Power sector policy interventions in view of coal power generation
12 May 2015 - {{hitsCtrl.values.hits}}
By Jayantha Ranatunga
Now that coal has become the major source of fuel for the generation of electricity, we need to rethink on the tariff policy of the power sector.
If we accept electricity as a fundamental right of the society such as food, health, education, clean water, unpolluted air etc.; then the present policy of providing power at the lowest bracket at a ‘heavy’ subsidy is justified.
Further, if we allocate the nature’s gift of hydropower, which belongs to the entire nation, one may even argue that the so-called subsidy is a myth as that is the real cost of hydro power. Rest of the high cost generators, such as diesel and coal are to meet the excessive use by the rest of the society and hence to be shared by them at those high costs.
Accordingly, fixing of a very high tariff for heavy domestic users is also the correct decision as they have no right or justification to consume electricity so extravagantly. Those who can afford the consumption of excessive electricity should be compelled to cross subsidize the bottom end users. If the utility is hoping to earn a surplus from the heavy users, they need to be mind full of the tariff ceiling beyond which the solar PV leveraged by the net metering will be more attractive than the grid power. When that happens, not only the utility will lose the surplus but also will be burdened with further depression of the day time valley in power usage..
We need to appreciate that the unfortunate victims of the present tariff policy are the industries and hotel sector, which are caught in-between. They are expected to bring in much needed foreign exchange to the country; for that they need to be cost competitive with other origins and destinations. Given this scenario, many industries have made good demand side management efforts by employing the energy efficient technologies and good management practices. As such they are not to be classed alongside the extravagant domestic energy users.
Promotion of off peak demand
The next step in rationalizing the energy sector rests upon the national policy makers to create off peak demand for electricity. This has now become a more serious issue than ever, with coal power plants taking over the generation sector. Few decades back the dominant generator was hydro power. Uneven demand pattern was not a key issue at that time as hydro resources were a storable form of energy.
Thereafter the Diesel power became the dominant contributor. Here too there was no dire need to even out the demand as the Diesel plants can be switched on and off at short notice. As we all know Diesel can be stored when not in use.
This scenario has now completely changed. Coal being a base load plant, the switching on and off at short notice is almost impossible and very costly. Therefore we now have an added requirement of facilitating a steady power demand throughout the day almost evenly distributed except for few minor peaks that could be met with water accumulated in the large reservoirs. Here too one needs to have a contingency plan for seasonal droughts which are more frequent at present.
Let us analyze the possible means of distributing the power demand. Not much can be achieved in the domestic sector as the demand is mainly due to lighting and TV.
Even the air-conditioning use, though small, mostly occur during day time, unlike the night heating demand in the cold West. Hotel sector demand is very similar to the domestic sector and therefore not much of a promise.
Industry on the other hand could help in this respect by extending their manufacturing activities to the night shifts. Here too there are cultural and social issues as the majority of the factory workers are female in this country. The social disharmony that may result by female night employment can bring in additional social costs that can even outweigh the benefits of more even power distribution.
Transport sector
Given the above scenario we may have to move towards the next major power consumer; the transport sector. The rail network which can be easily electrified could fill the morning and evening valleys in the power demand pattern. Unfortunately it cannot create a night time demand. Interestingly this is not a new proposal. Eng Wimalasurendra wrote about this proposal in 1914 in the Institution of Engineers Transactions in an article justifying his pet subject, hydro power.
In order to encourage night time consumption, the automobile sector, particularly the use of private electric cars, could be incentivized to charge the batteries during the night time when there is a lower tariff in operation This is a move in the right direction as the world over there is aggressive research being conducted in reducing the cost of rechargeable batteries and improving the storage capacity. Now that the government has reduced custom duty for electric vehicles, next step is to provide rapid charging stations and a reduced tariff equated to the avoided cost of fuel, as the rest of the costs are sunken and unavoidable.
There are several other major benefits in such a policy intervention. It is known that coal can be converted almost at 35 percent efficiency to shaft power, which is same as Internal Combustion engine, which too operating at 35 percent efficiency, (irrespective of whether it is petrol of diesel). What is more significant is that the cost of coal per Joule is nearly one third the price of liquid fuel and that will remain so for a foreseeable future. Accordingly, the cost advantage of coal to shaft power through electricity route is nearly three times that of the internal combustion engine of the automobile.
In addition to such major financial gains, there are very significant environmental benefits too. Global warming is reduced to nearly half, due to half the amount of carbon being burnt. Further, urban air pollution is completely eliminated in the electric vehicles. Such air pollution will be shifted to a high elevation on top of a chimney and that too in a sparsely populated rural location with sufficient air flow for dilution of toxic emissions.
(The writer is a Chartered Engineer)
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