywell, Steag,
Emerson, General Physics, Smart Signal, Kalki Tech (PRISM), ABB, Siemens
Technology Innovators
Specialist Service Providers
Research & Educational Institutions
Specialized institutions like Central Power Research
Institute
Educational institutions like IITs, NITs, Indian Institute
of Science, National Power Training Institute (NPTI)
Financial Institutions
Banks as State Bank of India, ICICI Bank
NBFCs like Tata Capital CleanTech
Public financial institutions like Power Finance Corporation, India
Infrastructure Finance Corporation Limited, IFCI
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Utilties
• Knowledge on advanced technologies and management practices to improve heat rate to meet PAT targets through issues of guidelines & newsletters and organization of workshops & seminars
• High returns despite low investment through collaborative R&D
• Access to state-of-the-art research & training
• Access to competitively priced state-of-the-art services from the local market
• Improved organizational expertise and capabilities
OEMs & Service Providers
• Expand business opportunities to benefit from growing heat rate improvement market; demonstrate, test and adapt new technologies & practices
• Ability to offer knowledge and technology driven cost competitive quality services
• Participate in institutional alliances with utilities, OEMs, academia and research to deliver cost effective solutions
• Opportunities for international service providers to forge alliances with domestic entrepreneurs
Research & Education Institutions
• Expanded and real-life R&D platform
• Larger portfolio of technical training courses
• Improved organizational expertise and capabilities
Financial Institutions
• Opportunities to design & test new financing mechanisms
• Larger business development opportunities in the Indian market
• Improved organizational expertise and capabilities
Value Proposition for Members
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Governing Board
Executive Director
Applied Research & Technology
Council
Program Manager
Assistant Program Manager(s)
Business Development
Council
Program Manager
Assistant Program Manager(s)
Learning by Sharing Council
Program Manager
Assistant Program Manager(s)
Administration & Accounts
Manager
Accountant
Mentor
Organization Structure
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Applied Research & Technology Council
• Launch & manage Solution Development Program and Model Power Plant Program to facilitate applied research & demonstration • Collaborative research to
develop/adapt solutions• Promote interactions with
international research institutes
• Demonstrate services & solutions in Model Power Plant(s)
Business Development Council
• Launch & manage Service Provider Development Program to expand Indian network • Facilitate joint ventures
between international service/ solution providers and Indian entrepreneurs
• Promote Indian service/solution start-ups
• Organize service/solution providers workshop & showcase events
• Provide technical consulting & representative services
Learning by Sharing Council
• Launch manage a Learning by Sharing Program to create a common platform to facilitate sharing of best practices• Conduct missions to best
performing thermal power plants globally
• Organize training programs, focused workshops & webinars
• Develop online information bank
• Develop/update best practices manuals
• Publish quarterly news letter
• Organize annual Power Plant Conference
Activities of Councils
1 or 2 Working Groups under each Council will provide policy guidance and technical leadership to the IHRA and its members in the selection, design and
conduct of heat rate improvement strategies and solutions
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Targetted IHRA Deliverables as on Dec 31, 2016
Applied Research & Technology Council
• Facilitate collaborative research on 2-3 priority solutions
• Showcase solutions & services in at least 1 Model Power Plant
Business Development Council
• Facilitate at least 3 partnerships between international service/ solution providers and Indian entrepreneurs
• Showcase at least 2 Indian technology start-ups
• Organize 4 regional technology/ service providers showcase events
• Provide consulting services valuing at least Rs 50 lacs
Learning by Sharing Council
• Conduct 4 visits to Best Operating Power Plants
• Organize 7 training programs, focussed workshops & webinars
• Updating at least 1 best practices manual and technical manual
• Conduct 2 Annual Power Plant Conferences
• Publish 8 quarterly newsletters
Solution Development Program
A Unique Revenue Stream for IHRA
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• IHRA’s flagship program• Implementation through collaborative R&D• Focus on creation of IPR for wide-scale deployment &
commercialization generating revenues for IHRA in the long term
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S.No Key Potential AreasPotential Quantum kCals/KWh at each
plant
National Coal Savings ( in million
tonnes)
National CO2 Savings ( in million
metric tonnes)
National Cost Savings (in Rs)
(assuming Coal costs Rs 2000/Tonne)
1 Dry Flue Gas 40 10 12.5 Rs. 2000
2Condenser & Cooling Tower
20 5 6.25 Rs. 1000
3 Combustion 10 2.5 3.17 Rs. 500
National coal savings and CO2
mitigation potential Showcase
The CO2 mitigation can also be achieved by introduction of advanced technologies like IGCC Oxy fuel combustion Carbon Sequestration
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1. High Loss category (40-80 kcal/kWh) Condenser and Cooling Tower Dry Flue Gas Loss HP / IP Turbine
2. Medium Loss category (20-40 kcal/kWh) RH Spray Unburnt Carbon Loss Unaccountable (LPT Efficiency, Hi Energy
drain passing, Insulation loss, etc)
3. Low Loss category (<20 kcal/kWh) MS & HRH Temperature deviations Feed water Temperature deviations
Key areas of efficiency improvement and cost saving potential at power utilities
35%
19%
22%
10%
7%
7%
Major Heat Rate Loss Areas
Condenser & CTs Turbine (HP/IP) Dry Flue Gas Loss
Unaccountables RH Spray Unburnt Carbon
Source: Efficiency Improvement at State Utilities – Challenges and Opportunities, CII Power Plant Summit, 2013
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Technology Transfer, Adaption and Indigenization
• Identification and implementation of best practices.• Reduction of air, steam and flue gas leakage.• Optimization of combustion through understanding of
coal quality and how it burns in the boiler, fine tuning operational parameters (air-to-fuel ratios), coal fineness, furnace cleanliness, etc.
• Use of low grade heat for coal drying.• Co-firing of boilers with multiple fuels.• Lowering of stack temperature.• Enhancing fuel flexibility in Indian Boilers.• New technology adaption in efficiency and
performance improvements including carbon capture & sequestration
O&M Practices & Technologies
• Optimization of processes using advanced computational tools.
• Conduct on-line, real time monitoring of performance. • Standardization of performance metrics.• Development of solutions for issues on seals on air
heaters, condensers, boilers, tube components, etc.• Use of variable speed motors,• Use of flue gas conditioning heat exchangers.• Implementation of intelligent soot blowing system.• Upgrading turbines. • Routine performance testing of critical equipment.• Improved performance of condenser, cooling tower,
boiler feed and CE pumps, FD&ID fans, ESP, etc.• Proactive maintenance.• Loading profile and impact on plant efficiency
Potential Priority Areas
First solution with IHRA IPR to be developed by end 2016 and commercialized by 2020
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Aims of Working Groups
• Identify, prioritize and select operational and technological/ engineering solutions for development and implementation in select Indian utilities.
• Foster partnerships between utilities, service providers, OEMs and other stakeholders in the planning and implementation of utility solutions.
• Guide the design, development and pilot testing of the utility heat rate improvement measures, practices and technological solutions.
• Monitor and evaluate the impact of the pilot projects on the utility’s technical and financial performance.
• Authorize and certify the progress report on the impact of the operational and design solutions on the utility’s performance; disseminate widely the findings of the pilot projects, and
• Provide strategic guidance and direction to the IHRA and members of the utility solution project consortium (eg. Service providers, OEMs, Utilities, R&D labs, etc.) on issues related to licensing and ownership of the Intellectual Property Rights (IPR)
Model Power Plant Program
Demonstrations and Skills
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• Efficiency interventions follow an one-off, unit by unit approach. – Lessons take time to disseminate across the sector and, – Inaccessible to plant and personnel due to diversity among utilities
and the geographical expanse
There is thus, a need for a common model demonstration unit located at a relatively easily accessible thermal power station with in-plant facilities for training,
laboratory, communication and data-links as well as “on-line” demonstration of technologies.
Why Model Power Plants
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• Model Power Plants (MPP)– Monitoring & Diagnostic
(M&D) Center at Philadelphia Electric Power Company (PEPCO)
– Instrumentation and Controls (I&C) Center at TVA’s Kingston Plant,
– Heat Rate Improvement Center at Potomac Electric Power Company
• Functions of MPP– Venue for training and
workshops– Showcase of innovative
technologies and operational solutions;
– Testing, standardization and certification of processes and products;
– Site for market driven, collaborative R&D projects
– Hardware/tool lending facilities
EPRI Model
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• CEA estimated 490 thermal power plant units (as on Mar 31, 2012)
– 25 to 800 MW of capacity and have varied problems and solutions• 46% of units producing 46% of national generation have 195-250 MW capacity• 37% units producing only 15% of national generation have 25-150 MW capacity• 17% of units producing 39% of national generation have a capacity of 500 MW
or more• 67.7% of the total operating coal based thermal units have exceeded their mid-
life (> 15 years) while 46.2% have exceeded their operational life (> 25 years) • 52.4% of the total capacity (MW) of coal based power has exceeded their mid-
life (> 15 years) while 28.6% has exceeded the operational life (> 25 years)
Utility members will be requested to offer and earmark representative units with capacities of 210 MW, 250 MW, 500 MW and 660 MW to serve
as model power units
Profile of Power Plants in India
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Aims of Working Groups
• Identify, prioritize and select model power plants for heat rate technology and operational solutions demonstration.
• To assist in the program design and costing of the model power plant demonstration projects. Specifically, the WG will consult and deliberate on the following: – expectations from the proposed MPP unit as a site for pilots and for training & knowledge sharing– accrual of monetary benefits and resolution of IPR issues to the utility and its partners hosting the MPP.
• To advise on the methodology, criteria & number of selected stations and units. The Working Group will need to explore establishing multiple model units on the basis of capacity or choice of model units that have a functional focus similar to the approach followed in the US by EPRI.
• Discussions with utilities to secure buy-in for designating the identified units as MPPs; Selection of 3-6 units based upon the agreed criteria
• Determination of broad budgetary requirements for designated MPPs and funding mechanisms• Foster partnerships between utilities, service providers, OEMs, National Labs and other
stakeholders in the design and conduct of market driven consortia R&D projects. .• Guide the design, development and pilot testing of the utility heat rate improvement measures,
practices and technological solutions.• Monitor and evaluate the impact of the model power projects on the spread and dissemination of
best practices in the country• Provide strategic guidance and direction to the IHRA and members of the utility solution project
consortium (eg. Service providers, OEMs, Utilities, R&D labs, etc.) on issues related to licensing and ownership of the Intellectual Property Rights (IPR)
Service Provider Development Program
Wide-scaling Run & Repair Services
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• Potential – CEA estimates that “run-repair-replace’ for R&M/LE during 2012-22
will require investments of Rs. 555-855 bn– Compliance of Perform Achieve Trade Scheme
• Significant challenges – Non availability of competitively priced, modern, state of the art
services and products• services are available internationally usually through small and medium scale
service providers at prices that are competitive in developed countries• such service providers do not typically exist in India• international service providers can be contracted by Indian utilities, the costs
are exhorbitant and therefore not financially viable in the Indian context
– BTG manufacturers/OEMs focus on on green-field capacity addition or replacements
“Run and repair” market remains small with a huge un-estimated potential
Potential & Challenges
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Conclusions from Round-table for Service Providers and Original Equipment Manufacturers
• MSMEs provide a range of thermal efficiency related services in the developed markets. – Many MSMEs established by former employees. India has very few such
service providers. They face significant barriers: • Lack of recognition by utilities and misconstrued competition by OEMs• Utility procurement practices that does not recognize start-ups/new enterprises
or have entry barriers like financial creditworthiness and/or proven institutional track record
• Lack of dedicated budget lines in utilities for promotion of efficiency
• Expanding the pool of heat-rate service providers needs a nurturing eco-system – Encouraging former employees to turn entrepreneurs and establish
enterprises– Facilitating partnerships or franchisee agreements between international
service providers and Indian entrepreneurs– Creation of a platform that can assist service providers to network and
market their skills and products
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• In discussion with utilities, identify and prioritize solution areas for which service providers are immediately required
• Identify priority solutions areas for which service providers are not available in India but are available abroad
• Initiate discussions with 3-5 international service providers on their plans to establish a base in India.
• Foster partnerships between these international service providers and Indian entrepreneurs for establishing indigenous enterprises/franchisees
• Create awareness amongst utilities on availability of indigenous service providers and the need to develop procurement frameworks to contract them
• Guide IHRA to develop model/standard documents for procurement and contracting of various services
Aims of Working Groups
Finance & Sustainability
Membership fee Seed money Participation fees for training programs Sponsorships for events Management fee for collaborative/ consortia research, Fees from consulting services, IPR and/or technology
commercialization
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Potential sources of revenue
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IHRA expected to break even in year 6 Activities of Learning by Sharing & Business Development Councils will start generating a
surplus from year 1 itself Risks: Low
Solutions developed by Applied Research & Technology Council expected to be commercialized with IHRA revenues from year 5
Risks: High
IHRA’s sustainability Need for international collaboration and partnership for technology transfer Capacity building for the IHRA team both in terms of technical and managerial capability
through Understanding the functioning & focus areas of EPRI, VGB, Jcoal & similar organizations
internationally
Challenges & Support required for IHRA
Needs gap funding of nearly Rs. 3 Crores in the first 5 years
Will generate surplus of around Rs. 1 Crores in years 6-8
Thank You