Wartsila India, which provides power solutions to diverse parts of the energy market, sees the difficulties due to uncertainty over gas availability as an opportunity to market its plants based on gas and high furnace oil (HFO) for baseload and peaking hours. In an interview with Sanjay Jog, managing director Rakesh Sarin explains the India strategy. Edited excerpts:
Constraints in the availability of gas has severely impacted generation of gas-based projects in India and the future development. Has it impacted Wartsila-supplied plants?
The advantage of these plants is that in spite of reduced availability of gas, the plants still operate at their maximum rated efficiency, unlike big frame plants. The same holds true when the offtake requirement reduces because of less demand. Wartsila has so far supplied 275 power plants, with generation capacity ranging between 10 Mw and 128 Mw across India. Of these, about 20 plants operate on natural gas in south and western India.
Also, these plants have gas supply sourced from sources other than RIL’s KG-D6 block. All the plants have performed better because of additional intermittent fall-back gas being available from time to time, which these plants could take because of the high uptime due to their modular design.
Wartsila has met a couple of states and companies with an offer of such generation plants of 100 Mw size. What’s the response? Will the gas constraints impact these deals?
Based on our analysis, supported by the study conducted by IIT, Delhi, gas fits in well as a time-of-the-day fuel for intermittent and peaking application. Such applications need high efficiency and flexibility in operation as measured by starting time, ramp-up rate and efficiency in part-load operations. Our technology provides a huge benefit for such application over the conventional technology. Last year, we did close to 300 Mq of order intake, which was mostly on natural gas as primary fuel.
Wartsila plants are largely meant to meet peaking shortage. Are they also useful for base load generation?
They have lower capital cost and higher efficiency, so are quite competitive compared to the conventional technology on gas in base load. For peaking and intermittent application, one gets a leap-frog advantage. Briefly, these plants have been running as base load as well as in peaking applications, an advantage due to high flexibility of the technology.
What policy changes are required for the 12th Plan capacity addition?
As mentioned above, gas fits in as a time-of-the-day fuel & it makes sense in the national interest that gas is allocated for peaking applications. Also, the baseload and peaking load should be separately identified and planned. Obligation for 24x7 supply for discoms should be in place. Further, the Central Electricity Regulatory Commission draft regulation for peaking rates needs to be implemented & bids for peaking power should be invited by discoms.
What’s Wartsila's business plan for India in such a situation?
Our plan is based should not get affected based on such a situation, since as even a mix of domestic gas and LNG fits in well for the smart generation application. The performance is unaffected considering lower plant load factor of plants on account of gas supply or 24x7 expensive power demand constraints.
The per unit rate of suply from plants based on high furnace oil (HFO) is on the higher side. Has Wartsila stopped supplying such plants in India?
The cost of power based on the current HFO price is in the range of Rs 7-8 per unit, still lower than operating on diesel. Wherever, reliability of power is important, our customers are operating these plants 24x7 as base load. In other places, customers are using it for time-of-the-day. In the present situation, HFO is practically the cheapest of all the available fossil fuel. Hence, industries for which reliability of power is critical find HFO-based power plants a good option.
