Power Plant Engineering

2.22 OTHER TECHNOLOGY
2.22.1 LIQUID FUEL
The recent controversies of tariff of IPPs in operation have been an eye opener to the issue of fuel
selection. Several experts in hindsight have also suggested that liquid fuel was a wrong selection for
projects such as DPC. However, this reasoning is too narrow and skewed in its interpretation of liquid
fuels. Naphtha is definitely the least favorite and the most prohibitive fuel world-wide and by definition
and characteristics, it does belong to the liquid fuel category. There are other veritably successful alter-
native liquid fuels like furnace oil, LSHS, etc. where power plants are viable in the liquid fuel mode.
Many liquid fuels based IPPs are now without ambiguity opting for safest bet and the least price
volatile liquid fuel that is furnace oil. Furnace oil has its tremendous advantages. With an average gross
calorific value of 10,200 Kcal/Kg furnace oil is a potent low grade fuel for energy generation. In com-
parison to more refined and primary fuels like naphtha and natural gas, furnace oil has no other commer-
cial value except being combusted for energy generation.
Crude oil prices has been floating between $55 to $65 per barrel at the current international oil
pool (Sept.—2005). It proffers excellent potential to have low generation cost of power. With an effec-
tive and time-tested technology of power generation with heavy fuel operated diesel engine based power
plants, furnace oil will indeed be the preferred alternative for liquid fuel IPPs. Further, establishing
captive power plant and IPPs on DG technology has very low gestation period in comparison to gas
turbine or steam turbine based combined cycle power plants. The detractors of DG technology and
using heavy fuel may trump up the bogey of high sulphur content. But that is not a very contentious issue
as government is now clearing IPPs and allowing them to use furnace oil as fuel with sulphur £ 2% by
weight.
For that matter, even LSHS or its Indian version LSWR if used will account for even much lower
sulphur content » 0.5% to 0.8%. The pollution control norms can be met for combusting both of the
above heavy fuels in the diesel engine power plants by constructing chimneys of adequate height for
exhaust gases’ exit. The furnace oil as well as LSHS has no problem of availability. Fuel storage, han-
dling and transportation are far simpler and easy to establish. It is also expected that over a period of
time, the most predictable and stable price levels will be for the furnace oil.
It also gives the opportunity for having lower levels of import costs on account of fuel while
using furnace oil. All these will help the government to keep the fuel import bills for the future at lower
levels, which is desirable. Under the circumstances, all medium and small IPPs can get their projects
started if they decide to switch over to furnace oil based DG power plants. Many promoters of IPPs have
already embarked on this course. It is a good sign at least a few, if not all, have realised that it is more
prudent and time saving to use most technically and commercially viable fuel for liquid fuel based
power generation. The IPPs can also freely source their liquid fuel requirements and no fuel linkage is
prerogative for sanctioning the project.
The most contentious issue was Naphtha. This fuel was primarily being imported to fulfil the
needs of the fertiliser and petrochemical industries as feedstock. Why at all it was considered for energy
generation remains an enigma. Government experts thought that locally produced Naphtha, which was
in surplus, could serve the needs of the liquid fuel based power plants. But the grade produced locally is
HAN (High Aromatic Naphtha), which could not be used for combustion in gas turbines which needed
LAN (Low Aromatic Naphtha).
This reflected a cruel lack of understanding of the technology of gas turbines used as power
generation machines and their fuel application part. This policy continued till it reached a dead end.

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POWER PLANT ENGINEERING
Finally the government allowed alternate fuels and heavy fuel based Diesel Engine technology for the
medium and small sized liquid fuel based power plants became popular.
Heavy fuel, especially furnace oil grades is ideally used in diesel power stations. This type of
technology to burn furnace oil using four stroke engines is the most reliable type of power generation
system. The concept of using diesel engine being extended to IPPs due to fuel being furnace oil
makessense. The gestation for such projects could be as low as 14 months for a 35 MW power plant.
Furnace oil and LSHS being residual fuels have no other commercial use than combusting for energy
generation purpose. Naphtha as well as Natural gas is of use as feedstock to the fertiliser and the petro-
chemical industry. The concept of residual fuels is therefore limited to the power generation industry
and for marine propulsions only.
Generation cost from fuel oil power plants could be pegged at a low figure of about Rs. 3.50 per
KW hr. of energy. Such generation costs is considering into effect all variables like furnace oil cost, lube
oil cost, operation and maintenance cost, interest on capital and borrowings, depreciation etc.
The crude oil prices, the world over had touched the lowest levels of the decade during the past
two years. One of the fundamental reasons for the liquid fuel captive power plants in India moving to
diesel engine technology using heavy fuel was the comparatively less volatile nature of pricing of the
heavy fuel like furnace oil, LSHS and residual fuels over the past decade. The past couple of years are
also witness to weakening of the crude oil cartel mainly via the OPEC nations thus removing albeit by
default monopolistic nature of the oil pool or the cartel of the select countries that control 80% of
universal oil reserves.
The international benchmark Brent rests at $27–$28 per barrel. It will be strategically worth-
while for countries like India to adopt heavy fuel diesel engine technology for power generation for the
medium capacity (up to 150MW range) of the power stations. All the small and medium IPPs ideally
should look to this route to come to best operational economics in terms of low generation cost.
Supply and demand mechanics cannot be achieved by extraneous machinations. They are in fact
a function of free play of the market forces. To move the oil market positively, a better proposition
would be to increase cash inflow by enhanced sales and a better market share. Crude oil producers
working towards such a stratagem will be able to profit in the long run and fulfil the aspirations of their
own populace in terms of improved GDP, per capita incomes and technological upgradation etc.
Lack of consensus on oil pricing and stock mobilisation generates parallel monopolistic alliances
of oil exporters, bordering on opportunism. The aim of this informal consortium was to bulldoze OPEC
and reduce the crude oil production so as to enable it to fetch higher price. A host of reasons can be
assigned to explain this market pricing structure. A few of these are:
(1) Stock surplus in the global crude oil market.
(2) Low levels of industrial outputs worldwide.
(3) Energy markets effected by the global economic slumps and accompanied by consumption
drops.
It is in this perspective that India’s bilateral negotiation for a part barter deal with Iraq for supply
of crude at $7 per barrel should be seen as a positive progress. The rest of the payment will go as counter
trading of wheat of equivalent value to compensate for international pricing for the crude. It is such
pricing arrangements that we should welcome in India to control the ballooning oil pool deficit and eke
out positive technology and fuel options.

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NON-CONVENTIONAL ENERGY RESOURCES AND UTILISATION
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