Thermal Power Expands Feverishly in India

In the town of Patratu in eastern India will soon stand a thermal power plant generating 6,400 megawatts. That is 11 percent bigger than the Taichung Power Plant in Taiwan, currently the world's largest coal-fired station.
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In the town of Patratu in eastern India will soon stand a thermal power plant generating 6,400 megawatts. That is 11 percent bigger than the Taichung Power Plant in Taiwan, currently the world's largest coal-fired station. This project is headed by the National Thermal Power Corporation (NTPC), a publicly-owned Indian power utility, and the government of the state of Jharkhand.

This will provide a much-needed service to India, especially for farms and businesses. Due to an energy deficit of nearly 160 gigawatts, 400 million Indians do not have regular access to electricity. To India's economic planners, thermal power is the only viable option to fulfill India's energy demand.

India has 297 thermal power stations, 14 percent of which are owned by the NTPC. These stations generate 189 gigawatts. A recent study by CoalSwarm and the Sierra Group, two American agencies, pegged the number of proposed Indian coal-fired plants at 588, with an installed capacity of 390 gigawatts.

The Role of King Coal

Coal currently accounts for approximately 60 percent of the total energy generated in India since the country has the fifth largest coal reserves in the world. However, production must be improved if India is to have hope of closing in on its energy deficit. Manish Aggarwal, head of the industry advisory service KPMG's energy and natural resources division in India, says that "India needs the latest technology, the latest equipment and international expertise if it is to raise coal production."

Virginia-based AES Corporation operates a dual 210-megawatt thermal power unit in Odisha in eastern India. AES proposed a new "super-critical" thermal power plant to be built in the state of Chhattisgarh. A super-critical plant operates at higher temperatures to maximize fuel efficiency and minimize greenhouse gas emissions. It will have an efficiency rate exceeding 45 percent as well as reduced carbon, nitrogen, and sulfur emissions.

Investment Opportunities

India presents a significant investment opportunity for foreign power companies. For one, this sector is profitable in India, generating 15-17 percent margins with fixed purchase power agreements. The government also encourages foreign direct investment. The National Tariff Policy allows power companies to make relatively predictable returns on invested capital.

By opening ports on the west coast, American coal producers will more easily and cost-effectively ship coal mined in Wyoming and Montana to Asia. They plan to build railroads to connect the Pacific Northwest with these coal mines. Ambre Energy, an Australian company, is spearheading the Morrow Project, which, when completed, will transport up to 8 million tons of coal to ports on the west coast every year.

Mitigating Climate Change

This year, India's Ministry for Environment and Forests established new rules requiring power companies to reduce sulfur and nitrogen dioxide emissions from coal-fired power plants by 80% within the next three years. India is on the path to safer and cleaner expansion of thermal power. Experts estimate that India's clean coal capacity will grow by 103 gigawatts over the next decade.

Circulating fluidized bed-combustion, another clean coal process, has a 45 percent efficiency rate and results in reduced pollution rates. It is currently utilized in 60 thermal power units in India including the Neyveli Lignite Corporation complex in Tamil Nadu and Simhadri Power Plant in Andhra Pradesh. This process will become more common as India imposes regulations on existing coal-fired power plants.

Just a couple of months ago, Essar Power Gujarat and CLP India were honored by the Peabody Energy Advanced Energy for Life Clean Coal Awards. Presented by the world's largest private coal company, the award commended the Indian power plants for their below-average sulfur and nitrogen emissions.

Thermal power in India is a rapidly expanding sector. As India becomes a more populous and industrialized state, efficient power plants and clean coal techniques must also develop to keep with the times.

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