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Power pricing and Power Purchase Agreement-2-July-Dec14

Power pricing and Power Purchase Agreement-2-July-Dec14

Section A (20 Marks)

Write short notes on any four of the following

  1. Guidelines for Competitive Bidding
  2. Main Features of the PPA
  3. Operation and Maintenance of the Power Station
  4. Events of Default and Termination
  5. Liability and Indemnification

 

Section B (30 marks)

 

(Attempt any three)

  1. Discuss about the tariff through competitive bidding process.
  2. Explain the provisions and issues of PPA.
  3. Throw light on the Insurance during the Construction Period.
  4. Elucidate about the delivery and content of monthly bills.

 

Section C (50 marks)

 

(Attempt all questions. Every question carries 10 marks)

Read the case “Biomass power Project in Andhra Pradesh” and answer the following questions:

 

Case Study: Biomass power Project in Andhra Pradesh

 

Biomass based power projects are promoted in Andhra Pradesh by Ministry of Non- Conventional Energy Sources (MNES), Non-Conventional Energy Development Agency (NEDA) and Government of Andhra Pradesh. The first project was commissioned in 1996 and most of the plants are established in 2001. The present installed capacity in the State is 206 MW. The typical size of the plants is 6 MW. In every district of the State, these plants are in operation.

Factors influencing the programme

The State has a favourable tariff regime. The third-party sale is permitted. There are lower wheeling charges and availability of multiple biomasses is abundant. Later the regulator has prohibited the third-party sale, but allowed the MNES tariff rate from the year 2000. The tariff was revised to Rs.2.88 per kWh in place of Rs.3.46. Again the rate was enhanced to Rs.3.18 from Rs.2.88 with the intervention of court. The Plant Load Factory (PLF) was pegged to 80%. Due to these factors there was a loss of interest for developers to set up new plants. The project was commenced in June 2000 and completed by December 2001.

Fuel procurement

Different types of biomass was utilised and the procurement methods are as follows:

  • Rice husk from rice mills
  • Bagasse from sugar plants
  • Jute stick from farmers
  • Casuarinas trees from Agro-Farming
  • Cotton and red gram stalks from farmers
  • Woody biomass from farmers
  • Groundnut shell from oil mills
  • Jute waste from jute mills

The plant was installed by Varun Power Projects (P) Ltd. The capacity of the plant was 6 MW. The project is first of its kind without much industrial experience. The plant is located at Chilakapalem, at Srikakulam District in Andhra Pradesh.

The selection of appropriate location is done with the following criteria:

  • Ensuring the availability of biomass resources, in surplus
  • Only one plant in the district
  • Adequate availability of ground water resources
  • Location of the plant adjacent to the existing grid of 132 KV sub-station
  • Location of the site on the National Highway connecting Howrah, Chennai
  • Ensured logistic requirement, including biomass mobilization

Fuel processing/preparation

Only rice husk was fired as it is without processing. All wood biomass was chiped in to smaller pieces using chipping machine. Bushy wastes like stalks are cut into small pieces using biomass shredder.

Investment

The project is set up at a total cost of Rs.2440 lakhs including land, buildings, plant and machinery and fixed deposit collected by IREDA

Means of finance

Term Loan       Rs. 1827 lakhs

Equity              Rs. 613 lakh

The project was funded by IREDA. Subsequently due to increase in the cost of biomass fuel, reduction in tariff, the company shifted the loan to a commercial bank to reduce the interest cost.

Equipment packages:

a)      Turbo generator and auxiliaries

b)      Boiler and Auxiliaries

c)      Fuel handling system

d)     Cooling water circulation system

e)      Ash handling system

f)       Compressed Air System

g)      RO/DM Water treatment system

h)      Air conditioning and Ventilation

i)        Fire protection

j)        Power evacuation and auxiliary power distribution system

k)      Controls and instrumentation

l)        Civil and structural works

Parameters of main equipment

  • Boiler configuration is as foloows.
  • 495 Deg.C, 65 kg /cm2 - 27 TPH Travelling grate fired boiler
  • Turbine configuration is given bellow.
  • 495 Deg. C, 65 kg /cm2 - fully condensing type – 9000 rpm machine

Problems and constraints

  • New kind of industry and market
  • Fuel processing.
  • Continuous and constant fuel feeding rate
  • Fuel required, size of the fuel to feed is up to a maximum of 20 mm.
  • Woody and bushy biomass is needed to be processed for required size
  • Because of volumes in nature, low bulk density procurement of biomass to the site adds high overhead expenses
  • Biomass ash is highly alkaline in nature. It requires frequent cleaning and maintenance of the tubes.
  • Being grid connected to rural sub-stations, occurring of high grid fluctuation, it demands continuous attention.
  • High moisture content of the fuel results in low boiler efficiency
  • Frequently reducing and varying tariff rate maintains high PLF
  • PLF has been pegged to 80%

Power generation

The unit operates at more than 80% of PLF. The average power generation rate, over a period of three years, is 438 lakhs of unit per annum. 1.1 kg of biomass per kWh, is considered as base for tariff calculation.

Table 1.1: Power Generation

 

 

Figure 1.1: A view of the Biomass storage and conveyer system of the biomass power plant in Andhra Pradesh

 

 

Questions:

 

  1. What are Non- Conventional Energy Sources?
  2. Summarize the factors influencing the programme mentioned in the above mentioned case.
  3. Explain the criteria for the selection of appropriate location of plant.
  4. What are the problems and constraints in setting a power plant?
  5. Discuss the different methods of fuel procurement.
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