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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
2
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
9
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
18
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
19
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
20
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
23
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.
24
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
25
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
26
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%
27
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
28
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
29
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
30
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
32
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)
35
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
42
• RISE Contracting Officer Representative: Monali Zeya Hazra, USAID India, [email protected]
• Chief of Party: Tushar Sud RISE, [email protected]
Anjan Kumar SinhaSenior Advisor, USAID GTG-RISE [email protected] | Mob:+91 9650992971