Captive RE is the most viable option for energy security

Ashish Gupta Head – Power Management Group (PMG), TECHPORT
Regional Manufacturing Support Organisation (RMSO), Holcim – South Asia Region.
Dealing with changing fuel market dynamics, while keeping the production cost to minimum is a challenge. Ashish Gupta shares with ICR how Ambuja tackles these challenges.

What is your current requirement for power and how much of it is met through captive power production?
Our total electrical energy consumption is around 1750 to 1800 million units (kWh) per annum. Out of the above, nearly 70-72 per cent consumption is through captive power generation.

How much of your captive power is generated using renewable resources? What are your future plans and targets regarding this?
Presently total captive renewable energy generation (wind늉媯ꉦ) is around 63.5 million units (kWh), which is approximately 3.5-3.7 per cent of total electrical energy consumption. Our future plan is to have 10 per cent of our total electricity energy consumption met through renewable energy resources by year 2020.

Are you planning any capacity addition/upgradation of your plant?
Presently there are no such proposals in the pipeline, for capacity addition/upgradation of conventional captive power generation facilities. We certainly have plans for enhancing renewable energy assets, so as to have minimum 10 per cent RE consumption, in next five/six years.

Last capacity addition projects, in captive power generation facilities, were executed during 2009-10 to 2011-12 with addition of:
I)Conventional CPPs (i.e., solid fossil fuel fired STG based power plants) by 81.7 MW, at different locations, and
II)Renewable energy based CPPs (wind and solar power) by 7.8 MW at different locations.

What suggestions would you like to give to a company planning to set-up a captive plant?
We will recommend against going ahead with the proposal for conventional captive power project without ensuring sustained supply of low cost fuels, such that captive generation cost is competitive to grid power cost. Of course this is taking into consideration quality and reliability of grid power in the vicinity.

Are you facing issues in availability of raw materials?
Presently solid fossil fuel market scenario is changing fast and is very volatile with respect to quality, price and logistic modes. Coal India is practically not permitting lifting of linkage coal by small capacity CPP owners, like us.

One has to depend mainly on very costly imported or open market (e-auction) fuels (like coal, petcoke, lignite, etc), mixed with other low cost alternate fuels (like biomass, agro-wastes, etc), subject to availability in the neighbouring areas and fuel compatibility of the existing boilers.

India has huge potential to tap solar and wind energy. What can be done to ensure that these resources are utilised effectively?
For power intensive industries like cement, steel, chemicals, petrochemicals, fertiliser, etc., enhancing own captive RE generating assets is the most viable option for energy security and to get energy at cheaper cost. Huge potential and resources are available, within the country, which can be tapped with user-friendly Central and State Government policies.

Are there any challenges in trading surplus power ?
The major challenges particularly by CPP owners of industries, other than power, may be summarised as below:
Technical and commercial incompatibility with local State Load Despatch Centres (SLDC)
Imposition of several conditions/constraints to avail open access facility for selling to a third party, by the local SLDC authorities
Often changes in accounting procedures to assess quantum of energy transmission through DISCOM & OA route leads to controversies in power bills, and
SLDC always prefers to influence CPP owners to sell power to DISCOM at APPC rate, which is normally lower than the variable cost of generation, for small size CPPs

How would you plan the energy sources in the dynamic energy market?
In today´s fast changing power and fuel market, from energy security and business perspective it is better to have conventional CPPs of bare minimum capacity, which will suffice their requirement to run essential equipments, that are required to run round the clock. 15 per cent of the energy demand must be met through captive RE generation facilities and balance from grid (combination of DISCOM & OA at cheaper rates).