Fuel Options for Electricity Generation in India

 Published On: Aug, 2014 |    No of Pages: 142 |  Published By: SNP Infra Research solutions | Format: PDF
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Electricity generation is the main pivot around which the economy of any country revolves. The electricity demand in India is on rise and is believed to depict a north bound trend despite of the economic slowdown with 88 GW capacity planned to be added in 12th FYP. At, the same time a host of plants which are operated by SEBs or PSUs in India is aging and a large number of power plants are scheduled for retirements/life extension in short and medium term. Hence, the need of new electricity generation capacity shall be even more highly felt by India in the near future, reason being increase in electricity demand coupled with distressed power units (due to lack fuel and finance in particular) and aging infrastructure.

However, the capacity expansion in terms of installed capacity has its own implications beyond huge tune of investments. Despite magnanimous efforts to increase the penetration of the renewable energy sources (RES), in India’s electricity generation portfolio the growth has not be something which can offset the fossil fuel contribution. Also, post Fukushima disaster and in view of the fact that nuclear energy remains a controversial subject globally, it is certain that electricity generation through fossil fuel would be the mainstay, at least in short to medium term for India. As a consequence, the electricity generation sector and the process industries would continue to depend on significant quantities of imported and domestic fossil fuels, leading to increase in the vulnerability of the Indian energy systems to power outages and disruptions in electricity supply.

Sealing the massive opportunity scale and building upon the maximum benefit potential that could come with the expansion of electricity generation sector in India calls for a tight knitted planned energy strategy. With the beginning of 21st century the energy scene in India has changed. India has a 3-tier strategic objective to promote sustainable energy use, increase competitiveness and maintain energy security. Hence, the future of electricity generation in the country should be in line to be compatible with these objectives.

Accordingly a key concern emerges: What is the best available fuel option available for electricity generation in terms of availability and affordability? In this dossier SNP Infra Research delves deep to answer many more of such questions which necessitates perfect understanding of the fuel mechanisms that affect the future development of the Indian electricity generation sector. Through this report, SNP Infra Research attempts to unveil the current pressure on the fuels especially coal and gas and what would be the future of fuel mix and how it would unfold in medium term scenario? Also, what should be the key strategy of Private Power Generators for long term fuel sourcing vis-ΰ-vis the availability?

Can there be any other domestic alternatives such as Shale gas, LNG for the rising demand of fuel or Import dependency is the only solution? Queries like these and many more find their solutions in the virtue of this report which is to explore how the Indian electricity generation sector would evolve from short to medium term under the changing sensitivity of the capacity mix of the fuels. The report also analyses comparatively coal and natural gas dynamics for all consuming sectors in India and especially involved in electricity generation. The report builds on from fuel dynamics and availability to analyse the risks associated with fossil fuel alternatives for electricity generation in India.

Report Highlights:
-The Electricity Generation System in India and The Indian Energy Strategy
-Understanding Fuel options for Electricity Generation
-Fuel Consuming Sectors, Fuel Options Determinants
-Coal for Electricity Generation in India
-Lignite for Electricity Generation in India
-Coal & Lignite Dynamics in India
-Gas for Electricity Generation in India
-Gas Dynamics in India
-Fuel Analysis for Process Industry Electricity Generation

A Must buy for:
This Report is a must for anyone dealing with:
-EPC Contractors
-Coal Mining Agency
-Coal Traders
-Gas Supplying Agencies
-Power Traders
-Technical & Environmental Firms
-Research Firms
-Consulting Firms
-Fuel Traders

Executive Summary

The Electricity Generation System in India and the Indian Energy Strategy

The Indian Energy Challenge
Significance of the Electricity Generation Sector in India
Role of Energy Capacity Planning in India

Fuel Options for Electricity Generation in India - Overview
Coal and Lignite
Oil and Gas
Biomass & Bio-fuels

Identifying Fuel Consuming Sectors
Power Generation Companies
• IPPs
• MPPs
• CPPs
Power Generation Projects by CPSUs and SEBs
Process Industries

Fuel Options Determinants
Availability of Fuel
Affordability of Fuel
Reliability of Fuel
Environment Friendliness of Fuel

Coal for Electricity Generation in India
Analysing Coal Availability in India for Electricity Generation – Vision 2025
Affordability of Coal for Electricity Generation – Mining Woes and Rising Cost
Reliability of Coal for Electricity Generation in India
Evaluating Coal on Environmental Scale –Is there an alternative in medium term

Lignite for Electricity Generation in India
Analysing Lignite Availability in India for Electricity Generation
Affordability of Lignite for Electricity Generation
Reliability of Lignite for Electricity Generation
Evaluating Lignite on Environmental Scale

Coal and Lignite Dynamics in India
Domestic Coal in India
Scenario wise assessment of Domestic Coal in India
• BAU Scenario
• High Mining Efficiency (HME) Scenario
• Low Mining Efficiency (LME) Scenario
Dependence on Domestic Coal for Electricity Generation
Coal Imports in India and Assessment of
Imported Coal Availability
• BAU Scenario
• High Imports Scenario (HIS)
• Low Imports Scenario (LIS)
Lignite in India and Assessment of Availability

Gas for Electricity Generation in India
Analysing Gas Availability in India for Electricity Generation – Vision 2025
Affordability of Gas for Electricity Generation – Pricing Dynamics Evaluation
Reliability of Gas for Electricity Generation in India
Evaluating Gas on Environmental Scale

Gas Dynamics in India
Domestic Gas in India
Scenario wise Assessment of Domestic Gas in India
• BAU Scenario
• High Gas Availability (HGA) Scenario
• Low Gas Availability (LGA) Scenario
Dependence on Domestic Gas for Electricity Generation
LNG in India – Vision 2025
Transnational Piped Gas in India – Way Forward
Unconventional Gas in India – Shale Gas and CBM’s Contribution in Electricity Generation

Fuel for Process Industries Electricity Generation
Analysing Fuel for Fertilizer Industry
• Coal
• Gas
• Bio-fuel
• Others
Analysing Fuel for Sugar Industry
• Biomass
• Coal
• Others
Analysing Fuel for Textile and Cement
• Coal
• Biomass
• Gas
• Others

Risks Analysis for Fuel in India
Project Selection risk
Geo-political Risk
Environmental and Technical Risk
Contractual Risk
Financial Risk

Unearthing Solutions to Risks and Challenges
Strategies to Mitigate Risk
Diligence Measures to be Adopted
Contractual Awareness
Government Support Utilization

Conclusion/Way forward

Annexure/Case Study

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