What is Station Heat Rate?

Running a power plant at maximum efficiency has become a  necessity for every generating station. Rising fuel prices, stringent emission norms, inefficient production, maintaining availability, need for flexibility and accelerating demand are all making way for an increased focus on the efficient running of a power plant. New power plants make use of advanced neural network based optimization technologies that strictly monitor and optimize the key performance indicators of a plant. For the older plants, Renovation and Modernization/Life Extension & Uprating activities are being undertaken on a selective mode based on a comparison study with constructing capital intensive new plants as per guidelines set by the Central Electricity Authority of India. With such a directional and policy level initiatives in place, one of the key parameters  identified for measuring the operational efficiency of a plant is its Heat Rate.

Heat Rate is defined as the input needed to produce one unit of output. As in simple terms it indicates the amount of fuel required to generate one unit of electricity, the station heat rate of a power plant directly indicates its performance. Performance parameters tracked for any thermal power plant like efficiency, fuel costs, plant load factor, emissions level, etc are a function of the Station heat rate and can be linked directly. It accounts for all generation requirements including the core BTG as well as the auxiliary consumption and is typically represented in Btu/kWh or kJ/kWh or kcal/kWh. 

Ideally if a power plant converts 100% of the input chemical energy to electrical energy, the heat rate would be around 862kcal/kWh. On an analysis done by the CEA, the typical design heat rate of a thermal power station in India lies between 2200-2600 kcal/kWh. The actual operating heat rate, though varies from 2% to over 50% for certain thermal power plants highlighting the need for an improvisation of heat rate by addressing the root causes. 

Gross heat rate is a function of the turbine heat rate and boiler efficiency. The net heat rate would further bring the APC% or the auxiliary power consumption to the defining loop. BEE in its PAT scheme computes Net heat rate of the individual designate consumers and this is typically used for defining, monitoring and evaluating a plant on its operational efficiency and performance. 

Thermal Power Plants as Designate Consumers in PAT

About 65% of the electricity consumed in India is generated by thermal power plants, 22% by hydroelectric power plants, 3% by nuclear power plants and rest 10% from other alternate sources like solar, wind, biomass etc. In Thermal Power Plant sector to become a designated consumer the identified threshold limit is 30000 toe and in first PAT cycle 144 designated consumers from various states have been identified for which the target have already been notified.

Thermal Power Plant sector has been categorized on the basis of their fuel input in to three subsector i.e. Gas, oil and coal based plants. The total reported energy consumption of these designated consumers is about 104 million ton of oil equivalent. By the end of the first PAT cycle, the energy savings of 3.211 million ton of oil equivalent /year is expected to be achieved, which is around 48% of total national energy saving targets assessed under PAT.

Thermal power plants earmarked as Designate Consumers have been given a target in terms of their Net Heat Rate. Baseline audit was conducted to identify the existing operating net heat rate . This was bench marked with industry standards and the target heat rate at end of PAT cycle has been set. 

Market Trading & Penalties

Market mechanism will be based on ESCERT (Energy Saving CERTificate) that will be issued by MoP/BEE. An ESCERT will be valued at one ton of oil equivalent( 1toe). These certificates will be tradable in IEX & PXIL at the completion of PAT cycle or on an interim achievable basis. In case of a TPP, the ESCERT will either have to be bought or sold depending on by how much margin the heat rate target is achieved or missed. 

PAT is one of the most promising initiatives to achieve the goal by implementing Best Available Practices and Technologies in the identified sectors through economical and viable projects. Broader implementation of sectoral crediting mechanisms could ensure that low‐carbon technologies are also used more widely, which in turn would encourage Indian industries to invest in these technologies.

(*Source: BEE PAT Booklet. To know more, please feel free to read about about it from BEE)

Introduction to PAT Scheme

On June 30, 2008, the honorable Prime Minister of India, Dr. Manmohan Singh, introduced the  National Action Plan on Climate Change (NAPCC). NAPCC recognizes the need to maintain a high growth rate for increasing living standards of the vast majority of people and reducing their vulnerability to the impacts of climate change. NAPCC outlines Eight National Missions, representing multi-pronged, long-term and integrated strategies for achieving key goals in the context of climate change. The National Mission for Enhanced Energy Efficiency (NMEEE) is one of the eight national missions with the objective of promoting innovative policy and regulatory regimes, financing mechanisms, and business models which not only create, but also sustain, markets for energy efficiency in a transparent manner with clear deliverables to be achieved in a time bound manner. It also has inbuilt provisions for monitoring and evaluation so as to ensure transparency, accountability, and responsiveness. NMEEE spelt out the following four new initiatives to enhance energy efficiency, in addition to the programs on energy efficiency being pursued. They are: PAT, MTEE, EEFP & FEED. 

NMEEE - As defined in PAT BEE Documents

Designated Consumers, as notified under the Energy Conservation Act, 2001, account for  25% of the national gross domestic product (GDP) and about 45% of commercial energy use in India. In order to accelerate as well as incentivize energy efficiency, the Perform Achieve and Trade (PAT) mechanism has been designed. PAT is a market based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries and facilities, through certification of energy savings that could be traded. The genesis of the PAT mechanism flows out of the provision of the Energy Conservation Act, 2001, The Act empowers the Central Government to notify energy intensive industries, as listed out in the Schedule to the Act, as Designated Consumers (DCs). The Ministry of Power (MoP) has notified industrial units and other establishments consuming energy more than the threshold in 9 sectors namely Thermal Power Plants, Fertilizer, Cement, Pulp and Paper, Textiles, Chlor-Alkali, Iron & Steel and Aluminum as Designate Consumers. 

PAT DC Break Up (As defined in PAT BEE Documents)

The designate consumers are graded on their Specific Energy Consumption (SEC - put in simple terms - the input required to produce one unit of output) within the sector. The SEC of an industry is calculated based on Gate-to-Gate concept to ensure comparability and standardization across industries. Therefore, the energy efficiency improvement targets fixed are specific to that unit.  Each DC is mandated to reduce its SEC by a certain value, based on its current/baseline. The DC exceeding the target can trade the surplus and the DCs who have not met the target will need to buy the deficit in an open/market exchange like IEX & PXIL in a fashion very similar to the carbon credit & REC schemes. 

The program is definitely a step in the right direction with energy guzzlers being forced to look for bettering their energy consumption patterns. The target being set at a DC level, helps give a proper clarity and path to charter. Extensive studies done for normalizing against industry benchmarks further ensures a fair target setting. Overall, the effort by BEE & CEA is indeed commendable with a lot of homework going in to prepare one of the most clear cut and ambitious plans to make India a more energy efficient country. 

*Data Source:  BEE's PAT Consultation documents.