Challenges in Thermal Power Generation

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Environment: Issues and Challenges in Thermal Power Generation

International Conference on Thermal Power Generation – Best Practices and Future Technologies

Organized by

National Thermal Power Corporation Limited

United States Agency for International Development

Environment: Issues and Challenges in Thermal Power Generation

P. R. Shukla, IIM Ahmedabad

1. Introduction Development of power sector has a direct correlation with economic development of the country (Ferguson, Ross et. al. 2000; Samouilidis, J.E. and Mitropoulos, C.S., 1984; Yang, 1998; Cheng, B.S. and Lai, T.W. 1997; Stern, D.I., 2000; Sajal Ghosh, 2000). Figure 1.1 shows in India with the growth of GDP, how the electricity consumption, energy consumption and carbon emission has grown. Figure 1.1: Energy, Electricity, Carbon and Economic Growth

From the figure, the positive correlation of the GDP growth and the electricity consumption can be observed. As seen in the figure, post 1990s the carbon emitted from the electricity sector has reduced. Also, the consumption of electricity has growth at the higher rate than that of GDP. In the next few sections we will try to synthesize what will be the relationship between GDP, Electricity consumption and environment in the future (Till year 2030). The focus will be on the power plants. After assessing the relationship between GDP, power sector and emissions we will enumerate the various instruments that the government of India can formulate to regulate the power sector and environment. 2. Power Sector of India Power is a critical infrastructure for economic development and improving the quality of life. For this reason, Power has been given due importance by the policy makers of India since independence. Since independence the generating capacity has increased from 1.362 GW to over 100GW in 2002. Over 500000 villages have been electrified. These are achievements in themselves. However, there have been certain problems. Some of the problems are the per capita consumption of power has stayed low (350 kWh); The State Electricity Boards (SEBs) are making huge losses; the electricity prices are high etc. For this reason India has started power sector reforms from early 1990s. In India, Power is a concurrent subject. Thus, both the center and the state are responsible for developing power sector. In 1990s after opening up of the power sector, various private players also invested in power generation. Pre 1990s private players were present only in some urban centers like Kolkata (Calcutta Electricity Supply Company), Ahmedabad (Ahmedabad Electricity Company), Mumbai (BSES and Tata) etc. The private share in 2002 has gone up to around 10% of the installed capacity. The central share is around 30% and the rest 60% is capacity installed by the SEBs and State Departments. However, in terms of additional capacities each year, after 1990s the private sector has been almost equal to that of state and center. In 2002, the addition capacities of state,


Environment: Issues and Challenges in Thermal Power Generation

P. R. Shukla, IIM Ahmedabad

center and private sector were respectively 1394 MW, 905 MW and 816 MW. Figure 2.1 shows the change in ownership pattern in Power Sector. Figure 2.1: Ownership Pattern in Power Sector

Source: SEB 2002 Historically, Indian power sector has been dominated by coal as the predominant fuel source of power. The installed capacity of coal based power plants has gone up from 7.508 GW in 1971 to 60.655 GW in 2001. Hydro power is the next important fuel source for India. It was 6.38 GW in the year 1971 (40% of total capacity) which went up to 15 GW (25 % of the total capacity in the year 2001. From the 1990s, Gas is emerging as one of the chosen fuel type. Renewables are present in the form of wind, solar, bio mass etc, but it represents less than 5% of the installed capacity. Figure 2.2: Fuel Mix of Generation Capacity

Source: SEB 2002


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