Monday, March 26, 2007

India's Fuel Basket For Power

Starting from where I had left my last post, India is gearing to use a basket of fuels for meeting its burgeoning power needs. It aims at generating 65.6% (84,400 MW) Thermal, 26.6% (33,942 MW) Hydro, 3% (3,900 MW) Nuclear and 4.8% (6, 191 MW) Renewable power by 2012. Thermal Power: India is endowed with huge coal reserves which provide a ready and economical resource. Obviously, it has been chosen as the main fuel for power generation till 2012. Out of the total thermal generation, coal-based generation has been fixed at 69,616 MW (54.1%), gas-based generation at 13,582 MW (10.6%) and oil-based generation at 1,203 MW (0.9%). Gas-based plants have the advantage that they can be commissioned within 28 months whereas the coal-based plants need at least 40 months. There is a low capital cost and commissioning cost for gas-based plants too. In a study of comparable cost, it was found that Interest during construction (IDC) and financial charges (FC) work out to only Rupees 2.75 crores ($.62 million) per MW for gas-based plants whereas it is Rupees 4.24 crores ($96 million) per MW for coal-based plants. India's preference should be for gas-based plants for their lower cost and less time taken for commissioning. The supply position of gas is also going to improve drastically and will be boosted to 250-270 mmscmd by 2012 from the current level of 90 mmscmd.
Hydro Electricity: India has vast potential of 150,000 MW but it is yet to be tapped. Generation of 33,942 MW by 2012 is envisaged which amounts to an utilisation of only 17% of the potential. Hydel power is clean energy and its generation is independent of fuel supply. It should therefore be given the priority it deserves.
Nuclear Power: Though only 3,900 MW (3%) of power generation by nuclear plants has been envisaged by 2012, there is a lot of scope to increase capacities significantly. India has got good reserves of Thorium. Public sector initiatives along with private sector partnerships will be required to expand capacity of nuclear power.
Non-conventional Energy Sources: A target of 6,191 MW (4.8%) for non-conventional energy sources by 2012 appears to be achievable. Wind, solar, bio-mass energy are showing great promises. Unfortunately, the emphasis has so far been on traditional sources chiefly coal though non-conventional energy sources can be exploited with proper support from the government. India's power position is going to improve as the mix of fuels for generation undergoes rapid changes due to cost, availability and environmental factors. Such prospects are brightening gradually.

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